May/ June 2017 AICC BoxScore

May/June 2017 Vol. 21, Issue 3

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2017 MEMBER BENEFIT ISSUE!

A PUBLICATION OF AICC, THE INDEPENDENT PACKAGING ASSOCIATION

May/June 2017 Volume 21, No. 3

BUYING TO GET BETTER A LOOK AT TWO COMPANIES FOCUSED ON GROWTH THROUGH ACQUISITION

ALSO INSIDE Three Days of Learning and Conversation CEO Metrics

TABLE OF CONTENTS May/June 2017 • Volume 21, Issue 3

COLUMNS

52 FEATURES

52 58

BUYING TO GET BETTER A look at two companies focused on growth through acquisition CEO METRICS How do you know how you are doing?

58

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.

3

CHAIRMAN’S MESSAGE

4

SCORING BOXES

8

LEGISLATIVE REPORT

12

MEMBERS MEETING

21

ASK RALPH

22

SELLING TODAY

26

TACKLING TECH

28

SAFEGUARD

30

LEADERSHIP

32

MARKETING MIX

62

THE ASSOCIATE ADVANTAGE

64

ASK TOM

68

FINANCIAL CORNER

72

THE FINAL SCORE

DEPARTMENTS

10

WELCOME NEW MEMBERS

35

GOOD FOR BUSINESS

40

POINT OF VIEW

46

MEMBER PROFILE

70

ICPF UPDATE

This is our annual Member Benefit issue! Look for this seal throughout the book that calls out each of your exclusive AICC member benefits.

BOXSCORE www.aiccbox.org

1

OFFICERS Chairman: Tony Schleich, 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: Humberto Trevino, Washington Box, S De RL De C.V. 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 Senior Managing Editor: Ashley Reid Senior Editor: Sam Hoffmeister 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 of 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 Alyce Ryan, Marketing Associate 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.

Chairman’s Message

LIKE THE PROS, WE STRIVE TO ALWAYS BE BETTER!

H

onestly, is there a better time of the year for sports than right now? Despite being a die-hard NFL fan, how could one not argue that this is one the best times of the year?

At the time I am writing this, there is a solid field of 64 hopeful teams for the coveted NCAA National Basketball Championship; the NBA and NHL playoffs are shaping up; and the Masters golf tournament is about to happen. It is truly a sports-​lover’s dream time!

Have you spent time trying to understand what it really takes for a team or an individual to reach the pinnacle of their game?

To become the champion, a team or individual must obviously be the best.

Unfortunately, our society today has watered down “being the best” because it may be offensive. What a crock! Sure, luck may play a factor in a team’s success, but as someone once told me, “Opportunities are called luck to those unprepared for them.”

Tying into all of this while continuing my “principled leadership” theme, I will move to our third of five “value pillars”—excellence. The standard definition of this word is “the quality of being outstanding or extremely good.”

Perhaps it is a cliché and overused from a business-mission statement standpoint, but we at the Lawrence Paper Company’s American Packaging Division still latched onto excellence and defined it as: “Striving always to be better while celebrating victories and improving from mistakes by having a prevailing attitude of innovative habits.”

Much as a championship-caliber team would do, we want to reinforce our culture in which we will celebrate our accomplishments. However, we also will encourage “failing forward” by learning from our mistakes.

Our journey to excellence is ongoing, and it is at times slow and frustrating. Going forward, we will be using the many educational offerings through the AICC Packaging School to facilitate this journey, and I strongly encourage you to sign your people up for the courses as well. In fact, your Association feels so strongly about the importance of this education and training that, effective April 1, all e-learning education and training opportunities are included in your membership investment. That’s real value!

It was good to see so many of you at our 2017 Spring Meeting and Independents’ Cup Charity Golf Tournament at Hyatt Regency Lost Pines Resort in Austin, Texas.

Thank you for your ongoing support of AICC!

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

BOXSCORE www.aiccbox.org

3

Scoring Boxes

HOW POOR PRODUCTIVITY GROWTH HURTS INDEPENDENT BOXMAKERS

BY DICK STORAT

P

4

BOXSCORE May/June 2017

Nonfarm Business Labor Productivity, Output, and Hours Worked, Average Annual Growth Rates % 4.0

3.8 3.4

3.5 3.0 2.5 2.0

2.7

2.9 2.3

2.1 1.6

1.4

1.5

1.1

1.1

1.0 0.5 0.0

0.2 90Q3–01Q1 Productivity

01Q1–07Q4 Output

output is lower than it would have been had the earlier, higher rates of productivity growth continued. And one consequence of that forgone output growth is the lost growth in corrugated packaging demand that is associated with it, as there has historically been a close correlation between growth in industrial production and growth in corrugated packaging demand.

One can calculate the difference between the nonfarm business output actually recorded since the end of the Great Recession in the fourth quarter of 2009 with the output that would have been achieved, had productivity grown at the rate associated with the prior business

SOURCE : US BL S

roductivity is the biggest single factor affecting U.S. consumers’ standard of living and the rate at which their spending grows. In turn, rising spending spurs production increases and leads to additional demand for boxes produced by independent converters.

Unfortunately, even with 1.3 percent growth during the fourth quarter, last year’s productivity gain amounted to only 0.2 percent, the slowest rate since 2011.

Moreover, productivity advanced by only 0.9 percent in 2015 and by 0.8 percent in 2014, according to the U.S. Labor Department. In fact, productivity gains during the current business cycle have not outperformed gains in any of the 11 business cycles since 1947.

Productivity gains occur when output grows faster than labor hours required to produce that output. The chart on this page shows the average annual growth rates of productivity, output, and hours worked for the current and last two business cycles and the average for the 11 business cycles the United States has experienced during the past 70 years. So far during the current business cycle—which began in the fourth quarter of 2007—productivity has grown at 1.1 percent, less than half the 2.7 percent growth rate of the previous business cycle (first quarter 2001 to fourth quarter 2007). In fact, it grew at less than half the 2.3 percent average growth rate achieved over the past 70 years.

One consequence of this faltering productivity growth rate is that national

0.3 07Q4–16Q3

Average of last 11 cycles

Hours Worked

cycle. The chart on Page 6 shows that gap pictorially as the difference between the green solid line, showing current business cycle output growth, and the red dashed line showing the 2.9 percent annual growth that output achieved during the previous business cycle.

The Great Recession had the largest decline in output of any recession in the post-World War II era, dropping a total of 6.7 percent between the fourth quarter of 2007 and the fourth quarter of 2009.

Since then, as the Output Trend lines chart depicts, output recovered at an average rate of 2.6 percent per year, the slowest pace of any recovery since World War II. In order to have recovered to

Meeting Registration will open June 2017 at www.AICCbox.org/meeting The AICC 2017 Annual Meeting will be held September 25-27, 2017 at The Encore Hotel in Las Vegas, NV. The annual meeting will feature a three-day series of workshop tracks, round tables, general sessions, networking, and social events. Special “box plant” group pricing will be offered, so more people in your company can attend this value packed week for one low price.

The AICC 2017 Designers Lab & Independent Packaging Design Competition—“Welcome to Fabulous Design” will be held in conjunction with the meeting. The meeting is being co-located with PackExpo Las Vegas 2017 at the Las Vegas Convention Center.

The Encore Hotel is an all suite hotel designed to be explored and discovered while exciting the senses of guests. Hailed as a luxury destination; the rooms are elegantly appointed and equipped with advanced technologies and panoramic views. Casual elegance describes the environment that is home to 20 signature restaurants, ultra-chic nightclubs, and luxury shopping that brings your Las Vegas experience to a new level of distinction.

Image Courtesy of The Encore Hotel

Highlights 2017 Independent Packaging Design Competition—“Welcome to Fabulous Design”—Featuring 42 categories for corrugated, folding carton, and rigid box makers. Competition Registration will be open in June 2017.

Designers’ Lab for Corrugated, Folding Carton & Rigid Box Designers—Opportunity for designers to learn new techniques in structural and graphic design, share knowledge and experience with peers and show off their skill and talent in the “Design Challenge.”

Design Lab Co-sponsored by ESKO, Gerber Innovations and HP. PackExpo Las Vegas 2017—The most complete packaging show in the worlds largest market. All attendees will have complimentary access to attend Pack Expo.

Image Courtesy of The Encore Hotel

The Encore Hotel—AICC Room Rates Resort Suite King or Double Accommodations: $249/night* (*plus applicable taxes—currently 13.38%)

To make your hotel reservations call (866) 770-7555, and reference the AICC 2017 Annual Meeting Hotel Reservation Deadline: Friday, September 1, 2017

AICC • 113 S. West Street • Alexandria, VA 22314 USA • (703) 836-2422 • www.AICCbox.org

Scoring Boxes

Output Trend Lines 2007Q4–2016Q3 Index: 2009 = 100

140 135

2 .9 %

130 125 120

4 .5

115

year per

r yea er p %

2 .6 %

110

ear per y

SOURCE: US BLS

105 100

07 Q4 08 Q2 08 Q4 09 Q2 09 Q4 10 Q2 10 Q4 11 Q2 11 Q4 12 Q2 12 Q4 13 Q2 13 Q4 14 Q2 14 Q4 15 Q2 15 Q4 16 Q2

95

2001Q1–2007Q4

the same level of output as would have been achieved by the 2.9 percent output growth of the previous business cycle, output would have had to grow at a 4.5 percent annual rate since the fourth quarter of 2009, instead of the 2.6 percent annual rate recorded to date—1.9 annual percentage points higher.

If we assume that the additional industrial output over the 2010–2016 seven-year period translated directly into additional corrugated shipments, we can calculate the additional demand for boxes that has been lost owing to subpar productivity growth during the recovery phase of this business cycle.

We take the actual percentage change in box shipments in each year and add to it an additional 1.9 percentage points.

The following year’s box shipments are then calculated using that growth rate instead of the actual rate. Doing this each year since 2009 yields a seven-year total

6

BOXSCORE May/June 2017

Current Business Cycle

incremental demand of 200 billion square feet of corrugated board! That amounts to a 7.9 percent increase over actual shipments during that period.

The shipments during last year under the higher productivity assumption would have been 52 billion square feet (13.8 percent) greater than the actual shipments of 376 billion square feet. Assuming the average size of a corrugator plant to be 300 million square feet per year and the average size of a sheet plant to be 75 million square feet per year, this incremental demand would have created the need for—or forestalled the need for closure of—some 65 corrugators and 100 sheet plants, using the Fibre Box Association’s average size of each plant type in 2015 and an apportionment of 80 percent of box shipment volume to corrugators, consistent with 2015 FBA data.

The situation only worsens if the long-term 3.4 percent average annual

growth rate of nonfarm business output had still prevailed. Instead of 4.5 percent annual growth to make up the output gap, a 5.5 percent annual growth rate would be required to make up the gap …

2.9 percentage points higher instead of the 1.9 percentage-point premium used in this example.

While the past cannot be re-created and there are important structural factors limiting current potential productivity growth, just imagine how different the independent corrugator business would be today if the output increase rate of the previous business cycle could have been maintained for the past seven years.

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

Legislative Report

PRO-BIZ POLICIES NOT SO CERTAIN NOW, DESPITE REPUBLICAN CONTROL

BY JOHN FORREY

I

n one of my columns earlier this year, I gushed about how President Donald J. Trump’s victory and the Republican Party’s takeover of the administration and both houses of Congress would pave the way for a flood of pro-business and pro-manufacturing policies. In fact, in my last column (see March/April BoxScore, Page 8), I called the speed with which the new administration was acting on certain issues “truly inspiring.”

The Trump administration has taken some strong actions in the first 100 days, such as the order directing the secretary of the treasury to review the 2010 Dodd Frank financial regulatory law; the orders reviving the Keystone XL pipeline and Dakota Access pipeline; and the “Energy Independence Executive Order,” which revoked the Obama administration’s Clean Power Plan and the emissions limits on new and existing coal power plants.

Your congressional representatives need to know your thoughts on these recent

developments. That is the only way a democracy works.

All these initial achievements have been eclipsed, however, by the internecine fighting within the ranks of the majority party, which essentially doomed what I considered to be a credible replacement to the Obamacare fiasco under which we have been living for the past eight years. It is hard for me to imagine how a Republican administration, working with Republican majorities in both houses of Congress, could let such an opportunity slip through its fingers so easily.

In a recent Wall Street Journal article, columnist Gerald Seib said that mere partisanship was no longer the problem.

“The danger at the moment,” he wrote, “is that the capital could be sliding into a kind of tribalism.” Some of the “tribes” he refers to are the “Freedom Caucus,” a successor to the tea party candidates of earlier days; the “Trump Tribe,” whose loyalty leans more to the president than it does the party; and the “Governing

All these initial achievements have been eclipsed by the internecine fighting within the ranks of the majority party.

8

BOXSCORE May/June 2017

Republicans,” who actually want to get things done and see the necessity for compromises. Compare these with the “Never-Trump” Democrats tribe and the very small tribe of “Maybe-SometimesTrump Democrats.”

Come to the 2017 Print & Packaging Legislative Summit As we approach the dates of our 2017 Print & Packaging Legislative Summit (June 20–21 in Washington, D.C.), let’s take a stance of support for governing from “the middle.” This is especially important for us as business owners because none of the Trump administration’s aspirations for regulatory reform, pro-business tax policies, and even Supreme Court nominations can succeed without treading on the middle ground, and seeking accommodation and compromise.

I hope you will be joining us this year. We need level-headed, determined business constituents to unify the “tribes” in our nation’s capital.

