May/ June 2022 BoxScore: The New Pace of Purchasing

A PUBLICATION OF AICC, THE INDEPENDENT PACKAGING ASSOCIATION

May/June 2022 Volume 26, No. 3

THE NEW PACE OF PURCHASING Bringing more capacity, more capability, and less downtime to the shop floor

ALSO INSIDE Leading the Charge Focus on the Why Member Profile: Sumter Packaging

TABLE OF CONTENTS May/June 2022

•

Volume 26, No. 3

COLUMNS

ON THE COVER Description

36

3

CHAIRMAN’S MESSAGE

4

SCORING BOXES

8

LEGISLATIVE REPORT

12

MEMBERS MEETING

18

ASK RALPH

20

ASK TOM

22

ANDRAGOGY

24

LEADERSHIP

30

MEMBER PROFILE

60

THE ASSOCIATE ADVANTAGE

62

WHAT THE TECH?

64

STRENGTH IN NUMBERS

72

THE FINAL SCORE

FEATURES

36

THE NEW PACE OF PURCHASING Bringing more capacity, more capability, and less downtime to the shop floor

44

LEADING THE CHARGE

DEPARTMENTS

44

Independent boxmakers continue to be way out ahead on the sustainability front

52

FOCUS ON THE WHY Transforming the sales process in a new, virtual-selling world

52

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. ©2022 AICC. All rights reserved.

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WELCOME, NEW & RETURNING MEMBERS

27

AICC INNOVATION

68

FOUNDATION FOR PACKAGING EDUCATION

70

INTERNATIONAL CORRUGATED PACKAGING FOUNDATION

Visit www.aiccboxscore.org for Member News and even more great columns.

Scan the QR code to check them out!

BOXSCORE www.aiccbox.org

1

OFFICERS Chairman: Gene Marino, Akers Packaging Service Group, Chicago, Illinois First Vice Chairwoman: Jana Harris, Harris Packaging/ American Carton, Haltom City, Texas Vice Chairs: Matt Davis, Packaging Express, Colorado Springs, Colorado Gary Brewer, Package Crafters, High Point, North Carolina Finn MacDonald, Independent II, Louisville, Kentucky Immediate Past Chairman: Jay Carman, StandFast Packaging Group, Carol Stream, Illinois Chairman, Past Chairmen’s Council: Joe Palmeri, Jamestown Container Cos., Macedonia, Ohio President: Michael D’Angelo, AICC Headquarters, Alexandria, Virginia Secretary/General Counsel: David Goch, Webster, Chamberlain & Bean, Washington, D.C. AICC Canada: Renee Annis DIRECTORS West: Jack Fiterman, Liberty Diversified Industries, Minneapolis, Minnesota Southwest: Michael Drummond, Packrite, High Point, North Carolina Southeast: Ben DeSollar, Sumter Packaging Corp., Sumter, South Carolina Midwest: Casey Shaw, Batavia Container Inc., Batavia, Illinois Great Lakes: Josh Sobel, Jamestown Container, Macedonia, Ohio Northeast: Stuart Fenkel, McLean Packaging, Pennsauken, New Jersey AICC Canada: Terri-Lynn Levesque, Royal Containers Ltd., Brampton, Ontario, Canada AICC Mexico: Sergio Menchaca, Eko Empaques Cartón, Guanajuato, Mexico

DIRECTORS AT LARGE Kevin Ausburn, SMC Packaging Group, Springfield, Missouri Eric Elgin, Oklahoma Interpack, Muscogee, Oklahoma Guy Ockerlund, OxBox, Addison, Illinois Mike Schaefer, Tavens Packaging & Display, Bedford Heights, Ohio

EDITORIAL/DESIGN SERVICES The YGS Group • www.theYGSgroup.com

EMERGING LEADER DELEGATES Cassie Malone, Corrugated Supplies Co. LLC, Chicago, Illinois Lauren Frisch, Wasatch Container, North Salt Lake, Utah John McQueary, CST Systems, Atlanta, Georgia

Copy Editor: Steve Kennedy

ASSOCIATE MEMBER DIRECTORS Chairman: Joseph Morelli, Huston Patterson Printers, Decatur, Illinois Vice Chairman: Greg Jones, SUN Automation Group, Glen Arm, Maryland Secretary: Tim Connell, A.G. Stacker Inc., Weyers Cave, Virginia Director: John Burgess, Pamarco, Roselle Park, New Jersey Immediate Past Chairman, Associate Members: Pat Szany, American Corrugated Machine Corp., Indian Trail, North Carolina ADVISORS TO THE CHAIRMAN Joseph M. Palmeri, Jamestown Container, Macedonia, Ohio Al Hoodwin, Michigan City Paper Box, Michigan City, Indiana Joseph Morelli, Huston Patterson Printers, Decatur, Illinois PUBLICATION STAFF Publisher: Michael D’Angelo, mdangelo@aiccbox.org Editor: Virginia Humphrey, vhumphrey@aiccbox.org

OVERSEAS DIRECTOR Kim Nelson, Royal Containers Ltd., Brampton, Ontario, Canada

Vice President: Serena L. Spiezio Content & Copy Director: Craig Lauer Managing Editor: Julia Berley Senior Editor: Sam Hoffmeister Art Director: Alex Straughan Account Manager: Max Lalwani SUBMIT EDITORIAL IDEAS, NEWS & LETTERS TO: BoxScore@theYGSgroup.com CONTRIBUTORS Maria Frustaci, Director of Administration and Director of Latin America Cindy Huber, Director of Conventions & Meetings Chelsea May, Education and Training Manager Laura Mihalick, Senior Meeting Manager Patrick Moore, Membership Services Manager Taryn Pyle, Director of Training, Education & Professional Development Alyce Ryan, Marketing Manager Steve Young, Ambassador-at-Large Richard M. Flaherty, President, ICPF ADVERTISING Taryn Pyle 703-535-1391 • tpyle@aiccbox.org Patrick Moore 703-535-1394 • pmoore@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 PROVIDING BOXMAKERS WITH THE KNOWLEDGE NEEDED TO THRIVE IN THE PAPER-BASED PACKAGING INDUSTRY SINCE 1974 We are a growing membership association that serves independent corrugated, folding carton, and rigid box manufacturers and suppliers with education and information in print, in person, and online. AICC membership is for the full company, and employees at all locations have access to member benefits. AICC offers free online education to all members to help the individual maximize their potential and the member company maximize its profit.

WHEN YOU INVEST AND ENGAGE, AICC DELIVERS SUCCESS.

Chairman’s Message

What’s the Score?

S

o many of us ask this question during the game or some version of it at the end of the game. Human nature drives most of us to measure wins and losses. By no means am I simplifying into only wins and losses, but knowing the score when it matters helps us lead, manage, and hold others accountable.

In continuing my theme and using the EOS framework, we find ourselves in the data component. Contextually, when we can use a set of numbers that allow us to make objective, informed decisions in place of emotional ones, we are better equipped to drive aligned decision-making for the good of the business and the vision. When a business is healthy, it uses a weekly scorecard to measure those key objectives that keep the company moving closer to its plan instead of further away. Everyone on the team owns a number so that we can keep score and the leader can step in to clear the road if a teammate is missing the goal. When the scorecard is exceptional, decisions can be made on objective evidence instead of gut feel and emotion. Who hasn’t walked out on the floor and seen an empty die cutter, only to go back into the office and tell estimating to lower the level on all die-cut business until it is full, only to find a backlog-slammed die cutter next month running low-margin jobs? That’s emotion over information. When everyone in your organization has a number, that’s creating a measurable. Whether it’s sheets through the press, scrap per day, designs completed, etc., measuring what’s important to your business provides support to people’s ability to drive success.

As you continue to work on your business, these scorecards and measurables will change, improve, and adjust. This is not meant to be a one-and-done approach to setting objectives to measure results but a dynamic part of an evolving business. When you begin to consider what to measure, take a moment to think about cause and effect as well. As an example, revenue growth in the sales function maybe doesn’t work with a scorecard metric of revenue (the effect) that comes because of 15 cold calls per week (the cause) that will ultimately result in the outcome you seek. In any event, sitting with your leadership to identify and incorporate a weekly scorecard where each member of the team owns a metric will set you on the course of an objective tool to lead, manage, and hold others accountable.

This is an exciting issue with some wonderful content on how equipment is evolving in our industry with the continued boom in e-commerce, along with many great insights—from the Emerging Leader perspective to the evolution of the sales landscape—we know you will enjoy.

Gene Marino Executive Vice President, Akers Packaging Service Group Chairman, AICC

BOXSCORE www.aiccbox.org

3

Scoring Boxes

Did Independent Converters Benefit from International Trade Last Year?

BY DICK STORAT

T

he math it takes to answer that question is straightforward. If exports of packageable products grew more last year than imports did, then paper-packaging converters had a larger pool of potential customers than if there was no international trade. On the other hand, if imports outgrew exports, then the potential packaging market shrank compared to its size without international trade, since the likelihood is high that the imported goods were packaged before their journey abroad and did not need as much additional corrugated or other paper packaging to protect them once they landed at our ports, compared to goods made here.

The first step to assessing this situation is to sort through internationally traded goods to identify those that consume paper packaging. For example, wheat is a large internationally traded commodity, but no paper packaging is required for it.

On the other hand, small appliances are usually packaged in shelf-ready packaging where they are manufactured, not in the destination country.

We have developed a list of packagingintensive traded goods and will investigate whether trade conditions last year expanded or contracted the domestic market for paper packaging. The table at right summarizes into five categories the exports and imports of packageable goods for 2020 and 2021.

The first category includes fruit, vegetables, tree nuts, meats, poultry, and all types of manufactured food products and beverages, excluding fresh milk. Exports last year amounted to $100 billion. They rose by 7% from 2020. The value of

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BOXSCORE May/June 2022

imports of these goods was 43% higher, however, amounting to $143 billion. They grew by 8% last year, at a rate like that of exports. The net result is that imports grew by $12 billion, while exports grew by a lesser $7 billion, shrinking the trade balance by $5 billion.

Domestic manufacturers of pharmaceuticals and other medicines exported $83 billion of these high-value goods last year, a significant 24% gain over 2020’s exports. The value of last year’s imports of these products, however, was approximately double that of exports, amounting to $161 billion. Exports were $16 billion higher last year, while imports declined by $6 billion. As a result, the trade balance improved by $10 billion, affording independent paper converters that much additional packaging opportunity.

Computers and electronic equipment consume a significant amount of paper packaging to protect high-value products.

In addition to computers, this category includes communications equipment such as cellphones, audio and video equipment, all sorts of measuring instruments, as well as semiconductors and other electrical components. Exports of these electronic devices and parts amounted to a substantial $218 billion last year, a gain of 12%

from 2020. Imports in this category also amount to approximately double the amount of exports. They totaled $447 billion last year and rose at 18%, a faster pace than that of export growth. The impact on domestic paper packaging market size for these products worsened by $45 billion, the difference between $24 billion of export growth and $69 billion of import growth.

The appliance category includes both large appliances like washing machines and smaller products like kitchen mixers.

Exports amounted to $15 billion last year and enjoyed exceptionally high growth at a rate of 75%. Imports amounted to $49 billion last year, three times the level of exports. Imports also grew rapidly last year, as consumer spending for durable goods hit a record high boosted by government COVID-related subsidies.

The net result was that imports rose by $15 billion last year, while exports rose by $6 million, shrinking the domestic production market by $9 billion.

The final category includes a myriad of other products that are typically packaged in paper packaging. Most of them are nondurable goods. In total, $141 billion of these goods were exported last year, and collectively their export value grew

Packageable Goods Trade Deficit ($ Billions) 2020 & 2021 PACKAGEABLE COMMODITY Produce, Food & Beverage Pharmaceuticals & Medicines Computers & Electronics Equipment Appliances Other Packageable Goods TOTAL Source: Census Bureau, RSA, Inc.

2021 EXPORTS 2021 IMPORTS 2020 VALUE Value %Change Value %Change Exports Imports 100 7% 8% 131 143 93 83 24% –4% 167 161 67 218 12% 18% 378 447 194 15 75% 41% 34 49 9 141 28% 30% 293 380 110 557 18% 17% 1,005 1,179 472

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Scoring Boxes

by a robust 28%. However, when imports of these same categories of goods were added up for last year, they amounted to $380 billion and posted a similar robust growth rate—30%. Subtracting the import growth from the export growth produces a result of $87 billion of growth for imports less $31 billion of growth for exports, a decrease of $56 billion in the trade balance.

Production and packaging of these domestic goods for shipment abroad is an important part of total U.S. manufacturing production. Exports of packageable goods amounted to $557 billion last year and grew at a healthy rate of 18%, more than three times the 5.5% growth rate of U.S. industrial production last year. Unfortunately, the import side of the trade ledger overwhelmed that impressive performance.

