Jan/ Feb 2017 AICC Boxscore

January/February 2017 Vol. 21, Issue 1

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A PUBLICATION OF AICC, THE INDEPENDENT PACKAGING ASSOCIATION

January/February 2017 Volume 21, No. 1

PLANTS FUTURE THE

OF

VIEWS FROM THE LEADING EDGE

ALSO INSIDE Looking Forward in the Corrugated Industry A Technology Renaissance Two New Columns!

TABLE OF CONTENTS January/February 2017 • Volume 21, Issue 1

COLUMNS

40 FEATURES

40

LOOKING FORWARD IN THE CORRUGATED INDUSTRY An interview with John Burgess, president of Pamarco’s flexo division

50

CHAIRMAN’S MESSAGE

6

SCORING BOXES

10

LEGISLATIVE REPORT

14

MEMBERS MEETING

17

ASK RALPH

18

SELLING TODAY

20

TACKLING TECH

22

NEW! SAFEGUARD

24

LEADERSHIP

26

NEW! MARKETING MIX

54

THE ASSOCIATE ADVANTAGE

56

FOLDING CARTON

60

FINANCIAL CORNER

64

THE FINAL SCORE

PLANTS OF THE FUTURE Views from the leading edge

46

5

A TECHNOLOGY RENAISSANCE The considerations of risk and reward when investing in new tech

46 50

DEPARTMENTS

12

WELCOME NEW MEMBERS

29

GOOD FOR BUSINESS

32

POINT OF VIEW

36

MEMBER PROFILE

62

ICPF UPDATE

Visit www.aiccboxscore.org for Member News and even more great columns. Scan the QR code to check them out!

BoxScore is published bimonthly by AICC, The Independent Packaging Association, PO Box 25708, Alexandria, VA 22313, USA. Rates for reprints and permissions of articles printed are available upon request. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of AICC. The publisher reserves the right to accept or reject any editorial or advertising matter at its discretion. The publisher is not responsible for claims made by advertisers. POSTMASTER: Send change of address to BoxScore, AICC, PO Box 25708, Alexandria, VA 22313, USA. ©2017 AICC. All rights reserved.

BOXSCORE www.aiccbox.org

1

OFFICERS Chairman: Tony Schleich, The Lawrence Paper Company, American Packaging Division Vice Chairman: Al Hoodwin, Michigan City Paper Box Vice Chairman: Joe Palmeri, Jamestown Container Companies Vice Chairman: Jay Carman, StandFast Packaging Vice Chairman: John Forrey, Specialty Industries/Krafcor/ NuPack Printing DIRECTORS-AT-LARGE Jim Akers, Akers Packaging Kevin Ausburn, SMC Packaging Group Matt Davis, Packaging Express Marco Ferrara, Cartones Sultana Jana Harris, Harris Packaging Corp.

Nelva Walz, Elegant Packaging REGIONAL DIRECTORS Region 1: Doug Rawson, Superior Lithographics Region 2: David DeLine, Deline Box Company Region 3: Justin Mathes, Vanguard Companies Region 4: Eric Elgin, Oklahoma Interpak Region 5: Gary Brewer, Package Crafters Inc. Region 6: Guy Ockerland, OxBox Region 7: Finn MacDonald, Independent II Region 8: Joe Hodges, Mid-Atlantic Packaging Region 9: Larry Grossbard, President Container Group Region 10: Peter Hamilton, Rand-Whitney Corporation Region 11–12: John Franciosa, McLeish Corr-A-Box Coyle Packaging Group Region 14: Yair Caballero, Corruempaques Overseas: Kim Nelson, Royal Containers Ltd. President: A. Steven Young, AICC Headquarters

Immediate Past Chairman: Mark Williams, Richmond Corrugated, Inc. Chairman, Past Chairmen’s Council: Greg Tucker, Bay Cities Container Corp.

Secretary/General Counsel: David P. Goch, Webster, Chamberlain, and Bean Counsel Emeritus: Paul H. Vishny, Esq. ASSOCIATE MEMBER DIRECTORS Chairman: Jeff Pallini, Fosber America Vice Chairman: Ed Gargiulo, Equipment Finance Corp Secretary: David Burgess, JB Machinery Director: Pat Szany, American Corrugated Machine Corp.

Immediate Past Chairman: Keith Umlauf, Haire Group ADVISERS TO THE CHAIRMAN Gene Marino, Rusken Packaging Jeff Pallini, Fosber America Tom Shallow, Fitzpatrick Containers PUBLICATION STAFF Publisher: A. Steven Young, syoung@aiccbox.org Editor: Virginia Humphrey, vhumphrey@aiccbox.org EDITORIAL/DESIGN SERVICES The YGS Group • www.theYGSgroup.com Editorial Director: Annette Gray Managing Editor: Ashley Reid Copy Editor: Steve Kennedy Associate Editor: Drew Bankert VP, Marketing Services: Jack Davidson Creative Director: Serena Spiezio Art Director: Jason Deller Account Manager: Brian Hershey

SUBMIT EDITORIAL IDEAS, NEWS & LETTERS TO: BoxScore@theYGSgroup.com CONTRIBUTORS Mike D'Angelo, Vice President Maria Frustaci, Director of Administration and Director for Latin America Cindy Huber, Director of Meetings and Conventions Chelsea May, Member Services Coordinator Laura Mihalick, Senior Meetings Manager Taryn Pyle, Director of Training, Education and Professional Development Richard M. Flaherty, President, ICPF ADVERTISING Information: Virginia Humphrey, vhumphrey@aiccbox.org Opportunities: Howard Neft, InTheKnow Inc. 847-899-7104 • thneft@aol.com Folding Carton and Rigid Box Advertising: Taryn Pyle 703-535-1391 • tpyle@aiccbox.org AICC PO Box 25708 Alexandria, VA 22313 Phone 703-836-2422 Toll-free 877-836-2422 Fax 703-836-2795 www.aiccbox.org

ABOUT AICC AICC, The Independent Packaging Association, is uniting and celebrating the success of inspired, independent packaging companies. We are a growing membership association which has served independents since 1974.

AICC SERVES: Passionate professionals; The independent and united;

The responsive and agile.

AICC WILL: Connect and cultivate; Deliver success.

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Chairman’s Message

ORGANIZATIONAL AGILITY

I

am excited to be settling into my new role as chairman of AICC and, through my initial travels, I have been constantly reminded of the incredible people who make up this industry! Although I have a bit of an aggressive schedule ahead of me, I remain excited to meet as many of you as I can, learn as much as I am able, and hopefully evangelize the benefits of my theme—principled leadership.

A principled leader is one who makes decisions framed by what they hold as immutable truths based on their core values. While we each possess our own core values, we need to be reminded that it is OK to profess them and encourage others to live them rather than just keep them inside.

In my first letter, I talked about one of five pillars of principled leadership: integrity.

Now, I would like to concentrate on our second pillar of principled leadership: agility.

My company learned to define agility as: “Act quickly and decisively to create killer solutions that make raving fans of our external and internal customers.” To complement our definition, a quick Google search for “organizational agility” yields: “The capability of a company to rapidly change or adapt in response to changes in the market.

An organization with a high degree of organizational agility can help a company to react successfully to the emergence of new competitors, the development of new industry-​changing technologies, or sudden shifts in overall market conditions.”

As you will most certainly appreciate, this issue of BoxScore is dedicated primarily to technology and innovation. Most will agree that a company’s organizational agility with respect to both of these is critical to its longevity.

Too much organizational flexibility may lead to a company taking too long to make critical decisions and changes that possibly lead to a lack of focus, or maybe even overanalyzing a situation to the point of “analysis paralysis.” Conversely, too much organizational rigidity may lead the company to be stuck in the way things have always been done—perhaps mired in a bureaucracy of red tape, processes, systems, procedures, etc.

The point of all of this is that a company’s ability to foster a culture of innovation and calculating when it is appropriate to invest in technology can be the key pivot point of a company’s agility. And the company’s ability to respond in a timely fashion will almost always benefit the organization in the long term.

I very much look forward to meeting with you and learning about your innovations and how you have embraced the new technologies available to our industry.

Tony Schleich President, The Lawrence Paper Company, American Packaging Division Chairman, AICC

BOXSCORE www.aiccbox.org

5

Scoring Boxes

IS SLOW GROWTH THE NEW NORMAL?

BY DICK STORAT

L

ike anyone in the packaging business, independent converters depend on economic growth to spur growth in demand for packaging. Ever since the last recession, optimistic economic forecasters have been predicting that annual economic growth would return to the 3 percent levels that characterized the best years before the downturn.

The reality has been quite different, however. Since 2012, the fastest annual rate of gross domestic product (GDP) growth has been the 2.6 percent advance recorded last year. And at the time of this writing, it is likely that GDP growth will not top 1.5 percent, its slowest advance since the last recession.

Despite rosy expectations, slow economic growth seems to be the new normal.

Why is that?

Fundamentally, that slower pace of growth arises for two reasons. First, the U.S. population has been growing slowly—less than 1 percent per year— and, consequently, the entry of new workers into the labor force has been slow.

And aside from adding more workers to the labor pool, output can grow only if those workers become more efficient. Yet, productivity growth has been lagging, despite the promise that advanced technology would spur new gains. The most recent data from the U.S. government shows that from the third quarter of 2015 to the third quarter of 2016, productivity in the nonfarm business sector was unchanged.

In large measure, productivity gains depend upon business investments that increase output per hour, or in

U.S. GDP Growth by Component & Total 3.5 2.5 2

1.4%

1.5

0.8%

0.9%

1 0.5 0 -0.5

SOURCE : BE A

Percent Change Annual Rate

2.9%

2014 = 2.4% 2015 = 2.6% 2016 (F) = 1.5% 2017 (F) = 2.2%

3

-1 -1.5

15Q4 Personal Consumption

6

BOXSCORE January/February 2017

16Q1 Fixed Investment

16Q2 Inventory Change

16Q3 Trade

Gov't

Total

infrastructure improvements such as better highways that can reduce the transit time for goods or services. Business investment has made no contribution to economic growth during the past four quarters. In the chart below, the major contributors to GDP growth are shown.

The blue columns show that the contribution of business investment to economic growth has been nil since the last quarter of 2015. Even more depressive to economic growth has been the impact of inventory reductions since October 2015, shown in the yellow bars as subtractions from economic growth. According to Moody Analytics, a macroeconomic forecaster, about half of the difference between earliest estimates of 2.9 percent growth this year and the 1.5 percent likely to be achieved has been caused by depletion of excess inventories. During this year’s third quarter, the buildup in inventories added 0.6 percent to overall growth. In other words, absent that inventory growth, growth would have been only 2.3 percent, not the 2.9 percent currently estimated.

Productivity gains have been easier to achieve in the manufacturing sector than in the service sector. Indeed, when it comes to service, taking one’s time may be the ultimate definition of good service. Who wants a faster haircut?

American households spent more than twice as much on services as they did for goods last year. Since 2000, the share of Americans working in manufacturing has decreased from 13 percent to 8 percent. Over the same period, the share working in health, education, and

Scoring Boxes

restaurant services has advanced from 17 percent to 23 percent. Over the 10 years ending in 2014, the productivity growth in these service sectors has ranged from 0 percent to –0.6 percent per year.

Between 1987 and 2014, overall service sector productivity gains have averaged –0.2 percent per year, according to the Brookings Institution.

Further hampering the difficulty of achieving service sector productivity gains is the negative impact of absorbing workers whose underlying skills may not be well-suited to their new jobs. If manufacturers shed their least productive workers first, manufacturing sector productivity will improve as a result of the downsizing, but the service sector will absorb workers who may be ill-suited for

their new jobs, further depressing service sector productivity.

That shift almost entirely explains the difference between the measured annual productivity growth of 1.6 percent in manufacturing and 0.2 percent in services in 18 OECD countries between 1970 and 2005, according to Alwyn Young, an economist at the London School of Economics and Political Science.

Research suggests that there is room for improvement in service sector productivity. OECD research suggests that the most productive service firms were three to four times more productive than laggards in 2013. The top 5 percent of firms studied showed labor productivity growth of 3.6 percent per year, on average, almost 10 times as fast as the bottom 95 percent.

This research suggests that reforms to remove barriers to entry and to promote competition in services, especially in health and education, could have a powerful impact on productivity growth.

But, until those gains are realized, economic growth in developed economies around the globe is likely to continue advancing at rates of less than 3 percent per year, limiting the prospects for rapid gains in packaging demand.

Dick Storat is president of Richard Storat & Associates. He can be reached at 610-282-6033 or storatre@aol.com.

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BOXSCORE January/February 2017

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Legislative Report

SAVING JOBS THE RIGHT WAY

BY JOHN FORREY

A

merica’s economy is the greatest in the world. However, I think we can all agree that we are far from reaching our potential. Anemic growth, flat wages, and more than 94 million people out of the workforce is a good place to start the conversation.

Let’s talk about jobs. Recently, the news headlines hailed the saving of 1,500 jobs in Indiana (Carrier Corporation).

While I think we can all appreciate the good intentions of President Trump in pursuing this action and even applaud Carrier for taking the high road, most business people can agree that this action is really out of sync with our freemarket economy.

So, how can the new Trump administration save jobs and do it right? Well, I’ve not been part of Trump’s inner circle of advisers, but if I were, I would counsel the president to work with Congress to create a business climate that encourages business to grow here rather than relocate elsewhere. How? Well, from a federal level, this starts by rewriting the

corporate tax code. According to the National Association of Manufacturers (NAM), the United States—and also our Canadian neighbors—has the highest corporate tax burden of any other of our G8 partners. This, coupled with various regulatory burdens and labor costs, puts our manufacturing sector at a 22 percent disadvantage right out of the gate.