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! AGE INDUSTRIES LTD. BILL ALLEN President/COO 3601 County Rd., 316C Cleburne, TX 76031 Phone: 817-641-8178 Fax: 817-645-0156 www.ageindustries.com bill.allen@ageindustries.com MacDERMID GRAPHICS SOLUTIONS PATRICK MULLANEY Business Director 5210 Phillip Lee Drive Atlanta, GA 30336 Phone: 404-696-4565 Fax: 404-699-3354 graphics.macdermid.com pat.mullaney@macdermid.com LOVEPAC ROBERT SIBTHORPE President 140 Rue Barr St-Laurent, QC H4T 1Y4 Canada Phone: 514-904-4300 Fax: 514-904-4301 www.lovepac.com rob@lovepac.com MEYERS MICHAEL LANE President 7277 Boone Ave. N. Minneapolis, MN 55428 Phone: 763-504-3481 www.meyers.com mike.lane@meyers.com

10

BOXSCORE May/June 2017

ELITRON AMERICA INC. DANIELE GALLUCCI CEO 1100 South Tower, 225 Peachtree St. Atlanta, GA 30303 Phone: 844-354-8766 www.elitron.com/en daniele.gallucci@elitron.com TANGO PRESS STEVE TOTH Co-founder P.O. Box 9895 Fayetteville, AR 72703 Phone: 479-439-6900 www.tango-press.com steve@tango-press.com AMERICAN INTERNATIONAL MACHINERY INC. KEVIN KOPLIN Managing Director 7725 S. 6th St. Oak Creek, WI 53154 Phone: 414-764-3223 Fax: 414-897-4431 www.signaturefoldergluers.com kkoplin@americanintl.com CAJAS Y EMPAQUES DE BAJA CALIFORNIA JOSE ARMANDO GARCIA Owner Blvd. Lรณpez Mateos Km 5.5, Col. Sanchez Taboada 21360 Mexicali, B.C. Mexico Phone: +52 686-5800-808 www.cyebc.com jose.garcia@cyebc.com

SAPPI NORTH AMERICA MARK HITTIE Director, Packaging Brands and Communications 255 State St. Boston, MA 02109 Phone: 617-423-7300 Fax: 617-368-6599 www.sappi.com mark.hittie@sappi.com SOUTHERN STATES PACKAGING ROSS LYON Sourcing P.O. Box 650 Spartanburg, SC 29304 Phone: 864-579-3911 www.sspc.biz ross@sspc.biz

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Members Meeting

THREE DAYS OF LEARNING AND CONVERSATION

Hundreds of representatives of AICC member companies came together for the opening night reception.

M

ore than 500 representatives of AICC member companies, with nearly 150 spouses and kids in tow, descended on the Hyatt Lost Pines Resort in Austin, Texas, April 26–28 for the AICC 2017 Spring Meeting.

Emerging Leaders Training Nearly 60 AICC Emerging Leaders (ELs) came in a day early to participate in a workshop on Principled Leadership. The session began with a presentation and conversation with Scott Ellis, co-founder, P2, moderating. The conversation focused on building trust, understanding customers, and using effective communication.

12

BOXSCORE May/June 2017

The group then broke into separate panels for the men and women to discuss Building the Right Reputation. Panelists included: Jody Akers, Akers Packaging; Bonnie Barraclough, Can-Am Packaging; Julie Elgin, Oklahoma Interpak; Jerry Frisch, Wasatch Container; Jana Harris, Harris Packaging; Emma Hay, EFI; Chris Heusch, ARCH Inc.; Larry Hudson, Jamestown Container Companies; Molly Mercer, Litho Press; and Barb Willians, EFI. Panelists shared their personal experiences and offered suggestions to the ELs. The connections made between the ELs and the industry panelists could be seen in the continuing conversations

throughout the remainder of the Spring Meeting.

During a working session, later in the program, ELs developed the mission statement for the Emerging Leader Program: Developing the Leaders of Tomorrow, Today.

Plant Tours Wednesday began with nearly 90 people embarking on tours of StarCorr Sheets LLC/Schwarz Partners Sheet Feeder group and Community Impact Newspaper.

StarCorr Sheets LLC is one of the newest members of the Schwarz Partners Sheet Feeder group. The greenfield plant

Members Meeting

was built in 2015 and started production in November.

Community Impact Printing prints the company’s 23 newspapers for the Austin, Dallas, and Houston metro markets. Their focus is to provide “hyper­ local” news.

Sales Managers Forum Another 30 joined the Sales Managers Forum, at which participants heard from Ellis on Hunting Hunters, with tips and tools for finding and developing packaging sales professionals.

Then, Ed Wallace, president and chief relationship officer of The Relational Capital Group, spoke on Sustaining Relational Capital. Wallace focused the group on understanding relationship management as a core competency and learning how to objectively evaluate the relationships of the sales team.

Next, attendees heard from Andrew Hurley, assistant professor of packaging science, Sonoco Institute of Packaging Design and Graphics at Clemson University, on Transforming the Commodity. This segment discussed finding the right value proposition for each potential customer and encouraged participants to look beyond the box.

The final presenter of the Forum was Dave Eggleston, president, Frain Integration, who offered insights on Differentiating the Commodity: The Disruptive Impact of Education on Value. The focus of this segment was on creating the understanding within a company’s customer base that you are the “industry expert” to create a sales cycle that involves a combination of consultative relationship management, trend analysis, activity-based recommendations, and reverse-engineered retailer expectations.

Attendees chose from four, two-day workshop tracks during the Meeting.

Christine Walters, JD, MAS, SHRM-SCP, SPHR – FiveL Company gave a keynote presentation and led the HR Workshop track.

Tony Schleich, president, Lawrence Paper Company, American Packaging Division, AICC chair welcomed attendees.

Al Hoodwin, CEO, Michigan City paper Box, and AICC vice-chair, encouraged everyone to take advantage of the free online education now available to all members.

BOXSCORE www.aiccbox.org

13

Members Meeting

MEETING SUPPORTERS Premier Meeting Sponsors

• Equipment Finance Corp.

• Automatän

• The Flint Group

• EFI

• Fosber America

• HP

• Global Boxmachine

• Poteet

• Great Northern Corp.

Major Golf Sponsors • Mitsubishi Heavy Industries America Inc. • Richmond Corrugated Box Co. • WestRock

• Huston Patterson • JB Machinery • KapStone Paper & Packaging • KOLBUS America—HYCORR LLC • Lewisburg Printing

Top, Midlevel & Golf Sponsors

• McLean Packaging

• A.G. Stacker

• Oklahoma Interpak

• Akers Packaging

• Pamarco

• Alliance Machine Systems

• People’s Capital & Leasing Corp.

• American Corrugated Machine

• Schwarz Partners

• Bay Cities

• Stafford Cutting Dies

• BCM Inks

• StandFast Group

• Benefits Exchange Alliance

• SUN Automation Group

• Bobst North America

• Vanguard Packaging

• Can-Am Packaging

• W.H. Leary

• Carolina Container

• Wasatch Container

• Cascades • Cascades Sonoco

Partners

• Dynaric Inc.

• NV Business Publications: Board Converting News & Corrugated Today

• Emmerci USA

• RISI: Pulp and Paper Week

• CorrChoice

14

• Haire Group

BOXSCORE May/June 2017

Human Resource Summit Forty-five human resources (HR) professionals came together during the HR Summit, hearing from Holly Green, CEO and managing director, The Human Factor; Gene Marks, columnist, author, and small business owner, Marks Group PC; and Christine Walters, J.D., MAS, SHRM-SCP, SPHR, FiveL Company.

Challenges and solutions discussed the first day included: • Finding, managing, rewarding, and engaging employees to become a “Best Place to Work” organization.

• Learning the employee life cycle (recruiting, retaining, rewarding, and engaging employees) and key actions you can take at each stage to be even more successful.

• Tools and services, platforms and applications, and hardware and devices that today’s innovative companies are using to recruit, collaborate, manage, pay, evaluate, and communicate with their employees.

• The Patient Protection and Affordable Care Act. The Summit continued through two days of workshops, which offered participants the opportunity to earn continuing education credits and review their employee handbooks and HR’s top 10 headaches.

In addition to the HR Summit and workshops, the Meeting hosted three additional workshop tracks.

Sales and Leadership Track Wallace spoke to more than 100 attendees about the relational ladder.

He stressed the need to pursue credibility, authenticity, and integrity to aspire to become a respected adviser. A respected adviser offers a two-way relationship, and it is relationships that allow sales to grow.

Members Meeting

Hot Topics Track Marks brought 45 people together and held a fast-paced session identifying “what’s hot” in business. Discussions covered health insurance, HSA (health savings account) plans, and Obamacare.

In trends, he mentioned that wages will increase by at least 3 percent, and minimum wages will also increase. He believes overtime regulations will not change in 2017 and noted that paid time off is trending up. He also mentioned that several companies, including LinkedIn, which are offering unlimited paid time off, see employees taking less time compared to companies with a use-itor-lose-it policy.

Day two of Hot Topics offered nearly 30 participants unfettered access to AICC’s corrugated and folding carton technical advisers, Ralph Young and Tom Weber. They offered immediate responses to the critical questions impacting the performance of member companies.

Supplier Innovation Twenty AICC Associate members presented their latest innovations over two days. The initial session had nearly 90 participants filling the audience. Presentations included: • “Alliance Machines Raptor Palletizer Offerings” — Danny Lopez, Alliance Machine Systems International LLC.

• “INext—Digital Transformations and the Technology That Drives Them” — Eric Nolan, Amtech/Futura.

• “New Developments of the Bahmüller Specialty Folder Gluer” — Benjamin Holke, Wilhelm Bahmüller.

• “Evolution in Bundle Reject Technology” — Chris Raney, Baumer HHS Corporation.

• “ColorConneXion—Simply Controlling Color” — Robert Callif, BCM Inks USA Inc. • “Eterna 3200-C6 (126") Specialty Folder Gluer” — Mark Caffrey, Brausse.

• “FlexSHIELD” — Jeff Stacy, Cascades Sonoco.

Have you considered adding roll handling equipment to your operation? C&M Conveyor has extensive experience providing roll handling solutions to the corrugated box, folding carton and printing industries. Our roll conveying systems include fully automatic, semi-automatic, manual push-type, and continuous feed and discharge. Call today to find out the best solution to your roll handling requirements and boost your plant’s productivity.

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BOXSCORE www.aiccbox.org

15

Members Meeting

Ed Wallace, president & chief relationships officer –The Relational Capital Group, explained how to build meaningful business relationships.

Two evening receptions offered extra time for members to connect.

Gene Marks, columnist, author, small-business owner, and CPA gave a keynote presentation and moderated day one of the "Hot Topics" track.

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BOXSCORE May/June 2017

The 2017 Spring meeting offered more learning opportunities than ever before.

• “Leading the Digital Transformation—End-to-End Certified Corrugated Workflows” — Barb Willans, EFI. • “Innovations in Rigid Box Manufacturing Automation Equipment for Luxury Packaging” — Glenn R. Maile, Emmeci USA LLC. • “Simplifying Multi-Part Corrugated Display Design & Production Workflow and Integrating Production with Business Systems” — Richard Deroo, ESKO. • “Printing Inside and Outside the Box in a Single Pass” — James Schiffman, Global Boxmachine LLC. • “HP PrintOS” — Bob Raus, HP Inc. • “The HP Pagewide C500 Press” — Steve Shannon, HP Inc. • “ColorCure ‘Cold’ LED UV” — Dave Burgess, JB Machinery.

• “KOLBUS Luxury Packaging Line/Boxline” — Robert Shafer, KOLBUS America Inc.–Hycorr.

• “Protecting Loads From the Elements With Lachenmeier Xeros Film” — Mark Wolschlag, Muller.

• “Corrugator Lab” — Peter Dobell, OM Partners.

• “SUN110 RDC: New Cost-Effective, Reliable, High Performance Rotary Die Cutter” — Aaron Schlothauer, SUN Automation Group.

• “ClearVision BoxChek” — Ray Rammelsberg, ValcoMelton.

• “Robotic Palletizing Solution” — Doug Vandergriff, WSA-USA. CEO Eye-Openers For early birds, the meeting offered two CEO eye-openers. The first, with Green, brought 52 people together with a riveting program on why we do what we do and how to set ourselves up to get clear on winning in business. Participants discussed managing time effectively, implementing

Members Meeting

Female leaders shared their experience with the women in the Emerging Leader program.

email processes to clean up your inbox and track and follow up with messages, and holding effective meetings.

The second was facilitated by Scott Ellis and Mitch Klinger, CPA, Klingher Nadler LLP. It allowed participants to learn from one another about deciding to buy or sell, making capital improvement decisions, and working with family.

Ellis and Klingher regularly facilitate AICC CEO Advisory Groups. Learn more at www.aiccbox.org/ceo.

Keynote Speakers Matt Elhardt, vice president, North America, Fisher International, presented an overview of the current state of the paperboard and corrugated industry, and provided an outlook for the future. He covered trends and cost drivers for fiber, energy, and labor.

Dinesh D’Souza, renowned filmmaker, author, and scholar, gave an

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BOXSCORE May/June 2017

autobiographical talk about how America has changed his own life and the world.

Wallace turned “we all make boxes” into how to build relationships into sales.

He explained behaviors validate your good intentions, and your good intentions reinforce your business relationships.

Relationship capital is principles that allow you to distinguish yourself. Wallace suggests one should unearth the goals, passions, and struggles of customers to build a relationship.

Walters offered an overview of HR laws and regulations that can affect small business. Of particular interest were the differences in state and federal laws.

Many areas were touched upon, including hiring, termination, nondisclosure vs. noncompete, and no-solicitation rules.