For those goods identified as packageable, imports exceeded exports by a factor of more than two, amounting to $1,179 billion last year. They also rose just as rapidly, gaining 17% in 2021.

When all those numbers are crunched, the result is that during 2021 the trade balance for packageable goods dropped from a negative $553 billion to a negative $622, a worsening of $89 billion.

So, the answer is clear. Independent paper packaging producers did not benefit from international trade last year.

The U.S. dollar continues to be stronger than justified by economic fundamentals in the U.S. manufacturing sector. As a result, domestic producers of packageable goods and their paper-packaging suppliers lost the opportunity to make and package $89 billion of domestically produced goods.  Dick Storat is president of Richard Storat & Associates.

He can be reached at 610-282-6033 or storatre@aol.com.

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12/3/21 2:24 PM

Legislative Report

Employment on Main Street (and Elsewhere)

BY ERIC ELGIN

T

he monthly employment numbers from the U.S. Bureau of Labor Statistics (BLS) are eagerly awaited in many quarters. These first-Friday stats are viewed as a bellwether of overall economic strength and the private sector’s job creation prowess. But the data reported by the media and Biden administration are just the surface. What do the numbers beneath tell us about the real state of our economy and employment?

Let’s consider the unemployment data from February of this year. In a statement released in mid-March, the Biden administration touted the 678,000 new jobs created in the previous month, saying that its economic policies were working to grow the economy “from the bottom up and the middle out.” Just after that, the Washington, D.C.based S-Corp Association released an interesting analysis, this one done by ADP. (I read the S-Corp Association’s newsletters from time to time because this group exists to promote and protect the interests of America’s 5 million S corporations, many of which are AICC member companies.)

ADP’s study is instructive because the BLS numbers report employment figures only by industry; ADP’s look at company size. According to the ADP breakdown, while private-sector employment increased by 475,000 net jobs, employment at small businesses —those with between one and 49 employees—decreased by 96,000, with the vast majority of those losses occurring at companies with fewer than 20 employees. The bulk of the job creation, it appears, is happening at public companies with more than 1,000 employees.

The S-Corp Association concludes from

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BOXSCORE May/June 2022

this that we are thus witnessing an “ongoing consolidation of economic power away from Main Street and into the hands of the largest publicly traded companies.”

The public policy implications of this are important to all of us who own small businesses. As I have mentioned in previous columns, the tax and spending legislation that we have seen introduced on Capitol Hill are tilted against small businesses, particularly pass-throughs.

The House-passed Build Back Better Act, which I addressed in the March/April issue of BoxScore, would potentially mean upward of a 20.4% difference in the tax rates for C-corps and S-corps, with the Cs having the advantage. Fortunately, cooler heads have prevailed in the Senate, just as our Founding Fathers designed, but even that chamber is fragile in its ability to rationally reason.

Th is brings me to my second point—Congress. I read recently—this is being written in early April—that a new Gallup Poll shows that 76% of Americans disapprove of the job the current Congress is doing. Since AICC is a nonpartisan organization, I won’t mention the party in control. Suffice

it to say, however, I imagine that most small business owners, seeing what is happening in their shops and in their plants, are in agreement with the poll’s majority. Let us then hope that another set of employment numbers—those on Capitol Hill—might also dramatically change in the months ahead.  Eric Elgin is owner of Oklahoma Interpak and chairman of AICC’s Government Aff airs subcommittee. He can be reached at 918-687-1681 or eric@okinterpak.com.

New & Returning Members

Welcome, AICC’s New Members!

LARSEN PACKAGING PRODUCTS, INC. BILL LARSEN President 425 S. 37th Ave. St. Charles, IL 60174 630-384-1137 www.waybeyondthebox.com

DURO-FLEX LLC BROCK SISCO CEO & Co-owner 1 Sandy Lane High Hill, MO 63350 636-585-0220 www.duroflexusa.com

FRAIN INDUSTRIES TAMI FRAIN President of Strategic Accounts 245 E. North Ave. Carol Stream, IL 60188 630-629-9900 www.frain.com

ACCURATE BOX CO. LISA HIRSH President 86 5th Ave. Paterson, NJ 07524 973-345-2000 www.accuratebox.com

K.B. REITER GROUP, LLC KEITH REITER President 295 Southfield Dr. Vernon Hills, IL 60061 847-910-0679

CL SALES & MANAGEMENT LTD STEVEN ANTONI President, Americas 900 Chapel St., FL 10 New Haven, CT 06510 203-824-2767 www.cloudlab.ag

SERVICE FIRST PROCESSING NADER SAWEERES Vice President 1315 N. Federal Hwy., Suite 200 Boynton Beach, FL 33435 561-404-0198 www.sfprocessing.com

TEN-E PACKAGING SERVICES ROBERT TENEYCK President 1666 County Rd. 74 Newport, MN 55055 651-459-1430 www.ten-e.com

ADVANCED GRAPHICS TODD HENDERSON Co-president 466 N. Marshall Way Layton, UT 84041 801-499-5000 www.advancedgraphics.com

SUNRISE MFG. INC. MATT SEWELL President 2665 Mercantile Dr. Rancho Cordova, CA 95742 916-635-6262 www.sunrisemfg.com

UNITED ENGRAVERS PETER CAPPAS President 618 Pratt Ave. North Schaumburg, IL 60193 847-301-3740 www.unitedengravers.net

KENTO DIGITAL PRINTING, S.L. JAVIER QUESADA CEO – Founding Partner Calle Oxigen 1 Burriana, Castellón 12530 Spain +34 964 890 290 www.kentodigitalprinting.com MIDWEST BOX ANDREW BACHER General Manager 9801 Walford Ave. Cleveland, OH 44102 216-281-3980 www.midwestboxco.com

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BOXSCORE May/June 2022

Members Meeting

Photos courtesy of AICC.

AICC Members Gather for an Xperience Like No Other

Over 100 AICC members and speakers came together for in-depth discussions during the Packaging Xperience.

A

ICC’s Packaging Xperience drew 85 members and presenters March 1–3 in Kansas City, Missouri. The three-day event highlighted post-COVID-19 trends in company leadership and market challenges, sales management, brand-owner demands, and technological innovation to help members better serve a consumer-focused packaging marketplace.

AICC President Michael D’Angelo opened the meeting by noting the dramatic growth in demand for corrugated packaging in the past two years and the industry’s continuing strain to meet it. Working smarter, understanding customers’ responses to changing consumer behavior, and leveraging technology will help members maintain their standards of service and long-term customer loyalty, he said.

Gene Marino, AICC chairman and executive vice president of Akers

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BOXSCORE May/June 2022

Packaging Service Group, set the tone for the program by discussing the challenges facing box plant personnel at the current pace of demand. His presentation described a “Strategy for Success,” rewarding knowledge, experience, and consistency in processes across all business operations—in other words, to have everyone in the right seat. Marino was followed by Mark Roberts, CEO of OTB Solutions, who asked attendees, “How do you make your company more data-driven?” Citing surveys of buyers in different industries as well as those who purchase corrugated and paperboard products, Roberts made the case that increasing sales will rely on understanding how and why your customer makes purchasing decisions and understanding their challenges in their markets.

A four-member panel of AICC member boxmakers followed, featuring Chris Stoler, CEO of Vanguard Cos.; Jana

Harris, president of Harris Packaging; Ed Nusslein, general manager of McLean Packaging; and Mark McNay, senior vice president and general manager at SMC Packaging Group. Panelists answered questions posed by D’Angelo and the audience, particularly around hiring practices, employee engagement, paper supply, lead-time challenges, and capital equipment purchasing plans.

Adam Peek, senior vice president of Meyers Printing, presented the subject of blockchain and cryptocurrency and their potential for business operations.

He explained why this technology is important for the corrugated and folding carton industries to watch, and he outlined several areas of the business process where it could be useful, namely on receiving timely price estimates based on real-time production factors, order tracking, and proofing and quality control.

Members Meeting

AICC members connected during numerous networking opportunities.

The continuing raw material supply issue was the subject of a three-speaker segment on the afternoon of Wednesday, March 2. Pete Butier, president of Evergreen Fibres, reported on the North American containerboard market. Joe Cali, global business development and sales at Price & Pierce, offered a global perspective. Ryan Fox, corrugated packaging analyst at Green Markets, a Bloomberg Co. publication, presented a retrospective and analysis of box demand over the past two years.

The program also featured several representatives from corrugated end users, namely, those in the direct-to-consumer market. Blake Brown, vice president of brand and creative for the Kizik shoe company, discussed his company’s experience in finding packaging suppliers as a startup. Stephan Ango, vice president, product, for the online packaging design marketplace Lumi, offered ways that boxmakers can promote themselves to smaller startup internet sellers.

On Thursday, March 3, the program continued with the end-user viewpoint, with Evelio Mattos, founder and host of Package Design Unboxd, who recommended ways that boxmakers can evaluate smaller startups for their potential success.

Turning to the production process and ensuring the quality of the packaging that members are providing their customers, Les Pickering, principal of Quadrant 5, took an in-depth look at factory maintenance procedures, showing best-in-class examples of organized and structured maintenance departments from box plants in the United Kingdom, United States, and Japan. John Kelley, CEO of Dusobox Creative Packaging Group, then presented an overview of hybrid flexographic and digital printing presses now coming to the market. These presses can offer boxmakers and their customers

versatility in addressing graphics and printing solutions, especially for the growing e-commerce segment.

Closing out the speaking portion of the program was Kim Alexis Newton, founder of Alexis Enterprises, LLC, a manufacturer of custom-made quilts. She recounted the start of her company and how she has successfully worked with AICC member Vanguard Packaging in creating their online packaging solutions.

After the program closed, members traveled to tour Lawrence Paper Company in Lawrence, Kansas, followed by SMC Packaging Group’s Arrowhead Containers division in Kansas City. Justin Hill, president, and Russ Packard, vice president, of Lawrence Paper welcomed the group to their plant. SMC Packaging Group CEO Kevin Ausburn and Arrowhead Containers General Manager Vern Bennett hosted members at Arrowhead.

Sponsors of the Packaging Xperience were Equipment Finance Corp.; SUN Automation Group; Pamarco; Poteet Printing Systems; and tour hosts Lawrence Paper Co. and Arrowhead Containers. For more information about AICC’s Packaging Xperience or any other AICC educational programs, contact Taryn Pyle at tpyle@aiccbox.org or Chelsea May at cmay@aiccbox.org. 

Attendees were welcomed on tours of Lawrence Paper Co. and Arrowhead Containers.

BOXSCORE www.aiccbox.org

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Members Meeting

A panel dicussion moderated by AICC Associate Chair Joe Morelli of Huston Patterson and Lewisburg Printers was the highlight of the Associates' Meeting.

T

he AICC Spring Meeting, April 6–8 at the JW Marriott Desert Springs Resort in Palm Desert, California, welcomed over 700 attendees to the desert for three days of general sessions, plant tours, workshops, and networking.

During the meeting, speakers addressed the state of the industry, what’s next, and strategies to increase profitability. Additionally, 208 members enjoyed the 8th Annual Independents’ Cup Charity Golf Tournament.

AICC Chairman Gene Marino, executive vice president at Akers Packaging Service Group, opened the meeting with a focused session that offered information on the state of containerboard, trucking, and transportation, and an economic and legislative outlook with industry speakers Gene Marks, CPA, author and columnist at Business Expert; Ryan Fox, corrugated market analyst at Green Markets, A Bloomberg Co.; and Avery Vise, vice president, trucking, at FTR.

MEETING SPONSORS • Poteet Printing Systems, a Flint Group Co. • HP • SUN Automation Group • EFI • Haire Group • Oklahoma Interpak • Flint Group • Kao Collins • Domino • Kolbus America • Mitsubishi Heavy Industries • Stafford Corrugated Products • Global Boxmachine • Huston Patterson/Lewisburg Printing Co. • Dusobox • Durst

AICC celebrated several member milestones during the 2022 Spring Meeting.

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BOXSCORE May/June 2022

Photos courtesy of AICC.

AICC Spring Meeting Brings Strategic Alignment to Members

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Members Meeting

Attendees enjoyed reconnecting with old friends and making new connections during numerous networking events.

Of the meeting, Marino remarks, “It is a privilege and an honor to represent this Association as chairman, and the turnout in Palm Springs is a testament to our industry. I sincerely hope that the attendees enjoyed the meeting as much as I did.”

Over the three days, Sean McDermott, founder and certified EOS implementer at The Traction Group, offered a keynote presentation, Align Human Energy & Activity in Your Company, and two workshop sessions.

McDermott also joined a special networking Q&A session with AICC Emerging Leaders (ELs). They were able to ask him questions about strategic alignment and growing with a company.

“The energy at the Spring Meeting is everything we’ve been missing the past couple of years,” says Senior EL Delegate Cassi Malone, customer service manager at Corrugated Supplies Co. “It was wonderful to connect with our peers in person again and share insights into how we are all managing through the different obstacles we encounter. It’s

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BOXSCORE May/June 2022

been like The Hunger Games of packaging, so being able to connect with people going through the same thing and knowing you’re not alone is key.