Now, I’m not suggesting we dismantle all environmental regulation or labor laws. But we do need to take a fresh look at what’s on the books now and see how we can lessen the burden placed on businesses, especially small, privately held companies such as AICC’s general members. Capping the amount of regulatory costs Washington can impose on your businesses and ending needless delays on energy and pipeline projects would be a good start toward lowering costs and creating more well-paying jobs.

Personally, I endorse Trump’s suggestion that it be a requirement that for every new federal regulation, two existing regulations be eliminated.

We need to take a fresh look at what’s on the books now and see how we can lessen the burden placed on businesses, especially small, privately held companies such as AICC’s members.

10

BOXSCORE January/February 2017

In the past four years, we have numerous examples of enacted regulation—many solely by executive order—that pits the government against business. The Department of Labor’s overtime rule (challenged now in court); the EPA’s clean-power standards; and the National Labor Relations Board’s (NLRB) union organizing and election guidelines come immediately to mind.

It seems to me that we in the manufacturing community have a wonderful opportunity in the coming years to retool our country’s approach to economic and business policy. In the coming issues of BoxScore, I want to explore how we can better work as an association united in this effort. Our most public way of influencing federal policy is our Washington Fly-In, held annually in June. This year, we will again be joined by the Printing Industries of America (PIA), but we are also reaching out to other packaging-related organizations to create a sort of “Paper, Printing, and Packaging Consortium” to amplify our voice.

So, as I have in many past editions of this column, I encourage you to set aside the time to come to Washington this year and be part of a new era in our relationship with federal legislators and policy makers. Details will be available soon.

John Forrey is president of Specialty Industries and NuPak Printing in Red Lion, Pa., and is chairman of AICC’s Government Affairs Committee. He can be reached at 717-246-4301 or jforrey@specialtyindustries.com.

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New Members

WELCOME, NEW MEMBERS! CL RABB BRYAN RABB CEO P.O. Box 6009 Gastonia, NC 28056 Phone: 704-865-0295 Fax: 704-868-8358 www.clrabb.com bryan.rabb@clrabb.com CUIR FABIEN VAL CEO 14 rue du Pont de Grès Pas De Calais 62220 Carvin France Phone: +33 3 21 69 25 34 www.cuir.com fabien@cuir.com DURST NORTH AMERICA CHRISTOPHER GUYETT Sales & Marketing Coordinator 50 Methodist Hill Drive, Suite 100 Rochester, NY 14623 Phone: 585-486-0340 Fax: 585-486-0350 www.durstus.com cguyett@durstus.com EPICOR SOFTWARE KAREN SKOGSBERG Marketing Manager 804 Las Cimas Parkway Austin, TX 78746 Phone: 800-999-1809 www.epicor.com karen.skogsberg@epicor.com

12

BOXSCORE January/February 2017

FELINS USA REGINA BASCONI ATS Automation Sales Manager 8306 W. Parkland Court Milwaukee, WI 53223 Phone: 800-843-5667 Fax: 414-355-7559 www.felins.com regina.basconi@felins.com

PROVIDENT LLC ANDY GILLIS General Manager 2319 E. Pensar Drive Appleton, WI 54911 Phone: 920-733-5415 Fax: 920-733-5913 www.providentgrp.com agillis@providentgrp.com

KNOXVILLE BOX & CONTAINER CHRIS CASTLEBERRY President 2129 Chipman St. Knoxville, TN 37927 Phone: 865-523-6772 Fax: 865-523-6773 www.knoxvillebox.com chris.castleberry@knoxvillebox.com

STITCHING AND GLUING SOLUTIONS JEFFREY JENSEN President 9848 Redhill Drive Cincinnati, OH 45242 Phone: 513-588-3199 www.stitchingandgluing.com jeff@stitchingandgluing.com

PPC TECHNOLOGIES & SOLUTIONS RICHARD McDONALD President 1092 Riverway Court Penaukee, WI 53072 Phone: 262-695-7536 Fax: 262-695-7536 www.ppcts.com rmcdonald@ppcts.com

TAP PACKAGING SOLUTIONS TONY HYLAND President & CEO 2160 Superior Ave. E. Cleveland, OH 44114 Phone: 800-827-5679 www.tap-usa.com

Thank you for supporting

i

AiCC.

Members Meeting

REGION 4 ROCKS TEXAS

BY MIKE D’ANGELO

A

ICC’s Region 4 Digital Symposium and Plant Tours kicked off with an opening reception and dinner at the Hilton in Rockwall, Texas. The twoday program was led by Regional Director Eric Elgin of Oklahoma Interpak and had a registered attendance of more than 70.

After remarks from AICC President Steve Young on the state of the Association, there was a keynote presentation. Texas Association of Manufacturers President Tony Bennett presented a comparison of what manufacturers want and what President Donald Trump might do. Areas explored were taxes, trade, regulation, workforce, energy, health care, and transportation. Bennett’s remarks were particularly informative to the box business, given his history as vice president of government affairs at Temple-Inland.

Thursday’s program opened with a presentation on educational opportunities in graphic arts and package manufacturing in Texas from Ben Dolezal of the University of Texas–Arlington. Next up, Steve Shannon and Pat Boss presented “The World Is Going Digital,” a view of the market evolution from HP’s perspective. Performance POP in Dallas and ABox in Forney, Texas, run HP digital presses. Numbers on digital growth through 2020 in various markets were presented. Compound annual growth rate was as follows, according to PIA: labels, 18 percent; flexible packaging, 28 percent; folding carton, 26 percent; point of purchase, 14 percent. Digital is seen as a complement to existing printing methods and offers unique opportunities for supply-chain optimization and marketing optimization. According to PIA,

14

BOXSCORE January/February 2017

AICC members touring ABox.

digital business comes from the following channels: transfer from existing print, 25 percent; new jobs from existing clients, 37 percent; new jobs from new clients, 38 percent. The driver for digital comes from what HP referred to as “the customer moment of truth,” a statement backed by POPAI data that shows that 76 percent of supermarket buying is unplanned.

Individual presentations by several digital suppliers were next on the program. Emilio Tellini of Gemini North America presented the Barberan digital press. David Carmichael of SUN Automation presented their CorrStream press, which is geared to the corrugated market. Don Coggswell and Wolf Verwuster of Durst North America presented an overview of digital from the various markets they serve, along with the latest digital packaging press.

Greg McGrath of Baldwin reviewed the range of accessories and complementary equipment they offer for digital printing operations. Josh Moore of PackageX presented their online tool that can be utilized to manage, purchase, and deliver graphically rich packaging and point-ofpurchase displays.

After a short break, Greg White of Performance POP shared the history of his company and its current mission in today’s market. The journey took them from being a commercial printer that evolved into a point-of-purchase-display supplier to one that today provides solutions for “anything retail” in terms of display solutions. This overview was very helpful ahead of the subsequent tour of their operation in the afternoon. Then, Keith Thompson, Pylar Pinkston, and

Mike Goody of ABox shared—via a very compelling internal Q&A—the ABox journey to opening an integrated digital printing and converting operation in a new facility. John Ballentine of Tango Press shared his company’s vision of how a startup digital printing operation brings value in the marketplace as Tango focuses exclusively on packaging. Next, AICC’s newest resident expert, Tom Weber, was introduced. Weber will tackle member questions related to folding carton technology, opportunities, and markets as part of AICC’s expanding “Ask the Experts” series. Tom moderated a question-and-answer session with the tour hosts.

Visits to Performance POP and ABox capped the day’s activities. Two paths to digital were on display for the attendees.

Performance POP’s addition of digital presses complements their existing litho and screen printing processes. ABox’s leap into digital with a new, dedicated plant with digital printing, die cutting, and folding and gluing stands apart from their existing folding carton converting operation.

The common theme expressed by all presenters during this highly successful Region 4 meeting was that “demand is changing”—at retailers, in consumer packaged goods, and by consumers. Are you equipped to meet the challenge?

Mike D’Angelo is vice president of AICC.

Register Now and Save!

Super Early Registration Deadline: February 17

2017 Spring Meeting &

Ed Wallace, Keynote Speaker

Independents’ Cup Charity Golf Tournament April 26–28, 2017, Hyatt Lost Pines Resort & Spa, Austin, Texas

Austin, the Texas Capital and Live Music Capital of the World

®

and the location of the AICC 2017 Spring Meeting and 4th Annual Independents’ Cup Charity Golf Tournament.

The 2017 Spring Meeting will feature a three-day series of general

sessions, workshop tracks, plant tours and networking and social events. The spring meeting will feature the popular Sales Managers’ Forum and a special Human Resource (HR) Summit for HR professionals and those that handle HR in the company.

Dinesh D’Souza, Keynote Speaker

Keynote Presentations: Ed Wallace, Author, Speaker and President & Chief Relationship Officer, The Relational Capital Group will kick off the meeting with a keynote on Investing in Relationship Capital followed by a two-day workshop track on the Five Steps for Transforming Contacts into High Performance Relationships and Winning Through Impactful Customer Meetings.

Dinesh D’Souza, Renowned Filmmaker, Author and Scholar will close the meeting with an inspirational and motivational presentation on What’s So Great About America.

The Hyatt Lost Pines Resort and Spa, located on 405 picturesque acres along the Colorado River between Austin and Bastrop, offers a family friendly setting with luxurious accommodations and onsite recreation and entertainment to please kids of all ages. In your spare time play golf at the championship-level Wolfdancer Golf Club, go for a hike, enjoy horseback riding and river kayaking, zip line through the trees, make s’mores, relax at the spa, or take advantage of the free daily activities. The young and young at heart will also enjoy the Crooked River Water Park with its’ flowing Crooked River, pools, two-story water slide and much more. Lost Pines is located adjacent to the 1,100 acre McKinney Roughs nature park.

Entertainment, Fine Dining & Shopping

Hyatt Lost Pines Resort

The 4th Annual Independents’ Cup Charity Golf Tournament

to benefit national and local charities takes place Thursday, April 27th at the Wolfdancer Golf Club. Wolfdancer, named in 2015 as one of the “Best Resort Courses” by Golfweek, is an 18-hole, 72-par, 7,025 yard, Arthur Hills & Associates designed course located on the Lost Pines property.

Registration Open! visit aiccbox.org/meeting for details

It’s All Happenin’ in

©2017 AICC, PO Box 25708, Alexandria, VA 22313 | 877.836.2422 | aiccbox.org

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Ask Ralph

A WORLD OF CONTAINERBOARD AND CORRUGATED

BY RALPH YOUNG

F

or my articles this year, I intend to focus on issues that a new person to this segment of the packaging industry would find helpful. Corrugated packaging is very much a local and somewhat regional business. Yes, your company may have national partners through FirstPak connections, but generally you serve a limited marketplace.

You might be asked for—or preferably you can present to your current or prospective clients—a broader picture of the international aspects of containerboard and corrugated packaging. World economies and current trading conditions impact the availability of various grades and pricing. This past November, Steve Young and I attended and participated in the biennial International Containerboard Conference sponsored by RISI. Many major domestic containerboard manufacturing and corrugated companies participate in this event, as do brokers from around the world who know current market conditions. On this recent occasion, I was delighted to make new network contacts from the United Kingdom, Ireland, Brazil, Mexico, Russia, Germany, Italy, and Saudi Arabia. They are usually very interested in the independent market in North America and the amazing quality of U.S. containerboards.

The International Corrugated Case Association (ICCA) reports on corrugated shipments by country each quarter. It appears that they are able to capture corrugated production in about 50 countries/regions out of approximately

200 globally. Of course, some areas are estimates, as statistical gathering organizations are not available. China, according to ICCA, is by far the largest corrugated producer. They are also likely the largest containerboard producer.

Much of our old corrugated containers (OCC) are exported to China, and then the corrugated cases with products are shipped back to the United States and to many other trading partners. Almost all of the containerboard—and therefore corrugated—is made from 100 percent recycled fiber, with the OCC being infused with old newspaper, sorted office waste, and other waste fibers.

The United States is a significant exporter of virgin, natural kraft linerboard. We have the strongest fiber in the world from our Southern forests, and it is greatly desired for the critical environmental conditions that fresh fruit and vegetable packaging has to endure.

Currently, exports remain at record highs, reported at 25 percent of the present production of kraft linerboard.

Exports of recycled linerboard are almost nonexistent, as other areas of the world are commonly self-sufficient in corrugated production.

We need to look to the sleeping giant in both the Asian and the Eastern and Western European producers. Russia has tremendous forest resources, but a terrible infrastructure and a central, government-controlled economy that is currently focused elsewhere. Brazil also has tremendous resources but a local

We need to look to the sleeping giant in both the Asian and the Eastern and Western European producers. economy that is struggling. Mexico is an awesome trading partner that consumes a significant portion of our containerboard exports.

Capacity expansions, greenfield builds, incremental creep, newsprint, publication machine conversions, and moving of machines from one location to another will keep us on the edge of trying to understand global supply and demand balances, and ultimately, local pricing. While security analysts focus on the change in tons, I benchmark the more definitive view of “What are the new grades being brought into the marketplace?” Are you ready to embrace the opportunity? Our average combined board grades are 42/33/42 and in Europe 20/19/20. Interesting? alph Young is the R principal of Alternative Paper Solutions and is AICC’s technical adviser.

Contact Ralph directly about technical issues that impact the industry at askralph@aiccbox.org.