Connections Two evening receptions brought together all attendees for hours of networking

and conversation. Nearly 40 boxmakers and suppliers enjoyed dinner together at The View Restaurant during the Folding Carton & Rigid Box Dinner.

Forty-five people attended the off-site BBQ & Brewery Tour.

4th Annual Independent’s Cup Charity Golf Tournament The Spring Meeting also offered the 4th Annual Independent’s Cup Golf Tournament. The winning team was Kyle Eldridge, Matt Ausburn, Vern Bennett, and John Krafels, with a score of 51.

Jessica Negus, John Burgess, Gil Beucher, and Kevin Ausburn all won closest to the pin, with Kevin Doherty taking home the longest drive, and Eldridge winning longest putt.

A total of $45,000 was given to Austin Music Foundation, Ronald McDonald House Charities of Central Texas, and Project Healing Waters Fly Fishing.

Back to Basics You may not think your employees need training, but they know they do.

Folding Carton Fundamentals Tues, June 21- Wed, June 22 Tinley Park, IL • Paperboard materials • Applications • Capabilities Examine the entire paperboard process from raw material choices to package design, printing, converting and sustainability, from the paper supplier to the customer. Discover the attributes of paperboard substrates, their strength, appearance and printability. Participants will be engaged in the analysis of current packaging solutions. This is two days of intense learning.

Learn more at www.aiccbox.org.

Build Your Team. Build Your Company.

Ask Ralph

A PRICE INDEX FOR RECYCLED CONTAINERBOARD

BY RALPH YOUNG

L

et me start by extracting a paragraph from my last article and build upon this to give more depth to the issue of recycled containerboards, their published prices, and another recent announcement of a mill conversion to these products.

Growth of recycled linerboard volume in North America is significant, yet its total production is not as great as virgin kraft production. This category is generally considered as 100 percent recovered fiber in the marketplace. However, the true definition, as defined by the American Forest & Paper Association, is as follows: “recycled paperboard produced from a furnish usually containing less than 80 percent wood pulp and used as facing material when combining paperboard for conversion into corrugated or solid fiber boxes.” RISI’s Pulp and Paper Week newsletter is considering adding a price index for this segment. At the time of the writing of this article, there is an open period of comment solicitation about its inclusion in the monthly Price Watch for containerboard. Much of this discussion revolves around using only recycled Test 1 linerboard, which is the strongest grade.

So, RISI, the producer of Pulp and Paper Week, and many other publications, conferences, and a newsletter, has sought comments on the publication of a 35# recycled liner and 26# recycled medium price index. Your own Paperboard, Regulations & Sheet Supply Committee has discussed this extensively and sent our views to the editor of Pulp and Paper Week. While the reported spread between virgin and recycled linerboard is often discussed in the commentary section each month, the placing of an actual price index on the Price Watch page, may cause

disruptions and calls from your customers and consumers.

Currently, this is compounded by the almost all-time high transfer price of OCC (old corrugated containers). Supply is tight, and export demand to China has been high. History records that as fast as prices move upward, they can also move downward at the same velocity.

Europe distinguishes six levels of linerboard quality not reflected in North America. The Confederation of European Paper Industries (CEPI) sets the minimum quality levels for each grade and publications that publish prices for the grades. That has not been the custom here. With the acquisition of RISI by a European company, one could expect that the new owners would move to list different prices for virgin and recycled linerboards and semichemical and recycled mediums. This is new to all generations and will begin to separate the quality difference in all containerboard.

The 42# virgin liner price was good until about 1991, when the alternative shipping regulations became effective, and we saw many 35# liners and 26# mediums able to generate a minimum 32# ECT through the converting operation, if the board was not crushed.

Last virgin fiber mill was built in 1981

by International Paper in Mansfield, La., very deep in the breadbasket of Southern pine fiber. These forests were also a rich source of mixed Southern hardwood for pulping into semichemical medium, which was the second machine at this mill site. Southern Container built the first modern recycled mill in 1994, much closer to the population and

manufacturing centers in the Northeast, Mid-Atlantic, and Midwest. Over time, two other machines were placed at Solvay, N.Y. Today, they are owned by WestRock.

This first machine has been engineered to manufacture linerboard as low as 18#/MSF, although the market did not exist for this low-basis-weight linerboard at that time.

Just recently, a Mexican company, BioPappel, with assets already in the United States called McKinley Paper in Prewitt, N.M., acquired Nippon Paper Industries’ Port Angeles, Wash., mill. Besides the production of lightweight recycled linerboard, the brand will include biomass cogeneration plant energy, which is sold back to the grid on the environmentally sensitive West Coast. Trim on one machine is good for 110" corrugators, and the other machine at 155" can trim narrower rolls for the Asitrades and other laminators within their shipping lanes.

This will probably be an astute decision if the correct investment in European boardmaking technology and pulp cleaning and fractionation are installed.

Other companies have partially converted newsprint machines without having completed their transformation into the most modern containerboard producing processes. alph Young is the R principal of Alternative Paper Solutions and is AICC’s technical adviser.

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

BOXSCORE www.aiccbox.org

21

Selling Today

FINDING TALENT

BY KIM BROWN

F

or years, the packaging industry has recognized the need to attract and retain talented individuals. The average age of our key people continues to rise. As these individuals ride off into the sunset of retirement, the vast knowledge they possess will be riding off, too.

There are certainly challenges to attracting young, talented individuals to what many may perceive to be an old, boring industry. But this isn’t the full story. I’d like to set aside how they might perceive the industry to explore another area that could instead be driving the best candidates away.

The list below outlines five of the worst problems with common recruiting processes: The recruiting process is designed and 1 executed in a manner to hire not the most capable or creative person, but the most docile and pliable one. If you weed out the independent thinkers you need during the recruiting process, you don’t get to complain when you don’t see or hear out-of-the-box-thinking from your team at staff meetings.

Often there’s a requirement of the 2 prospective talent to fill out fields in a seemingly endless and insulting online application form providing the same information found on the résumé they’ve already attached. This process sends a clear message: “If you want to work for us, start begging.” They’re expected to take tests, complete questionnaires, and tolerate unexplained delays and a severe lack of communication. We make it clear: “You are not a priority, so sit back and be quiet, because if you follow up, we might

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determine you to be desperate and not the right candidate.” E-commerce marketers stress the importance of the metric that reflects shopping cart abandonment. A potential customer demonstrates an interest in buying, and we don’t want to see them leave the store empty-handed! We change our opinion when a potential applicant abandons the process of seeking employment through the website. Do not mislead yourself by claiming any individual who leaves the process isn’t someone you’d have wanted. It simply isn’t true.

The subject of salary and being 3 unwilling to disclose the range for the position is seen as a negotiating advantage. Is the objective to hire a talented individual or to negotiate for the lowest possible pay level and

then be surprised when the quality of work reflects this? We demand the candidate’s past and current salary information. There’s a budget for the position—wouldn’t it be easier and considerably more respectful to share this upfront and allow both sides to determine whether the conversation should proceed?

Job descriptions are written in 4 language that often really has little to do with the work itself, and they include a set of qualifications that are more about what’s on paper than a skill set. If you are seeking a top-tier salesperson who has 15-plus years in the industry and a proven track record of surpassing the numbers, why are you asking them where they went to college 20 years ago? Be careful when deciding whether the priority is maintaining

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Selling Today

the bureaucratic system or hiring a smart and capable person to do the actual work.

At every stage of recruiting, we 5 send the clear message: “We are the employer, and we are big. You are the job applicant, and you are small.

We have the big decision to make on which one of you is good enough for us.”

As with most business issues, there’s a tendency to keep doing the same things you’ve been doing forever, even self-destructive things, rather than to

step back and examine the result it is creating. It’s easy to dismiss it as a lack of available talent rather than a difficult and ineffective hiring process.

Good people don’t have to settle for bad treatment. The signals given during the hiring process provide a clear picture of the company’s culture and the value they place on people.

If you recognize your company in the above statements, don’t feign surprise when qualified and eager job applicants don’t show up in droves. If you have several open positions or positions that have been vacant for long periods of time, perhaps it’s time to re-evaluate

your recruiting process. We’re living in the reputation economy. Don’t underestimate its ability to reward you with a limited talent pool.

Be the rare employer that understands that great companies have always been built by the hearts and minds of their team.

Kim Brown is the founder of Corrugated Strategies. She may be reached at 317-506-4465 or kbrown@corrugated strategies.com.

Some concepts contained in the above article are credited to Liz Ryan, CEO of Human Workplace.

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BOXSCORE May/June 2017

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Tackling Tech

WHAT IT TAKES TO WIN

BY JOHN CLARK

O

n November 2, 2016, the world as we had known it changed.

The Chicago Cubs won the World Series.

This Game-7 victory ended nearly a century of abject failure and incompetence. It is important to understand that the seeds of this fateful day were sown nearly 30 years before, on August 8, 1988, the Cubbies played their first night game. The lights were turned on at Wrigley Field, and the Cubs were no longer limited to playing day games under the hot summer sun, and hence, no longer being their own worst enemy.

Playing all day games in Chicago in the summer took a physical toll on the players, leaving them progressively “cooked” and worn down by the summer sun, and invariably causing the players and team to wilt in the dog days of August. There were other factors, of course—a weak farm system, bad management, unfortunate personnel decisions, accentuating hitting, and undervaluing pitching, a result of playing half their games at tiny Wrigley Field. And one can add to that the untold self-inflicted damage caused by young multimillionaires perhaps staying out past the nightly curfew to enjoy some of the finer things a city such as Chicago has to offer.

The important point here is that management came to the realization they were playing the game in a way that had passed them by, and they understood they were doomed to lose forever. In industrial terms, their facilities, infrastructure, manpower, and operating philosophies were not up to the task of competing in a fast-moving, increasingly aggressive market.

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BOXSCORE May/June 2017

Sound familiar?

The questions now become, Are you ready to compete in such a dynamic environment? And are you prepared to do it faster, leaner, and in a more cost-effective way? Are your operations manned and machined to compete on a rapidly changing playing field? And finally, are you prepared to analyze your business in new, deeper, nontraditional, and more expansive ways?

In baseball, there is something referred to as the five tools. These skills define the value of a player. The five tools of baseball are running, hitting for average, throwing, fielding, and hitting for power.

Few players possess four of these skills; only the elite excel at all five.

Let’s translate these skills into so-called plantspeak: Run: Scheduling and operating the plant to ensure that all orders are correct and delivered on time. Synchronizing various operations to work smoothly together.

Hit: Orders move through the plant with waste controlled and quality achieved.

Every order delivered on time and on budget. Scheduling machinery and resources to ensure that every order is delivered correctly and on time.

Throw: Item pricing is aggressive while assuring sustainable and reasonable margins. Better ballplayers get paid better.

Make sure your pricing represents the value you provide.

Field: Order flow is seamless, from customer service to posting of cash. There are roughly 12 to 15 steps between a

request for quote and customer payment.

Make sure you understand and master each of these steps.

Hit for Power: Margin is gained through continued improvement and real added value. Impart to your customers that your provided value is worth more than shaving off a few cents. Small margin increases take the ball from the warning track to the seats.

Most companies possess three of these characteristics, a smaller number can claim four skills, but only the most elite possess all five. As talented as the staff may be, it could be all for naught if the managers don’t have a fundamental understanding of what it takes to win, and how to take advantage of new analytic tools to get the most out of every resource, every single order, every single day.

Take a hard look at your business.

Understand your people, processes, and products, and don’t settle for being just a major leaguer or an All-Star—take dead aim on the Hall of Fame.

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

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Safeguard

SAFETY IS THE MOST IMPORTANT PART OF ‘PRINCIPLED LEADERSHIP’

BY STEVE YOUNG

E

arlier this year, AICC and the Fibre Box Association (FBA) announced the winners in the 2016 Corrugated Container Industry Survey of Occupational Injuries and Illnesses. AICC and FBA have cooperated in conducting this annual survey since 1988. It is an effort that speaks to the ongoing working relationship that both associations enjoy for the benefit of the corrugated industry.

This year we were happy to note a 7 percent increase in the number of plants recognized for safety achievements, which my FBA colleague Dennis Colley called “a true testament to the corrugated packaging industry’s commitment to creating safe work environments.” This increase in our member companies’ awareness of and accomplishments in workplace safety is, in my view, directly reflective of the “principled leadership” themes that AICC Chairman Tony Schleich has spoken about this year.

Why? Because a commitment to safety in the plant is the most important part of principled leadership, putting a first priority on the welfare of your employees and, by extension, their families.

This fact was starkly highlighted in early April, when a boiler explosion at a corrugated box plant in St. Louis claimed the lives of four workers—one in the box plant and three in a neighboring business.

The accident, which made national news, reminds us that industrial accidents can happen anywhere and at any time, and it is always the responsibility of the company owner to ensure the safety of the work environment for his employees.

While the investigation is ongoing, and while we extend our condolences to the

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companies and people involved, I believe we have a sobering opportunity to assess our own workplace safety regimen and, if need be, improve it and expand it so as to minimize the risks of even the most minor of accidents.

I’m not a risk manager or a safety expert, but it seems to me that every owner, manager, and supervisor can do some internal introspection and put together their own safety self-assessment, as follows: 1. Do we have a formal safety policy

and the written procedures for following it?

2. Are the safety policy and written procedures available to and clear for all employees?

3. Do we have regularly scheduled safety meetings to review procedures, incidents, corrective measures, etc.?

4. Is every employee trained in the fundamental risks in your plant operations?

5. Does every employee have personal protective wear—ear protection, eye protection, etc., as needed?

Is this equipment in good working order, and are employees trained in its proper use?