Plus, so far, we’ve lived to tell the tale and have a few laughs about it, which is the other key to keeping our sanity as we all continue to grow.”

Over two days, supplier innovations were shared to an engaged audience during workshop sessions. Presenting companies included Automated Conveyor Systems, Advantzware, AG Stacker, Barberan, Baumer hhs, Bobst, CST Systems, Domino North America, Digital Print Inc., Durst Group, EAM Mosca, EFI, Emmeci, eProductivity Software, Global Boxmachine, Highcon, Kolbus America, Motionalysis Inc.,

AICC Emerging Leaders were treated to a special session with keynote speaker Sean McDermott.

UPCOMING NATIONAL MEETINGS AICC/TAPPI Corrugated Week September 19–21 | San Antonio, Texas AICC 2023 Spring Meeting & 9th Annual Independents’ Cup Charity Golf Tournament April 24–26, 2023 | Miami, Florida AICC 2023 Annual Meeting September 18–20, 2023 | Louisville, Kentucky Learn more at www.aiccbox.org/calendar.

Members Meeting

OMP, Pamarco, PARA, RapidBond, SUN Automation Group, and Valco Melton.

Attendees also heard an extended producer responsibility (EPR) legislation update from Terry Webber, vice president of industry affairs at the American Forest & Paper Association.

The closing keynote was an exciting account of being held hostage by pirates from Captain Richard Phillips, hero of the high seas and real-life inspiration for the movie Captain Phillips.

During the meeting, Greg Tucker, industry leader and chairman and CEO of Bay Cities, was inducted into the AICC Hall of Fame for his contributions to the industry.

Prior to the meeting, 10 sales professionals participated in a two-day Accelerate Sales Forum in which Mark Roberts, CEO of OTB Sales Solutions, ​ helped attendees develop targeted conversations that lead to revenue, deliver sales results aligned with a buyer-centric approach, and learn to use application exercises to create fluency within sales teams.

Plant tours at Fruit Growers Supply and EnCorr Sheets LLC was time well spent for more than 100 attendees.

The meeting also recognized AICC member milestones.

“It felt like we were back to a ‘normal’ meeting after several years,” says AICC Vice Chair Jana Haris, CEO of Harris Packaging and American Carton Co. “The venue, the programming, and as always, the networking opportunities were all outstanding.”

AICC’s “Recyclers” Cycling Team enjoyed a post-meeting outing Saturday, April 9, in Joshua Tree National Park, covering 40–60 miles through the Mojave Desert.

Videos of many of the sessions are available to attendees upon request.

Photos from the meeting can be found on AICC’s Facebook page. 

Over 200 AICC members participated in this year’s Independents’ Cup.

GOLF TOURNAMENT SPONSORS • Major Sponsor: Domtar Packaging

• American Corrugated Machine

• Schwarz Partners

• Blackhawk Corrugated

• Bobst

• BW Papersystems

• BHS Corrugated

• EMBA

• Bradford Co.

• EAM-Mosca

• Equipment Finance Corp.

• Haire Group

• WestRock

• Jamestown Container

• Fosber

• JB Machinery

• BCM Inks

• Kao Collins

• AG Stacker

• McLean Packaging

• Litho Press

• Metsä Group

• Bay Cities

• Pamarco

• Huston Patterson/ Lewisburg Printing Co.

• Printron

• Poteet Printing Systems, a Flint Group Co.

• Quantum Ink

• Flint Group • Kolbus America • Isowa • Akers Packaging Service Group

• Roosevelt Paper • StandFast Packaging Group • Standard Printing Co. • SUN Automation Group • Wasatch Container

• Alliance Machine

BOXSCORE www.aiccbox.org

17

Ask Ralph

Glue Tabs: Failures?

BY RALPH YOUNG

I

n almost 40 years in the containerboard and corrugated industry, I have never heard of a box failure due to the manufacturer’s joint that was properly die cut and had 100% adhesive coverage.

If you have any working hands-on awareness of premature failures, please let us know; we could use your input as we build the designed experiment for evaluation of cold adhesive glue tab strengths.

This all started with one member asking why brokers would require different-width glue tabs for different-size boxes without asking for the actual numeric strength value of a typical 1¼ glue tab. So, we are looking for data that supports carton strength relative to size along with inside or outside flap. The investigation has begun.

High-speed camera inspection systems today can monitor each box for glue patterns and skew or fishtailing of the glue tab, and reject any box that is not in compliance, but that may not be enough.

TAPPI TM 813, Tensile Test for the Manufacturer’s Joint of Fiberboard Shipping Containers, has not renewed the review process, maybe because of a lack of significance to CORTOBEC committee members who vote on the renewal of test methods every five years.

As a side note, TAPPI test methods for containerboard and corrugated properties range from numbers 400 to 570. Th at’s a lot!

Score line quality, including width and depth, can play a factor. And yes, medium strength can play a part in the pin adhesion strength with the glue tab liner.

Scott ply bond, Cobb absorbency, smoothness, roughness, and porosity

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measure surface and internal characteristics of the linerboard and will be evaluated in this trial. All these are standard TAPPI test methods and are repeatable from one lab to another.

In our literature search, we discovered a study that answered a question I have had for years about what is the strongest glue tab method: cold-set adhesive, hot melt, staples, or tape.

Here is what was reported in pounds per inch per tensile: • Cold set adhesive: 127# • Hot melt adhesive: 109# • Tape: 53# • Stitch/staples: 26# What was also reported from the study was that “the compression strength of the box is largely unaff ected by the type of joint produced.” Now, don’t shoot the messenger. I am only bringing forward what others have discovered. The question remains: Can we increase box compression and supply chain endurance by widening the glue tab beyond the required minimum width of 1¼ inches as mandated in Rule 41/Item 222? At least one independent converter is required by various brokers to provide glue tab widths up to 3 inches, all without any quantitative proof that that extra material adds to box performance. We will see when the results are in from the university research.

The literature search revealed only a few additional studies: The fi rst in modern times goes back to 1970, when Owens Illinois was a major box producer. Another was a European study done on mottle white (yes, before white top) in 1978 and another one by Jay

Singh at Cal Poly in 2018. Linerboard has changed significantly since 1978, especially with the introduction of CD ring or SCT as a highly critical variable leading to box compression and stacking strength. But the glue tab testing protocols employed then are still valid today. We chose Cal Poly to partner with us on this project.

We also did have conversations with other highly respected testing facilities focused on corrugated: Advanced Packaging Technology Labs and Applied Paper Technology.

Valco Melton has had two articles published in Corrugated Today, the oldest one going back to 2009. Harper Love had also been a regular contributor to Corrugated Today on starch and adhesives.

Dick Target’s column in each issue covered a multitude of topics focused on corrugated manufacturing and printing.

As an industry, we are at a loss because of the technical knowledge and product information shared in each issue of that publication.

As you read this article, we should be deep into the testing. If you would like to join in this study or expand upon it in any way, please contact us. Certainly, the findings are not just for independent packaging members but for the entire corrugated industry. How else may we serve you?  Ralph Young is the principal of Alternative Paper Solutions and is AICC’s technical advisor.

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

ˍLeading connectivity

For your kind of d corrugated board MORE PERFORMANCE, MORE VALUE LUE From pre-feeding to palletizing, BOBST connects every step of the modern corrugated packaging process, to deliver more performance and value for you. Interested? Find your local BOBST representative at www.bobst.com/contact

www.bobst.com

Ask Tom

Top 10 Characteristics of a WorldClass Manufacturing Facility

BY TOM WEBER

S

everal AICC members have asked me to identify what auditable aspects of manufacturing facilities truly differentiate one from another.

Here’s my “Top 10 Characteristics of a World-Class Manufacturing Facility.”

1. Safety and Health • High awareness is maintained day to day among employees to keep each other safe, healthy, and secure.

• Equipment is properly guarded, and exceptional housekeeping is a daily given in all work areas.

• All employees are trained in safe practices and consistently wear personal protective equipment without having to be asked to or threatened.

• Zero lost-time accidents with very low OSHA incident rates are a daily reality, not a lofty annual business objective to be discussed only at year-end.

2. Involved and Committed Workforce • Employees at all levels understand and are committed to continuously improving their operational responsibilities, recognizing the greater good.

• Idea generation, accountability practices, and participation on corrective-action teams create suggestions that are implemented at a rate of 10–12 per employee annually.

3. Just-in-Time Manufacturing and Deliveries • A quality product is manufactured and delivered when needed as defined by the customer.

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• On-time deliveries in full exceed 98%, as defined by customers.

• Advanced planning systems are in place to ensure tracking measures for reporting data daily.

4. Focus on Product Flow • Residence time of all materials both into and throughout the various processes is low.

• Materials move smoothly between operations with very low spoilage.

• Various tools are utilized to track material flow throughout the day.

5. Preventive and Predictive Maintenance • Machine breakdowns during scheduled run hours are virtually nonexistent.

• Machines are maintained to run quality product at historically low waste levels.

• Delay time is approaching zero on all major machine centers.

6. Bottlenecks Are Managed • Frequency and severity of bottlenecks are identified via realtime monitoring.

• Quickly and appropriately resolve any bottlenecked areas or machine centers.

7. Total Quality Management • Actions are focused on continually improving the quality of the products, processes, and systems.

• Quality products and services are consistently produced with results approaching zero defects/ Six Sigma.

8. Fast Setups • Setup times are all approaching measurements in minutes.

• The setups take such little time that maximum flexibility is available.

• Visual reference points and organization within the facility and at machine centers are evident.

9. Extremely Low Inventories • Raw materials are gated with justin-time methodology to facilitate quick response.

• Work in process is reduced below historical levels to keep production moving.

• Finished goods are driven to the lowest possible levels using MIS/ predictive modeling, etc.

10. Supportive Policies and Procedures • Corporate and facility policies, procedures, and practices must be supportive and not hinder continuous improvement efforts.

• Say what you do clearly and concisely, and then do what you say.

The ultimate objective of a properly executed continuous improvement process is to create a world-class organization with a distinct competitive advantage in the marketplace.  Tom Weber is president of WeberSource LLC and is AICC’s folding carton and rigid box technical advisor.

Contact Tom directly at asktom@aiccbox.org.

Andragogy

Who’s Ready for Summer School?

BY JULIE RICE-SUGGS, PH.D., AND ALLI KEIGLEY

W

ithout a doubt, many of us are ready to celebrate the warmth and fun of summer days filled with long evenings, the sun shining hot, and exciting plans to fill up your weekends. And even if summer doesn’t mean three months of vacation—because, you know, we’re adults now—we can still have fun creating a summer bucket list full of ideas for new adventures. If you haven’t already put together your summer of 2022 bucket list, here are some ideas to get you started: hike in a place you’ve never been (followed by a lovely picnic on-site), get some friends and head to the pool, take a road trip, watch a live sporting event, and so on. Oh, and one more thing—take some online classes. I think I hear crickets on that one. But hear us out.

Now, we understand that your immediate response to the thought of having continued education on a summer bucket list is likely one of disdain or disbelief.

Maybe that’s because you are thinking back to the summer school days of your youth—and, yes, yuck! However, we’re definitely not talking about anything that requires you to be cooped up in a classroom all day, learning from a blackboard while sitting at an uncomfortable desk.

While you most likely know that’s not what we’re talking about, you may not be familiar with what we are suggesting. For starters, you don’t need the heavy books, binders, and backpack full of notebooks and pencils that harken back to your middle school days. The only thing you need is access to a computer and at least 3 Mbps of internet—easy, right? AICC’s partnership with The Packaging School allows for member companies and all respective employees the value-add of online training programs for free. And

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with more than 80 online courses in both English and Spanish, all related to the packaging industry and the manufacturing environment, you’re sure to find something that suits your current needs.

Just grab your computer, and we’ll get you squared away.

Not only have we removed the need for bulky school supplies, but we’ve also made the method of instruction one that caters to adult learning styles. How? We use a technique called microlearning. If you aren’t familiar with the term, it just means we take difficult topics, break them up, and then arrange them into bite-sized lessons you can engage with on any device. We use infographics, quick readings, videos, animations, discussions, and interactive slides as the vehicles to deliver information. This unique method empowers you to learn and complete courses on your schedule, at your own pace, anywhere you might be.

New Adventures To add to the extensive existing course catalog, we have some new opportunities for you to dive into this summer.

The fi rst new course available to you is called Innovations and Machinery Advancements in the Corrugated Industry.

Th is course is part of AICC’s Education Investor Program, which allows member companies to be thought leaders in the industry through premier online education with The Packaging School.