BOXSCORE www.aiccbox.org

17

Selling Today

18 WAYS TO SELL VALUE INSTEAD OF PRICE

BY GEORGE MORETTI

W

hen faced with a price lower than yours in a competitive situation, try using one or more of the following points to promote your value. It may save the sale and profit dollars.

1

Don’t get panicky. Hold the

conviction that your price is right.

Fear of price is the weakest point in selling. Be confident, and your customer will have more respect for you.

Find out why the price is lower. Find the vulnerable spot

in the competitive price—it’s nearly always there.

8

Modify the specifications, if

possible. Then you and your competitor are not figuring on the same thing.

9

Ask how much inventory.

quantity, quality, and service being compared.

Inventories in local warehouses enable the customer to carry less inventory on the floor. Is vendor-managed inventory something to consider? Is it a factor in the cost/price?

3

10

2

Get all the facts. Check the

Ask the customer to be reasonable. Persuade them to

make allowances for differences in your specifications or service that justify your price.

4

Be reasonable yourself.

Demonstrate the difference between price and value. Always avoid an argumentative attitude. Talk about the benefits the customer will receive instead.

5

Sell your company. Emphasize

all the good points about your company—its history, personnel, and reputation. Discuss your sales points one by one. Remember, professional, proactive, and positive salesmanship can win over price.

6

Find out if the customer is bluffing. Check to see if the lower

price is real or an assumed belief of the buyer. Sometimes a competitive price was never quoted by the competition.

18

7

BOXSCORE January/February 2017

Sell what you have. Feature

your designs, quality, special products or services, and those other things you do that no competitor can duplicate.

11 12

Expand the specifications. This

14

Discuss the product. Make

the customer understand that someone can always build an inferior product to a price; that inferior merchandise is never a bargain.

15

Cite examples. Sometimes it

makes sense to give the customer examples of people who bought on price alone.

16

Examine the competition.

Ascertain whether a mistake has been made in your company’s or your competitors’ estimates. By taking corrective action, you may make a friend.

17

Be flexible. Adjust your

quantities, qualities, and service to those of the competition and refigure.

18

Think of the future. Consider

the ethics and future implications of reducing or not reducing your price.

will shift the basis of comparison.

Sell your service. Emphasize

the advantage of dealing with a reputable company that backs up its products with good service.

13

George Moretti is president of GM Training & Consulting Group.

He can be reached at 716-909-1177 or gmtcg@roadrunner.com.

Check the products. Find out potential ways being used to cut back on the quality of the product.

AICC hosted this topic as an iWebinar on January 10, 2017. A recording of that webinar is available for purchase. There is also a seminar on 5 Sales Strategies That Work on Feb. 7–8, also hosted by AICC and featuring George Moretti. Visit www.aiccbox.org for more details!

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AICC’s Packaging University continues to expand the largest and most recognized curriculum of industry-specific webinars, forums, workshops and e-learning courses for independents in the Corrugated, Folding Carton and Rigid Box business. From Sales to Maintenance, Production Managers to CEO’s, AICC has comprehensive, targeted, training programs for all levels. Our instructors, both in and outside the paper and packaging industry, are respected and knowledgeable consultants with direct experience in the topic at hand.

It’s time to go back to school and get your business to the head of the class at AICC’s Packaging University.

Log on to the AICC Packaging University site at AICCbox.org, contact Taryn Pyle at tpyle@aiccbox.org or call 703.535.1391 to receive AICC’s new course catalog.

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113 S. West Street • Alexandria, VA 22314 • Phone +1.703.836.2422 • www.aiccbox.org

Tackling Tech

SMART MANAGEMENT — A VIEW THROUGH THE LOOKING GLASS

BY JOHN CLARK

T

he pace of technological changes is increasing at an amazing rate.

To put things into some sort of perspective, the phone in your pocket is 100 million times more powerful than the computers that landed men on the moon in 1969.

While the packaging industry has evolved at a nominal pace over the years, the explosion of new technologies and processes will force plants to make increasingly difficult decisions with greater risk and with less assurance of the outcome. Let’s look at some of changes you will face.

Approaching Fast The landscape of the packaging playing field is changing and shrinking at the same time. Mergers, acquisitions, and consolidations will continue, with the pace likely to increase. Faster, more sophisticated, and more capital-intensive machinery and logistical demands will force companies to pay a premium for what is the most critical component to a company’s success—volume.

With this increased potential reward comes exponentially greater risk. A wrong bet can be not only damaging; it can be fatal.

Digital printing is coming, and it’s going to change everything. The introduction of digital will be the biggest change in the industry since the flexo folder gluer, but its effect has a far broader reach. Companies will have to rethink how they purchase machines, hire and train employees, and sell value previously unrealized in order to justify a very large capital expense for a machine that will be obsolete in five years.

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BOXSCORE January/February 2017

Everyone talks about quality, but few have a firm understanding of how to quantify it.

With cloud-based computing, your computers are no longer on your desk; they are in your pocket. And not just your pocket, but your clients’ and vendors’ pockets as well. With cloud-based computing, the internet serves as a real-time bridge between you and your customers.

Inventory values are constantly updated, reorder quantity purchase orders can be automatically generated, and much of the friction that occurs during a transaction can be eliminated.

by extension, the true cost of serving the client—can be much more specific.

The growing of cannabis may seem unrelated to the world of packaging, but changing American perceptions may have a huge impact on the packaging industry.

Acreage planted in hemp produces four times as much fiber as a comparable area planted with trees. As it turns out, hemp is white by nature, reducing the need to use harmful chemicals to bleach the fibers.

Just Over the Horizon Everyone talks about quality, but few have a firm understanding of how to quantify it. The days of making a box with marginal quality are over. Orders today are rejected because the blue ink is dark blue, not midnight blue. Quality requirements range far beyond making and printing a box. In today’s world, the unitizing, shipping, and unloading of containers is just as important. Any false step can cost you money.

There are few—if any—points in the order completion cycle that create as much friction as the delivery planning and logistics. Decreased lead time, smaller order sizes, and having little or no control over your clients’ receiving protocols adds hidden costs to your operation and takes away from your bottom line.

Using a GPS, automated trip logs, and analytics, the true cost of delivery—and

Reality Check Every year, Fortune magazine prints a list of the 500 most profitable companies in the United States. Recently, a comparison was done between the lists from 1955 and 2015, a 60-year review of how the companies were performing. Only 12 percent of companies on the list in 1955 were still on it in 2015. The nature of American capitalism, the dynamics of “creative destruction,” forces companies to change, adapt, and transform to meet the demands of the marketplace. The packaging industry is not excepted from this dynamic.

John Clark is director of analytics at Amtech Software. He can be reached at jclark@ amtechsoftware.com.

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Safeguard

SAFETY PERCEPTION IMPACTS RISK-TAKING

BY DOUG FRIEL AND JOHN KIEFNER

S

When do the safety devices that protect us become a hazard?

Problems begin to surface when we rely on safety devices to protect.

22

BOXSCORE January/February 2017

afety professionals address most hazards in a sequential order of thinking: • Engineering solution (get rid of hazard altogether).

• Administrative controls (minimize the hazard through improved job process).

• Personal protective equipment (protect from the hazard).

Safety guards, interlocks, and other safety devices are often used to engineer out the hazard so that there is no longer danger present. Almost all machinery in industry has some level of safety built into it through various safety devices.

Variations of industry safety devices have also made their way into our homes and are used on a daily basis.

When do the safety devices that protect us become a hazard? Problems begin to surface when we rely on safety devices to protect. Have you heard the saying “People compensate for increases in perceived safety by taking more risk”? When we feel safe, we tend to take more risk.

Picture yourself driving with and without a seatbelt. Without the seatbelt, most people feel vulnerable. However, most people do not have that same sense of vulnerability when driving 75 mph with a seatbelt on.

We have convinced ourselves that we are safe with the seatbelt, yet injuries from a 75-mph accident could be significant.

A furniture factory I once worked with used an edge-bander to cut the edges off tables. A large guard was on a timed delay that allowed the operator to open it 30 seconds after the machine was shut off, allowing saw blades to come to a complete stop. The operator would tug each day on the guard after the machine was shut off

and wait until it opened. The operator did this for years without incident. One afternoon, maintenance was performed on the machine, affecting the delay timer. The next day, the guard released at 25 seconds, rather than 30 seconds, and the operator instinctively reached into the machine.

The blades had not yet come to rest and amputated a few of the employee’s fingers.

Although the guard may have prevented many previous injuries, it contributed to the employee’s complacency and sense of perceived safety.

Other examples of safety devices include interlocked machine guarding, personal protective equipment (back belts, fall protection harnesses, etc.), automatic shutoff of machinery (often triggered by temperature or time), audible and visual warning devices, smoke and heat detection, and much more.

Please take a moment, with the help of your employees, to identify safety devices throughout your company.

Explain the importance of these devices along with the consequences of bypassing safety devices. In closing, remind your employees that these devices are in place to help protect, but should not be relied upon. Safe decision-making prevents far more accidents than safety devices.

Doug Friel is vice president of Johnson, Kendall, and Johnson. John Kiefner, CSP, is safety specialist at the company.

Friel

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Leadership

SMART COMPANY

BY SCOTT ELLIS, ED.D.

A

sk a disruptive question, and you may get a dismissive answer. In a discussion of digital preprint the other day I asked a CEO, “How fast could you process orders if you didn’t have ink in your plant?”

He said it didn’t matter, because it wasn’t going to happen. I did not ask the question to annoy him, or to try to be clever, or to persuade him toward digital exclusivity. I asked the question to learn how his company dealt with change in the market. He dismissed the question as theoretical, as if I had asked him what

proactive. When we ask ourselves “what if,” we shift certainties to an uncertain state, and it can be unnerving. But if we are just asking questions about the marketplace, it is essential that we question the answers that were true in the past and make certain they are still viable. So, I will ask you a disruptive question: What are you doing to anticipate customer needs so you can make a profit meeting those needs in the future?

The answers to this question will probably be found in multiple sources. You will interview customers and study trends

Your company is not naturally inquisitive.

The value of learning as an organization must be encouraged with direction, time, and resources. would have happened if Napoleon had had a B-52. He is practical and smart.

He knows that the technology is only in the proving stage, and that the adoption of the new technology will take some time, if it happens at all. His mind went directly to the obstacles and unknowns, like ink costs or how variable print would be trimmed on the corrugator. I may have gone too far when I said, “I don’t know, but the person who figures it out may own your plant.”

Disruptive questions challenge the things we hold to be self-evident. They are essential if we are ever to become

24

BOXSCORE January/February 2017

in their industries. You will examine the advantages and costs of new technologies in packaging. You will learn from your own company employees how to improve and adapt your best practices. And some portion will be left to chance, but chance favors the prepared mind. Here are some ready sources of the data you’ll need:

1

Question your answers. A

whiteboard or a communal Google document is a good starting place to answer the question: What do we know for sure? Then question your answers— are they still true today? Have some of the

obstacles since been removed? Can it be reduced to a math problem? For example, to solve for the ink cost question I posed to my CEO friend, the cost of ink in his current production facility could be determined. In addition, he would consider the cost of printing (time, labor, and shipping). Then he would be in a position to compare projected costs of preprint (including shipping time and cost).

2

Study your customers’ industries.

Customer interviews will provide a wealth of information about the near horizon. They will tell you about the challenges and changing requirements for their industry. Keep in mind that most customers are as reactive as we are, so the long view is suggested here as well.

They may be as shortsighted as Henry Ford is attributed to have deemed them: “If I had asked people what they wanted, they would have said ‘faster horses.’ ” Study their industry, and see if there are impending changes that are likely. For example, what would you have changed five years ago if you had anticipated the impact that Amazon would have on the marketplace?

3

Become a learning company.

Internal process improvement will prepare you to be more adaptive to a variety of challenges. I am convinced that the smartest companies intentionally grow their company memory. They actively gather information so processes may be improved and root causes eliminated. In short, they listen well, they are proactive problem-solvers, and they keep track of lessons learned.

Leadership

In this way, they avoid solving the same problems repetitively.

Internal sources of this information include corrective action requests and ideas generated by every team member, and well-defined downtime codes that are tracked and lead to timely response. They can include meetings where salespeople discuss innovations and challenges they see on customer visits. As was mentioned in an earlier installment of this column,

it could include a formal report from anyone attending a seminar or a trade show. Gathering this information and making it accessible will inform your team in preparing for the future.

Your company is not naturally inquisitive. The value of learning as an organization must be encouraged with direction, time, and resources. The discipline of asking, discussing, and answering disruptive questions will be an important

part of this development. They disrupt the unquestionables and free us from comfortable certainty that would have us cruising the freeway on faster horses.

Scott Ellis, Ed.D., is a partner in P-Squared (P 2). He can be reached at 425-985-8505 or scottellis@psquared usa.com.

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BOXSCORE www.aiccbox.org

25

Marketing Mix

P+PB: HOW LIFE UNFOLDS CAMPAIGN WORKING FOR YOU ™

BY JOAN SAHLGREN

I

n the B2B world, marketing is often linked directly to sales, with features and benefits, lead generation, and databased email and direct mail campaigns front and center. For Paper and Packaging Board (P+PB), representing both the packaging and paper sides of the industry in a single promotional campaign means we don’t have just one product to sell or an array of product lines to promote.

Charged with stemming the decline on the paper side and helping grow the demand for packaging, how does the marketing campaign, launched just a year and a half ago, help create real preference for our industry’s offerings? How does it help the independent corrugated, folding carton, and rigid box industries?