6. Is all our machine guarding in its proper place and in good working order?

7. Are logout-tagout procedures clearly understood and instructions posted at each machine center?

8. Are machine emergency stop (e-stop) buttons and pulls accessible and in working order? Are your employees familiar with their operation?

9. Are Material Safety Data Sheets (now

called simply Safety Data Sheets) up-to-date and in a place where they are accessible to all employees?

10. Does the equipment manufacturer send safety bulletins or update safety procedure recommendations for the equipment in operation at your plant?

11. Do we have a scheduled preventive maintenance program for machinery and energy supply systems?

12. Is your OSHA 300 log (or its Canada equivalent) up-to-date and compliant?

13. Do you have documented substance abuse policies and corrective measures consistent with state and local laws?

14. If we require personnel with specific licensing credentials—e.g., engineers, drivers, etc.—are their credentials current and in good standing?

These are but a few of the questions a good safety assurance policy will have in your company. I’m sure you can add many more points to this list, and I’m even surer that all good AICC members have sound policies and procedures in place. Suffice it to say that safety should be top of mind every day and not a topic that comes up only as part of an investigation of an accident or injury in your plant. Let us all renew our efforts in this regard, placing safety at the head of our call to “principled leadership.”

Steve Young is president of AICC. He can be reached at 703-535-1381 or syoung@aiccbox.org.

PRINT & PACKAGING LEGISLATIVE SUMMIT June 20–21, 2017 • Washington DC

s e ne Voice O h t m W u k l a o e p V t S a e ll In Gr a h We S Join your peers in the packaging and print industry as we address our legislators as one industry with one voice. The Print & Packaging Legislative Summit co-hosted by AICC, the Independent Packaging Association, Fibre Box Association (FBA) and the Printing Industries of America (PIA) will take place Tuesday, June 20 & Wednesday, June 21, 2017 in Washington DC. This year we will again partner with the National Association of Manufacturers (NAM) for their 2017 Manufacturing Summit.

With the new Administration in power, now is the time to stand united and voice your support for legislation that benefits the domestic manufacturing base, improves the North America competitive climate, puts American back to work and keeps it working.

“Power always thinks it has a great soul and vast views beyond the comprehension of the weak” —John Adams

Preliminary Schedule at a Glance * Tuesday, June 20, 2017

3:00–5:00 P.M.

Summit Industry Briefing

5:00–6:30 P.M.

Opening Night Reception

7:00–9:00 P.M.

NAM Congressional Dinner with Keynote Speaker (The Grand Hyatt Hotel)

(Capitol Hill Club) (Capitol Hill Club)

Wednesday, June 21, 2017 8:15–9:30 A.M.

Briefing Breakfast Meeting

9:30 A.M.–12:30 P.M.

Congressional Meetings

12:30–2:00 P.M.

Congressional Luncheon

2:30–5:00 P.M.

Congressional Meetings

6:00–9:00 P.M.

Optional Dinner Event

(Capitol Hill)

(Capitol Hill) (Capitol Hill) (Capitol Hill)

*Schedule is preliminary – events, timing and location are subject to change

Accommodations

Washington Marriott Marquis Hotel 901 Massachusetts Ave NW, Washington, DC 20001 Hotel Room Rate: $292+tax (tax—currently 14.50%) Hotel Cut-Off Date: Friday, May 26, 2017 For Reservations: Call (888) 236-2427 Group Rate Code: AICC Print & Packaging Legislative Summit

Registration Information Available at: www.AICCbox.org/flyin • For More Information Contact: Laura Mihalick at lmihalick@aiccbox.org

Leadership

WANTED: WILLING AND CAPABLE EMPLOYEES

BY SCOTT ELLIS, ED.D.

L

ook at you. You are willing and capable and motivated to achieve your company goals. No decision will affect your success in building that company more than whom you invite to work with you toward those goals. However, many of those you’ve considered for your team are either unwilling to do the work, incapable of doing it, or both.

Across America, I hear a story of frustration as the rate of personnel turnover in our industry climbs: “I cannot find people who want to work in any aspect of manufacturing, and when we do bring in someone with potential, they don’t stay.”

My response is to inquire about the source of referrals and placements for their production workforce. The common answer is, “We get them from a temp agency.”

At this point, I am always reminded of an old joke about a guy looking for his keys under a street lamp. In the very short version he is asked—by a priest or a rabbi, I’m not sure which—where he had last

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seen his keys. “Over there by my car,” he said, “but the light’s better here.” I guess they hire from the temp agency because it has the appearance of easy effectiveness, but this method alone won’t help you find employees or your keys.

Let’s get our heads around the problem.

There are factors that contribute to the difficulty of finding willing and capable employees: • Larger manufacturers within the industry can afford to pay more than small independents.

• Manufacturers, and a growing number of distribution companies, are competing for the same potential workforce. And at first, it seems cooler to work at Amazon than at The Box Factory.

• For many independents, the company has no real human resource function to search for candidates. In many plants, an accounting clerk who

has multiple duties, including payroll and employee benefits, handles HR. • A generation of potential employees who expect to do anything but physical labor has arrived in the labor pool.

• We are too busy to change the way we seek and retain willing and capable workers.

The problem exists for all levels of employment. I focus on the entry-level jobs here because many of the most valued contributors in the industry are promoted from the production floor.

An additional reason for this focus is that I have seen the most enviable workforces in the industry built with a long view.

Those with the short view will work with multiple temporary employment agencies, hoping to sort through a large number of people to find a few keepers.

Since the need for a worker is reactive, we are willing to settle for someone above room temperature who can run the baler. Those with the long view devote time and resources that they must steal from other worthy tasks, to build the most critical component of future success. The following best practices are a sample of methods I have participated in with valuable results: 1. Start by meeting with your source agencies, which may include temporary agencies, state employment departments, welfare-to-work programs, veteran outplacement services, tech schools, community colleges, and even probation departments.

Leadership

2. Who’s in your pool? Provide your

potential sources with a set of clear requirements for the acceptable candidate who would be attractive to your company. You will find some people within these organizations who see the value in honoring your requirements and becoming your reliable source. Your requirements should focus on as many traits you value (e.g., problem-solving ability or initiative) as those you are trying to avoid. What are your requirements? a. Do you believe that veterans would be a good group from which to solicit applications? b. Will an applicant be disqualified by a felony conviction, or just a violent offense? Whatever the answer, consideration must be given to the risk of a charge of negligent hiring in which you may be considered liable

for acts of those employed who have a criminal history. c. Will you hire relatives of those already employed? If so, will there be any controls for related people reporting to one another? d. Will you hire people qualified only to fill the open position, or will you hire people who will likely be able to move up in the organization? (E.g., an employer decided to set the production employee standard at hiring only people capable of becoming lead machine operators rather than hiring a person capable of fulfilling only a lower-level responsibility.)

Choosing whom you will invite to come aboard your organization is crucial. The cost of undisciplined hiring is realized everywhere, from turnover,

to training, to efficiency losses, to lawsuits. The importance of investment in finding and even developing the potential workforce is acknowledged by clearly defining your hiring process and objectives, and then adhering to these objectives without exception.

Take the long view and build the company culture you desire.

Scott Ellis, Ed.D., is a partner in P-Squared (P 2) focused on leadership and process improvement. He co-authored AICC’s Welcome on Board and recently released Changed People Change Process: Build a Continuous Improvement Culture Where People Act Like They Own the Place.

He can be reached at 425-985-8508 or scottellis@psquaredusa.com.

BOXSCORE www.aiccbox.org

31

Marketing Mix

#POWEREDBYPAPER Photos courtesy of Ashley Mungo

BY JOAN SAHLGREN

#PoweredByPaper was the Paper and Packaging Board’s interactive trade show booth at this year’s South by Southwest festival in Austin, Texas.

T

hose who work in this industry understand the difference in paperboard, containerboard, kraft paper, and just plain paper—but the average person simply sees the box or package that’s bringing them what they want. To showcase the idea that the paper material at the heart of our industry is essential to modern innovation and entrepreneurial solutions, the Paper and Packaging Board created #PoweredbyPaper, an interactive trade show booth at South by Southwest, the pop-culture film, music, and tech festival held annually in Austin, Texas.

The booth featured a dozen innovative products, all built on the idea that paper-based material was essential to bringing that product to life, chosen by the inventor or maker because it was uniquely able to provide a solution. The goal? To have the influencers and visitors in attendance appreciate, as our industry does, that paper-based materials have endless possibilities to create new, innovative products that keep our lives productive and safe—and that paper-based materials

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are the “natural choice” for creators and innovators.

Hundreds of visitors stopped by the gallery produced by the Paper & Packaging – How Life Unfolds™ campaign to see how this 2,000-year-old technology powers modern creativity at the intersection of design and digital. Thousands more snapped and shared photos, tweeted and posted across social channels.

The interactive event was the first time the Paper and Packaging Board incorporated experiential outreach into the marketing mix of the consumer-focused Paper & Packaging – How Life Unfolds™ campaign. Currently, advertising can be seen across digital video platforms and, in April, in magazine issues from Bloomberg Businessweek to Parents, Us Weekly, Forbes, Men’s Journal, Sky, and Hemispheres.

While each use of the material covered by the board’s program was represented, the focus was on how consumers interact with innovations they didn’t know could be made from paper materials—innovations such as the trade show booth itself,

a foldable homeless shelter, baby boxes, virtual reality viewers, and more. For a complete list of innovations featured, visit www.howlifeunfolds.com/poweredbypaper.

What can we learn from this? On a trade show floor, literally surrounded by the latest digital doodads and technological advances, the crowd at our booth was elbow-to-elbow as visitors took a moment to appreciate other makers.

Our in-booth giveaway was a small field notes paperboard-covered book visitors were able to personalize. A station with paper supplies was provided where show attendees took a quiet, creative moment to become makers themselves. Now, that is the power of paper.

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

FREE ONLINE EDUCATION FOR ALL AICC MEMBERS

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AICC TOOLBOX ................................................ 35 YOUR BUSINESS . . ........................................... 36 AICC INNOVATION ........................................ 38

BOXSCORE TIPS, TRICKS, AND SOLUTIONS TO BETTER BUSINESS

AICC TOOLBOX

AICCBOX.ORG GETS A NEW LOOK AND MEMBERS GET MORE VALUE

I

n July, AICC will launch a new website with more functionality, allowing members to connect more easily with each other and with AICC technical advisers for folding carton, corrugated, and safety and risk management, and to find the industry information they need to thrive.

AICC is dedicated to providing members and the industry, as a whole, the best information available about and for the independent. The overhauled website will feature expanded discussion lists, personalized content, and personalized home pages for members. All employees of member companies will be able to see their recent conversations and the information most relevant to them, based on the preferences and subscriptions they choose for themselves.

SEVERAL OTHER KEY MEMBER FEATURES INCLUDE: • Connect with fellow members who are “Online Now.” • Create a profile so you can connect with peers anywhere on any device.

• Chat in real time with staff.

• Reprint invoices or receipts through your profile.

• Join groups.

• Earn “Independent Incentive” points and progress to your next level.

• Track progress to completion of one of AICC’s Mastery Certificates.

• View event-specific photo galleries.

• Post and view comments on news items.

The new website will also come with a new app that will allow you to engage with other members on the go, see the most recent AICC updates, and track your AICC activities.

BOXSCORE www.aiccbox.org

35

Good for Business

YOUR BUSINESS

AICC — GOOD FOR YOUR BUSINESS

BY MIKE D'ANGELO “If people don’t want to come out to the ballpark, how are you going to stop them?”

— YOGI BERR A

T

he oft-quoted sage of baseball made this comment in reply to a question about declining attendance at Yankee Stadium in the mid-1960s.

After decades of success, the Yankees had fallen from their annual perch atop the American League standings. Fans opted not to take advantage of a product that had fallen in quality and performance.

Fortunately, AICC, as a member-driven organization, does not suffer from a decline in quality and performance.

On the contrary, your Association is constantly seeking ways to improve programming, content delivered, talent development opportunities, and advocacy for its members. That said, there are members who pay their dues (admission) but choose not to take full advantage of AICC programming (come out to the ballpark). AICC keeps tallies of engagement scores of members so that we can ensure that we have something for everyone in an association comprising diverse interests and activities. There is data to back this up.

In speaking with AICC constituents, there are many reasons for this somewhat passive approach to membership. Lack of time is usually the first one expressed, particularly by the owner or leadership staff of an independent converter. This is certainly understandable as a reason for the individual, but it does not take into account the possibility for others in the member organization to be able to

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BOXSCORE May/June 2017

access the broad range of programs that AICC has to offer. When a company joins AICC, all employees at all locations have access to member benefits. If you are investing in an AICC membership, you are investing in your people. Being an AICC member without membership benefits being available broadly and deeply in your organization is leaving a portion of that investment stranded​ —even if you as the leader may take advantage of the networking of an AICC national meeting, the camaraderie of an AICC regional event Summit—formerly known as regional meetings—or the best practices learned from participating in an AICC CEO Advisory Group.

AICC has now made your investment in membership all the more valuable through the inclusion of the full course roster of AICC online education as a part of that membership with no extra charges.

This program is available to all personnel

at any member company. See the related article on Page 38, and please see Steve Young’s remarks on this topic in “The Final Score.”

Returning to more of the wisdom of Mr. Berra, he once said, “It gets late kind of early out there,” referring to the shadows that appear in Yankee Stadium on a summer afternoon. He could very well have been speaking about the chances for the success of an enterprise that fails to properly and continuously train its people.

