Digital transformation in a company has to be a C level priority
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Aggiornamento: 10 ore fa
Interview with Silvano Gauch, LxBxH Gauch and Florian Mäurer, HK Verpackungen.
Digitalisation is now a decisive factor in how efficiently, resiliently and competitively companies in the corrugated packaging industry are positioned. But what does it mean in practical terms to make digitalisation a top level priority? What role does senior management play strategically, organisationally and culturally in the process?
We spoke to two decision makers from the sector who have already shared their current status and digitalisation initiatives within our Digitalisation Working Group.
In the interview below, both speak candidly about their personal digitalisation journey, measurable successes, internal resistance, and why cybersecurity has long been a core responsibility of business leadership.
“This makes IT a business critical infrastructure and places
it squarely within the remit of the highest level of
leadership.“ (Silvano Gauch)
Why did you decide to make digitalisation an active “CEO level priority” in your company?
Silvano Gauch: In theory, nothing in our company works without IT anymore: no orders can be taken, no quotations prepared, no packaging produced and delivered. That makes IT business critical infrastructure and it must sit firmly within the responsibility of the top level of leadership. For me, however, digitalisation is neither an end in itself nor a buzzword. It is a tool for achieving clearly defined goals: for example, reducing fixed costs per order, producing small orders profitably, or making processes more efficient.
As Managing Director, it is therefore essential today to build sound knowledge of digitalisation and technology, even without an IT background. You don’t need to be able to code yourself, but you do need to understand this business critical topic and be able to manage it strategically.
By the way, one key aspect that is often underestimated is cybersecurity. Digitalisation and IT security are inseparable. Every Managing Director should ask themselves: how long can my business keep running if IT is brought to a standstill by a cyberattack? At LxBxH Gauch, we know our systems are attacked daily, as is likely the case in every company. Fortunately, we have not had any major incident so far. Nevertheless, we have set ourselves up so that, in an emergency, we can keep our core processes (especially production and the dispatch of orders) going for several days even without functioning IT.
Florian Mäurer: Digitalisation is a CEO level priority for us because it is a strategic topic that affects every area of the business and will only work properly with clear prioritisation and committed implementation.
Digitalisation makes knowledge available across the team: systems support employees in their day to day work, take pressure off them, and at the same time ensure traceability. This improves our ability to cover for absent colleagues, makes us more resilient when staffing is tight, and reduces reliance on key individuals. At the same time, digitalisation creates transparency and standardisation: decisions become traceable, processes measurable, and continuous improvement only becomes systematically possible in the first place.
“Digitalisation is a CEO level priority for us because it is a strategic
topic that affects every part of the business and will only truly work
with clear prioritisation and committed implementation.“(Florian Mäurer)
What role have you personally taken on in the digitalisation process?
Silvano Gauch: I take direct responsibility for software development and our IT infrastructure. This also includes risk analysis and continuously strengthening our defences against cyberattacks.
I also set the strategic direction for future digitalisation goals, for example exploring whether and how we can use AI in a meaningful way. The detailed design and implementation are then carried out largely in close collaboration with specialised external service providers. External partners support us across all relevant areas, including IT infrastructure, the ongoing development of our in house ERP system, and 24/7 cybersecurity monitoring. The strategic direction, however, remains clearly anchored within the management team.
Florian Mäurer: I take the lead role in the digitalisation process. Thanks to my long standing background in IT, I’m familiar with many processes across different industries, so I actively drive the continuous digitalisation of our processes both strategically and operationally. I gather requirements from colleagues, develop suitable concepts and implement them, followed by joint testing and further optimisation. Over time, this has resulted in a comprehensive in house system that interfaces with our existing ERP system. For instance, it provides information on mobile devices directly on the shopfloor and helps us to digitalise our processes in a targeted, step by step way (see the high level system architecture in the screenshot). This allows us to respond flexibly to new requirements and significantly increase the pace of our digitalisation.
Did you start out with a clear digitalisation strategy, or did projects emerge gradually over time?
Silvano Gauch: When I joined the company 25 years ago, computers were essentially used as digital typewriters. Costings were done by hand with a pencil, emails ran on a separate computer, were printed out, answered, and then typed up again.
Before joining what is now LxBxH Gauch, I worked in the e commerce environment and had a clear vision: a “dotcom packaging company”. My goal was a website that could automatically calculate prices for folding cartons without any manual input from employees. In other words, an e commerce platform for corrugated packaging, including the backend.
I pursued this step by step. What mattered most was an iterative approach: each time, we digitised the process where we expected the greatest labour or cost savings, starting with product costing, then production planning, and later customer acquisition as well. The advantage was that we were able to put partial systems into productive use quickly, delivering immediate, measurable savings. That convinced employees because they could see the benefit straight away. Today, you would describe this approach as “agile development”.
Over time, the individual modules merged into an end to end overall system that covers the entire process from the customer enquiry through to delivery. My overarching objectives were always clear: save time and costs, and increase product and process quality. End to end, partly redundant data availability reduces errors and significantly improves process reliability.
Florian Mäurer: We made a conscious decision to start with small, manageable steps rather than spending a long time developing an elaborate, “all encompassing” strategy. Our initial focus was a clear and realistic goal: digitising warehouse management. That allowed us to gain first experience and introduce our colleagues to the new system gradually, step by step. From there, we expanded into other areas and implemented targeted improvements.
Big plans, by contrast, often fail: overly long preparation phases drain motivation. Comprehensive processes that are developed in full and then rolled out all at once overwhelm users. And during a rigid implementation, practical feedback is often missing, which not infrequently leads to wrong turns and wasted investment.