First, what is the marketing campaign? The multiplatform integrated marketing campaign, Paper & Packaging – How Life Unfolds™, features TV ads, print ads, digital and online advertising, and a full suite of social media channels, with the website www.howlifeunfolds.com as the hub. Based on research, the advertising was developed with a consumer audience in mind.

How do we know it’s working?

In addition to immediately available marketing data on campaign performance (likes, shares, video views, website hits), P+PB tracks performance and impact using an attitude and use tracking survey.

Consumer attitudes about the industry’s products and their propensity to use them were measured before and after they saw the ads, both in print and on TV. Continued measurements about consumer recall are done after each TV flight airs.

26

BOXSCORE January/February 2017

After just one year on air, we saw some statistically significant improvement.

After just one year on air, we saw some statistically significant movement. Key metrics on perceptions of paper and packaging products among our target audience are shifting. They are listed below with 2015 ➝ 2016 totals, results August 2015 through May 2016. An asterisk (*) denotes significant improvement.

Personal Relevance Among the target audience members who recall seeing campaign ads, measures related to personal relevance have held steady or improved since the start of the campaign, and some show significant improvement. Survey respondents agreed with the following statements: • I think storing/keeping information on paper is still a valuable thing to do: 64% ➝ 78%* • Paper-based product packaging is an essential part of everyday life: 56% ➝ 68%* • Corrugated cardboard boxes are essential to the way I live my life today: 60% ➝ 63% Product Quality Attitudes among the audience members who recall seeing campaign ads have shown significant improvement around

the quality of paper bags and paper-based product packaging: • I prefer paper shopping and grocery bags to plastic: 48% ➝ 63%* • Products that come in paper-based product packaging tend to feel more premium: 52% ➝ 66%* • When a company decides to package its products in paper-based packaging, I think more highly of that company: 44% ➝ 63%* Attitudes around the quality of corrugated boxes are already high and remain steady: • I can rely on corrugated cardboard boxes to get my merchandise shipped/ delivered safely: 83% ➝ 84% P+PB continues to share results and data through an industry partners program. If you’d like to know more about the program, contact lauer@paperandpackaging.org and/or sign up for the newsletter at www.paperandpackaging.org.

Joan Sahlgren is director of public relations at the Paper & Packaging Board.

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BOXSCORE TIPS, TRICKS, AND SOLUTIONS TO BETTER BUSINESS

AICC TOOLBOX

OH MY BLOG!

M

embers have been visiting the Ask Ralph blog for years. Now, AICC offers www.aiccexperts.org, a blog featuring responses to the technical questions asked of all AICC advisers in corrugated, folding carton, and safety and risk management.

Ralph Young, AICC’s corrugated technical adviser since 2006, has served members for more than a decade, and will continue to answer all corrugated questions.

“The technical advice and service we receive from AICC is invaluable to our company’s efforts to stay current on industry trends,” says Cindy Borland, director of Marketing, Midland Packaging & Display.

Tom Weber, AICC folding carton technical adviser, uses his years of industry experience and his vast network to respond to all folding carton and paperboard questions.

Ralph adds, “Tom’s career path has paralleled mine, just on the other side of the aisle. He brings a wealth of exposure and talent to our technical expertise for both our general and associate members.”

Doug Friel, vice president, Johnson Kendall and Johnson, Inc., is also acting as AICC’s safety and risk management adviser to provide members with the

information they need to address their safety questions.

Mike D’Angelo, AICC vice president, says, “Doug has the knowledge and network to make sure AICC members can find the answers they need.”

Questions can be submitted to Ralph at ryoung@aiccbox.org, Tom at tweber@ aiccbox.org, and Doug at dfriel@jkj.com.

BOXSCORE www.aiccbox.org

29

Good for Business

EMPOWERMENT

4 WAYS TO EMPOWER YOURSELF BOTH PROFESSIONALLY AND PERSONALLY

BY AJIT NAWALKHA he most effective way to tackle the ongoing threat of being overwhelmed is to set aside external success formulas and start building personal qualities that get you moving toward your goals, no matter how confusing and chaotic things get.

Here are the most powerful qualities you must cultivate to build and sustain success in your life and work.

T 1

Focus

We live in a world of constant distraction. Between social media notifications, email pings, and message alerts, you get pulled in many different directions at every moment of the day. It makes it nearly impossible to concentrate for any period of time. Focusing on one task at a time, making sure it’s done well, and seeing it through to the end is a skill that will put you way ahead of everyone else.

Cultivate focus by cutting out anything and everything that takes you away from the task at hand. If you work with other people or in a noisy environment, get noise-canceling headphones. If you find it impossible to stop yourself from checking your email, turn off the Wi-Fi in your office or on your computer. There are even apps that allow you to block out wireless signals for a predetermined length of time.

While these may seem like extreme measures, they’re well worth enforcing.

When you have fewer distractions, you’ll find that continued focus isn’t hard to achieve.

30

BOXSCORE January/February 2017

2

Resilience

Resilience is about bouncing back: picking yourself up, dusting yourself off, and carrying on when life brings you to your knees. Many believe it’s a quality that you either have or you don’t, but I say that’s not entirely true. Like all other qualities, resilience can be developed.

Read books about it, hire a mindset coach, and find programs or seminars that show you how to strengthen this quality in yourself.

When you’re resilient, nothing and no one can hold you back or keep you down. It’s a trait that pretty much guarantees success.

3

Discipline

Not a lot of people talk about discipline anymore, making it seem like more of an old-fashioned term. But it’s certainly not outdated. More than ever, discipline should play a big role in our fast-paced, frenetic 21st-century world.

Discipline is essentially your ability to control your impulses and emotions.

You should call on discipline when you’re on a diet and a friend offers you an extra large slice of birthday cake, and you should call on it when you want to watch your favorite series on Netflix but need to finish that project for work.

Discipline allows you to continue on the path toward a goal. It turns you into an unstoppable force as you head toward success.

4

Courage

When it comes to achieving success, courage is probably the most

important quality of all. It’s the only one you can use to overcome fear.

It’s normal and natural to feel afraid as you pursue your goals and dreams.

Maybe you’re experiencing fear of failure, fear of being ridiculed by others, fear of financial ruin, etc. But if you allow these fears to dictate what you should and shouldn’t do, you won’t even want to get out of bed in the morning.

Courage is the only antidote to these fears, so you should strengthen your ability to be brave. To build courage, find ways to face your fears.

If you’re afraid of speaking in public, volunteer to give a toast at your friend’s wedding. Then, do whatever it takes to prepare yourself so you’ll do a great job. If you’re afraid of the ocean, learn how to swim.

Increasing your capacity for courage is an invaluable exercise. The prize always goes to the person who’s brave enough to reach for it.

Never forget that you are the master of your destiny and the creator of your fate. Make a conscious effort to develop focus, resilience, discipline, and courage every chance you get.

These four qualities will determine your ability to achieve massive success, no matter what your goals are. They’ll give you the power to create the kind of life you’ve always wanted.

Ajit Nawalkha is the co-founder of Mindvalley and an angel investor.

He is also the face of Zentrepreneur and Evercoach.

Good for Business

AICC NNOVATION

ASK THE EXPERTS

B

uilding upon the success of the AskRalph blog and Q&A service, AICC is adding two new technical advisers with expertise in the folding carton and paperboard sector and safety and risk management, respectively.

AICC, The Independent Packaging Association, now offers members unlimited access to Tom Weber, folding carton technical adviser, for answers to all of their folding carton technical questions.

“Folding carton manufacturers are a growing segment of our membership, and we are seeing more corrugated members partnering with them and moving into folding carton themselves.

We want all of our members to have access to the information they need to

build the best box, and we are excited to be offering this premier service,” says Steve Young, AICC president.

Tom Weber has 39 years of paperboard packaging experience. He is recognized by industry peers to be knowledgeable and well-informed in all sales, marketing, and production processes; various types of paperboard and plastic converting equipment; and technically proficient in leadership training and Six Sigma/ LEAN methodologies. He has managed multiple facilities in operations, run a regional business as general manager, and successfully directed a privately held company as its president. His career includes tenures with Tenneco, Caraustar, North America Packaging Corporation, Core Systems LLC, and CardPak.

AICC is also continuing to increase member benefits by adding the expertise of Doug Friel, vice president, Johnson Kendall and Johnson, Inc., as AICC’s safety and risk management adviser.

“AICC is committed to helping members achieve safe work environments,” says Joseph M. Palmeri, regional vice president, Jamestown Container Companies and AICC Safety Committee chairman.

“A safe environment improves employee morale and often leads to increased productivity and better customer service. Lost productivity from injuries and illnesses costs companies nationwide $60 billion each year.

That’s why as chairman of the AICC Safety Committee, I was thrilled to hear that Doug Friel will be joining the AICC team as the safety and risk management adviser. Doug has worked with the committee as an adviser and as a judge in our Operation Safe Shop competition for the past five years.

Doug will bring a real-world, practical approach to members’ safety questions and concerns.”

Doug Friel has been in the insurance, safety, and risk management industry for 20 years. His firm, Johnson Kendall & Johnson, Inc. (JKJ), has created a niche in the corrugated and packaging space.

Doug has been a member of AICC for 10 years and has helped various members with issues such as lock out tag out, machine guarding, OSHA compliance, confined space, proper warehouse storage, racking, sprinkler systems, driver safety, forklift training, etc.

Questions can be submitted to Tom at tweber@aiccbox.org or 330-245-1460 and Doug at dfriel@jkj.com or 215-579-6439.

BOXSCORE www.aiccbox.org

31

Point of View

Q

How Do You Leverage Technology to Grow Your Business?

Technology in the corrugated space seems to be moving faster than ever. It used to be common to open doors to find new customers and accept orders by facsimile.

Now, to even stay relevant in growth and customer retention it seems like you need a team of data analysts and developers that would make Facebook proud. “You mean we must understand social media to find our next group of client acquisitions?” you might ask. You bet!

The way you understand and utilize today’s technologies, coupled with your ability to share in tomorrow’s technologies, will be the new test of how many companies can survive or thrive in the changing marketplace. Why is that? The market is no longer driven by the skills of your sales team; it is driven by the demands of the customer. As we all get busier in our jobs and lives, customers want information faster, with less salesy interaction. They increasingly want to purchase online, they want product reviews and spec comparisons instead of line cards,

and the advertising and shared information that reaches them more consistently is now social media.

At The BoxMaker, we have integrated online ordering and catalog features into our clients’ buying habits. We’ve created an online, e-commerce web2print platform for addressing the “need for speed” in custom printed boxes and labels at www. fantastapack.com. We have partnered with several hardware and software companies to lead the charge in digital print speed and technology; automated workflows; API orders; data analytics for real-time monitoring; email marketing; social media reach (including research, advertising, and retargeting); instant chat conversations; driving traffic to our website brands; and leveraging design and art services into our sales portfolio.

It takes intense focus, leadership, and drive to find success in any one of these areas, let alone all of them. Don’t kid yourself—keeping up with technology and the changing demands of your customers is difficult and costly. But what does the alternative look like? — Justin Stacey, director of innovation, The BoxMaker

Looking for even more points of view?

Visit www.aiccboxscore.org for tons of valuable input from industry professionals on the questions you most want answered!

32

BOXSCORE January/February 2017

A NEW COMMUNITY IS JUST A CLICK AWAY

A

ICC members always say that the connections they make with other members is one of the best member benefits. Kim Nelson, president, Royal Containers, says “AICC has introduced us to the players in the marketplace. Locally the knowledge that is shared among the members has been absolutely invaluable.”

Members can now create connections from their plant and learn from one another online using AICC Communities. AICC Communities is the latest resource for packaging professionals; it allows AICC members to easily interact and communicate online to exchange ideas, experience, and knowledge with their peers. AICC Communities is a private online network with members-only discussion groups on a variety of topics. Members can ask for help, ideas, benchmarks, or support from other members. Participants will find practical answers and solutions so they will not have to reinvent the wheel.

Because Communities is an exclusive member benefit, participants must log in to the website to access this resource.

There are currently Communities for: • Customer Service • Design • Human Resources • IT • Corrugated Production

• Folding Carton Production • Rigid Box Production To ask a question, click on the Community for that topic area, click “Add Discussion Forum,” ask a question, and click save. To receive an email when

responses are added, members can “follow” a question. Members control their own subscriptions to questions, so they will receive only the notices they need.

Join discussion groups to spark or contribute to a conversation.

BOXSCORE www.aiccbox.org

33

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LONE STAR CORRUGATED CONTAINER CORP.

BY VIRGINIA HUMPHREY

COMPANY: Lone Star Corrugated Container Corp.

ESTABLISHED: 1959 JOINED AICC: 1975 PHONE: 800-552-6937 Photo courtesy of Lone Star Container Corp.

WEBSITE: www.lonestarbox.com LOCATIONS: Irving and San Antonio, Texas; Charlotte, N.C. PRESIDENT: John McLeod Jr.

L

one Star Container Corp. has made it its business to always be ahead of the curve when it comes to technology and the capability it has to serve its customers.

Throughout the decades, the company has anticipated important trends in the corrugated industry and gotten in on them while they were still fresh and few others were doing them. Lone Star was among the first corrugated companies to do what is now called high graphics.

The company also got an early start in labeling, and moved from labelers to laminators back before it was common practice. Lone Star also started a digital department more than a decade ago, putting the company ahead of the curve on that trend as well.