This newest AICC member value is a home run.

Mike D’Angelo is vice president of AICC.

Good for Business

AICC NNOVATION

FREE EDUCATION FOR ALL AICC MEMBERS

W

ell-trained employees positively impact a company’s bottom line, and employees who are given professional development opportunities are more likely to stay at the company that supported them. Earn the gratitude of your employees and reap the benefits of their expanded knowledge as part of your AICC membership.

In 2013, AICC launched its online learning initiative. The goal was to build an unrivaled professional education program that assists independents in hiring, training, and cross-training employees in all departments for corrugated and paperboard packaging. AICC has been building its online learning library ever since.

AICC began a partnership with the Packaging School in November to expand the quality and quantity of online learning opportunities.

Now, AICC is taking its dedication to your growth and professional development one step further. All AICC e-learning courses are available to members for free. More than 20 courses and webinar recordings, a value of more than $4,600 per employee, are now available to every employee at every location of AICC general and associate member companies.

“We have found continuing education to be vital in retaining our employees.

Employees want to know that you are investing in them and their future with the company,” says Al Hoodwin of Michigan City Paper Box Company.

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BOXSCORE May/June 2017

“Our millennial generation employees are especially attracted to educational opportunities and will truly appreciate the variety of more than 20 online courses that are now available to all AICC members at no cost.

“We will plan on making the Safety Basics course a requirement for all current and new employees, since it will create a safer workplace and potentially help our workers’ compensation cost,” says Hoodwin. “It is something, as a company, we wanted to do when AICC first introduced the program, but the cost of 76 employees at $250 each was a bit daunting. Now that this $19,000 value of courses is available for free to all members, there is no reason for us not to make the time for the employees to take the course. The best part of online education is that it is available 24/7, so it will be very flexible to implement in our environment.”

Additionally, these free online courses will allow your team to earn 14 of the required 36 credits to earn an AICC Production Mastery Certificate and 10 of the 36 credits to earn an AICC Sales Mastery Certificate. Learn more at www.aiccbox.org/mastery.

Courses include: • Achieving Higher Levels of Productivity in Corrugated • An Understanding of Accounting and Financial Statements • Communication for Coaches

• Corrugated Basics Three-Part Course Package • Corrugated Containers • Faster, Better, Smarter With Value Stream Maps • Fingerprinting the Flexographic Press • Flexographic Ink Management • Flexographic Print Basics • Glass Packaging • Go Team: Make Your Team More Productive • Keeping Score: How to Read Financial Statements • Navigating Time: Job Shop Time Management • Overall Equipment Effectiveness for the Packaging Industry • Packaging Foundations • Paperboard Cartons • Project Planning: MAPP the Project for SUCCESS • Safety Basics (English and Spanish) • Understanding Board Combinations Several recent webinar recordings are also now available for free to all members: • 18 Ways to Sell on Value Instead of Price • Convergent Selling • Three Pillars of Maintenance • Warp Fundamentals AICC, with the Packaging School, will continue to add new courses every month.

The pipeline for new courses over the next 12 months includes:

Good for Business

• Internal Staff Development Guide for Onboarding • Setup Reduction • How to Spec a Box • Cutting Dies • Basic Math for Production • Anilox Rolls • Color Theory • Metal Packaging • Polymers in Packaging • Package Printing • Packaging Machinery March 2018 – Regulations • Distribution • Sustainable Packaging • Design Workflow “Providing training, education, and talent development for our members has

long been a core mission successfully delivered by AICC,” says Mike D’Angelo, AICC vice president. “By now, including the full slate of e-learning courses with membership, AICC is clearly stating to members that we stand with you in partnership in building and growing your people, and therefore growing your business. There is no barrier, no cost to the member, and no cap on the number of courses that may be taken or on the number of people who participate. AICC can become your training department. Your investment in AICC membership is an investment in building the experience and competency of your team. Courses range across multiple disciplines, from the plant

floor to the front office, and touch all aspects of the packaging markets.

As is the custom at AICC, content is prepared by subject-matter experts and organized and presented by education professionals. AICC will, with its partner the Packaging School, continue to develop and strengthen course content to remain ahead of what we expect will be significant engagement from our folding carton, corrugated, rigid box, and Associate members.

If you are an AICC member, we urge you to take advantage of this new opportunity.”

Register for the online courses at www.aiccbox.org/packagingschool, and start expanding your skills, free.

MEMBERS MUST LOG IN TO ACCESS FREE COURSES. If you haven’t created a password or don’t remember it, you can reset your password with just three easy steps*: 1. Click “login” in the upper right corner.

2. Click “forgot my password.”

3. In the pop-up box, enter your email address, click “submit,” and you’ll be sent a link to reset your password. You may need to copy and paste the URL into your browser. * Please note that AICC is revamping its website, and these instructions may change slightly.

BOXSCORE www.aiccbox.org

39

Point of View

Q

How do you communicate your company’s mission or goals to your employees?

As a supplier of precision roller products to independent and integrated manufacturers of corrugated packaging, and displays for some of the most recognizable products in the world, ARC International endeavors to instill a sense of pride within its employees to ensure that we provide consistent quality and unmatched service to our customers.

While most sales people are certainly aware of our mission and goals, we routinely include manufacturing, technical, quality, safety, and customer service personnel in meetings and training

sessions to discuss demanding print samples, package requirements, corporate projects, and industry trends. When an active or potential customer visits one of our facilities for a plant tour or training, they are always introduced to both office and plant personnel. And when the customer is on the shop floor, we’re proud to have our machinists and operators describe their own manufacturing process.

ARC International has also sponsored Six Sigma Green Belt training groups that bring together employees from all aspects of the company—sales, customer service, production, maintenance, quality control, safety, shipping and receiving, and accounting. This creates a

It’s one thing to communicate, verbally or in writing—preferably both when it comes to company goals. It’s another to make sure the message has effectively been received and understood, with the final objective to get commitment and evoke a behavioral change with employees.

The message must be clear, concise, and specific as to how the employee can contribute, with his or her fellow associates, in reaching the mission and goals detailed from upper management.

“Repetition” of the same message is key. For us, we post on employee bulletin boards, in our CEO’s monthly newsletter column, in daily production meetings, and in face-to-face

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true team approach, as each participant presents his or her project that is aimed at creating efficiency and consistency to our customer base.

So, when our employees visit the grocery store, drugstore, or big-box merchandisers and witness the shelves being stocked or the point-of-purchase display units promoting items, they can feel a sense of pride knowing that their hard work has contributed to the successful distribution and marketing of so many important products. What a pleasure and honor it is to be a participant in the packaging industry that serves us all! — Steve Woodard, vice president of sales and corporate services, ARC International

discussions. Enhanced frequency along with communicating the message correctly and consistently has a profound effect on commitment and understanding.

For those larger issues of strategy or transforming corporate culture, I believe meetings with all levels of the organizational chart are required, so that trusted subordinates can communicate their feelings, can offer solutions, and eventually feel they have a part in the successful implementation of a great future!

After 40 years in the business, I remember one thing my immigrant father always told me—always, always, listen to your employees; they are a lot smarter than you are! — Bob Nowak, general manager, flexo division, Braden Sutphin Ink Co.

At Automatän, we communicate our company’s mission and goals beginning at the first interview.

The interview is not only used to learn about the candidate, it is the start of educating candidates about the company, our goals, and culture. This process is continued through the onboarding process, on-the-job training, management team meetings, as well as Open Town Hall meetings.

We understand the importance of positive communication, which is stressed whether the communication be in person, email, telephone, or texting. Positive communication is critical for the morale of our employees and the company’s success.

At Automatän, we also have an open-door policy.

Our employees can bring concerns, whether positive or negative, to our attention at any time. By keeping an open line of communication among all departments, employee engagement is able to thrive, which in turn allows employees to discuss their thoughts, ideas, and tasks, and to discuss the company as a whole when wanted or required. By doing this, we have improved communication throughout our company, and this empowers our employees. In turn, they feel valued and take pride in their work, as well as know how important they are to the success of Automatän.

Additionally, it is important for everyone to be on the same page. Identifying and clarifying common goals will provide a number of benefits.

Lastly, it is important to reward a job well done.

We do this by celebrating with cookouts, pizza parties, potlucks, and summer and Christmas parties.

We want our team to have a sense of camaraderie, togetherness, and family. We believe this helps with keeping the morale of everyone high.

We will continue to inspire, motivate, and educate our team in hopes that they are happy and believe in what we do as a company and with our products. We learn from our mistakes and continue to grow personally and as a company while we continue to deliver on our promises and bring value to our customers, both internal and external.

— Jennifer Hoernke, human resources manager/marketing, Automatän

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BOXSCORE www.aiccbox.org

41

Point of View

Q

How do you communicate your company’s mission or goals to your employees?

At Bay Cities, we communicate our mission and goals quite extensively. This begins with the Leadership Group’s development of our strategic plan, which we develop annually and maintain quarterly. The development of this plan is done off-site for a couple of days, and we come back to the stockholders and communicate the plan companywide at a “State of the Bay” meeting. This plan is handled by breaking the different departments’ goals out with timelines and objectives that each department needs to complete, with their share of mastering the overall goal. Each department works with their group to grasp the issues at hand and master them.

The manager of a particular department is tasked with obtaining their particular goals by a particular time. This is usually a year. We break each goal down to its basic core and divide these efforts among particular associates in the departments.

Each is given a scorecard toward mastering the goal. The manager then, on a month-to-month basis, measures the progress of the scorecard’s status with the particular employee in their

one-to-one (121) meetings. That status then is lifted into the overall status of the department, which is measured and monitored by the president monthly, then reported back to the leadership team. If help is needed on any level, we all jump in and make it happen.

The status of the whole plan is reviewed at the monthly State of the Bay meeting.

This process works well enough that we know where we are all the time and what efforts toward our goals need extra attention.

Obviously, all of this upon its success drives the value of the company up, by which each employee participating in the ESOP (employee stock ownership plan) receives more valuable shares in his or her plan. Bay Cities allows two bites of the apple, so to speak, along the way. We set up every year a bonus owner success plan (OSP), which rewards everyone with cash for hitting the target annually. When the goal is hit, the value of the company rises sharply. Our payouts are based on driving the EBIDA [earnings before interest, depreciation, and amortization] up and driving our customer satisfaction up. The payouts are 3–7 percent of the employees’ annual grab. We share all of this progress in monthly State of the Bay meetings, where

July/August Point of View:

our department reports are observed by everyone for their status, and frankly, the whole group may realize that there is an area that needs extra help, and like true owners, they roll up their sleeves and help out.

This is cascading the goals of the company down to the department and individual contributor level. The series of 121 meetings between department leaders and employees acts as a progress report as to where that employee is in their career growth and their contribution to the company. The scorecards are reviewed monthly for their completion along the way. The cascading up happens when the department managers report the success of their goals back to the CEO in their 121 meetings. Performance reviews really are not that necessary. On the other side, it is a great feeling to share the success of the company together, as that fires up the culture to do more.

This is a fantastic program that, after a bit of time when it becomes a habit, is very easy to accomplish. The winning years are truly something that brings forth a driven ownership culture that is really fun to work with and brings back some nice financial rewards for everyone. — Greg Tucker, chairman/ CEO, Bay Cities

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Please send all responses to BoxScore@theYGSgroup.com.

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BOXSCORE May/June 2017

We communicate our company’s mission and goals through various forms of repetition. We speak about it during general and sales meetings. We discuss it during reviews. Our company’s mission and goals are reinforced on a regular basis through various facets of communication. — Rob Callif, president and chief operating officer, BCM INKS

Communication is hard in the best of times, and especially hard when you are dealing with staff in multiple time zones and physical locations. We handle most communications by utilizing a weekly meeting (always held on the same day of the week—along with all meetings) to minimize productivity loss, or through our weekly training webinars that allow us to promote one aspect of knowledge transfer each week.

These methods allow for conversation and clear messaging, directly. With all meetings, we establish an agenda, capture notes, and post them on the company Sharepoint site for review at any time. We try to avoid sending emails, unless they are more like notification-related messages that require no follow-up to avoid a lot of back-and-forth email strings. — Jay Farr, CEO, Advantzware

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BOXSCORE www.aiccbox.org

43

MAKE THE MOST OF YOUR All employees at all locations of AICC member companies have access to all benefits.

Find answers to technical questions you have- folding carton, corrugated, or safety & risk management. Just

Tell us your challenges and success so we can create the best member benefits for you.

ASK THE AICC EXPERTS.

VOLUNTEER FOR A COMMITTEE.

www.aiccexperts.org

Committee participation is now open to all.

Email info@aiccbox.org to learn more.

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.

113 S. West Street·Alexandria, VA 22314·United States (703) 836-2422· www.aiccbox.org

INDUSTRY STATS AICC membership gives you access to: • Scoring Boxes- a monthly perspective on the corrugated and containerboard industry.

• ICCA Reports- quarterly reports on worldwide corrugated shipments and production. www.aiccbox.org/stats

COMPANY'S MEMBERSHIP ALL AICC ONLINE COURSES ARE FREE. Production, sales, design, HR, finance, and more. AICC brings the education to you. www.aiccbox.org/packagingschool

UPDATE YOUR COMPANY ROSTER.

2 MASTERY TRACKS.

Around the country AICC will be offering topical

SUMMITS

Keep AICC up to date with your latest employee roster, so all employees hear the latest industry news and information.

Take your skills to the next level and earn a Mastery Certificate in Production or Sales.

to allow you to gain in-depth knowledge on topics critical to you.

www.aiccbox.org/profile and then login.