What measurable impacts have you already achieved through digitalisation?
Silvano Gauch: The impact has been substantial. Over this period, we increased the number of orders by 160% and manage that volume with significantly fewer employees than we did in the past. We also reduced the average lead time from the start of production from 24 days to 10 days.
Progress is particularly evident when it comes to pricing customised packaging: new calculations are now completed around ten times faster than before. At the same time, far less specialised production know how is required to produce a robust quotation. This noticeably increases our flexibility and competitiveness.
Florian Mäurer: The first major step mainly created far greater transparency in the warehouse: pallet locations can now be retrieved live at any time, and goods and materials can be located immediately. Cover also works smoothly, because information is available without having to ask around or spend time searching.
Loading times have been noticeably reduced, because the loader always knows exactly where the goods are. “In the past, a loader might easily spend ten minutes searching. Today, they scan and drive straight to the right pallet.”
This not only boosts efficiency in the warehouse significantly, but also lays the foundation for further growth.
Were there any reservations or resistance internally? How did you deal with that?
Silvano Gauch: Over the past 24 years, the resistance has been enormous, and in some cases it still exists today. Many employees feared being replaced by software or losing control over pricing and production planning.
In my view, that’s exactly why a software project must not be implemented as a “big bang” exercise along the lines of “everything new, all at once”. It overwhelms the organisation. Instead, the workforce needs to be brought along on the journey. We deliberately focus on small, continuous steps. If issues arise, users can report them at any time and roll back to the previous release. The problems are then usually fixed immediately. This iterative development lowers the barrier to entry and increases acceptance.
Dialogue with employees is crucial. At the same time, resistance to change must not be allowed to block progress. What works is a combination of strategic leadership from senior management and practical, shopfloor driven input from the workforce. People like routines. Change takes energy. That’s why digitalisation has to deliver tangible relief, not add extra burden.
Florian Mäurer: Of course there were reservations: “It’s always worked so far”, “I don’t know anything about this stuff” – especially among older colleagues who hadn’t used much technology before. But I simply got started anyway: a short introduction and quick wins. The scepticism disappeared quickly. Today, suggestions for further development come from the colleagues themselves.
What were the most important success factors on your digitalisation journey?
Silvano Gauch: Two factors were decisive for me:
Clear prioritisation of digitalisation initiatives based on labour savings. When employees experience first hand how much time a solution takes off their plate, acceptance rises automatically.
The principle that “the ‘machine’ works for people, not the other way round.”
Digital solutions must not create a sense of loss of control. In our organisation, employees still define key parameters such as selling prices, order sequencing or machine run times. The digital solution then implements these inputs efficiently. Digitalisation should improve work, not turn people into assistants to the software. This principle was essential for long term acceptance.
Florian Mäurer:
Starting small: We deliberately started small and simple. Instead of a large project, we began with a manageable pilot area in the warehouse. The system could grow together with the workforce, early successes immediately created acceptance and took away fears of the new. If we had overreached at the beginning, motivation would have been drained quickly.
Maximum simplicity: Maximum intuitiveness and ease of use. We only built in functions that genuinely fit our processes, without unnecessary menus or a flood of buttons. Every colleague, including tech sceptics, can find their way around instinctively, which makes day to day work far easier.
High speed: We were able to go live with the first functions after just two weeks, with no months long waiting time. After that, we expanded step by step based on real feedback. That made adoption almost self sustaining. Colleagues gradually trained themselves and today they even ask for further
What priorities do you see for further digitalisation over the coming years?
Silvano Gauch: In the packaging industry, we are seeing order sizes decline. To keep the costs per new customer, per quotation, per order and per production run stable, or reduce them further, additional manual process steps will need to be fully automated.
That’s why our new digital sales and enquiry platform on the website (lxbxh.ch; user interface shown in the graphic) will become increasingly important. We recently launched its third generation and will continue to optimise it on an ongoing basis. We are also steadily pushing ahead with digitalisation in production. However, I haven’t yet defined any specific major projects for this year, as we implemented significant steps over the past two years and now want to consolidate them.
One thing remains clear: digitalisation is not a project that ends it is a continuous process, aimed at securing efficiency, quality and competitiveness in the long term.
Florian Mäurer: Looking ahead, we’re approaching a decisive turning point: either we translate our proven, practice tested know how with clearly defined, real world requirements into established standard software, or we put our in house development on a broader footing and turn it into a product of our own. That way, we can make the benefits of our solutions available to other companies as well and, with greater shared resources, drive digitalisation forward successfully.
Our industry urgently needs a modern, simple and adaptable digital platform with open interfaces, so that we can integrate innovative tools such as AI for smart forecasting or workflow automation at speed. That’s how we’ll be equipped for the dynamic business of the future and always use the best fit solutions, without having to wait years for updates or customisations in a traditional ERP environment.
“Digitalisation is not a project that ends, but a continuous process
aimed at securing efficiency, quality and competitiveness in the long
term.“ (Silvano Gauch)
We would like to extend our sincere thanks to both interview partners for the open conversation and the valuable insights they shared from their experience.
In closing, both emphasise that digitalisation is not, and should not become, a competition about hiding solutions. It thrives on open dialogue. Exchange benefits both sides. Anyone facing similar challenges, looking for fresh impulses, or keen to share their own experience is warmly invited to contact Philipp Blank, Head of Professionals Academy (pblank@professionals-academy.de). He will be happy to connect you with Silvano or Florian. It is often precisely these encounters that spark the best ideas and not infrequently even lead to joint projects.