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Founded in 1959, Lone Star Container got its start when its founder discovered that the corrugated business was much more lucrative than the steel strapping business, in which he was formerly involved. John McLeod Sr. sold steel strapping in North Texas. He had a large account with Sid Richardson, a carbon black manufacturing company. He worked on a large project of shipping bulk containers reinforced with steel strapping and worked with Sid Richardson engineers to develop a new way of shipping their carbon particles. Once the project was done, his company earned 25 cents worth of steel strapping on each pack, compared to $3 worth of corrugated box.

“At that point, he realized he was in the wrong business,” says his son, John

McLeod Jr., who is now president and CEO of Lone Star Container.

He would go on to open Lone Star Container and bring in a minority partner, Jerry Hardison. Both of the founders passed away in 2010, leaving the younger McLeod in charge of the company for which he’d worked all his life.

“I started working in the plant when I was 14 years old, doing everything you can imagine,” says McLeod. “It’s one of those family businesses where you grow up in the business.”

Staying Power McLeod identifies consistent management as one of the reasons the company has been able to attract good employees who stay for their entire careers. He says Lone

Member Profile

Star fills most of its positions from within, with new hires being limited to apprentices who come in to learn the business from the ground up.

“Consistent management is another thing,” says McLeod. “Some places have a new boss every two years, and people get along with some bosses and some they don’t. So, my dad ran the company for a long time. There is something to be said for my father at the helm, and I’ve been a pretty good student of his.

I respect him immensely and aspire to follow in his footsteps.”

McLeod started to have more managerial say in the company around the late 1990s, allowing for a smooth transition period for his employees. He says the company has a consistent philosophy that allows Lone Star to match with its employees and its employees to match with it.

“We’re a family business,” says McLeod. “Everyone here has family with high expectations, and apparently we are a good place to stay. Our average tenure, from the baler operator all the way up to the sales service manager, is around 18 years. We have plenty of people with 35 years of experience.

“We offer a steady, solid place of employment,” McLeod continues.

“Expectations are understood—the customers are No. 1. We have good benefits and a pleasant working environment.

That hopefully adds up to a decent place to work.”

The lengthy tenure results in employees who are experts in the industry and in the machinery they work on. McLeod says his employees are well-versed in a lot of equipment and are able to run multiple machines. When new processes are brought in-house or new equipment is

EQUIPMENT THROUGH THE YEARS Lone Star Container Corp. has built its reputation by staying ahead of the curve on the corrugated business. This has often expressed itself in the equipment they purchase and the plant processes they adopt.

In 1968–69, the company started a movement into what is known today as high graphics, but back then was called three- and four-color flexo printing—something that, at that time, was still very rare. Lone Star purchased new equipment from Martin Machinery Company that gave them the capability to print three and four colors. That opened the window to displays, and during the 1970s, the company became more of a display provider—along with the same old brown boxes and industrial packaging it had done before.

In the 1970s, as Lone Star became more of a display provider, it started getting more involved in labeling and purchased a Crathern and Smith automatic labeler.

“In the late ’70s, that was new,” says McLeod. “Most anyone who did any labeling up to that point had a Potdevin.”

By the end of the ’70s, Lone Star had added an FMC labeler and begun to learn about the litho print business. In the early ’80s, it added an additional labeler—an Automatän— which is now considered standard in the industry.

“By the mid-1980s, we had grown so much that in the Southwest, we considered ourselves the leader in the labeling business on the graphics side,” says McLeod. “And now we’ve got three- and four-color flexo capability and extensive labeling capability and the expertise that goes along with learning all that stuff.”

In 1986, Lone Star upgraded from labelers to laminators. The company launched what would become two complete lines of laminators. McLeod says they recently replaced one of those with a Bobst Asitrade laminator, what he calls the “Cadillac of the market.”

Lone Star purchased a web laminator in 1986, and then opened a second line in 1990.

From the 1990s through the 2000s, its graphic business had grown to be 60 percent of its entire product mix. While Lone Star still does brown boxes, high graphics and displays have become the majority of its offerings.

“We have over the years brought any process that we deemed necessary to improve customer service lead time or quality in-house under one roof,” says McLeod.

One of these moves occurred in 1995, when they opened a complete litho printing division, something McLeod says was rare for corrugated places to do at that time.

“A lot of companies are either litho printers or corrugated converters,” says McLeod. “We blended the two. So, in the ’90s, we were able to control our own print schedule and our own print quality.”

BOXSCORE www.aiccbox.org

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Member Profile

acquired, the employees are quick to learn the new operations.

from the conceptual stage to supply-​ chain fulfillment.

DIY Lone Star Container prides itself on keeping as much of its manufacturing processes in-house as possible, allowing the company to pass savings on to its customers. This means Lone Star does everything from creating the box to labeling and laminating, to also producing all the graphics. Lone Star offers services in design, shipping, litho printing, flexo printing, gluing, die cutting, and digital packaging.

Lone Star’s services now encompass anything and everything that is corrugated. The company provides retail packaging, elaborate temporary POP displays, and protective packaging. It works with customers on everything

Looking Ahead McLeod says the next area of focus is updating digital printing, a department that first opened in 2006.

“That will be our next move, to upgrade that department,” says McLeod. “For two or three years, we’ve been looking at all the new equipment that has come out on the market. So far, nothing has caught our eye enough to buy, but every year we get closer to having to upgrade.

In the digital department, our processes are six or seven years old, and that’s getting pretty antiquated. So, that’s what the future holds—upgrading our digital printing equipment.”

Lone Star started sheeting its own top sheets in 2011. McLeod said it wasn’t a

landmark move, but it was something the company was initially doing on the outside. It was then decided Lone Star needed to be in total control of its processes, so it now does all of that in-house.

Sometime this year, Lone Star is opening a new sheet plant in San Antonio. The building has been purchased, and machines are being installed.

This new building supplements their 250,000-square-foot flagship building in Irving, Texas, and their sheet plant in Charlotte, N.C. Virginia Humphrey is director of membership at AICC.

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BOXSCORE January/February 2017

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BOXSCORE January/February 2017

PLANTS OF THE FUTURE VIEWS FROM THE LEADING EDGE

By Robert Bittner

W

hether you call them “factories of the future,” “cutting-edge,” or “forward-thinking,” a small group of industry leaders share an overarching commitment to remaining at the forefront of what is possible—and what may become possible—in packaging. Their unique approaches highlight the range of opportunities available for companies willing to take the lead.

Committed to the Cutting Edge John Kelley, president of Dusobox, says his personal commitment to the cutting edge came about while talking with a Dusobox employee. “I’m third-generation in this business,” he says. “I think my commitment to what we’re doing now started when I joined the company after college. I sat down with one of the original employees of Dusobox that my grandfather had hired. She said, ‘Your grandfather’s done X, Y, and Z, and your father’s done X, Y, and Z. So what do you want to do?’ At the time, I’m sure I had a

“If you’re striving to be futuristic and ‘bleeding-edge,’ you’ve got to have a good manufacturer standing behind your equipment.”

— Michael Drummond, Packrite deer-in-the-headlights look! But that led to me asking how we can best help our customers. How can we make a one-plant, multigenerational family business relevant to major brand owners? How do we bring more value to customers and introduce our thinking to a broader customer base?

These are the questions that continue to drive me, my brother, Richard, and our entire leadership team.”

While focusing on the cutting edge was the next step in Dusobox’s growth as a mature company, a commitment to the cutting edge was fundamental to the core vision behind Packrite. Michael

Drummond, founder and president of Packrite, notes that he launched his company specifically to be a forward-thinking supplier to the industry. “We started as a company that would help other companies be more successful with all they do,” he says. “We created something that was different from what anyone else had ever done before.”

At Vanguard Packaging, CEO Mark Mathes decided that it was a choice of being cutting-edge … or else. “What drove me was the desire to still be in business in 10 years,” he says. “You’re either going to do it or you’re going to get eaten

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“You’re either going to do it or you’re going to get eaten up. In today’s world, anybody can be anything. The lines between independents and integrateds has completely blurred. Yes, there is always a place for well-run, niche-based companies. But if you put this technology in, even the small guy can play big.”

— Mark Mathes, Vanguard Packaging

up. In today’s world, anybody can be anything. The lines between independents and integrateds has completely blurred.

Yes, there is always a place for well-run, niche-based companies. But if you put this technology in, even the small guy can play big.”

Embracing Innovation One good reason to operate a step or two back from the cutting edge is the cost commitment involved in constantly implementing the latest technologies.

Mathes admits, “We don’t even look at equipment available today. If you can buy it today, it’s already obsolete. We have already begun to put out POs for equipment that’s two years out.”

“The technology in our industry is changing so fast, you’re always trying to catch up,” echoes Drummond.

“I remember one time when we bought some equipment from a major machinery supplier. By the time I went to Europe to see it before it shipped, they had introduced a new model!”

Among the machines that help to shape Packrite’s factory of the future, Drummond mentions a Bobst Asitrade, custom-built to meet Packrite’s needs.

“We followed that with the Masterfold

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BOXSCORE January/February 2017

170 with a double Gyrobox, the only one of its type in North America, which we bought three years ago. Then we bought the Mastercut 2.1, which is one of 12 in the country. In 2016 we installed the Masterflute MF324 Asitrade single-face laminator, which is ‘bleeding-edge’ technology.”

Of course, choosing the right “bleedingedge” equipment means matching new functionality to a packager’s real-world needs. Drummond notes that the Masterfold 170 features a cloud-based tracking option for all its gluing information. “If we ever had a quality problem, we could go back into that cloud-based information and trace that back to the specific glue error that may have occurred.”

Dusobox has made a similar commitment. “On our production side, every piece of equipment is state-of-the-art, with the most advanced quality-control features,” Kelley says.

“We’ll image every sheet. We’ll inspect every glue point. If there’s any fault, it never gets to the customer. We are embracing zero-defect packaging.”

Mathes, though, believes the days of huge, multiple-machine installations are likely coming to an end. “We installed

a WSA pre-feeder behind a brand-new Latitude. This pre-feeder is about 30 percent smaller than any other we’re aware of. Space is money. With the right four or five pieces of equipment and the right scheduling of the plant, you can do with 100,000 square feet what it used to take 200,000 square feet to do. In addition, we put in an extremely high-speed laminator, which enabled us to eliminate three traditional laminators, and we still increased capacity. Then we put in a high-speed short-setup flexo-folder-gluer, eliminated others, and still increased capacity. I took a total of about six shifts of work down to two shifts. That has translated to the bottom line.”

Forward-thinking companies are not dependent on equipment manufacturers for all of their innovation, however.

Dusobox, for example, has teamed with app developer Augment to create an augmented-reality app they use as both a design and marketing tool.

Augmented reality (AR) is the concept behind such popular entertainment apps as Pokémon Go, which allows smartphone users to “see” Pokémon cartoon characters “in the wild” as they explore their own neighborhood, and Instagram filters, which allow smartphone users

to add masks and makeup effects to their own selfies in real time. Dusobox designers can design and render near-​ photorealistic 3-D images of a client’s proposed point-of-sale display, then, using their AR mobile app and an iPad, show the client exactly what that display would look like in a real-world environment— without actually producing a single physical prototype.

Kelley credits Dusobox’s Jason Hays with spearheading the app’s development and the company’s relationship with Augment, a company that had previously focused primarily on furniture and hard goods, not retail or point-of-sale. “Now we can get into collaborative discussions regarding POS needs and work with a team in real time, as opposed to days, weeks, whatever,” Kelley says. Such pre-prototype visualization also saves money. “It allows everyone to achieve the largest dividends by capitalizing on the dollars previously wasted on trying to get it right without visualization first.”

Outside the Box “Cutting-edge” need not apply only to shiny new hardware installations or the latest innovative software.

Vanguard is operating out of a 600,000-square-foot manufacturing, fulfillment, and assembly plant that is roughly 150 feet underground. Part of a so-called Subtropolis business park located in previously mined limestone caves, the company has taken full advantage of its unique location to create a work environment that reflects a cutting-edge commitment to sustainability.

The plant’s thick, natural limestone ceiling provides geothermal insulation that maintains an average temperature of 76°F. Polished concrete floors eliminate the need for carpeting. All installed lighting came from overruns from other construction projects. Vanguard

reduced ink waste by bringing ink mixing in-house and repurposing leftover ink by using it to create black ink. (According to the company website, “Vanguard uses a pine tree rosin-based ink from BCM Inks. Pine tree rosin is a byproduct of the papermaking process and is collected at the mill.”)

A similar approach to sustainability is in evidence at the above-ground Advance Packaging in Grand Rapids, Mich. Like Vanguard, Advance relies on an in-house “ink kitchen” for color blending and ink reclamation. In addition, inks are water-based, with ink solids removed in an on-site water-treatment facility.

The company’s devotion to sustainability extends far beyond ink. For example, outdoor landscaping was designed to reduce the need for watering; heat generated by the corrugator/scrap system

is reclaimed and redistributed to heat nearly the entire facility; the corrugator runs at reduced temperatures to lower energy use; glues are corn- and waterbased; scrap from corrugating/converting is baled and recycled; and an automatic conveyor system diverts power only where needed, practically eliminating hi-lows in production. Even shipping routes are designed for optimal delivery times and decreased fuel consumption.

Meeting the Challenges “Having a futuristic company doesn’t just happen,” Drummond admits.

If you’re striving to be futuristic and ‘bleeding-edge,’ you’ve got to have a good manufacturer standing behind your equipment.”

In addition, you need a team of well-trained and committed staff.

Box designers can now render 3-D images of displays for clients using augmented reality.

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“The factory of the future will continuously foster and incubate innovation within our industry.”

— John Kelley, Dusobox

“Your people are the key to making all of this technology work,” Drummond says.

“We constantly retrain.”