Working with subject matter experts Katie Graham and Rob McCann from BOBST, we take you on a journey to help you better understand the current state of the corrugated industry as well as where it’s headed. New trends, demands, and the ever-changing state of the world are causing the industry to make significant strides in machinery advancements. These advancements aim to mitigate current pain points in the industry and streamline your packaging line.

This course begins with an engaging infographic overview of the corrugated market–you can even download it! Then we jump into some key packaging trends that help brands and converters alike compete efficiently, such as economic growth, consumer trends, brand owner

Andragogy

trends, sustainability, e-commerce, digital advancements, and packaging automation.

The next module focuses on industry pains and the innovative solutions and technology that can offer some relief.

Topics include workforce challenges, consistency, precision, and inline production—you also hear about real-life examples on the packaging lines and how current issues are being dealt with. Lastly, the course explores two BOBST industry solutions—an automatic packer and a flexo printing and rotary die cutting (DRO) innovation.

Another course adventure to add to your bucket list is the Machine Primer resource.

Working with subject matter expert Scott Ellis, Ed.D., of Working Well and numerous education investors, we created an interactive experience for you to learn from. This resource will introduce you to

a wide variety of equipment utilized in today’s packaging industry in a format that allows you to follow your own adventure, so to speak, and select equipment that interests you. The machines used as examples represent various generations of technology. For example, a flexo folder gluer may be a fully functional, two-color, gear-driven machine built in the 1970s, or it might be a 10-color, servo-driven, fixed-architecture machine built last year. The core functionality of printing, cutting, gluing, and folding is the same no matter the machine. Each machine comes complete with a definition, video, and diagram that help the learner understand the basics of how the machine works.

More examples will be added for each machine type as they become available, so stay tuned for updates.

Hopefully, you’re seeing that these courses are nothing like your old summer

school experiences. Our courses are engaging, informative, and relevant to wherever you are in the packaging industry. Bonus: You can take them while you’re on your epic summer escapade— it’ll be like an adventure on top of an adventure! We’ll see you there!  Julie Rice Suggs, Ph.D., is academic director at The Packaging School.

She can be reached at 330-774-8542 or julie@ packagingschool.com.

Alli Keigley is production coordinator at The Packaging School. She can be reached at alli@ packagingschool.com.

BOXSCORE www.aiccbox.org

23

Leadership

Replacing Yourself

BY SCOTT ELLIS, ED.D.

RELATED AICC RESOURCES AICC members can access the resources mentioned in this article, as well as all of AICC’s other valuable resources, at www.aiccbox.org/packagingschool.

To ease your way in orienting and equipping your team members, I have worked with AICC to provide a growing cache of resources.

Training Tracker We built an Excel-based tool for members that do not have their own learning management system but still want to invest and track education. This can be used for career-pathing an individual or ensuring compliance across multiple departments.

It is useful for tracking completion of the 100-plus courses in AICC’s online catalog, including industry-specific topics.

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BOXSCORE May/June 2022

Image courtesy of AICC.

I

t does not matter if you just got hired to run the bailer or you are finalizing your succession plan in the corner office.

Leaders replace themselves. They are not concerned with hoarding information to ensure security. They know the judgment that comes with experience will bring opportunity.

During your first week on the bailer, you learn all you can to understand the job, the equipment, and your customers.

As you gain experience, you look for ways to simplify and improve the process.

Then you find ways to better serve your customers, such as setting aside sheets of set sizes that can serve as dunnage for various machines. Finally, you save the knowledge in notes or other documentation so that you are ready when you can train someone else and move on to your next challenge. So, in short: 1. Study the job, the equipment, and the customers.

2. Improve the process and better serve customers.

3. Codify the new process.

4. Be ready to train your replacement.

Packaging Math Quiz Provided by Liberty Container and modified for availability online, this math quiz assesses entry-level skills.

When a refresher is in order, the online course Packaging Production Math addresses common math skills used in production.

Carton Style Catalog In the near future, a Carton Style Catalog will be added to this list. It will include descriptions and 3D renderings of the carton styles commonly used across paper-based box manufacturing.

In February, the Machine Primer launched with the help of many OEMs and contributing boxmakers. This resource provides exposure to a wide variety of equipment types. Even those with industry experience will find value in the interactive plant floor map, including everything from papermaking to converting with three print methods. This fictional facility provides a description,

a diagram, and a video of the machine making product.

These resources will make your job of self-replacement easier. Combined with the encouragement of knowing someone is investing in their career, team members will gain competence more quickly and stay engaged as they gain experience.

Self-replacement is essential for creating an engaged and capable workforce in which team members act like they own the place.  Scott Ellis, Ed.D., delivers training, coaching, and resources that develop the ability to eliminate obstacles and sustain more eff ective and profitable results. He recently published Dammit: Learning Judgment Through Experience. His books and process improvement resources are available at workingwell.bz. AICC members enjoy a 20% discount with code AICC21.

Repeatability Flexibility

Availability When you’ve been in the business as long as we have, you start to be able to anticipate the market’s needs. That’s why Haire isn’t experiencing year-plus wait times on APSTARs. Have yours installed in 2022.

Let’s talk about getting a Rotary Die Cutter on your production floor in 2022. hairegroup.com

Headline BYLINE

Fundraising

Independents’ Cup Raises $40,000 for Packaging Education

D

uring the AICC Spring Meeting in Palm Desert, California, 208 members came together for the 8th Annual Independents’ Cup Charity Golf Tournament. Through sponsorships and on-site donations, more than $40,000 was raised to support the Foundation for Packaging Education.

The Foundation for Packaging Education supports the development and distribution of employee education and training resources for workers in the corrugated, folding carton, rigid box, and related supply chain industries.

“Thank you so much for your generous donations to the Foundation for Packaging Education,” says Jay Carman, foundation chairman and president and CEO of StandFast Packaging Group.

“We truly appreciate your investment in growing the educational and training needs of our Association. Because of your generous support, the Foundation will be able to develop even more online courses, webinars, and in- person seminars to further develop your workforce.”

Participants played on the Palm and Valley Courses at the JW Marriott Desert Springs Golf Club, designed by acclaimed architect Ted Robinson Sr., and built in the mid-1980s. Although participants were playing in nearly 100-degree heat, spirits remained high, and everyone came off the courses smiling.

The expected contribution to the foundation was doubled through donations made on the golf course. One of the generous donations was made by Automated Conveyor Systems (ACS) and Independent II. “ACS has been an active member of AICC for over 40 years. The benefits of the partnership bringing both the manufacturers and suppliers together have driven strong results through our organization,” says ACS Chairman and CEO Michael Shenigo. “The opportunity to give back to AICC was a no-brainer in respect to AICC’s Packaging School. ACS is a firm believer and proud supporter in providing education to develop individuals, both existing and the next generation.

As the corrugated industry continues to

grow, providing a premier educational program will support the innovation necessary to meet this unprecedented demand.

We are all in this together and the more we can do to stay ahead and drive results throughout the entire industry will allow us to meet the challenges we face and provide a sustainable future for all.” ”The willingness of AICC members to support the work of the foundation and AICC education programming is always gratifying to see. The spontaneity of the giving during the heat of battle on the golf course was really something,” says AICC President Mike D’Angelo. AICC congratulates the winners of the tournament.

The Foundation for Packaging Education will hold its next fundraising event at The Sanctuary at Kiawah Island Golf Resort in South Carolina, November 8–10. The event will include a round of golf at the renowned Ocean Course, a round of golf at Osprey Point, a reception on Tuesday evening, a group dinner on Wednesday evening, and an excursion into Charleston for nongolfers. 

BOXSCORE www.aiccbox.org

27

AICC Innovation

Professional Development

The ‘Emerged Leaders’

AICC Emerging Leader Contribution

BY JEFFREY DIETZ

I

f my phone had a tool for tracking business jargon the same way it counts steps, I would crush every day with “labor shortage” discussions alone. Fresh in mind from the AICC Xperience in Kansas City, Missouri, the conversations were once again dominated by the challenges most in focus. We all know them too well, and none of us are immune to them in this current environment. I’m not here to complain about the day—I get enough of that from my children when the Wi-Fi is too slow, but I think we can all take a lot of comfort in knowing that one term we very rarely hear, if ever, within the corrugated community is “leadership drought.”

In 2014, AICC and its member companies were proactively preparing for the future, because there would come a time when many of the first- or second-generation owners and longtime leaders would retire, leaving a gap of generational knowledge and industry experience. To combat this anticipated “leadership drought,” AICC created a new program focused on developing young professionals who were either new to the corrugated industry or were next in line to run family-owned businesses. This group was expectantly named Emerging Leaders (ELs), as they showed long-term interest in the industry and were essentially being groomed as the next generation of its leaders. Relationship-building and mentoring would be at the forefront of this program, as that is what many in the industry would say is key to making a career in corrugated.

These ELs would take part in this multiyear development program consisting

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of educational trainings and networking events. Owners of independent box plants invited the group on tours of their facilities and introduced ELs to industry veterans at networking events. The program would prove to separate itself from other young professional groups by not only providing them with a cohort of peers who were at similar points in their careers, but also giving them direct access to industry leaders and mentors who willingly shared all their knowledge of business operations and packaging experience.

The timing of the formation of the AICC EL program was fortuitous in my case. In search of willing and able members, slightly seasoned associates who were just beyond the age requirement were given the opportunity to join for a two-year period. Even though I imagine it unfolded like the scene in Animal House when Otter (Steve) shows the picture of Larry Kroger (me) and someone (Virginia Humphrey) screams out, “We need the

dues,” I am appreciative nonetheless. The exposure I received within those two years to the bright young minds that we have in our industry is something that I value significantly. We are fortunate to have future business leaders who are in tune with their companies, with a thirst for learning more, and that we also have current business leaders who are willing and able to give that exposure to these future leaders.

I have experience with this on both ends of that spectrum. As previously mentioned, I was once an EL who learned alongside some incredibly talented peers. Now that

Are you a business leader who’s identified driven, passionate individuals within your organization who might be a good fit for the Emerging Leaders program? Send them to our website to learn more and sign up at www.aiccbox.org/leader.

AICC Innovation

I’ve “emerged” and am in a leadership position, I am able to benefit from the EL program in a new way. As an employer looking for driven, high-value employees who have industry knowledge, we seek people with EL qualities and experience.

Recently, we hired two EL program graduates, Rebecca Rendon and Daniel Brettschneider, both of whom have taken newly created positions within our organization. In these roles, they have seamlessly taken ownership without a standard road map for success. This level of autonomous forward thinking is what separates good from great in the new modern workplace. As with most ELs I have had the opportunity to work around, they embrace new challenges and continue to offer great ideas to improve our operations, even outside their immediate scope of responsibility. ELs are both independent and team-oriented, looking out for what is best for the future success of their organization; their desire to improve the business goes hand in hand with the same desire to improve themselves. The quality of their work is exceeded only by the quality of these individuals, and we are a fortunate group to be surrounded such exceptional young minds.

While there is no substitute for experience in the development process, AICC has laid the groundwork, with the EL program, for helping us to identify and nurture our industry’s future business leaders. If you haven’t done so already, please take some time to speak with these talented individuals at a future AICC event. You’ll recognize in a short time why our industry has a bright future, and you should worry less about who will carry the torch forward.  Jeff rey Dietz is president of Kolbus America and a graduate of AICC’s Emerging Leaders program.

He can be reached at jeffrey.dietz@kolbus.com.

BOXSCORE www.aiccbox.org

29

Member Profile

Sumter Packaging: ‘Your Key to Service’

BY STEVE YOUNG

COMPANY: Sumter Packaging ESTABLISHED: 1920 JOINED AICC: 1976 PHONE: 803-481-2003 Photo courtesy of Sumter Packaging.

WEBSITE: www.sumterpackaging.com HEADQUARTERS: Sumter, South Carolina CEO: Ben DeSollar

B

en DeSollar, CEO of Sumter Packaging in Sumter, South Carolina, can trace his company’s lineage back more than a century, to the founding of Iowa Fibre Box Co. in Keokuk, Iowa, in 1920. The newly formed company hired James O. Hoerner to sell boxes, and within 50 years, Hoerner-Waldorf was a nationally recognized supplier of corrugated packaging products. (See Nov/Dec 2021 BoxScore, “SMC Packaging Group: ‘Open.

Transparent. Honest. Successful.’”)

The story continues: In 1938, the company hired Ed Fienning, DeSollar’s grandfather, as a salesman, and he would go on to marry James Hoerner’s sister, Eola Hoerner. Several years later, in 1958, they founded Kankakee Container in Kankakee, Illinois, where DeSollar’s

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BOXSCORE May/June 2022

father, Chuck Fienning, started as a salesman in 1977. The rest, as they say, is history.

Sumter Packaging itself, in the central South Carolina city of the same name, started in 1980 as a subsidiary of Kankakee Container. A common theme in the history of many independents —building a plant to serve a major customer—was the principal reason for the new South Carolina location.