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Build Your Team. Build Your Company.

Member Profile

BENNETT

BY VIRGINIA HUMPHREY

COMPANY: Bennett Packaging ESTABLISHED: 1987 JOINED AICC: 1993 PHONE: 816-379-5001 WEBSITE: www.bpkc.com Photo courtesy of Bennett

LOCATIONS: Lee’s Summit and Kansas City, Mo.; Wichita, Kan.; Bentonville, Ark. President/CEO: Kathy Bennett Purchased in 2015, Bennett’s Barberán Jetmaster 1680 six-color digital press is the first of its kind in North America.

B

ennett is not your average momand-pop box shop.

Sales Manager Robert Sweet preaches that message when he meets with his customers—and Bennett’s low customer turnover indicates they are true believers. Bennett stands apart from the rest of the market because of ownership’s willingness to invest in new technology to ensure it can provide the best solutions.

“When I’m talking to clients—whether it is while brainstorming on new retail packaging, discussing product display options, or presenting creative solutions designed by our teams—I take great pride in the fact that we have the cutting-edge technology, and all the resources needed

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BOXSCORE May/June 2017

within our in-house teams—design, account management, and customer service—to allow us to facilitate any of our clients’ needs,” says Sweet. “Bennett’s integrity from their 30 years of providing quality and service, and continuous reinvestment in the company, let us be more than just a regular box shop.”

The company was founded in 1987, when Kathy and Doug Bennett took over a Kansas City, Mo., box plant that was going under. The family was already in the box business in St. Louis, a business the Bennett parents continued to run for several years before retiring.

Kathy Bennett is the primary owner, making Bennett one of the

few women-owned companies in the industry. Vice President Garrett Bradley says that while some people will seek out women-owned companies to do business with, the ownership isn’t what sets Bennett apart.

“The bottom line is, if you can’t perform, it doesn’t matter if you are owned by a woman or a giraffe, you are going to be outsold,” says Bradley. “Yes, it is unique, but if you can’t be competitive on price and you can’t deliver, it doesn’t matter that you’re a woman owner.”

Bennett works at being competitive by being solutions-oriented and providing its clients with everything they need throughout the entire corrugated process,

Member Profile

from the basic box to ancillary stretch wrap. It also makes sure it is leading the pack when it comes to technology and keeping all of its machines up-to-date.

“Reinvestment is probably our most important business practice,” says Bradley.

“In this industry, we’ve got a lot of competitors that run 20-year-old machines.

If you come to our plant, you just don’t see that. There isn’t anybody who can make a box cheaper than we can make it, because we have the newest die-cutters, gluers, etc. Anything and everything you can find in a store or warehouse, we can make it. Without that reinvestment, without constantly putting money back into the company, our quality would be lower, and we would have more issues on the sales side.”

In addition to purchasing new machines, such as a digital press they installed in 2015—which Bradley describes as the most significant event since he started working for Bennett 23 years ago—they have expanded their graphics and design departments to meet the need for new business.

They are committed to having as many resources as needed to provide the highest possible quality.

“We are very customer-focused,” says Bradley. “I know a lot of companies would tell you that, but we probably employ more resources than you would traditionally find in a box plant—more customer service reps, more designers, more support staff—so we can give a higher level of satisfaction to our customers.”

He cites their low customer turnover as evidence that their philosophy is working.

By staying up-to-date, Bradley points out, Bennett can give its customers access to the equipment it has. This way it is able

BENNETT: EMBRACING THE DIGITAL AGE Bennett isn’t afraid to be on the leading edge when it comes to digital printing.

In 2015, they invested in the large-format, production-speed Barberán Jetmaster 1680 six-color digital press, being the first—and right now only—of its kind in North America.

“We’re coming into a new era for the whole corrugated space with the digital printing,” says Garrett Bradley, vice president and co-owner of Bennett. “Being the first people in North America with this caliber of press has led to a lot of opportunities. It also comes with its own set of challenges, but it has been a really good move for us.”

The digital press is a direct-to-corrugated press that prints at speeds rivaling the litho and flexo printers. It prints approximately 60,000 square feet per hour. It doesn’t need any plates, and art files can be downloaded directly to the press. It’s a single-pass digital process that produces true production proofs. It is able to format up to 66" by 196" and handles small- or high-volume printing.

“We could have waited and let someone else test the technology out, but ownership here says, look, we vetted the machine, the machine works, and there is no doubt this is the way that the market is going to go,” Bradley says. “If you really believe this is the way the market is going to go, then there’s really not a whole lot of sense in waiting, provided you feel comfortable with the solutions out there. We felt very comfortable with the process; we were sure this was the way the market was going to go, so we jumped in.”

He says he understands that their competitors have a lot of money tied up in capital and might not be able to make that move, but that the installation of the digital press has been the most significant sales event since he joined the company 23 years ago. The technology, he says, is something the industry has been waiting for and talking about since he got into it, and now there is equipment that can actually do it.

Barberán is a Spanish company and the first company to sell commercially a single-pass high-speed digital press.

BOXSCORE www.aiccbox.org

47

Photo courtesy of Bennett

Member Profile

The Barberán Jetmaster 1680 allows operators at Bennett to upload art files directly to the press.

to bring flexo, digital, or litho to their customers based on what the customer needs and not just on what machines Bennett has.

Sweet says he came from the litho side of the industry when he joined Bennett a year ago and has seen that it has been the vision of the company ownership that has led them to be able to provide all three types of printing to their customers.

“They knew where the technology was going,” Sweet says. “We are on the leading side, and we will continue to be on the leading side because of the vision of the ownership. We are in touch with the marketplace.”

A company that promotes itself as a place where “imagination meets corrugation,” Bennett boasts a nine-member design team that is devoted to thinking up ways to help its customers bring products to market. Its display side is the fastest-growing section of its business, and design is the most critical part of that

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BOXSCORE May/June 2017

process. Bradley says you have to design displays that are going to get consumer attention, or you can’t be successful.

“Working with our customers from the very beginning is key. We take what they envision, and determine how we can best make it,” says Bradley. “Our design team has to figure out how to build and produce these ideas out of corrugated— our primary medium—in the most efficient way.”

Bennett’s headquarters facility is a 450,000-square feet underground, climate-controlled environment. Another 150,000 above-ground facility hosts their contract packaging and distribution.

Sweet says Bennett’s commitment to a solutions-based approach fuels him when he is talking to the sales staff or out meeting with customers. He says the company is successful at providing not only valuable service, but efficient solutions to customers in every area.

“We can still go out and offer phenomenal brown boxes—we’re the experts,”

says Sweet. “But with the constant growth and reinvestment in Bennett, we can offer so much more. If someone needs litho, we can provide that. If high-end flexo makes more sense for a project, we do a very good job of that. And now with our digital capabilities, we are leading the industry.

“We’re not saving lives here, but we are providing new options within our industry. There are some cliché things I’m saying, but if you came and looked at our facility, you would see. I emphasize to my sales team—this is what you’ve got to sell, solutions to your customers, and understand that we are not a regular mom-and-pop company.”

Virginia Humphrey is director of membership and marketing at AICC. She can be reached at 703-5351383 or vhumphrey@ aiccbox.org.

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BOXSCORE May/June 2017

BUYING TO GET BETTER A LOOK AT TWO INDEPENDENT COMPANIES FOCUSED ON GROWTH THROUGH ACQUISITION

By Robert Bittner

G

rowth is imperative for an in independent boxmaker. Pouring capital into your business, however, is not the only path to achieve it. Advances in digital printing, heightened expectations for precision engineering, shifts in customer preferences, competition from overseas, increasing demands for faster turnaround, shorter runs, and high-​ quality customizations—the industry is constantly changing. Companies that want to be around for the next decade and beyond must grow and change as well.

For a number of packagers, growth is a result of acquiring other operations and not primarily a result of expanding organically by hiring more sales staff, building new plants, adding equipment, and increasing production. Inorganic growth, through acquisitions, generally results in faster expansion, quicker cash flow, and an immediately expanded customer base.

Englander dZignPak

Marty Englander, president of Englander dZignPak, which celebrates its 50th

Inorganic growth, through acquisitions, generally results in faster expansion, quicker cash flow, and an immediately expanded customer base. anniversary this year, has built the company primarily through acquisitions.

“Englander Container started in 1967 in Waco,” he recalls. “Most of our market was in Central Texas. In 2000–2001, the economy took a pretty tough tumble, and at that point in time—for no other reason than the economy—Englander lost 25–30 percent of our business due to acquisitions, closures, and so on.

About that time, I took over as president of the company, and I began trying to look at how we were going to replace that business.

“Our Waco-Central Texas market wasn’t large enough to replace it, so we began to look at where we were going to go. Our first acquisition was

River City Paper in San Antonio. That was successful. So when the company continued to grow after that, we started looking at what’s next. We bought a small digital company in Fort Worth in 2007, then ventured deeper into digital and screen printing in 2009 with the purchase of a sign, banner, and in-store marketing company. Then an opportunity in Arkansas came up, and we acquired Stribling Packaging and Juiced Creative.”

This acquisition expanded the company’s production and design capabilities as well as its regional reach. It also opened the door to opportunities with Wal-Mart.

Meanwhile, another Texas company called Hager Containers was on a similar path. Led by a trio of owners that

BOXSCORE www.aiccbox.org

53

They need to understand what you’re trying to achieve, what you’re doing, and why you’re doing it. If not, all of those people are going to create their own answers. included Carl Renner, Hager had recently acquired Shelby Packaging, which added graphic design, distribution, foam, and wood to Hager’s corrugated business.

Such expansion deserved a name change, and Hager Containers became dZignPak, with an emphasis on POP displays, sign holders, literature racks, and tradeshow displays.

The leaders of Englander Container and the newly branded dZignPak had known each other for years. Now, they looked at each other and “we asked if 1 and 1 could equal 3,” Englander says. The

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companies joined forces in 2011. Today, Renner is vice president of the merged Englander dZignPak. When it comes to acquiring other operations, Englander says, the company’s market, product mix, corporate culture, and assets and equipment all play a part.

“Culture is probably as important as anything,” he says. “If we’re looking for a company to acquire, we want to find the right people who fit our culture.” Culture is critical because the organization needs to be well-integrated, operating as one unit. “I’d be lying if I said it was all easy,”

Englander admits. “Some things have been easier than others.”

Among the top challenges was integrating software systems among plants.

“That plays into culture, too,” Englander points out. “X group is used to doing it this way; Y group is used to doing it that way. Integrating vendors also can be a challenge; you’re used to working with someone, and now you need to work with somebody different. It’s also challenging to make sure we have a consistent message going out across all the managers of the company.

“Looking back, I don’t think we were as fast as we should have been with our corporate communications,” Englander admits. “People need to hear a common message. There needs to be clear leadership, a clear path, and clear communication and goals across the new entity to ensure the most success. I’d like to say everything we did was perfect, but it wasn’t.

“You have your plan, you know what you’re trying to achieve. But inorganic growth might bring in a lot of new people. They need to understand what you’re trying to achieve, what you’re doing, and why you’re doing it. If not, all of those people are going to create their own answers. They’re better off hearing it from the leaders.

“When that doesn’t happen, you can see the effects in morale, the way employees react to situations. Those are the things that let you know you should have done it differently. I think the thing I’ve learned the most through all of

these acquisitions is that clear, concise communication with both internal and external customers is the key to success.

“We’ve been most successful when we’ve focused on our core competencies.

We’ve learned you can’t be everything to everybody. If I’d looked a little deeper into the crystal ball, it would have definitely changed some things.” For example? “I didn’t realize how fast things would change regarding digital printing.

Also, I probably wouldn’t have gotten into screen printing at all, and I’d probably have invested in different equipment. But through those acquisitions, we got some very good people who are still with us.”

Jamestown Container Companies

The situation is somewhat different at New York state-based Jamestown

Container. Like Englander dZignPak, the company has a long history of growth through acquisition. Unlike Englander dZignPak, though, Jamestown Container is not so much focused on buying physical plants as they are in expanding their pool of customers and personnel.

Founded in 1956 by Glenn Janowsky, Jamestown Container Companies is a multiplant, full-packaging supplier offering corrugated, custom shipping boxes, wholesale packaging and shipping supplies, foam, POP cartons and displays, and contract packaging and fulfillment services.

For Joseph R. Palmeri, vice president and COO, the economy is largely responsible for driving Jamestown’s approach to growth. “I would say our growth is about 70 percent acquisitions and 30 percent

organic. Our market here in western New York, part of the old Rust Belt, has really shrunk, so it’s tough to grow organically.

Jamestown was once the furniture capital of the United States, where all the buyers came. This company started because of that. But that business has all moved out, and there hasn’t been a lot of growth. We hit our high-water mark in the late 1990s, and we haven’t passed it since. So, if you’re going to grow, you need to grow as much as you can organically and then do the rest through acquisitions.

“Our business model has been to buy companies and then consolidate them into our facilities. We’re not interested in buying brick-and-mortar; we’re buying their business.”

When choosing which businesses to pursue, Palmeri’s top priority is that the

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Before jumping in, it is critical to weigh the benefits as well as the challenges that accompany inorganic growth.

company’s customer profile fits with Jamestown’s book of business. “Then we look at the equipment they have, the culture. Are they similar to ours? Are they focused on taking care of customers?

We look at potential growth within 200–300 miles of that company. All of that has worked for us.”

The challenges Jamestown encounters also differ from Englander dZignPak’s.

“One of the big challenges is assimilating people,” Palmeri notes. “If you’re going to buy a company and then shut it down, you have to be aware of and follow the laws. It’s also a challenge deciding who you’re going to keep, and then making your pitch that Jamestown is the better company, so they’ll want to stay on.