For Drummond, being cutting-edge also means making education and research an integral part of his own day-to-day management. “Every day, I review the technology. I make sure I’ve got information about the latest trade shows and know who’s showing what.

I go to Drupa and SuperCorrExpo®.

I invite suppliers in and listen to what they’ve got to say. And I have a great team of people who look at what’s going on and what we’d like to see.”

Having a team fully invested in pushing the envelope is critical to success. “It’s very much an absolute, companywide commitment that you’re going to do something somebody else hasn’t done,” Drummond points out.

“Your employees have got to be willing to take on the challenge.”

Growing Forward Every cutting-edge company will follow the path that best fits its culture and its clientele. But Kelley believes certain key points may turn out to be foundational moving forward. “The factory of the future will continuously foster and incubate innovation within our industry,” he says, highlighting photorealistic renderings, augmented reality, digitally printed prototypes, and manufacturing processes that transcend multiple platforms—for example, flexography printed

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BOXSCORE January/February 2017

directly on the substrate, lithography laminated to the substrate, and digital printing directly onto corrugated, all in service to the goal of maximizing brand consistency. “Our factory of the future will continue to focus on the leading-edge thinking and investments that allow our customers—the brands—to maximize their strength and growth.”

Mathes suspects the changes will be even more transformative for the industry.

“I think the ‘factory of the future’ isn’t going to look anything like it does today, even five years down the road. Plants that are chock full of equipment are going to discover that four or five pieces of high-speed equipment running around the clock will do. There will be far fewer employees on the production side and much higher equipment efficiency. We will have robotics heavily involved in our industry as well.

“Ten years down the road, cuttingedge factories will be running a lot of hybrid equipment. We’ll see a flexofolder-gluer with a digital station, a hybrid combining flexo and at least four- to six-color digital. Imagine what a great hybrid machine you’d have if you could put flexo as your background and just use digital where you need the four-color process. I don’t know anybody working on that right now, but I bet you’ll see one at the next SuperCorr in four years.”

The factories of the future do not choose that role to inspire envy among

their peers or to suggest that all packagers should aspire to what they have achieved.

Not every packager can be cutting-edge.

“Unless you’re a WestRock or something like that, most people don’t have the resources to invest in all the technology,” Drummond points out. “Not everybody can spend $25 million on equipment! Packrite was created to service that marketplace, so multiple companies can take advantage of that ‘bleeding-edge’ technology. We fill in the gaps, so other companies can expand their offerings without investing a huge amount of money.”

The specific gaps requiring the help of a cutting-edge partner will vary from packager to packager. And not every cutting-edge company offers the same set of services. Kelley recommends that AICC members seeking such partnerships take the time to meet other members and learn how they can help to fill in specific gaps. “It’s a very collegial environment,” he says.

“More often than not, you’ll be able to find one of the leading-edge members to help.”

Of course, the industry has room for any number of up-and-coming companies striving to join those at the leading edge. For Drummond, they will remain colleagues, not competitors.

“If they build up to the point where they’ve got enough business to buy, say, a specialty folder-gluer like we’ve got, that’s great! If somebody else is doing well with this approach, it will pull the whole industry up.”

Robert Bittner is a Michigan-based freelance writer and frequent contributor to BoxScore.

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LOOKING FORWARD IN THE CORRUGATED INDUSTRY

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BOXSCORE January/February 2017

AN INTERVIEW WITH JOHN BURGESS, PRESIDENT OF PAMARCO’S FLEXO DIVISION

T

Photo courtesy of Pamarco

he independent packaging industry has seen many changes and continues to evolve to meet customer demands. We sat down with industry veteran John Burgess of Pamarco’s flexo division to ask about the state of the industry, some of the biggest challenges, and what to expect going forward.

BOXSCORE: How have you seen the uses of corrugated printing evolve since you began in the industry?

BURGESS: To get a clear picture, you’ve got to look at it from two angles: how the corrugated industry has evolved and how boxes have evolved. Boxes began as a functional item; they were intended to protect something, not to sell a product. If you look at a corrugated box from years ago, it was made from highly absorbent paper and was very low in terms of graphic content—maybe a “This Side Up,” a logo, or a certification from the manufacturer. The graphics were one or two colors at most. From our standpoint as a supplier, it was all about providing relatively low screen anilox, doctored traditionally by rubber wipe rolls, rather than the now more widely used doctor blade chamber manufactured from aluminum or carbon fiber and a laser engraved anilox designed to transfer a thin film of ink.

Absolute Chambered Doctor Blade and Pamarco Anilox roll in a typical corrugated preprinter.

Today’s box not only fits a protective function, it’s also a means of marketing the product inside of it. Since the mid-’90s, we have seen the rise of the wholesale and warehouse approach to consumerism, where most products are displayed on shelves with a simple price tag; in other words, the graphics on the box are the selling point. This means that those graphics have had to go from very basic one- and two-color designs to preprint quality graphics for point of sale.

In order to maximize the quality and still manage to create the revenue-yielding product, there was an attempt to replicate preprint by using post-print equipment,

Today’s box not only fits a protective function, it’s also a means of marketing the product inside of it.

BOXSCORE www.aiccbox.org

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I’ve been asked many times if I perceive digital as a threat to corrugated. In short, my answer is no. I see them as complementary technologies, not competing ones.

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but the combination of a porous medium and older printing equipment with inadequate registration and color control made this very difficult. The result was the development of the modern multicolor post-print machine that we see in today’s corrugated operations.

absorbent material, the call for high graphics has driven changes throughout the industry, from the printer all the way back to the corrugator: better board, better paper, better sheet, better machines.

The quality of all of these pieces has had to increase exponentially.

BOXSCORE: What have been the biggest changes in the processes used in corrugated printing?

BOXSCORE: How has new technology affected both the uses and process?

BURGESS: The single biggest process change is that presses now have to be capable of a rapid job changeover.

Multiple jobs per shift must be run, which means that setup and breakdown times for jobs have to be minimized through better wash-up and plate-mounting systems. Many of these new flexo machines have increased from one to two colors up to five to eight colors in order to cope with the variety of printed work that customers are requesting. This includes very complicated graphics that have to have multiple color stations in order to achieve the graphic look that the designers want on their boxes.

Another notable change is that along with better graphics, the demands on the paper quality have also increased.

The paper and the board have to be very consistent and have low-ink absorption characteristics. This shift has brought about the advent of in-between station drying by IR or hot air to prevent smearing of the ink. Rather than just transferring thick ink films onto an

BURGESS: In the same vein that this shift has meant quality improvements in machines and paper, it has meant advances in their other components as well. By 1998, almost all rolls produced were engraved by laser into ceramic—partially owing to the rolls’ durability, but also because graphics were being propelled upward. As the anilox improved, all other components, such as the plates and the inks, also had to be enhanced to maintain the highest quality of graphic reproduction.

BOXSCORE January/February 2017

BOXSCORE: How has preprint changed the game for corrugated printers?

BURGESS: Preprint was introduced into the U.S. market in the ’80s and ’90s after successful implementation in Europe and the Far East. Preprint is designed for long-run jobs, although the latest machines entering the market have been adapted to perform smaller runs as well. The initial investment in a press

is higher than in a post-print machine, but the ability to print directly to a well-​ calendared paper with low absorbency that is corrugated after print can produce exceptional graphics.

Because of these changes, post-​printers are now looking to run near-preprint graphics on the new multicolor machines.

This is done by using high-screen anilox and corrugated board with high-holdout liners in very tight registration, but at a lower cost than preprint.

BOXSCORE: How has the sophistication of this market space affected OEMs and suppliers?

BURGESS: OEMs have had to completely redesign the machine they’re manufacturing to become more efficient. There are now five- to eight-color machines being sold on a regular basis when, less than 10 years ago, there were virtually none. Anilox rolls started at 165-line screen; now we are producing many at 1200- to 1400-line screen for the point of sale and wine box markets.

The fixed-frame machines produced today allow for multiple jobs to be set up at a time and offer the ability to switch from job to job without stopping the press. The presses are running faster, but they are built so much better than earlier presses, so that damage and wear on the anilox is less frequent. Although there are fewer machines, the net change

in anilox roll demand is very small because there are now many more print stations per press. In addition, some manufacturers are designing equipment that will hold multiple anilox rolls on a turret in the same print station to aid with job transition.

BURGESS: I think the biggest adaptation is that you can run small quantities and still make money. The idea that there is no minimum quantity to make a job worthwhile means that you can run a job for only an hour; you couldn’t do that in the past. Today, with modern presses and the ability to set up several jobs at once, the process is far more flexible. There is now the ability to create subtle changes that make the box more current: offers, price notifications, competitions, seasonal aspects, and so forth. It’s making the process more adaptable for the manufacturer, the customer, and in the end, the consumer.

BOXSCORE: With the rise of high-end corrugated and the increasing demands for better quality, how do you see the future shaping up for this industry?

BURGESS: The next big wave is digital.

I’ve been asked many times if I perceive digital as a threat to corrugated. In short, my answer is no. I see them as complementary technologies, not competing ones. The digital revolution has driven flexo to improve, and I think that it will continue to do so, because digital is relatively slow. In terms of print runs, digital offers hundreds of boxes per hour compared to flexo’s offering of thousands.

Photo courtesy of Pamarco

BOXSCORE: What are OEMs and suppliers doing to adapt to this ever-changing environment?

The current emphasis on digital means that more and more companies are investigating and purchasing, which could take capital away from spending on conventional print equipment. Machine manufacturers, however, are very busy and are investing in plants and machinery to speed up deliveries, which is just another indication of the buoyancy in the market today.

BOXSCORE: Do you see any effect on the flexo side of the business? Market share issues?

Crossover? Changes?

BURGESS: I think that corrugated box manufacturers are now being recognized as real printers—not just rubber stamp printers. We’re also seeing an increase in FTA and AICC attendance and membership. Another notable change is collaboration among converters. The consistency that these converters can offer to customers through an alliance

is driving the flexo process to improve and stimulating the acceptance of high-quality graphics in the marketplace.

It’s reassuring for the customer to have multiple resources for disaster scenarios.

The other major wave currently in the market is the sale of many independents to the larger integrated converters. I think there are many schools of thought as to the overall impact that this will have on the market.

BOXSCORE: Do you have any closing comments?

BURGESS: The industry is continuing to evolve and become faster and more flexible. The equipment that is now coming in from the Far East is enabling converters to enter the flexo market at a lower cost. This is creating a whole new set of clients for people selling components, like ourselves, and giving the end user more options for purchasing high-quality boxes.

BOXSCORE www.aiccbox.org

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BOXSCORE January/February 2017

A TECHNOLOGY RENAISSANCE THE CONSIDERATIONS OF RISK AND REWARD WHEN INVESTING IN NEW TECH

BY MIKE D'ANGELO

I

n what can perhaps be considered a most cruel hoax being played on ownership, a technology renaissance has been occurring in the packaging business at a time of generally slow economic growth. United States gross domestic product increases have been at or below 2 percent for multiple quarters.

Lackluster GDP performance drives uncertainty in the overall strength of the economy, affecting all segments—consumers, producers, and CPGs, to name a few. PIRA figures show great promise for growth for packaging media over the long term, but the year-over-year growth, especially in a developed market such as North America, shows low to mid-singledigit strengths.

Yet the fact remains: Manufacturing technology in general, and printing and converting technology in particular, are evolving and developing faster than ever. Improvements made in equipment, substrates, and inks have been both evolutionary over the long haul as well as sudden, and all with impact. The recently concluded SuperCorrExpo® in Orlando showcased the gamut of what is available to packaging producers in a broad sweep of technology that was in some cases familiar, and in other cases unrecognizable.

So, in this environment, what is the risk/reward consideration? The risk is being left behind. A former colleague of mine had a picture in his office of dinosaurs roaming in a field. The picture was captioned, “In a changing world, if you are not adaptable, you will disappear.” The landscape in our great industry is evolving.

Let’s break the technology renaissance down into four categories: • Connectivity through information platforms (commonly known as the internet of things).

• Robotics.

• Augmented reality.

• Digital printing (as a complement to existing processes).

Connectivity Printing presses and converting equipment have been the “big game” in our industry for more than four decades.

Machine suppliers developed equipment well-suited for boxmakers to use to print and convert what their customers ordered.

The suppliers sold the presses, repaired the presses, replaced parts on the presses, and improved or replaced them with the next big idea. Along the way, machinery began to subtly shift from being mechanical things to being electrical things. Motors

'In a changing world, if you are not adaptable, you will disappear.' became more sophisticated. Presses were controlled by drives and programmable logic controllers.

Artificial intelligence allowed machines to make adjustments prior to operator intervention. These were the precursors to today’s platform connectivity, what General Electric in 2011 called the “industrial internet.” Today, the Harvard Business Review (HBR) calls it “digital ubiquity.” Digital ubiquity actually was driven up the supply chain to box plants and their suppliers as the value proposition began to shift from a reliable product (the press) being used to make other reliable products (boxes), to identifying and expanding the benefits and analytics that can be generated by the equipment. In other words, equipment that performs became a given. What can the press offer beyond good production?

Digital ubiquity has changed printing and converting equipment, and consequently the box, from sometimes being seen as a

BOXSCORE www.aiccbox.org

51

The technology functions by enhancing one’s current perception of reality. AR technology will allow boxmakers to extend their product into the real world without ever leaving the office. We’ve heard so much about how the “box sells the product,” and many boxmakers have created retail sales environments within their buildings to help customers visualize their products on the shelf, the end cap, or the display on the floor. AR can re-create the same visual experience without having to physically set up the simulated retail environment. It will revolutionize the way customers will work with a boxmaker’s sales and design teams.