DeSollar explains, “So a customer of ours back in the late 1970s, AO Smith, was going to put a plant in the Carolinas, and it ended up in McBee, South Carolina.

They said, ‘Hey, if you come down and offer the same quality service and price range, we’d love to have you make our boxes when we open up our plant.’ So, based on a demographic study, we put a

50,000-square-foot sheet plant here in a pecan orchard.”

Sumter now has three locations: the main sheet plant in Sumter, which over the years has expanded to 115,000 square feet; a smaller, 62,000-squarefoot sheet plant in Statesville, North Carolina; and a 15,000-square-foot warehouse and assembly facility in Orangeburg, South Carolina. The company’s product mix is a combination of custom point-of-purchase displays, corrugated boxes and industrial packaging, digitally printed graphics, process printing, die cuts, and specialty items typically found in an independent’s production repertoire. Beyond these manufactured products, Sumter also provides contract packaging services, fulfillment, and logistic services for its

Member Profile

expansive customer base. Talking about the company’s market area and services, DeSollar says, “We pretty much serve every market from internet entrepreneurs to national fulfillment for Fortune 500 retailers. So we hit a very big range of customers.”

He adds, “We are not in any way dependent on any one niche, so we can focus on serving all customers well.”

Geographically, Sumter serves North and South Carolina, eastern Georgia, and parts of Virginia and Florida. On occasion, says DeSollar, the company will ship nationally and even into Canada and Mexico. “They can’t get boxes and, somehow, they find us.”

Equipped to Serve Sumter’s locations are equipped to serve.

The original plant, built in 1980, operated on a single shift and was equipped with a 66" Staley two-color rotary die cutter; a 66" x 141" two-color Curioni flexo press; and a 35" x 84" two-color Curioni flexo folder gluer as its primary equipment.

Since then Sumter’s main plant, now at 115,000 square feet with an expansion in the works, has added an extensive list of converting equipment to its original mix, including: an Emba 245 41" x 96" four-color flexo folder gluer with die cut section; an Emba 170 23" x 68" three-color flexo folder gluer with die cut section; a Simca 66" x 178" two-color jumbo flexo folder gluer; a Baysek die cutter; a J&L specialty folder gluer; a Post Specialty folder gluer; a four-color Serenco rotary die cutter; a 66" Staley two-color rotary die cutter; a two-color 66" Harper rotary die cutter; a 50" S&S flexo folder gluer; and a Stock semi-automatic litho labeler.

Sumter’s equipment roster covers the broad range of the company’s market demand, from basic RSCs to die cuts and higher-volume runs.

Sumter’s capital equipment mix has also changed as the market area’s demand

for high-graphic packaging has continued to grow. The company started moving toward graphics in the early 2000s with the addition of an ink kitchen and spectro-photodensitometers to more accurately measure color. The company added an HP digital printer in 2014 and later paired it with an XP44 Auto Kongsberg cutting table. As DeSollar explained, the company’s Emba 245, acquired in 2020, allowed the company to further accelerate its shift toward higher graphics. Mitch Garner, production manager, agrees, saying, “We learned a lot of printing lessons on the Emba 245 on what to do and not to do. Before that machine, our highest anilox roll was 360; now I’ve got 500s.”

Sumter’s next phase in its graphic printing capability is game-changing: a seven-color Göpfert 1628 rotary die cutter with two bundle breakers and inverter to allow easy configuration of inside-outside print runs. The machine, due in late 2022 or early 2023, will open new opportunities for the company. “To some extent it’s a new market, because we’re going to be able to produce products we haven’t been able to produce before,” DeSollar says. “We’re doing as much as we can to ramp up training early—visiting McLean Packaging in Philadelphia, John Kelley at Dusobox in Orlando, Florida, a number of other plants in the U.S. and abroad—and leaning heavily on the supplier base, not just at Göpfert, but John Bird of JB Machinery, our anilox roll, print plate makers, and ink suppliers.”

Service and Quality: ‘100 Sets of Eyes’ The company’s continuing investment in equipment and process improvement is an integral component of its success over the years. But its key strength in the market comes from its unyielding commitment to service. Indeed, when pressed for an elevator speech for Sumter Packaging, the CEO’s first words were “unsurpassed service.” The company’s logo, designed

by DeSollar’s grandmother Eola Hoerner Fienning, features crossed keys and proclaims, “Sumter Packaging: Your Key to Service.”

One of the guarantors of Sumter’s service promise is Sherry Matthews, assistant customer service manager. She attributes Sumter’s gold-star reputation to the team spirit and longevity that is present in the customer service department, a spirit that also extends to the sales force and the plant. “I’ve been here for 35 years,” she says. “We have a lot of longevity in our customer service department, and everyone takes their work personally, their customers personally. We’ve just all worked together for so long, and we know how everything works here, and we know how to coordinate things.”

When asked to cite an example of this team spirit in play, Matthews refers to the lead-time challenges that have dogged the entire industry for the past two years: “We were used to being able to serve our customers next day if we had to, or two days, maybe three, five at the max. Then with the increased demand and the other challenges of the last two years, we had to increase our typical lead times out to two or three weeks.”

Displaying the conscientiousness of any good customer service pro, Matthews says, “You have to have flexibility because we need to minimize disruption to our customers. So if we had a critical situation, the sales manager jumps in, I jump in with Jimmy Ezell, the customer service manager, and with production, and we work something out for the customer.”

DeSollar adds that managing customer expectations has been an important part of the lead-time discussion: “We now have ‘by’ dates, and if we can get products out the door prior to what we’ve promised and our customer is able to take it earlier, then we’ll get it to them earlier. We try to have positive surprises and try to manage expectations based on the increase in demand.”

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Member Profile

Sumter CEO Ben DeSollar (left) and Mitch Garner, production manager, at Sumter Packaging’s plant in Sumter, South Carolina.

This service-first ethic, as emblazoned on the company logo, goes hand in hand with quality. DeSollar says the company’s longtime emphasis on continuous improvement is another essential part of its growth and customer loyalty.

The company earned its ISO 9001 certification in 1997, implemented lean manufacturing principles in 2004, and holds a G7 Master Printer Certification.

Processes aside, he attributes the most effective quality measures to the people who make up the Sumter Packaging team.

Teamwork Counts “I think just having a bunch of really good people pulling in the same direction for

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such a long time has really helped us stand out in the marketplace,” DeSollar says. “We have 100 sets of eyes in the production area, and over time, they’ve learned what works.”

One of those sets of eyes belongs to Johnny Welch, lead man and operator of the Emba 245. Commenting on the challenging nature of the corrugated job-shop environment, he says, “Boxes may seem simple, but there are a lot of tricks that you need to know to get the first order out right and to make sure jobs are consistent after that.”

Jim Baibak, Sumter’s sales manager, who was on the road for 13 years selling for the company, echoes DeSollar and Welch. “As a sales rep, it was awesome

being on the road knowing everyone in the plant had your back.”

People, Beginning With ‘Pops’ The Sumter team spirit is part of the company’s DNA. DeSollar attributes it to his grandfather, Edward “Pops” Fienning, and his father, Chuck Fienning. “Pops was just a wonderful guy,” DeSollar says.

“When he was in his late 80s and early 90s, he used to volunteer and play piano for the ‘old’ people down at a nursing home in Hilton Head.”

Chuck Fienning started at the company in 1977 as a salesman in the Kankakee plant. In 1984, following the establishment of Sumter, he became the CEO. “Pops came to my dad and said, ‘Fix it or

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sell it,’” DeSollar says. “And he got things on the right track and put in a really solid base. I came in 2003.”

DeSollar’s background prior to Sumter is atypical, coming from the automotive turnaround world, where he was fi xing up financially and operationally troubled automotive companies at home and abroad. “I was working for a Detroitbased firm; most of it was troubled tier-two and tier-three automotive suppliers. They also gave me some of the unusual assignments because of my prior background in Asia,” he remembers.

The offer to join Sumter, DeSollar recalls, was received through his wife, Cathy, who got a call asking if Ben was interested in coming to Sumter as chief financial officer. “She asked me, ‘If you worked for Sumter, would you have to travel as much?’ At that point, I had worked one day in my New York office after several years on the road for that company. I came here in 2003 as CFO.” In 2009, DeSollar purchased the company, and Chuck Fienning retired. In the first year, DeSollar says, Fienning told him to move into the corner office, and Fienning and his wife, Sue, spent the next year traveling the world. He recalls, “He did it partly to give me space to run the company and partly because he felt ‘life is short, and I’m going to see the world with my wife.’”

DeSollar gives credit to his forebears for some of the innovative management practices still in place today. Chuck Fienning had everyone in management positions travel with the sales team to see customers. “Everybody from finance to customer service to manufacturing rides with sales,” DeSollar says. “That way, you are physically with the customer at their facility, and you see what can be improved from the customer perspective and how does what you’re doing fit into the big picture. A lot of times you get in your little silo and think ‘I’m accounting’ or ‘I’m production.’ Having management

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go out and ride with the sales team— that’s something that I thought was a great idea, and despite people being busy, I tried to expand it a little bit.

“We’ve got a good culture,” he adds.

“We’ve been around forever; folks like us.

People take time out and are good to each other. We also make sure that everyone has enough backup so that no one person is too stressed. We’re constantly going around to leadership here, asking, ‘What can we take off your plate? How can you bring people up?’”

This attention to everyone’s needs shows in the company’s overall employee longevity. “It’s not unusual—we just did a 35th anniversary present for Frankie, who’s been on the forklift for 35 years. There are a lot of folks on the floor who have been around for years. I think it started with Pops, who was a nice guy and brought in a bunch of good people.”

Baibak adds, “I was looking over a list of our 35 salaried employees, and 20 of them have been with the company over 15 years. That’s pretty awesome.”

Sumter Packaging continues to invest for the future, as shown by the anticipated arrival of the new Göpfert 1628.

“I think graphics are going to be a big part of our future; the Göpfert is huge,” DeSollar says, adding, “If we just run the capacity off that machine, it might be a 50% increase in sales. This is a huge change for us.”

What is DeSollar’s outlook for the industry? He cites current challenges the industry faces: labor, the supply chain, and the economy. His advice to owners in the face of a potential economic slowdown? “Get all the debt you can now because of inflation,” he says. “The upcoming environment for getting new credit won’t be nearly as favorable— tighter credit standards, higher rates, and higher prices for new equipment with the inflation we’re having.”

Yet he’s optimistic as well. He thinks the supply chain crisis of the past two

years will foster more onshoring of manufacturing. “We’ve seen a lot of manufacturing coming back to the U.S. over the past five years,” he says. “There’s been a lot of reshoring in our market across the board—for instance, even textiles and furniture, once thought to be dead industries in the Carolinas, have come back.”

Sumter Packaging’s success in the corrugated packaging industry has been shared with the industry at large.

DeSollar’s father, Chuck Fienning, is a past chairman of AICC and served for more than a decade on its board of directors; DeSollar himself serves as a regional director for AICC and has served on the board of the International Corrugated Packaging Foundation for the past six years. DeSollar says it’s important for companies in the industry to be involved in their associations.

“The pace of technical change in the corrugated industry has accelerated greatly over the last five to seven years,” he says. “Being active in the AICC gives you a front-row seat to see that change and get multiple perspectives on it. With the required investment for a new piece of equipment running in the millions, investing a small amount for AICC membership has been well worth it for the perspective it gives.”

We’ll give the last testament to Sumter Packaging to Welch. He remembers his introduction to the box business when he joined Sumter 30 year ago. “When I got out of school, I worked outside and said, ‘I ain’t going to work inside in a business.’

I ended up coming here and said, ‘I’m going to give it a shot,’ and 30 years later, I’m still here.”  Steve Young is AICC’s ambassador-at-large.

He can be reached at 202-297-0583 or syoung@aiccbox.org.

SAVE THE DATE! SEPTEMBER 19-21, 2022

SAN ANTONIO,TX

Á

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THE NEW PACE OF PURCHASING Bringing more capacity, more capability, and less downtime to the shop floor

By Robert Bittner

T

he need for increased capacity, improved automation, and advanced capabilities is compelling many boxmakers to revise their established equipment purchasing strategies in response to a changing marketplace and workforce.

“Without a doubt, we are on a faster upgrade cycle now than we were in the past,” says Guy Ockerlund, president of OX BOX, a converter specializing in heavy-duty industrial packaging. “The whole landscape has changed. Within the last two or three years, it’s really been all about increasing our capacity. It’s become less of a financial decision than it is about just trying to meet customer demand.”

Not surprisingly, the recent boom in e-commerce is one of the factors driving that demand. “It’s keeping a lot of the big players very, very busy,” Ockerlund says. “Even though we’re not one of those big players, there’s so much business that it’s overflowing to plants like ours, keeping us very busy. Th at’s only going to continue.”

In addition, he believes consolidation and exits within the industry are putting more pressure on the remaining plants. “If we lose an hour on the shop floor because of equipment issues, it’s hard to make that time back up,” he says. “We want to offer dependable products and services. The only way we see to do that is with dependable machinery.”

