The global diaper industry is exceptionally competitive. Diapers need to be constantly redesigned and improved to gain an advantage over competitor brands within this competition. Innovation varies between types of products within each brand and can vary within each type of product (e.g., adult vs. baby diapers).
A significant factor that makes the future of diaper production a challenge is that most changes made are either very expensive or technologically difficult to implement.
Besides rigorous testing required for product safety, manufacturers need to create high-quality products which meet customer expectations; thus, quality control is a significant aspect of the design process. The ability of diaper manufacturers to develop high-quality products is heavily dependent upon their access to production equipment.
“Diaper manufacturing companies need state-of-the-art machines to produce quality diapers at a profitable price.” Thus, technological breakthroughs in diaper manufacturing can be mainly attributed to the availability of such production equipment (i.e., capable of implementing relatively inexpensive and laborious changes).
The Current Level of German Diaper Production Equipment
Concerning diaper manufacturing equipment, there is no significant technological difference between German and Chinese diaper production lines. The only notable difference lies in the price. Due to lower labor costs, Chinese manufacturers can export diaper machines at much lower prices than their European counterparts.
This has led to numerous European diaper-production plants closing over the past ten years as companies seek more cost-efficient production capabilities overseas.
Where are the Difficulties? What is the Focus of Future Technological Breakthroughs?
Diaper Production problems:
- Lack of raw materials (cellulose).
- High Costs for Infrastructure (building/machines).
- Low Productivity.
- High Labor Costs.
- Need for New Technologies
#1. Germany lacks significant production capacity for pulp and SAP material used for absorbent cores. All cellulose-based raw materials must be imported from either North America or Asia, which has led to high-cost inflation throughout the product life cycle due to global competition for these resources.
With demand expected to grow at rates higher than domestic production capacity, the lack of local production facilities will increase finished product prices and a reduced profit margin for producers.
#2. In addition to the first problem regarding raw materials leads directly into the second as there is no native diaper manufacturing equipment production in Germany that would allow German manufacturers to meet growing demands on their own soil.
Instead, they must rely on importing diaper manufacturing equipment from other companies in Europe and Asia. This has led to a significant increase in the cost of manufacturing plants for German diaper manufacturers as production rates have failed to keep up with demand growth.
#3. As a result of higher production costs, low product yields lead to both #4 and #5. To offset production costs for diaper manufacturing equipment, manufacturers need increased productivity from their machines.
With current technologies focused on increasing speeds but not increasing productivity at those speeds, there is a substantial gap between diapers produced per hour by a machine and diapers sold per hour by a retailer or distributor in Germany.
While this problem does not directly affect the raw materials problem described above, it does drive up overall production costs. As a result, to offset increased production costs and compensate for lower yields per machine, companies will need to charge higher prices in the German marketplace.
#4. The final issue is a lack of focus on new technology regarding diaper manufacturing equipment. Following significant advancements in diaper manufacturing equipment throughout the 1990s, there has been little change over the past fifteen years regarding core technologies or concepts used for building diaper machines.
While these older technologies are still more than adequate at meeting market demand, they do not allow manufacturers to overcome the high infrastructure costs described above, nor enable manufacturers to reduce labor requirements while simultaneously increasing overall productivity rates for their plants.
#5. A potential solution would be for Germany either to begin an active campaign that focuses on developing raw materials processing capabilities or to partner with companies that are already involved in the production of raw material processing technologies.
This would increase local self-sufficiency for German manufacturers, allowing them to reduce costs associated with importing pulp and SAP from other countries while also forcing diaper manufacturing equipment producers to remain competitive against foreign companies producing their own machines.
#6. As a final note, it is suggested that manufacturers hire external consultants who have expertise in developing diaper manufacturing equipment and those who specialize in germ protection tools & services.
These two concepts work hand-in-hand as outsourcing the production of pulp and SAP materials will allow German companies to focus all their energy on building high throughput diaper manufacturing machines instead of competing with foreign businesses that are already producing raw material processing equipment at lower costs.