AR technology will allow boxmakers to extend their product into the real world without ever leaving the office.

commodity to being an integral part of the connected world.

This is also reflected in the way new equipment is bought today. It has fundamentally changed the machine supplier/ machine buyer relationship. General Electric CEO Jeffrey Immelt summarized the shift in the supplier’s approach to selling in this way: “The transition we have to make with our customers is going from agreements that are break/fix to agreements that guarantee outcomes.”

This is why today in the packaging business we see new machine contracts written with criteria that could be based on uptime, productivity, life-cycle analysis, reduced staffing, or some other “outcome.” The winning solution today is one that combines technology, innovation, connectivity, and analytics.

The ability of today’s printing and converting equipment to “speak” to the owner, the operator, the supplier, and other pieces of equipment results in benefits that include lower maintenance costs, improved uptime, and improved capacity.

All significantly improve the service provided to the ultimate customer and to their ongoing satisfaction. Connectivity, digital ubiquity, the internet of things— call it what you will—is the common denominator and driver in the technology

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BOXSCORE January/February 2017

renaissance being seen in today’s printing and converting marketplace.

Robotics Because digital ubiquity extends well beyond any single machine or plant, it is no surprise that it also creates a system that can unite all of the activities within a plant. Functions that used to be distinct steps and processes from scheduling to prepress, production, and finishing, through shipment of the product out the door can now be integrated into an encompassing operating system. In many plants, this integration and the resulting speed of throughput has created bottleneck issues. Robotic technologies have been implemented in the united system to eliminate these issues. Robotics achieves greater reliability, efficiency, and flexibility, usually with less waste associated with a process. The agile integrated enterprise needs to have an unimpeded production process. Robots are always ready.

Augmented Reality Augmented reality (AR) is a live direct or indirect view of a physical, realworld environment whose elements are augmented (or supplemented) by computer-generated sensory input such as sound, video, graphics, or GPS data.

Digital Printing If you have read to this point and not grasped that the world is going digital, here is a gentle reminder: The world is going digital. Digital printing presses have been on the scene for two decades now and remain an important complement to flexography, offset, and gravure.

According to Printing Industries of America (PIA), digital print opportunities come from the following channels: transfer from existing print, 25 percent; new jobs from existing clients, 37 percent; new jobs from new clients, 38 percent.

These numbers importantly show that existing printing processes in use today meet or exceed customer requirements.

Because of this, these presses are here for the foreseeable future.

There is also a tremendous growth story in the new job categories cited

by PIA. Digital printing offers unique opportunities for supply-chain optimization, marketing optimization, product development, and reduced time to market. AICC’s recently concluded Region 4 meeting, a Digital Symposium (see related story, Page 14) held in Texas, brought together a large number of suppliers, users, and those looking to be educated. They were not disappointed.

Plant tours at the digital operations of Performance POP and ABox Packaging showed the promise of digital printing alongside the pillar printing operations upon which these companies built their success. Digital is no traditional disruption scenario. According to HBR, “the paradigm is not displacement and replacement but connectivity and recombination.” These changes are wrought by the effect digital ubiquity has on other components of the supply chain, on factors in your customers’ businesses, and on the overall economy.

Understand that risks are best handled with openness and knowledge. Educate yourself. Use partners and independent resources—anything and everything available to ensure that you understand the target of your investment. To determine if the risk is worth the reward, ask:

• What level of performance do you need?

• What metrics—quality, cost, labor— do you want to track?

• What level of differentiation opportunity do you need?

• What level of capacity enhancement do you need?

• What level of productivity is necessary to keep yourself afloat?

• What level of flexibility is necessary for your company?

• Will the new addition keep you competitive?

• Will it give you an edge with your customers?

• Will it allow you to acquire new customers?

There is so much information and there are so many criteria you can discuss with suppliers today. You

can get a very good sense of what your potential return on investment will be.

It is quite likely that return will have less and less to do with your banker’s calculations. You should expect to count on a return that is measurable and built into the machine contract—a contract that looks nothing like the buy/break standard of the past.

Embrace technology. The thing that is changing the fastest is the speed of change.

Mike D’Angelo is vice president of AICC.

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BOXSCORE www.aiccbox.org

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The Associate Advantage

HISTORY REPEATING? ED GARGIULO EQUIPMENT FINANCE CORP. VICE CHAIRMAN EGARGIULO@EFC-FINANCE.COM

JEFF PALLINI FOSBER AMERICA CHAIRMAN PALLINIJ@FOSBER.COM

DAVE BURGESS JB MACHINERY SECRETARY DBURGESS@JBMACHINERY.COM

PAT SZANY AMERICAN CORRUGATED MACHINE CORP. DIRECTOR PSZANY@ACM-CORP.COM

KEITH R. UMLAUF THE HAIRE GROUP IMMEDIATE PAST CHAIRMAN KUMLAUF@HAIREGROUP.COM

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BOXSCORE January/February 2017

I

n January 1981, after the country had suffered years of poor economic growth, excessive inflation, and crippling interest rates, a new president—Ronald Reagan—was inaugurated, promising economic growth through lower tax rates and business-friendly economic policies.

Later that year, the Economic Recovery Tax Act of 1981 was enacted. Over the subsequent eight years, 20 million new jobs were created, inflation dropped from 13.5 percent to 4.1 percent, and real gross national product rose 26 percent. Many businesses prepared, utilizing their available resources, and took full advantage of that booming economic recovery.

Well, history may now be repeating itself. By the time you read this article, a new administration with a same-party Congress will be in power, promising similar tax cuts and business growth policies. The question is: How do we take advantage of this potential opportunity?

Probably the most valuable, industry-​ specific resource available to packaging operations is our own AICC. AICC’s mission is to support the growth and prosperity of packaging operations.

AICC offers exceptional educational programs for your employees, in areas including production, customer service, safety, design, sales, finance, leadership, and sustainability. The industry support network is available to more than just your employees. AICC’s CEO Group program provides both owners and managers with the ability to meet

regularly with their peers located in noncompetitive geographic areas to address issues facing their operations.

This environment allows discussion of methods, policies, and procedures that have been effective for other members.

Finally, AICC’s Associate Supplier network is also readily available to assist you with the evaluation of new and used equipment, plus services geared to the individual needs of your company based on both existing product lines and additional industry niches.

We all look back on favorable circumstances that we have both wasted and seized upon during our business careers.

As entrepreneurs, we tend to look at our successes as “what we were expected to do” and beat ourselves up about our failures to identify and/or respond to missed opportunities.

J. Paul Getty once said, “There are always opportunities through which businessmen can profit handsomely if they will only recognize and seize them.”

Over the past several years, we have become too familiar with unfriendly government tax, environmental, and regulatory policies. The upcoming favorable business growth climate comes along rarely. Utilize AICC’s vast educational lineup, CEO Group Program, and Associate Supplier resources to prepare your business to take full advantage of the opportunities that lie ahead.

This article was written by Ed Gargiulo.

The most valuabe, industry-specific resource available to packaging operations is our own AICC.

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THE ‘FORGOTTEN’ GLUING / FINISHING DEPARTMENT

BY TOM WEBER

I

recall the days in the early to mid1970s as a summer intern working my way through college, and then as a supervisor fresh out of college, when our 13-machine gluing department was producing 75,000 tons annually of folding cartons across a three-shift operation. We had only two brands of gluers in those days—Post and International—and they were very niche in their approach to successful manufacturing of a particular carton design. The make-readies were long, the waste high, but the speeds were OK as I reflect back on those exceptionally lengthy runs we used to produce.

Fast-forward to today. The runs are short, raw materials are ever so precious, and the time frames to produce the business are even shorter yet; there is no time for errors, increased costs, or quality issues. What are we to do?

Embrace new technology, and then collect the cost-savings associated with that decision!

In so many facilities I see the same significant investments in prepress

Embrace new technology, and then collect the cost-savings associated with that decision! workflow, printing equipment, die cutters, etc.—and then I see the same old gluers I was running in the ’70s. Why? Simply because they can? Not good enough!

Arguably, gluing is one of, if not the, most labor-intensive/highly skilled departments in most folding carton facilities, yet we continue to justify the lack of investment there because they are still able to produce a decent-quality product, albeit with longer setups, average run performance, and poor waste results.

The time has come to truly acknowledge the new technologies that have given us not only one or two, but at least three or four companies—none named “Post” or “International”—that have invested heavily in this specific area of technology for the express purpose of allowing one

AICC 2017 SPRING MEETING Don’t Miss the “Ask the Experts” roundtable session at the upcoming AICC 2017 Spring Meeting, to be held at the Hyatt Lost Pines Resort, April 26–28, 2017, in Austin, Texas.

This interactive session will take place on Friday, April 28, from 8:30 to 10 a.m. and will feature Ralph Young, AICC corrugated technical adviser, and Tom Weber, AICC folding carton technical adviser. Come hear about the “hot” industry topics in both corrugated and folding carton, and have the opportunity to ask Ralph and Tom your technical questions. For more information and to register for the meeting, visit www.aiccbox.org/meeting.

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new gluer to do the work of two or even three, depending on your product mix and business needs. Keeping the old equipment around just because it can still manage through some “highly skilled operator divine intervention” to meet the customer’s needs is not necessarily the right choice for your business. We must all be forward thinkers. See the examples below for what new gluing equipment can add to your company: • A computerized “save” option to capture the data from the best-running machine settings of a production run that has just been optimized.

• Automated setups that will gain an operator up to 80 percent of the recalled job data from the previous saved run statistics above. This saves a lot of time!

• Exponential—not incremental— improvements in setups, waste reduction, and accuracy of both the folding and gluing.

• The ability to add countless ancillary devices in-line to ensure the precise production of the most challenging designs and for the most discriminating clients. Short of Malnove in Omaha in the mid-’80s, I can think of precious few folks who have been applying windows in-line on a right-angle gluer. This is now a daily event for many folks in our industry,

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Folding Carton

as well as radio-frequency identification (RFID), internal print, and many others.

The ability to finally utilize your gluing operators and feeder/packers in the most highly efficient manner. Again, this is one of the most labor-intensive departments in most folding carton facilities, and also the most critical, as they must somehow produce a quality product here, even if it has not been delivered to them from printing, cutting, or perhaps stripping/windowing.

There are currently several OEM contenders competing for the title of best all-around folding carton gluer.

They would meet and/or exceed the criteria of today’s and tomorrow’s most critical clients. I would strongly suggest that you purchase one of them and replace at least two of your oldest gluers and enjoy the many benefits associated with freeing up that entire gluer crew of two or three for however many shifts you operate at your facility. The thoughts of making more with less, and even better and faster, have always driven me to explore the absolute best my company’s precious capital dollars could afford. I urge you to do the same, and the time is now!

I hope I have given you something to think about, and more importantly,

just enough information for you to initiate your own internal investigation of what is out there for you and your respective teams. As we all know, multiple high-quality choices are always good when it comes to any major capital acquisition.

Tom Weber is folding carton adviser for AICC. He can be reached at tweber@webersource.com.

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09.12.16 17:02

RALPH HAS A NEW FRIEND

Meet Tom Weber

Tom has 39 years of paperboard packaging experience. He is recognized by industry peers to be knowledgeable and well informed in all sales, marketing, and production processes, various types of paperboard and plastic converting equipment, and technically proficient in Leadership Training and Six Sigma/LEAN methodologies. He has managed multiple facilities in operations, run a regional business as General Manager, and successfully directed a privately held company as its President. His career includes tenures with Tenneco, Caraustar, North America Packaging Corporation, Core Systems LLC, and CardPak. AICC members now have unlimited access to our new Folding Carton Technical Advisor, Tom Weber, to find the answers to all of their technical questions. Do you have questions? Ask Tom, at tweber@aiccbox.org or (440) 221-3103.

AICC, the Independent Packaging Association is uniting and celebrating the success of inspired, independent packaging companies. We are a growing membership association which has served independents since 1974.

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AICC Will: Connect and cultivate; Deliver success.

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Financial Corner

CHARGING FOR DELIVERY 101

BY MITCH KLINGHER

H

ow you charge your customers for delivery is often a function of a well-intended yet misguided calculation. While it is relatively easy to isolate delivery costs on your P&L, coming up with a rational method to charge your customers for delivering their product is often problematic. We have discussed many times in these pages that the market sets the price for your products and services, and that it might be more fruitful for you to step away from the cost-plus calculations that your full absorption costing system spits out, and to look at the variable profit of the order. How does delivery figure into this paradigm?

Are delivery charges merely another “zero-sum game” where you just need to recoup your perceived costs? If this is the case, then you simply need a rational way of allocating them to each situation.

This leads you to calculations such as cost per mile, cost per stop, and cost per trip.

Many of you have begun measuring the time it takes to deliver, and adding that to the equation. In previous articles, I have endorsed this concept as forward-thinking and a means to reward customers who cooperate with you and reduce barriers to inefficient delivery situations. Armed with this knowledge, you might be able to influence your customers’ behavior to create a win-win situation.

Signed, Sealed, Delivered Should delivery be a profit center?

After all, we are capitalists, aren’t we?

The core mission is to create profits to provide a return on investment to ownership, right? If so, then we should be trying to profit on our delivery function in the same manner that we mark

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up plates and dies and pallets and everything else we sell. If we do things a little better than others, we should be able to charge a little more, right?

Or maybe delivery costs are like every other cost on the P&L, in that some of the costs are fixed and some of the costs are incurred only if you accept the order. If this is the case, then you need to make sure that your out-of-pocket costs are covered by each order and that your fixed costs are part of the pool of expenses that

must be covered by the variable profit from the order.