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“Does the manufacturer or supplier have a trusted reputation for following through and staying engaged throughout the install? We want to find machine suppliers who are going to provide teamwork.”

—Jim Beard, chief operating officer, Vanguard Packaging Purchasing Priorities Adding the right equipment, at the most advantageous time, involves assessing a variety of important issues.

Vanguard Packaging CEO Chris Stoler notes that his company begins the process by considering the markets the company is targeting and the specific segments they want to reach. “Those help us to fashion our thinking around what types of equipment we’ll need and the kind of technology we want to leverage into the organization.”

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Once Vanguard determines how a new piece of equipment would fit into the company’s long-term strategy and budget, the leadership team considers the potential for cost improvement, capacity gain, and capability and value gain, weighing such questions as: Will a new piece of equipment require fewer operators, allowing the company to shift workers to positions currently going unfi lled? Where are the current hurdles when it comes to capacity? What does future capacity need to be in order to

serve the revenue strategy? How will this equipment address those concerns?

“Then we assess the overall capabilities,” continues Vanguard Packaging Chief Operating Officer Jim Beard. “Does this equipment offer value that goes beyond just the price? For example, training is extremely important. Does the manufacturer or supplier have a trusted reputation for following through and staying engaged throughout the install? We want to find machine suppliers who are going to provide teamwork.”

Of course, new equipment may not always be the appropriate choice.

“Maybe the life of some equipment can be extended through scheduled maintenance and repair,” Beard suggests. “But if you’re spending $250,000 a year on repairing hardto-fi nd parts or motors they no longer make or out-of-date electronics, then it becomes a question of serviceability costs for keeping that equipment at original equipment manufacturer specs.”

Doing the Due Diligence “Once we make the decision to buy, we usually spend three to four months on research and due diligence to find the right equipment,” says Mark McNay, senior vice president and general manager at SMC Packaging Group.

For SMC, that’s equipment that allows the company to grow its volume while also leveraging technology and

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automation. “We want to be able to expand into new opportunities with our existing customers and open ourselves up to burgeoning markets as well,” McNay says.

The SMC purchasing team begins the research process by talking to OEMs. Along with machine specs and other information, they request customer names, so McNay and his team can follow up with candid conversations about the equipment’s pros and cons.

The company’s due diligence extends to suppliers and OEMs themselves. “We want the OEMs we choose as partners to own the equipment as much as we do,” McNay says. “It’s important that the vendor we choose delivers good service and support after the sale. When we sell packaging to our customers, our work [with those customers] is just beginning. I’d like to think that the OEMs with whom we work are wired the

same way: They want to help us—on an ongoing basis—to get better at running their equipment.”

Th at may mean a semiannual visit to work on the equipment, ensuring that it’s running at peak performance and checking on service needs that might be hard to diagnose during normal predictive or preventive maintenance.

“Also, having those guys in on a regular basis helps to reinforce the good behavior that we have from an operating and maintenance standpoint,” McNay points out. “Maybe it catches some of those bad habits that we’ve begun before they get ingrained.

“With the number of new employees that have come on board in the last 18 months,” he continues, “we can’t just rely on tribal knowledge to make sure we know how to get the most from these machines. We want to bring back those trainers or those technicians from our

“For us, an equipment purchase is a partnership, not just a business transaction. We work with customers for mutual success.”

OEMs to make sure we’re training people to the right standard.”

This is particularly important when the machine is bringing new functionality to the shop floor. Matthew Condon, business development manager for Domino North America, a digital printing supplier, says, “When a potential customer comes —Matthew Condon, business development manager, to us, we focus a lot on education. Digital Domino North America is still very new to the boxmaking market.

But Domino has been in the digital market for 43 years. We’re positioned to help potential customers understand what it can do for their business.

“For us, an equipment purchase is a partnership, not just a business transaction,” he continues. “We work with customers for mutual success. In addition to education, we provide a lot of support and training—even to the point of helping our customers understand how to better sell their capabilities to their customers.”

During the research, it may be tempting to pass over a supplier’s name you don’t recognize. Yet taking the time to investigate unfamiliar suppliers are leveraging as much technology as And, as a three-plant manufacturing may uncover some surprising facts. For possible into our business—mechanical operation, SMC considers parts availexample, it’s not unusual for major automation as well as systems automaability in relationship to the company as boxmaking machines—corrugators, tion for running our business.” a whole. “If we are considering buying presses, die cutters, folder gluers—to “We have all experienced the challenge Brand X, it’s useful if we have other Brand arrive 18–24 months after being of finding workers,” McNay says. “With X equipment in our fleet of machines ordered. Condon notes that the build the labor inversion in 2018, we saw the because of similarities in maintenance, time for Domino’s digital printers number of jobs available exceed the operations, and parts,” McNay explains. is typically around six months. “We number of people able or willing to “In the absence of that, we like to know are also able to do our own in-house work. Out of necessity, we need to look if our regional colleagues have Brand X equipment leasing,” he adds. “Th at’s at automation so we can reduce the equipment, making it possible to share one of the biggest reasons why people number of people required to run our parts in an emergency.” want to work with Domino.” machines.” In addition, he notes that the Finally, McNay mentions the value of ergonomic needs of an aging manufacturTaking on New Technologies considering parts availability before puring workforce can, in part, be addressed Increasingly, boxmakers are upgrading to chasing any new machine. “We want to through automation. equipment offering improved automamake sure that the people we do business Condon believes the labor challenges tion, enabling them to maximize their with have a great parts inventory that can also are leading some customers to be to us within 24 hours, if at all possible,” existing workforce. consider digital-printing technology for “We have embraced the reality that he says. “That’s critical to us. In the last the first time. “There’s an art to running 18 months or so, we’ve been running 24/6. we have to automate everything we traditional, large flexo machines,” he possibly can,” Stoler says. “Whether it’s So it’s difficult for us to be down for very acknowledges, “especially when you get material transfer or automated feeds or long without experiencing some real into high-graphic, multicolor work. In automated scheduling or whatever, we customer hardship.”

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addition to the technical ability needed to manage them, I think there’s a feel to making them run well. That’s a special skill. But because it’s been harder to get younger people into the manufacturing sector, there aren’t a lot of people who can back up a specialist in that role. With digital, you can run higher-graphic work without that level of specialist expertise that’s needed on the flexo side; the same person can run one-color kraft or run a multicolor, high-graphic image.”

Regardless of the why or the form that automation and automated processes may take within a given piece of equipment, Stoler believes it is not about adding bells and whistles or chasing the latest, shiniest gadget. Simply put, these features are about providing better tools for growing the business. “I don’t think of this in terms of investing in assets,” he says.

“We’re investing in resources.”

Lessons Learned “My advice for other converters is to involve your internal team early and make sure they are involved in every step of the process,” McNay says. “And then bring all the stakeholders to the table, from the early discussions all the way through the installation and training. That includes any of your local subcontractors—the general contractor, the electrician, the rigger. You want to make sure everybody’s on board so that when it’s time to begin installation everybody’s in agreement about what needs to be done. This can all be handled virtually, if needed. Through Teams, Zoom, or GoToMeeting, we’ve been able to share documents, navigate the Gantt charts, and make sure everybody’s on the same page so there are no surprises when installation day arrives.”

Condon recommends gaining a thorough understanding of the new

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equipment’s cost of ownership and what it will require in terms of maintenance and service, to avoid unnecessary surprises. “Take the time to analyze the larger scope of your business as it might relate to digital printing. If you only look at the cost of a digital machine, the writedown, and the cost of ink compared to flexo, you can get a little bit scared.

But consider those costs in context, in relationship to the type of work you’re running and how often you’re running it.” He notes that when the right work is paired with the right run lengths, digital can definitely compete with other, more traditional alternatives from a cost perspective.

Although every purchase will have its own unique timeline, Ockerlund suggests being prepared for a potentially lengthy process. “When we made the decision to buy [our new] press, we did the background research and talked with six different manufacturers,” he says. “We were more than a year into that process before we even narrowed the field down to our top two or three.”

Th roughout the research and duediligence phase—no matter how long or short it may be—Stoler encourages boxmakers to build as many good partnerships as possible with equipment manufacturers and vendors. And then work with them beyond the initial purchase to grow your business. “I think we learned more from our laser die cutting installation process than we did in the actual due diligence we did in advance to select the equipment,” he recalls. “Th at has helped us immensely in thinking about how we build our business going forward.”  Robert Bittner is a Michigan-based freelance journalist and a frequent BoxScore contributor.

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LEADING THE CHARGE Independent boxmakers continue to be way out ahead on the sustainability front

By M. Diane McCormick

S

ustainability has long been a core value at Meyers, the Minneapolisbased print services company, but few clients showed interest—especially when it came to paying for it. In recent years, however, CEO Christopher Dillon has seen a shift.

“People care more now,” he says.

“From a business standpoint, it’s a good thing because we’ve been focused on sustainability for a long time. It’s helpful for humanity to finally see people willing to do something about it.

We’ve got a lot of work to do, and

there’s still a long way to go, but it feels like the scales are tilting in the right direction.”

Sustainability isn’t a corporate buzzword anymore. It’s a necessity as businesses polish their environmental credentials. That puts boxmaking—steeped in recycling throughout its history—in the right place at the right time, ready to step up sustainable operations while teaching customers and consumers about the environmental benefits of paper-based packaging.

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Having the Talk Indiana-based Michigan City Paper Box Co. makes rigid boxes, primarily for the jewelry industry. Most of its chipboard is made from pulped corrugated and newspaper. About half of the papers wrapping the boxes are recycled content.

Glues are 100% recycled and recyclable.

Even the cottony insert known as jeweler’s fiber is 100% recycled.

“We have been environmentally focused almost accidentally because of the materials our product is made from,” says Keith Thomas, director of strategic initiatives and business development. “We were kind of sustainable before sustainability was cool.”

Within the rigid box industry, Thomas has seen slow but steady progress in sustainability over the last five years, and he expects more in the next five.

Increasingly, RFQs arrive that list sustainability as an important factor.

Michigan City takes those requests as a cue to educate the procurement staff of those potential clients on the choices that impact sustainability. They might learn,

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for instance, that the circular life of a box ends if a plastic-based film lamination is applied.

Education and customer communications are essential to building shared goals around sustainability, industry players agree. One client of Dillon’s, asking about lowering its toxic emissions, concurred with Meyers’ recommendation for eliminating the alcohol used on an older press.

Similar dialogues are becoming common as companies scour their supply chains for ways to boost their sustainability

figures and meet the environmental, social, and governance (ESG) goals presented to investors, customers, and other stakeholders.

“We’re pretty well positioned to offer suggestions to help customers with their sustainability goals,” Dillon says. The pandemic’s supply chain crisis has made those conversations even easier, he adds, as customers forced to seek alternatives to their mainstays have been open to discussing the switch to more sustainable materials.

The capabilities for sustainability are baked into the Meyers organization over decades but also, as sustainability demands ramp up, acquired through strategic hires, says Dillon. Th at includes a sustainability-minded senior vice president of sales and business development and a newly hired environmental health, safety, and sustainability leader.

Boxmakers, designers, and suppliers can find fact-based, data-driven support for their in-house sustainability decisions and customer conversations in American Forest & Paper Association (AF&PA) materials, including Design Guidance for Recyclability of Paper-Based Packaging, the 2021 report delving into the impact of nonfiber elements, and the 2021 Access to Recycling Study, which found that 79% of Americans have access to residential curbside recycling programs.

“When consumers know that the box becomes something else and it’s used over and over, they feel good about their choice to use paper and paper-based packaging, and frankly they start looking for it.”

—Mary Anne Hansan, President, Paper and Packaging Board

“There is a strong business case to be made for sustainable manufacturing and for paper-based products,” says AF&PA Senior Director of Energy and Environmental Policy Jesse Levine. “First and foremost, individuals are increasingly aware of the environmental impact of product packaging, and they view paper and cardboard as a highly sustainable option. And they’re willing to pay more for renewable and biodegradable packaging. Since our products are easily recycled, people can contribute to the circular economy.”

Empowering Industry Messaging At the Paper and Packaging Board (P+PB), the board of directors made a timely decision in late 2019. Seeing consumers eager to opt out of plastics, they recast P+PB’s promotional efforts into consumer education about the recyclability of paper-based packaging, the vast U.S. reforesting that industry supports, and ways to recycle boxes.

In the years after the “How Life Unfolds” campaign launched in July 2015, more of those boxes were arriving in American homes, and the COVID-19 pandemic accelerated the e-commerce surge.

Today’s campaign includes social media postings and everything from colorful, animated broadcast ads to the YouTube series Baking With Josh & Ange, featuring Angela Snyder of The Office (much more fun than her dour TV character) and her husband, Josh Snyder. Simple, common-sense tips from a habits expert—put a box for collecting paper-based items on each floor of the house—trigger consumers to take that last step on the way to the recycling bin.