You’ve got to look at tax consequences, pension plans, commissions, 401(k). If you’re buying brick-and-mortar, you can also run into environmental issues.”

For Jamestown’s most recent acquisition, H.P. Neun, the biggest challenge was coming to terms with a different mentality about how to go to market.

“Most of our plants, we bring in sheets in the front and ship them out the back. Neun was more of an inventorybased company.”

When it comes to offering advice, Palmeri says, “Don’t buy just for the sake of buying. Don’t assume you have to buy and keep those plants operating; ask yourself if you can bring the business in-house. Also, don’t be afraid of joint

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ventures. You don’t have to have total control if you have the right deal. But look at the equipment available and the people available.”

Weighing Your Options

Once you acquire another company, you’re suddenly larger. But you have also acquired many more parts to manage.

There may be a steep learning curve as new employees struggle with new software and new systems. Existing staff must learn how to manage the expectations of new customers. Unless you are fortunate to have extensive resources, you may also be dealing with new debt. Before jumping in, it is critical to weigh the benefits as well as the challenges that accompany inorganic growth.

Benefits may include: • Acquiring a product or service you don’t currently offer.

• Gaining a fresh and expanded customer base.

• Tapping into existing equipment and processes.

• Adding a variety of trained employees.

• Joining with an existing brand’s reputation.

Yet there may be downsides for every advantage: • Products may be outdated or in need of refinement.

• Customers may be reluctant to shift allegiances.

• New equipment may mean new training for current staff.

• Existing employees may have morale issues or may not adapt to the new culture.

• You may need to rebrand to showcase new capabilities.

In the end, the effort required to reshape an acquired company—along with its current employee mix, customers, and products or services—might mean that profitability and organic growth may be delayed.

The question of how to grow is not an either-or proposition. Both Englander dZignPak and Jamestown Container use acquisitions and consolidations to strengthen their efforts while continuing to invest in new equipment, new staff, and new sales efforts. Neither approach holds the single solution for growth in a highly competitive market. The two approaches work best in tandem.

“Buying somebody is the easy part,” Englander cautions. “Merging the organizations and really growing the new company is where the hard work is.”

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

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CEO METRICS

HOW DO YOU KNOW HOW YOU ARE DOING?

By Scott Ellis, Ed.D.

T

he first field trips my elementary school took were to a commercial bakery, a dairy, and a candy manufact­urer. Later, I visited and then worked in the manufacturing and lumber facilities my dad managed. Now, I am privileged to visit and work in scores of manufacturing plants every year, and they still feel like field trips. It has been my lifelong habit to ask the same simple question of the fascinating people I meet

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in these plants: How do you know how you are doing?

The answers vary from broad to specific, and from negative to constructive indicators. The most disappointing and negative answer I get is, “Well, my boss is not yelling today, so we must be doing OK.” In the healthiest of cultures, the employee is able to show me their dashboard tracking productivity, quality, and safety. It seems that the farther we get

from the machines, the more subjective and intermittent the measurement becomes. Consider the CEO whose barometer is the amount of WIP in the plant. Other leaders suffer a heart-rate synchronicity with the speed of a key machine. The slower the machine goes, the higher the heart rate. Broad measures hold meaning for these leaders, but are they accurate? A general manager I respect called me the week after his plant

In the healthiest of cultures, the employee is able to show me their dashboard tracking productivity, quality, and safety. had made a major step toward just-in-time production. His excitement was a mix of joy and panic as he explained his physical reaction to seeing so little work on the line. He was happy because he had moved to a system where shipping controlled the production schedule on a pull system; he had panicked because the line was sparsely populated. “We are delivering what they need when they need it, so the customers are happy,” he said. “But it may take me a few weeks to get used to this.”

How do you know how you are doing?

When I ask CEOs this question, I learn a great deal about how they measure their company’s overall progress, how they see the productivity of their people and processes, and how they rate their own efficacy. CPA and industry adviser Mitch Klingher has been facilitating AICC CEO Advisory Groups since their inception, and I began serving new groups a few years ago. We count it a privilege to be trusted supporters of their leadership and improvement endeavors.

With respect to that trust, I will share a bit about what we have learned about best practices for CEO metrics, from personal to plantwide applications.

Not every CEO will benefit from an industry-based advisory group. There are those who have simple ownership structures, with equal and nonfamily partnerships. In situations such as this, the leader does not feel the isolation experienced by so many. This sense of aloneness comes from having all your

advisers biased by their relationship as employee or shareholder, or even as family member. So, for many CEOs, it is the camaraderie and perspective of joining like-experienced people and learning from their stories that brings value. On the personal level, many of these leaders use the group as their personal sounding board to bounce ideas, gain perspective, and invite accountability. This permission to check in on progress toward goals has

a similar effect to enlisting a workout partner. I am more likely to keep a promise I have made to myself if I know someone is going to check up on me. The measurables in this personal area tend to be around follow-through on necessary and unpleasant tasks that must be done consistently in order to produce results.

Another is whether a critical conversation with an owner, an employee, or a customer has occurred.

One subjective metric I have found to be useful to family business owners and/ or operators involves self-rating effectiveness of communication, decision-making, and conflict resolution in three spheres of family business. In Working With the Ones You Love, Dennis Jaffee drew a picture similar to the one shown here. My exercise involves rating your effectiveness (1–10) in each of the relational overlaps.

FB

Family

Business

FBO FO

BO

Ownership

BOXSCORE www.aiccbox.org

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Some have taken the next step to measure and report a scorecard for each department facing their internal customers.

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If you are a family business owner who is active in the business, then you occupy all three spheres, and your relationships are impacted by the overlaps. If this seems esoteric to you, then letâ&#x20AC;&#x2122;s talk the day after Thanksgiving.

The CEO metrics for the health of their enterprise are also varied. Within the advisory groups, they range in formality, but include benchmarking of both operational productivity and financial health. These groups are constructed with noncompeting operators of similar-sized businesses. Most have built a trust level that allows them to share a financial scorecard that reports MSF shipped against cost of labor and materials. It

also includes tracking of waste, turns of inventory, and machine utilization (uptime, average setup, and speed). The data is more thorough and examined at a deeper level than I can describe here. Once the initial reticence about sharing the numbers is overcome, the members report that it is one of the most challenging, comforting, and educational group components.

Operational benchmarking is another enterprise-level metric. Formality of observation ranges across groups as they tour the member host facility.

The most disciplined observation is achieved by using a criterion of questions to compare local practices to those of

excellent manufacturers. One assessment utilized was adapted to the job shop and is based on Professor R. Eugene Goodson’s “Rapid Plant Assessment.”

Eleven categories of operational excellence receive ratings, and the participants use the data gathered to develop a suggested action plan. Their comments are scripted to begin with this phrase: “Based on the data we have gathered, here’s what we would do if we owned this business. …”

CEOs are also improving the way they measure and communicate the effectiveness of processes within their businesses. Most measure production (uptime, speed, quality, safety) and on-time delivery very well. Fewer communicate this information to the people in a way that gives clear direction about how to remove the obstacles to the desired improvement. Members have success stories from numerous methods, including throughput-based incentives and overall equipment effectiveness reporting. Some have taken the next step to measure and report a scorecard for each department facing their internal customers. For example, a customer service department reports monthly accuracy of data provided to production, and information turnaround time to goal. A maintenance department posts maintenance downtime as a percentage of overall plant downtime as well as open vs. closed work orders.

At Valley Container, General Manager Robert Niedermeier has found the numbers that tell the business story he needs every day. His key performance indicators are: • Daily booking: to see trends longterm/anticipate cash needs/keep in touch with labor needs.

• Monthly sales report dashboard: to see trends/track budget/coach— praise results.

CEOs are improving the way they measure and communicate the effectiveness of processes within their businesses.

• Cash balances (this creates favorable or challenges sleep patterns): really to know when I can or can’t spend.

I get a larger view on financial health and direction.

• Sales index: shows margin gain/loss.

• $PM: cost of quality—quality system that reports monthly cost of quality (remake/complaint/internally or externally). $ is compared to sales YTD with a goal of under $Xk/million sales currently.

• QC audit %: shows how each major area is doing for their quality check.

• IQR (internal quality report): measures frequency/month—dollarassociated—area of quality issue.

Robert says, “I know it seems like I am tracking a lot, but it helps me keep a finger on the pulse. You can also see a snapshot version of this on the TV monitors we have installed in the office and in the factory break rooms. They show not only Valley’s win/loss, but also numbers from our other companies for comparison.”

There is a move to simplify productivity reporting at Arrow Box in St Louis.

Brad Kramper reports that they have historically reported all the normal production metrics by shift. In a move to simplify and communicate more clearly, they have been experimenting with one metric this year. “We decided to track and report one productivity measure; MSF per hour. … If the number goes up from the prior week, we include a bright green arrow. If the number goes down from

the previous week, we include a bright red arrow.”

Combining shift data has eliminated the artificial division of team performance. Brad goes on to say, “We believe this one-number metric shifts the focus of accountability to the team level, incentivizing our employees to work together to achieve goals. … The refreshed approach has definitely heightened the level of employee engagement. Since posting, we have received multiple process improvement suggestions from employees of all skill levels. We have been working hard to implement the best suggestions and keep the momentum going.”

Who was it that told you to start a business so you could be captain of your own destiny? That person never understood the burden of responsibility that CEOs bear. The measurements discussed here help to reduce subjective observations to math problems. The perspective gained by sharing resources, other perspectives, and lessons learned have helped many CEOs complete those math problems with a balance of head and heart. Learn more about CEO Advisory Groups at www.aiccbox.org/CEO. Scott Ellis, Ed.D., is a partner in P-Squared (P 2), focused on leadership and process improvement. He co-authored AICC’s Welcome on Board. He can be reached at 425-9858508 or scottellis@psquaredusa.com.

BOXSCORE www.aiccbox.org

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The Associate Advantage

VALUE 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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W

e all use that word often, but what does it really mean?

Recently, I had the opportunity to discuss that question over lunch with a dear friend and golf buddy who is about to celebrate his 90th birthday. He has been an extremely successful commercial real estate developer in the Atlanta area over the past 60 years, and even at this stage of his life, he is working on a new hotel project.

We sat and he talked about our business careers, including the people and organizations he has worked with over the years, with particular emphasis on those with whom he enjoyed a “valued” relationship.

While I am not a young man, it’s difficult to compete with the life experiences of an 89-year-old when discussing lifelong friends, business associates, and associations. But he was struck when I told him of my more than 35-year relationship with AICC and its members. It represented a very enjoyable reflection of my years and experiences in the corrugated industry. I told him of the numerous lifelong friends I have made over those years and explained how AICC members had always gone out of their way to educate me about the operations, processes, and management of their companies. He was also very impressed when I told him of the close cooperation among AICC members and how all are willing to take the time to help their fellow members.

My friend looked at me and said, “Now, Ed, that’s value.” I had never really

thought of it that way, but he was right.

Value is not measured solely in dollars; it is cooperation, assistance, teaching, support, and interest in the success of others.

From that point on, I’ve always had a good answer when asked by prospective AICC members why they should join.

AICC is an organization of people who are committed to success—not just theirs, but the success of others and the industry.

That is why AICC was established … for the mutual benefit of all members.

For example, everyone I have spoken with who has been involved in AICC’s CEO groups has told me that experience has provided an immense value to them and their businesses. I constantly hear about the help and information members have provided to each other when they are having a problem in their operation or are planning a machinery purchase, expansion of their operations, etc. Others have explained the help and support members have provided when a machine has gone down and they needed a job run for a major client. These are just a few of the many examples of cooperation and assistance.

As we were leaving, my buddy said, “You know, Ed, we have both been very lucky.” I’m glad he feels that way about his business associates, because I know I do. All of us should be proud of this association and what it represents. All of us should appreciate the value of AICC. This article was written by Ed Gargiulo.

Value is not measured solely in dollars; it is cooperation, assistance, teaching, support, and interest in the success of others.

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Ask Tom

SURROUNDING YOURSELF WITH THE ‘BEST AND BRIGHTEST’ TEAM MEMBERS IS ALWAYS GOOD BUSINESS!

BY TOM WEBER

G

allup recently released the 2017 findings from their seminal work on employee engagement in the American workplace. Once again, the percentage of employees who report being “engaged” is 33 percent. This number is disappointing and has barely changed over the past decade. Must we simply resign ourselves to the fact that a vast majority of employees will show up to work every day being disengaged? No! There is another way!

We believe that engagement in the workplace can be improved, and that there is a level of performance beyond engagement; that employees yearn for a work environment that creates the conditions that encourage them to show up at their best. Fulfillment at work doesn’t need to be so rare, and it’s not rocket science either.

Think of a time in your life when you were at your best, when your heart was fully in it, and your performance reflected your passion. List the conditions that created or accompanied that performance. Now start creating those conditions at work. They will give others a greater opportunity to become more fully engaged and even reach that level of performance that goes beyond engagement.

When we create a workplace that fosters inspiration, encourages the inspired, and recognizes employees who are all in, we’ll see these changes reflected in the numbers. When we’re inspired, we become inspiring, and that’s a lot better than engaged.

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How do we accomplish this on a very limited, fixed-cost budget, as fast as possible, since time is rarely ever our friend!

When we create the conditions that allow our team members to become “everyday inspired,” we are truly creating employee and team performance opportunities that bring the absolute best outcomes for our companies. Each and every company has a plethora of internal resources they apply in the name of employee development, which are sometimes seen as “must participate or else” job prerequisites from above. I am going to suggest another way, one that engenders much more trust,

communication, and responsibility by you toward your team.