Most of the time, customers want one price for their products and services, and periodically they will try to compare the price that you are charging them to the price that a competitor may charge. In the last issue of BoxScore, we discussed “unbundling” the sale to get a better understanding of what the true contribution of the order by profit center was.

Delivery charges are certainly a part of this equation. We know that we must

ABC Box Inc.

Schedule of Delivery Expenses For the Six Months Ended September 30, 2016 WAGES OVERTIME PREMIUM PAYROLL TAXES FRINGE BENEFITS FUEL TOLLS REPAIRS AND MAINTENANCE LEASES DEPRECIATION

ADDITIONAL INFORMATION MSF SHIPPED 115,887 # OF TRIPS 1,020 # STOPS 3,576 # MILES 98,766

$ 156,000 17,160 13,260 35,100 30,864 7,876 26,275 32,578 16,554 $335,667

COST/MSF COST/TRIP COST/STOP COST/MILE

% SALES 1.52% 0.17% 0.13% 0.34% 0.30% 0.08% 0.26% 0.32% 0.16% 3.27%

/MSF 1.35 0.15 0.11 0.30 0.27 0.07 0.23 0.28 0.14 $2.90

$2.90 $329.09 $93.87 $3.40

Financial Corner

design, produce, and deliver—on time— quality packaging to our customers to convince them to pay us. We also know that to do so, we incur fixed plant and other operating costs that are necessary to support this endeavor. Our customers want us to charge them a reasonable, market-based price, and for the most part, they really don’t care how we calculate it.

The Problem and Solutions Therein lies the problem, and there is no universally correct solution, because all customers are slightly different. Let’s take a look at the hypothetical ABC Box Inc. ABC is a sheet plant that employs six nonunion drivers that it pays an average of $25 per hour. It runs a fleet of five tractors and one straight truck and leases the tractors, but owns its own trailers. On the previous page is a snapshot of their delivery costs and other delivery data for the six months that ended September 30, 2016.

As you can see, ABC’s total cost of delivery for those six months was $335,667, which represents $2.90 per MSF shipped and 3.27 percent of sales.

They have also calculated that their average cost per trip is about $329, their average cost per stop is $94, and their average cost per mile is $3.40. Obviously, there are other variables that need to be considered, such as cube utilization, traffic, the specific needs of the buyer, and so on.

Most of you have tables built into your estimating systems that make these calculations and supposedly consider these and possibly other factors. At the end of the day, most of you don’t really know how much of these costs you are

recouping because you haven’t been able to break out the delivery charge on all orders. In addition, very few of you have only the variable component of this function above the contribution line, thus further clouding the real contribution of the order. My recommendations in this area are: Take the time to really understand what is included in these tables, so you have a good understanding of how your system is calculating what to charge for delivery.

As I have advocated in previous articles, start to track the time it takes to deliver, and make that part of how these charges are calculated. Try to use this to influence customer behavior whenever possible.

Keep track of the freight charge on each order, so that at the end of every accounting period you can find out whether your delivery charges are sufficient. Hopefully you can do this through your system directly or by taking steps to unbundle the sale. If this isn’t possible, consider tracking this on a spreadsheet outside the system.

Use the averages calculated above (cost per MSF/trip/stop/mile) as sanity checks for each situation.

Determine which of these costs vary directly with each order, and make sure that your estimating VPP (variable profit prediction) systems don’t allocate fixed costs such as leases and depreciation to the variable cost pool used in your contribution calculations. In my view, the variable costs would be fuel, tolls, driver overtime, and related payroll costs.

I say this because most of you pay your drivers for a 40-hour week, and most of the maintenance costs don’t vary much if the mileage is 10 percent higher or lower.

However, you must make this decision based upon how you run your business. If you look at things the way I am suggesting, the average variable cost of delivery is $0.49/MSF, yet I’ll bet that if most of you were running this company, you would have a variable freight charge of well over $2/MSF. On a tight order, $1.50/MSF could make a big difference.

Mitch Klingher is a partner at Klingher Nadler LLP. He can be reached at 201-731-3025 or mitch@ klinghernadler.com.

BOXSCORE www.aiccbox.org

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International Corrugated Packaging Foundation

SKILLSUSA ‘PLANT FLOOR’ PILOT FOR HIGH SCHOOL STUDENTS LAUNCHED IN CHICAGO

T

his January and February, several pilot programs are being initiated at high schools throughout the Chicago area to determine whether a local model to prepare students for careers in plant operations and maintenance can be created through a partnership with SkillsUSA. Over the past eight months, ICPF has worked in a joint effort with FBA and AICC in identifying and working with SkillsUSA chapters and corrugated packaging firms that are willing to dedicate the time and

resources necessary to develop customized educational programs at select Illinois high schools.

Formerly the Vocational Industrial Clubs of America (VICA), the SkillsUSA program of work is delivered through more than 17,000 member sections (classrooms) in 4,000 public schools (chapters) in all 50 states. These schools are comprehensive high schools with career and technical curricula, regional career and technical education centers, and local two-year colleges.

Four ICPF Corporate Partners— KapStone, PCA, StandFast Packaging, and WestRock—have committed the next two years to dedicating key personnel to provide plant tours, create curricula, mentor faculty and students, make classroom presentations, and take the additional steps necessary to establish an educational platform to serve corrugated packaging firms in the Chicago area.

The prototype can then be replicated by corrugated firms and SkillsUSA chapters throughout the nation.

ANNUAL TELECONFERENCE TO INTRODUCE CORRUGATED CAREERS TO 400–500 STUDENTS

O

n February 23, ICPF will conduct its annual Teleconference on the Business of Corrugated Packaging & Displays and Its Career Opportunities. An estimated 400–500 packaging, graphic design, marketing and sales, supply-chain management, business, and other students and faculty on 15–18 college and university campuses are expected to participate. This annual event is not a webcast, but a live video conference utilizing professional WKAR TV personnel and TV broadcast equipment at central Michigan’s public television studios for two-way interactivity. Campuses annually participating include Appalachian State University, Bowling Green State University, California Polytechnic State University, Clemson University, Dunwoody College

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of Technology, Indiana State University, Illinois State University, Lewis-Clark State College, Michigan State University, Millersville University, North Carolina A & T University, Rochester Institute of Technology, Rutgers University, the University of Florida, University of Texas–Arlington, University of Wisconsin–Stout, and Virginia Tech.

The topic, “The Business of Corrugated Packaging & Displays and Its Career Opportunities,” will be addressed

by Andy Pierson (president of MidAtlantic Packaging) and Craig Gunckel (president enterprise solutionsand merchandising displays for WestRock.

Marysa Kotsogiannis, a recent MSU packaging graduate who is a packaging and graphic designer at Green Bay Packaging in Chicago, will moderate

the teleconference. Marysa was recruited

by Green Bay Packaging through ICPF. The panel presentation will be followed by a round of live questions remotely directed to the panelists from each of the participating campuses.

The teleconference’s grand finale will include ICPF’s annual Best of the Best Student Design Presentation Competition.

Two student teams from Millersville University, a team from Appalachian State, and one from Cal Poly will be tasked to show, tell, and sell their winning entries by explaining the objective, the research conducted, design, and other background information. Those student teams, that earlier placed in AICC’s 2016 design competition, will be competing for cash prizes.

International Corrugated Packaging Foundation

HOLIDAY WEEKEND IN NEW YORK— THANK YOU!

ICPF’s ninth Holiday Weekend in New York was enjoyed by 55 couples who celebrated the season while supporting ICPF’s educational initiatives.

The 44 participating companies, as well as weekend sponsors, were recognized for their support by Steve Landaal, ICPF chairman 2015–2016.

I

CPF wishes to thank the 2016 registrants and sponsors for making the ninth annual Holiday Weekend in New York the most successful to date.

Both the number of participants and the level of funds raised for ICPF’s educational initiatives exceeded the records set in the previous year. Established in 2007, the annual New York supports ICPF initiatives.

The 2016 event sponsors included Pratt Industries, sponsor of the Friday opening reception at The View; BW Papersystems, sponsor of the Saturday Broadway matinee performance of On Your Feet!; Bobst North America, sponsor of the Saturday reception and dinner at the 21 Club; and Equipment Finance Corporation, Fosber America, and Gerber Innovations, which sponsored ICPF’s holiday gifts for participants. Additional sponsors included

Mid-Atlantic Packaging, Progress Container & Display, Smurfit Kappa, and Serenity Packaging.

Corporate registrants included Akers Packaging, American Packaging, Amtech, Atlas Container, Bay Cities, Bobst North America, Buckeye Corrugated Inc., BW Papersystems, Cascades Containerboard Packaging, CEL Chemical, Equipment Finance Corporation, EFI, Fitzpatrick Container, Foley & Lardner, Fosber America, Gerber Innovations, Green Bay Packaging, Greif, Haire Group, Huston Patterson, Interstate Resources Inc., JB Machinery, J.M. Fry Printing Inks, KapStone Paper & Packaging, Kiwiplan, Kruger, Landaal Packaging, Liberty Diversified International, Mid-Atlantic Packaging, Moore Packaging, Packaging Corporation of America, PackageX Inc., Pratt Industries, Progress Container &

Display, Serenity Packaging, Smurfit Kappa, StandFast Packaging, Sumter Packaging, Testing Machines Inc., Wasatch Container, WestRock, AICC, and FBA. Jeff and Janice Chalovich (WestRock) served as co-chairs of this past December’s weekend event.

Mark your calendar for the next Holiday Weekend in New York, which is scheduled for December 8–10, 2017.

For more information, contact ICPF at info@icpfbox.org, 703-549-8580, or visit www.careersincorrugated.org.

Richard Flaherty is president of the International Corrugated Packaging Foundation.

BOXSCORE www.aiccbox.org

63

The Final Score

WHAT ARE YOUR TOP THREE BUSINESS CHALLENGES IN THE NEW YEAR?

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his is the time of the year when we’re traditionally asked to give an outlook for the industry. This year, rather than rely on our own forecast, I went directly to AICC’s members and asked, “What are your top three business challenges in the new year?”

Here are three topics that come up frequently in recent polls: Profitability. It comes up in every survey we do: Profitability—or rather, the erosion of profitability—is a key concern of members everywhere. And it should be. Our competitive economy drives members to find new ways to find new niches, increase sales, and reduce costs. This concern plays out in concrete action: training to increase sales; seeking a better understanding of material and manufacturing costs; and investment in equipment and machinery to improve efficiency. This leads us to the next challenge.

Planning for capital investment. For some members, a big challenge is keeping pace with technological change in our industry. Said one, “The thing that I find most challenging is just keeping up with the machinery and technology.” Another member, referring to the pace of change in their customers’ operations, said, “Increased automation demands a whole other business model to understand and maintain.” We saw this play out at AICC/TAPPI SuperCorrExpo® 2016, with the type and quantity of machines offering quicker setup times, faster run speeds, digital print processes, and new innovations in ancillary equipment, such as robotic feeders and smarter stackers. All these contain the secrets to increasing throughput, driving down cost, and increasing profitability. This goes to our next concern, the challenge of finding good employees.

Finding and keeping workers. Recently, in a survey AICC conducted among its members asking their principal concerns about the business, 26 percent of the responses had something to do with finding, retaining, recruiting, or training. This concern has driven a unique project involving AICC, Fibre Box Association (FBA), and the International Corrugated Packaging Foundation (ICPF). Working with SkillsUSA, the three organizations are promoting a pilot project among corrugated and folding carton plants in the Chicago area to develop yearlong internship programs to expose high schoolers to the opportunities available in the corrugated industry. Thanks to StandFast Group, WestRock, and Packaging Corporation of America for stepping up to do this pilot.

I could go on, but my space is limited, so let me finish by saying that AICC provides the resources for members to deal with these challenges and more. Our training and education programs, technical resources, networking events, and cooperative ventures such as SuperCorrExpo® give the independent sector the tools to succeed and grow in our dynamic industry. Here’s to a prosperous 2017!

Steve Young President, AICC

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BOXSCORE January/February 2017

AnviLatch

™

A

AnviLatch, the latest modern anvil cover mounting technology from Dicar eliminates the hassle of mallet mounting your anvil covers. Simply place the AnviLatch device on the die drum and position the safety guard…

Place the lead edge of the cover in the mounting slot… Rotate the drum and cylinder… and AnviLatch secures the cover lock-up without the use of a mallet or hammer. It’s simple, safe and fast.

FEATURES: Available for all popular rotary die drum sizes Eliminates the need for mallets or hammers Safety guard protects operator from nip Includes Gripper Bars for easy drum rotation Mounts in minutes

®

Dicar, Inc.

10 Bloomfield Avenue, Pine Brook, NJ 07058

 800 -323 -4227

www.dicar.com

Dicar, the Dicar logo and the color of blue used in Dicar products are registered trademarks of Dicar, Inc. AnviLatch is a trademark of Dicar, Inc. Dicar products may be covered under one or more US and International patents or pending patents. Copyright © 2016. All Rights Reserved.

TRUE CONTROL NEW EXPERTFOLD 145 | 165 Featuring class-leading folding control, superb ease of use and access to the latest quality assurance systems, the new EXPERTFOLD 145 and 165 deliver both high productivity and excellent box quality.

Modular in design, with advanced feeding, highly accurate pre-breaking and folding systems that minimize fishtailing and gap, these EXPERTFOLD models are perfect for growing your corrugated or litho-laminated box business.

www.bobst.com