The campaign stokes the goodwill and civic-mindedness that, research shows, consumers feel when they recycle. “We make a case for being a ‘force for nature,’” says P+PB President Mary Anne Hansan.

“That’s our call to action. When you

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choose paper-based products, you’re making the best choice for the planet.”

Now, the P+PB’s “Box to Nature” program offers a recycling mark for printing on boxes—preferably a top flap, for visibility—featuring three key elements. A message promoting the circularity of paper-based packaging says, “This box has 7+ lives. Our planet has one.”

Simple instructions say, “Empty. Flatten.

Recycle.” And a QR code links to an interactive microsite on recycling. P+PB research found that 75% of consumers agree they would be more likely to recycle after seeing the message.

Together, How Life Unfolds and Box to Nature empower the industry to get involved on multiple fronts, Hansan says. A data- and research-based sales enablement program offers materials and training on the recyclability and planet-saving benefits of paper-based products.

P+PB offers its materials free to the industry, with robust support through a $24

million multimedia consumer-awareness campaign. “When consumers know that the box becomes something else and it’s used over and over, they feel good about their choice to use paper and paper-based packaging, and frankly they start looking for it,” said Hansan.

Industry public education campaigns have been a key factor in increasing participation in recycling programs, says AF&PA Executive Director of Recovered Fiber Brian Hawkinson. AF&PA’s campaigns are boosted by wide availability of recycling programs and significant industry investment in collection programs and product circularity. “Industry innovations and infrastructure investments continue to this day,” Hawkinson says. “The paper industry has planned or announced approximately $5 billion in manufacturing infrastructure investments from 2019 to 2023 to continue to make the best use of recycled fiber in our products.”

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“The younger generation is committed to sustainability in a way we haven’t seen with previous generations, and they’re also willing to pay more. There’s data out there that says that.”

—Christopher Dillon, CEO, Meyers Boxmakers can’t solve the problem of educating consumers about recyclability, but they can help, says Dillon. Going where audiences get their information has led Meyers to post educational items on LinkedIn for the business exposure, and to make TikTok videos on sustainability.

“The younger generation is committed to sustainability in a way we haven’t seen with previous generations, and they’re also willing to pay more,” he says.

“There’s data out there that says that.”

Making Gains in Nonfiber Materials In the full spectrum of supplies, paper is “the easier answer” to achieving a sustainable product, admits Dillon. The inks, adhesives, and coatings that make each box functional and distinctive are another matter, but he sees room for “a lot of small wins.” In his shop, there is the elimination of alcohol use from the last of the lithographic presses, and a barrel collecting used ink for black printing that’s not “super color-critical.”

Quality can never be sacrificed, he adds, but options in products and processes are making advances. For instance, Meyers is now evaluating and seeing opportunity in processless plates. “Technology is getting to the point where we’re comfortable that it’s good enough to sustain the quality our customers require,” Dillon says.

AF&PA’s 2021 Design Guidance for Recyclability of Paper-Based Packaging put a spotlight on the innovations and technology improvements that are

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making nonfiber elements and treatments “easier to recycle than historically,” says Hawkinson.

“One of the biggest takeaways was that every combination of paper-based packaging with nonfiber elements attached to it is recyclable,” he adds. While challenges remain, the guide “helps companies make strategic decisions to achieve their sustainability goals.”

Michigan City typically uses soy-based inks and an environmentally friendly adhesive based, in part, in waste gelatin collected from gel cap makers. Whenever possible, the company tries to steer customers toward such options as aqueous coatings and sustainable inks. However, “balancing sustainability with aesthetics sometimes involves a bit of a trade-off,” including in the finishing processes on papers, says Thomas.

That’s when sustainable options play a role. Consider that digital printing instead of foil stamping improves recyclability. Michigan City’s natural black flat kraft box is 100% recycled, with a finish similar to nonrecyclable film laminates. In an age when online shoppers don’t need to be swayed by eye-catching packaging, such an option can be viable, says Thomas. “We’re still able to put a sustainable gloss logo on a dull recycled paper that comes close to looking like the nonrecyclable film laminated box,” he says. “We get pretty close a lot of times.”

At P+PB, a summer 2021 design challenge invited competitors to create

packaging that is 100% recyclable in all its elements and from start to finish— from product box to shipping. “We are trying to get this message out that it’s even better when it’s designed from the beginning to be recyclable,” says Hansan.

Operational Sustainability Leaders in sustainability don’t limit their eco-focused efforts to sourcing.

They also infuse sustainable practices throughout their operations. As AF&PA notes, paper mills have reduced greenhouse gas emissions by more than 24% since 2005, by using more renewable bioenergy and switching to less carbon-intensive fuels.

Michigan City chose to source most of its paper from a mill electrified by hydropower, in part because “it complements our focus on sustainability,” says Thomas. At his facility, automation improves efficiency, and recyclable waste is collected and bailed for return to the product component stream. “It may go back into making the very chipboard or the very paper that we end up using ultimately,” he says.

Meyers has embraced an enterprisewide sustainability strategy. A rooftop solar array and a partnership with Xcel Energy to purchase electricity from wind and solar sources helped the company achieve its goal of carbon-free manufacturing in 2021.

The solar project and installation of LED lighting in the facility were initiated in compliance with Meyers’ certification from the Sustainable Green Printing (SGP) Partnership, Dillon says. The process felt familiar due to its similarity to ISO certification, and Meyers was an early adopter. Annual audits and continuous improvement projects ensure that certification principles are infused into daily operations. A company sustainability committee tracks progress. “It all starts with corporate social responsibility and it being the right thing to do,” Dillon

says. “I like the accountability that comes with the SGP.” SGP certification also positions the company to attract new customers from the growing number of businesses seeking partners with sustainability credentials.

Some of those customers—educated by Meyers about the opportunity—are now trying to make a dent in their sustainability goals by encouraging their other suppliers to seek certification.

Collaborating with industry organizations gives different segments of the industry opportunities to reinforce their particular messaging while presenting a unified voice about the imperative of sustainability, says Hansan. “We’re all motivated by a very singular purpose, which is to create strong and healthy markets for our products, because we know that’s a really important part of keeping forests as forests,” she says.

“We’re making sure that consumers understand that recycling is valuable, and they’re making an important difference. It’s like a symphony where we all have really important parts in the orchestra, but the thing that drives all of us is creating a favorable market for paper products.”

A Pathway to the Future In an industry in which sustainability is ingrained, leaders still see room to grow, but they also see progress. Dillon, for instance, is encouraged by the converter and materials sides “taking it more seriously than I’ve ever seen.”

AF&PA has largely met its 2020 sustainability goals. Now, its sights are set on Better Practices, Better Planet 2030. The goals strive toward further reducing greenhouse gas emissions, advancing a circular value chain, driving water stewardship, and advancing more resilient U.S. forests.

AF&PA’s advocacy and education for lawmakers, policymakers, and local communities are also “at the heart of what we do,” says Levine. Signing up for AF&PA’s grassroots text alerts (text “Paper” to 50457) and the AF&PA Delivered biweekly newsletter keeps industry players in the know. “All of us can be a voice for our industry,” he says.

P+PB’s engaging, youthful, and colorful campaigns overlay education with branding that gets the attention of entertainment-hungry media consumers.

That approach is also generating supply chain enthusiasm among packagers and the rest of the paper-based products

industry, says Hansan. “It’s so topical,” she says. “Before, sustainability used to be a small part of features and attributes.

Now, I’ve heard more and more companies saying that it’s all of those things.

We have to be the whole package, and consumers don’t always know that whole sustainability story, especially on the forest side. We are addressing all of those topics through our advertising.”

After all, paper-based packaging has long had a good story to tell about sustainability. Thomas’ Michigan City Paper Box has taken a leadership role under CEO Al Hoodwin, former AICC chairman, who continues to advocate for sustainability industrywide. “As the trend continues, it will put us in a more favorable position, because it’s just the nature of who we are,” Thomas says. “It’s how we’ve operated for years and years. There’s not much that falls in our lap, but this is a strange twist of fate that’s working in our favor.”  M. Diane McCormick is a Pennsylvania-based freelance writer.

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FOCUS ON THE WHY

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Transforming the sales process in a new, virtual-selling world

By Todd M. Zielinski and Lisa Benson

F

or better or worse, the selling landscape has changed over the last few years. Although this shift happened abruptly, changes in selling methods have occurred organically since prehistoric humans first bartered for products and services thousands of years ago. The recent change in selling methods means packaging companies and salespeople will need to adapt and create a strategic plan for growth that involves integrating digital and virtual activities into their sales and marketing processes. Part of that strategic growth plan should also include creating compelling value propositions that will resonate with prospects and allow packaging companies to generate additional revenue through upselling and cross-selling to current customers.

BOXSCORE www.aiccbox.org

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a meal with a prospect or feeling the energy of tens of thousands of people at Pack Expo. Fortunately, trade shows have returned, with more than 60% of surveyed organizers saying they are focused on designing live experiences in safe physical environments, according to a survey by Convene magazine, a meeting industry trade publication.

It is not likely that selling will return to pre-pandemic ways, nor will face-to-face selling disappear. Moving forward, we will likely see a hybrid selling model through which critical meetings and most networking return to face-to-face, but the vetting of prospects and initial meetings may remain virtual. Some prospects may be more or less risk-averse than others, so there are no hard-and-fast rules of when to meet in person and when to meet virtually.

Virtual Is Here to Stay Before 2020, most packaging manufacturers hadn’t experienced virtual selling.

Today, there is a broad acceptance of virtual meetings and remote demonstrations, but does this mean virtual selling is here to stay? And if so, what do salespeople and companies have to do in order to adapt and see new business growth?

According to the data, it appears virtual selling is here to stay. A 2021 Bain and Co. survey found that 92% of B2B buyers prefer virtual sales interactions. Companies that are prepared and have adapted to virtual selling have

been successful. In fact, a LinkedIn State of the Sales 2021 survey revealed that almost half of the salespeople responding said they have closed sales of $500,000 or more without ever meeting the buyer in person.

Virtual meetings provide salespeople and prospects flexibility and are less demanding on resources than traditional face-to-face selling. However, salespeople tend to be social creatures, and video can’t replicate the connection you make by looking into a prospect’s eyes and shaking their hand. And virtual networking just doesn’t have the same feel as sharing

Trying to be everything to everyone will create an environment in which you are wasting time—a valuable resource— chasing leads that aren’t a fit.

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The Sales Process Before the Meeting The virtual sale is more than virtual meetings and remote demonstrations.

The selling starts long before a potential customer makes contact with a company.

Even before the COVID-19 pandemic, most buyers relied on digital information to take them through much of the sales process before any interaction with a sales team occurred. A pre-pandemic Gartner B2B buyer survey revealed that buyers spent only 17% of their time meeting with potential suppliers and 45% of their time researching independently.

Considering that the 17% is likely divided among several suppliers, this leaves little time for the salesperson to pitch their product and close the sale.

The heavy reliance on digital information means companies and salespeople must develop an omnichannel marketing strategy that integrates a seamless experience across all channels, virtual and in-person. This includes investing in technology, website development and search engine optimization, and content development.

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Th is also requires investing time to create a sales process that ties it all together to produce repeatable datadriven results.

Create Messaging With a Compelling Value Proposition Your messaging in sales materials on your website, in your elevator pitch, and across your organization must be aligned, succinct, and easy to understand, and it must address the needs of your prospects and customers. It must resonate.

To create sustainable growth in a competitive market, you need a compelling value proposition as part of your sales and marketing strategy. You may need more than one for additional markets or products and services.

A strong value proposition will inform and persuade prospective customers of your ability to provide value to them. It is typically a single sentence that says, in the simplest terms, “We offer this product or service to this prospective target, providing this value.” The value

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Meeting with dormant customers and those with the potential for additional spending will allow you to learn what pains they may be experiencing. proposition’s success depends on having value desired by your targeted prospects, which differs from that of the competition. If you position your company, product, or service the same as your competition, then the only thing left is price. Usually, competing on price is a losing proposition for everybody.

To create a compelling value proposition, you need to thoroughly understand your offering, market competition, and your target market. This means understanding how your competitors position themselves in the market, their strengths and weaknesses, the type of customer they go after, and why customers choose them.

It is crucial to make sure your value proposition targets the right type of customer. Trying to be everything to everyone will create an environment in which you are wasting time—a valuable resource—chasing leads that aren’t a fit.

Creating a target market profile based on industry, spending, type of products they sell, specific needs they may have, geography, etc., will narrow your focus, providing a better chance that your message will resonate.

Remember, the value you offer isn’t your products and services, and good quality and experienced people should be considered the “price of entry.” Value is measured in terms of your customers’

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costs. This may include direct monetary savings, time savings through increased efficiencies or productivity, or cost-avoidance measures.