I want to suggest that some significant portion of your training dollars should be put into the hands of others who are like-minded but come from different places. AICC is an outstanding example of everything that is right about this.

The AICC training programs can be done online, off-site, or a combination of the two. Trusting your employee(s) to go off-site occasionally is almost always rewarding to their attitudes, to their confidence in their companies, and certainly to their spirits upon returning.

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Ask Tom

The AICC training is short in time frame, selective, and very specific to a particular salient topic.

NOTE: This is exactly the way we should deliver employee feedback, hopefully multiple times per year, and much more positively than negatively, if we know what’s truly good for us anyway!

When our key employees are trusted to attend training events off-site, they become, in essence, important ambassadors for their company, set an example for others, and certainly listen carefully to make certain the training message and intent are articulated back to their senior leadership. The folks who are chosen to attend these sponsored events always come back with more “arrows in their quiver” and become even more “everyday inspired” team members for their respective peers and subordinates.

My opinion is to not necessarily spend more, but just to look at the option of utilizing such a treasure as AICC to aid your efforts to continually stay engaged with your key high-potential employees, and they will reward you daily for your trust!

A wise man, Steven Vannoy, who developed Pathways to Leadership training, once told me, “Tom, do you want to improve your top 10 key employees by 10 percent, the ones who give you 80 percent of what you like daily already? Or do you want to improve your bottom 10 employees by 10 percent, who only give you 50 percent of what you like daily, at best?”

Well, that’s easy. The top 10 improvement totals 80 percent and thus gives me literally another entire employee, and frankly it is done much more easily and

swiftly, by willing employees! The bottom improvement gives me a mere 50 percent at best and is agonizingly tough, with way too many distractions. I guess you get the picture!

My take is this: Use the resources you have both internally and certainly externally to get that top tier of your employees “everyday inspired” to make your respective company the best it can possibly be. It is all about your focus as a key business leader in our fine industry.

Good luck, and let’s make it a great 2017.

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

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18.01.17 18:16

Financial Corner

CAN FINANCIAL PROFESSIONALS BE THE ARCHITECTS OF CHANGE?

BY MITCH KLINGHER

O

ver the course of my career, I have been called many things, some good and some bad, but I think the worst thing anyone has ever called me is “bean counter.” I guess in the world of stereotypes, that’s what accountants are—a bunch of historians who “count the beans” and report on them. Whenever there is a missed accrual, a transaction recorded in the wrong period, an estimate that is way off, or if the reporting is not timely, there is lots of finger-pointing and plenty of blame to go around. When the reporting is accurate and timely, it is simply expected. In addition to our financial reporting responsibilities, the financial managers are the de facto personnel departments, the employee benefit administrators, the paymasters, and the credit and collection department.

We update the costing systems, maintain banking relations, prepare budgets, justify the capital expenses, and perform just about every other task that no one else wants to get involved with. But what about strategic leadership? What about key tactical decision-making?

In the last issue of BoxScore, I laid out the need for integrated information. The double entry accounting system that was invented in the Middle Ages and the cost accounting systems that were invented during the Industrial Revolution are insufficient tools with which to cope with the modern realities faced by converters.

Financial, plant, sales, marketing, operational, logistical, and personnel data must be combined in meaningful ways to allow modern-day managers to be effective.

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In the last issue, I pointed out the need for the estimator to have expected “real” contribution of the order along with current plant performance data on how the order will run and real-time plant data in order to make a good decision.

The following are other examples of integrated data needs: 1. Operational reporting on business

segments and profit centers—in addition to the financial breakout of these key areas, machine hours, order size, setup times, throughput speeds, and overall utilization of machine hours must be included. For labor-intensive areas, the labor and labor burden must be broken out separately, as well as operational information on the number of jobs, the overall difference between estimated and actual labor, and the fixed costs that are directly part of the department.

2. Shipping costs must be looked at with data that includes miles, stops, trips, and driver overtime.

3. Maintenance must be broken out by machine and include information on the number of POs and a breakout between repairs and routine maintenance. In addition, the overall fixed costs associated with running the department must be broken out and not commingled with other endeavors.

4. Customer service reporting should include information on the number of orders processed, the complexity, and accuracy.

5. Design department reporting should include information about the number,

complexity, and the timeliness of the designs worked on during the period.

6. Sales reporting should include information as to new customer activity, new design activity, number of quotes, and the success rate, as well as information about the commissions earned and paid during the period.

7. Reports on purchasing and procurement should include a synopsis of amounts and prices paid for all major items ordered by vendor during the period, as well as any meaningful change in suppliers.

8. Reporting on products should include information on the revenue and contribution from all major product lines, along with information on the resources used to manufacture them.

In addition to the mandate to keep a proper set of records for both internal and external reporting, to create and maintain internal control systems and ensure that there is proper segregation of duties to safeguard the company’s assets, and to make certain that the company is in compliance with regulations promulgated by the various taxing authorities and other governmental agencies, your accounting department interfaces with all other departments in your organization and is involved with the collection and dissemination of most of the company’s operational data. Information is powerful if used to further the goals of the organization.

My favorite cartoon character when I was growing up was that famous oversized chicken, Foghorn Leghorn,

Financial Corner

who was known to say, “Don’t bother me with the facts, boy, I’ve already made up my mind.” As Foghorn points out, the facts can be easy to ignore, especially if those who are disseminating and reporting on them are not given a clear mandate to use them to further the goals of the company. You must charge your financial professionals with creating the reports and analyses that will change future behavior and not simply report on past results. Knowledge and information are possibly the most powerful tools that we have at our disposal. If you want to facilitate change in your organization, a good way to start is by charging your financial professionals with disseminating knowledge using integrated reporting

techniques to raise the knowledge level of your managers.

I would like to remind everyone that May 22 is National Accounting Day, so please seek out an accountant and give him or her a hug and a kind word.

Since everyone seems to think that accountants are humorless creatures, in closing, I leave you with some accounting humor: • A fine is a tax for doing wrong.

A tax is a fine for doing well.

• An accountant is someone who solves a problem you didn’t know you had in a way you don’t understand.

• What do you call a financial controller who always works

through lunch, takes two days’ holiday every two years, is in the office every weekend, and leaves every night after 10 p.m.? Lazy.

• How can you tell when the chief accountant is getting soft? When he actually listens to marketing before saying no.

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

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International Corrugated Packaging Foundation I N T E R N AT I O N A L

PACKAGING

CORRUGATED

F O U N D AT I O N

STUDENTS SEEKING CORRUGATED PACKAGING AND DISPLAYS CAREERS

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n February 24, the evening before ICPF’s 2017 Teleconference on Corrugated Packaging, 20 select students from Bowling Green State University, Clemson University, Michigan State University, and Virginia Tech joined visiting executives from Green Bay Packaging, KapStone, Pratt Industries, Mid-Atlantic Packaging, Welch Packaging, and WestRock for ICPF’s student dialogue on corrugated packaging careers.

The students from Bowling Green State University, Clemson University, and Virginia Tech were awarded

ICPF travel grants to visit East Lansing for ICPF’s Student Dialogue Dinner.

The next day, the students joined the 126 MSU packaging students in the PBS broadcast auditorium to view ICPF’s Teleconference. There they gained a unique perspective of the Teleconference by observing more than 500 fellow students interactively participating at Michigan State and from the 17 remote campuses.

The résumés for the students attending the dinner, as well as those of more than 100 other qualified upcoming graduates, can be accessed on ICPF’s Career Portal

by ICPF Corporate Partners and potential partners that post student internships or full-time entry-level openings there this quarter. Please note that students are hired quickly by other industries, so there is a small window of opportunity to employ student interns and 2017 graduates before they are hired elsewhere. We encourage ICPF partners to contact ICPF and use the career portal today to post full-time openings for spring graduates and students seeking summer or fall internships.

STUDENT PACKAGING JAMBOREE CONDUCTED AT RIT

T

his past March, more than 70 students and faculty from Clemson, Michigan State, RIT, Rutgers, Virginia Tech, and the University of Wisconsin-Stout participated in the 2017 Student Packaging Jamboree, which was hosted by the RIT packaging school in Rochester, N.Y. Jamboree program planners were assisted by the International Corrugated Packaging Foundation (ICPF), which served as one of the sponsors and recruited Ben Urquhart of New England Wooden Ware Packaging & Display to provide the opening keynote address on “Current Trends in Corrugated Packaging Design and Production.”

During the Jamboree, ICPF’s program manager, Bari Zimbrick, promoted corrugated careers and provided tutorials

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to students on the use of ICPF’s career portal, where students can post their résumés for firms to review and apply directly online to the corrugated packaging openings companies post there.

In speaking about the Jamboree, Ben Urquhart was very enthusiastic about the resource RIT offers to corrugated packaging firms in the Northeast. “As a result of the assistance by ICPF and my visit to the Jamboree, I already have received more than a dozen applications from upcoming RIT packaging students for one of our designer openings.”

ICPF corporate partners—and potential partners—can view many of the Jamboree participants’ résumés in ICPF’s career portal.

The 2018 Student Packaging Jamboree

is scheduled for March 29–30 at Michigan State University.

To learn more about using ICPF’s career portal, contact ICPF at rflaherty@icpfbox.org or visit www.careersincorrugated.org.

International Corrugated Packaging Foundation I N T E R N AT I O N A L

PACKAGING

CORRUGATED

F O U N D AT I O N

ICPF 2017 STUDENT DESIGN PRESENTATION COMPETITION

T

he ICPF Teleconference grand finale this past February included ICPF’s 2017 Student Design Presentation Competition. Four student teams—two from Millersville University, a team from Cal Poly, and a student from Appalachian State—were tasked to show, tell, and sell their designs (that won first or second place in a separate 2016 competition conducted by AICC) by explaining the objective, the research conducted, design, and other background information. Appalachian State secured first place, and second place went to the Cal Poly student team. The two Millersville teams won third and fourth place. Each team was awarded a cash prize.

HOLIDAY WEEKEND IN NEW YORK— DECEMBER 8–10, 2017

E

arly Bird Registration is available until June 30 for ICPF’s 2017 Holiday Weekend in New York, scheduled for Friday–Sunday, December 8–10, 2017. Register by June 30, 2017 to save $200. Bring your spouse or guest for holiday shopping, touring, dining, Broadway-play viewing, and enjoying New York’s holiday season, all while supporting ICPF’s educational mission.

This year’s event will begin with a Friday evening reception at Sardi’s, a restaurant that is frequented by celebrities from around the world. The opening reception is sponsored by Pratt Industries.

ICPF guests will view a Saturday Broadway matinee of one of the latest hits, sponsored by BW Papersystems.

Saturday night, participants will be treated to a reception and dinner at the renowned Le Cirque restaurant. The reception is sponsored by Fosber America, and the dinner is sponsored by Bobst North America. Registrants also will receive a surprise holiday gift, sponsored

by Equipment Finance Corporation and Gerber Innovations.

In addition to saving by registering by June 30, ICPF’s New York holiday event always sells out early. Space is limited!

ICPF recommends you register this spring and no later than September 1.

Request a registration form by emailing registration@icpfbox.org, or visit www.careersincorrugated.org to download.

Richard Flaherty is president of the International Corrugated Packaging Foundation.

BOXSCORE www.aiccbox.org

71

The Final Score

SIGNIFICANT RETURNS: YOUR MEMBERSHIP INVESTMENT TIMES 10!

E

arlier this year, the stock market experienced what I have heard called the “Trump Bump” and topped 21,000. What a great boon for all of us and the returns on our retirement accounts! Yet as remarkable and significant as these returns might be, there’s another investment opportunity that promises even greater gains.

In this column, I am pleased to write about the newest and most significant expansion of your AICC membership value in recent memory: Effective April 1, 2017, and continuing with your membership renewal—what we like to say is your membership investment—all AICC e-learning education and training courses will be included as part of your Association membership and will be available free of charge online to you and your employees (see article, Page 38). In a move to recognize that our industry faces a serious education and training gap, with the number of retirees increasing and the pool of new workers shrinking, your AICC Board of Directors has doubled down on your membership value in order to help you develop a better-trained and educated workforce, and to help your employees realize their full potential in the service they perform for you.

In April, we began the rollout of this, with 18 ready-to-access courses on AICC’s Packaging School site. Online courses such as “Corrugated Basics,” “Flexo Print Basics,” “Job-Shop Time Management,” and “An Understanding of Accounting and Financial Statements” are now ready for immediate download by your employees. The course catalogue is expansive—meaning it covers a number of in-plant disciplines and distinct areas of industry education. “Paperboard Cartons,” for example, is an overview of the folding carton segment of the industry and is ideal for any newcomers in folding carton plants. This particular course is normally priced at $499, but in your new membership benefit package, it is available free of charge. Do you now see why the title of my column makes sense? If you’re a member company paying us at the higher end of our dues scale—$5,000 or more—and only 10 of your employees take the “Paperboard Cartons” course, you’ve received the value of your dues back immediately. The more employees enroll, the more that dividend keeps paying, so much so that depending on your dues scale, you could see a return of 10 times!

I hope you will take advantage of these and all the associated resources that we are providing with this new member benefit. Review our offerings with your management team; craft a message to your employees that your company is a proud member of AICC, and thus they are all eligible to receive the benefits enjoyed by your company.

AICC has delivered significant returns in membership value to hundreds of companies for more than 42 years. In this, our 43rd year, by making our e-learning an automatic part of your membership, your membership investment will grow times 10!

Steve Young President, AICC

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BOXSCORE May/June 2017

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