Answering the following questions can help you determine the value you bring to your customers: • What are the pains experienced by prospects in your targeted markets?

• What are these pains costing your prospects? Consider costs associated with: º New business development, º Revenue growth, º Investment costs, º Productivity, º Operating expenses, and º Cash flow.

• How does your product or service mitigate or eliminate these pains differently than your competitors?

• How does your product or service lower your customer’s total cost of investment (operating expenses, production costs, investments, etc.) or improve your customer’s productivity and performance (revenue growth, labor productivity, inventory reduction, etc.)?

A simplified—and completely fabricated—example is a prospect we’ll call Ace Widgets, a small manufacturer with unpredictable forecasting that is facing long and often changing lead times from their packaging supplier. Receiving critical packaging late results in a delay in shipping widgets (reduced productivity), consequently upsetting customers. These customers may find an alternative product (lost revenue) and post publicly, dissuading others from purchasing from Ace (lost new business development opportunities).

Alternatively, Ace may decide to buy large quantities of packaging so they don’t run out. This negatively impacts cash flow and increases operating expenses because they now need to store and manage them.

Faux Packaging Co.’s solution is a dynamic vendor-managed inventory

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(VMI) system with artificial intelligence (AI) that can accurately forecast swings in production levels, so less inventory is required on hand. This service can be provided at a lower cost than traditional VMI services, allowing smaller companies to participate, and allows Faux Packaging to provide next-day delivery. This service will help increase Ace Widget’s productivity, mitigate its risk of losing current or future customers, and reduce its inventory costs.

Faux Packaging’s value proposition for VMI geared toward small businesses might look like this: Faux Packaging provides a revolutionary AI-driven, vendor-managed inventory service with next-day delivery to small businesses, providing them the control they need to increase productivity, lower inventory costs, and increase customer satisfaction, resulting in a stronger bottom line.

Drive Sales With Upselling and Cross-Selling Virtually building new relationships has been a challenge for many packaging

companies, and new customer growth has become stagnant or has dipped.

However, one resource for revenue growth is often neglected: your customer database. These companies are already familiar with your company, so reception will be warmer for upselling or cross-selling opportunities. Upselling, selling customers a higher-end solution, and cross-selling, selling customers related and complementary items, are methods for increasing revenue without the effort required to build new relationships.

To uncover opportunities, look at companies spending much less with you than their expected annual spend for packaging and companies that have gone dormant and haven’t purchased from you in a while. For dormant customers, finding out why they left and taking corrective actions for any reason you are responsible for will be the first step.

When developing your value propositions, don’t neglect these customers if their pains are different from prospects’.

Evaluate the gaps between what you

currently offer them and what they need.

Do they have other pains that you can address and create additional value?

Upselling and cross-selling shouldn’t be deceptive or high-pressure. If your customers can clearly see the value in purchasing upgraded or additional services, they will be more likely to feel you are a true partner.

An example of upselling is selling customized packaging to customers who buy standard-sized corrugated boxes.

When developing your value proposition, consider the pains that drove other customers to seek out customized packaging over standard packaging. What were they concerned about? Product damage?

High shipping costs? Material waste?

Environmental concerns? Influential value propositions position you to offer a compelling reason for your customer to upgrade services.

The same is true for cross-selling. Your customer may have partnered with you for a specific reason, not fully understanding the value you can offer them.

Asking questions is a great way to uncover unresolved pains for which you have a viable solution.

Meeting with dormant customers and those with the potential for additional spending will allow you to learn what pains they may be experiencing.

Find out if they have new products or projects coming up for which your product or service can create cost avoidance opportunities.

Although it can be beneficial to have them visit your facility to see your production and capacity in action, there may be a great benefit to you visiting their facility. This allows you to look around and uncover pains they didn’t realize were solvable. For example, a packaging

operator performs a repetitive motion on the packaging line, which could lead to carpal tunnel syndrome. You have a solution for packaging that reduces or eliminates the movement, potentially preventing a lost-time injury, higher compensation costs, and strain on an already thin workforce. Your customer may not have known that such a solution was possible, and if you hadn’t been in the facility to see it and speak with the operator, you would have missed the opportunity to cross-sell.

Selling Moving Forward Over the last two years, packaging manufacturers were forced to change how they sell, but as we move from pandemic to endemic, we will see the pre-pandemic traditional sales model merge with the pandemic virtual model to create a hybrid process. Virtual versus in-person impacts only how, when, and where meetings and interactions occur.

The why hasn’t changed. Prospects have always had and will continue to have issues that keep them up at night.

Differentiating yourself by creating a compelling value proposition by tuning in to the pains of prospects and customers alike will allow you to better position your company as a valuable solution to those pains—and ultimately increase your revenue.  Todd M. Zielinski is managing director and CEO at Athena SWC LLC. He can be reached at 716-250-5547 or tzielinski@athenaswc.com.

Lisa Benson is senior marketing content consultant at Athena SWC LLC. She can be reached at lbenson@athenaswc.com.

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The Associate Advantage

Stronger Than Ever

BY GREG JONES

GREG JONES SUN AUTOMATION GROUP VICE CHAIRMAN GREG.JONES@SUNAUTOMATION.COM

JOE MORELLI HUSTON PATTERSON PRINTERS CHAIRMAN JMORELLI@HUSTONPATTERSON.COM

TIM CONNELL A.G. STACKER INC. SECRETARY TCONNELL@AGSTACKER.COM

JOHN BURGESS PAMARCO DIRECTOR JOHN.BURGESS@PAMARCO.COM

PAT SZANY AMERICAN CORRUGATED MACHINE CORP. IMMEDIATE PAST CHAIRMAN PSZANY@ACM-CORP.COM

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I

n January, I had the opportunity to spend some time with leading owners and executives of independent box plants and fellow suppliers throughout North America.

One recurring theme in those conversations was that most everyone was coming off one of their most profitable years, despite all the challenges of the COVID-19 pandemic. If you were not profitable in 2021, you may need to reevaluate your strategy.

There are not many reasons to expect this momentum to change drastically soon, with OEM backlogs running out to early or mid-2024. Although uncertainty surrounding the Russia-Ukraine war looms, Smithers is reporting that the corrugated market is expected to grow 3.7% annually and is set to exceed $300 billion in 2023.

This is coming off 2021, when we experienced growth of 4.5% in the United States alone, with Canada realizing 5.5% growth.

Mexico is also embracing a tremendous growth rate of 8.8%. The growth was not restricted to North America; the global corrugated industry grew 8.8% as well, creating a fortuitous outlook for our industry.

Aiding in this growth, e-commerce sales continue with a great momentum of 45% year over year, while climbing toward an expected of $5.5 trillion in sales come 2023.

Add that the average box is touched 20 times or more throughout its distribution process, and you have a stressed logistics supply chain with an even more imperative need for corrugated boxes to withstand the rigors of this supply and demand.

Furthermore, the expansion of current plants and greenfield sites should get your attention. We are seeing consistent announcements of major U.S.-based integrateds breaking ground in the northwest United States and multiple foreign-based integrateds penetrating the marketplace with brand-new facilities in the tri-state area of Ohio, Kentucky, and Indiana.

Of course, not only is the construction of greenfield facilities drawing attention, but, as we have read in this magazine and other publications, forward-thinking independents are looking at major expansion of existing locations. Additionally, it was reported at the AICC Packaging Xperience in Kansas City, Missouri, in March that at least five independents had invested in new corrugators over the last 18 to 24 months, which is equally exciting.

One area that lost some momentum during the pandemic was digital printing on corrugated. Prior to the pandemic, there was an incredible buzz when it came to digital printing. Then, it felt as if almost every time you picked up an industry publication, there was someone promoting, buying, or selling a single-pass digital printer. That, or an operation was entering the market with a multipass unit.

There have certainly been units placed over the course of the last two years, but due to the massive market changes influenced by the pandemic, the unprecedented volume demands became the primary focus of all converters. This surge pushed many digital considerations to the back burner.

That noted, we are witnessing the market shift its focus back to digital opportunities with strong consideration and orders of single-pass digital printing. Additionally, much success of digital laser die cutting and creasing is being recognized throughout North America.

This is absolutely an exciting time to be in the corrugated industry! I look forward to seeing all of you at the regional AICC events throughout this summer and Corrugated Week in San Antonio this September 19–21. Greg Jones is executive vice president at SUN Automation Group and is vice chairman of AICC’s Associate board.

Planning for the future is one of your most important jobs. Selling your business, succession planning, equipment decisions and expansions require the best advice and strategy. We’ve been providing Business Planning Services to the independent converter for over 30 years. Need to make a big decision? Call us now.

STILL the Industry Experts 580 Sylvan Avenue, Suite M-A Englewood Cliffs, NJ 07632 (201) 731-3025 • Fax: (201) 731-3026 info@klinghernadler.com

What the Tech?

IIoT in the Corrugated Industry

BY MATTHEW MILLER

B

ox plants are constantly looking for more efficient ways to maintain and increase output as the corrugated industry continues its trajectory of rapid growth and increased demand due to the rise of e-commerce. Increasing uptime through longer operational hours and other traditional methods can help in the short term, but investing in a smart longterm solution is critical for improving productivity and profitability.

Since the invention of corrugated box manufacturing machines nearly 150 years ago, optimizing machine performance has been heavily reliant on the experience, guesswork, and intuition of its operators.

Now, predictive analytics via machine learning can provide predictions of when—and how—corrugated equipment may fail. The promise of advance notice of downtime is empowering plant leadership to make more informed decisions to improve the reliability and efficiency of their fleet.

While implementing an industrial internet of things (IIoT) solution, such as machine learning, is not a new idea in the greater manufacturing industry, these technologies are now gaining market adaption and adoption in the corrugated converting industry. Early adopters and leaders in the corrugated industry are already running pilot programs to see the true capacity, resiliency, and potential return of incorporating machine learning into their fleet. These experiments are allowing box plants to begin the process of optimizing their operation as a whole, feeding machine-learning algorithms with the necessary data and feedback one machine at a time.

Machine-learning technology is dynamic, evolving to provide flexibility

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for how box plant managers can incorporate IIoT into their production line without overhauling or drastically halting their operation. Machineagnostic tools can collect vital information from corrugated converting equipment through sensors that don’t disrupt an operation and don’t void warranties on older machinery.

Data is then collected, analyzed, and presented through a digital dashboard, allowing anybody to view actionable insights, optimize maintenance, and reduce downtime—no matter what brand of machine equipment is in use at their plants.

The latest advancements in machine learning include advanced insights and optimization, providing analytics that predict when and how corrugated equipment will fail. Whether the machine can be fi xed before the failure or production is rerouted to another machine, predictive analytics allows plant management to make better, more informed decisions to improve the overall uptime and efficiency of their fleet.

Machine learning solutions can also provide additional value by helping box plants take advantage of planned downtime. The benefits of planned downtime open up opportunities for plant managers to order parts in advance, schedule maintenance resources, and shift production to alternate machines.

Being prepared for these instances, rather than racing for resources, parts, and

labor during unplanned downtime, is yet another avenue that machine-learning tools provide to limit lost time and improve efficiency in an operation.

The beauty of machine learning, especially in such a rapidly growing industry, is that wider adoption and collection of data can yield more accurate predictions. Through the progressive nature of machine-learning algorithms, box plants will be able to plan around when and how their converting equipment will fail.

Understanding issues and proactively solving them—thanks to machine learning—are revolutionizing how box plants understand, predict, and maintain their converting equipment.  Matthew Miller is technology director at Helios, with expertise in bringing products, processes, and technology to life. An expert at aligning technology solutions with customer needs, he has successfully led teams to build products that have led to significant commercial growth and increased business productivity.

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Strength in Numbers

Understanding Your Estimating System

BY MITCH KLINGHER

E

veryone has an estimating system that they utilize to make pricing decisions on, and with a few exceptions, no one seems to be entirely happy with theirs. During this era of rapid price increases for materials, labor, and just about everything else that converters need to manufacture and get their products to market, many of you are concerned about whether your estimating systems are able to keep up with all of this change.

There is an old adage that says that costing is a science and pricing is an art, but after observing how this industry operates for the last 30 years, I don’t think that any of this rises to the level of either art or science. My observation is that in a time of rising prices just about everyone makes more money and in a time of falling prices they make less money. The simple fact is that prices rise when supply seems to be constrained and demand is still strong, and that is what we are currently experiencing.

None of this has anything to do with estimating system design; you are simply raising prices based upon market conditions. However, there is a bit of danger lurking in the future if you don’t really understand what is going on in the mysterious realm of estimating, where only chief fi nancial officers, controllers, cost accountants, costing consultants, and other brave souls dare to go. So, let’s take a deeper dive into this dark place so we can begin to understand and demystify what goes on there.

First, a bit of historical perspective.

Cost accounting, as we know it today, was invented by Josiah Wedgewood of the famous Wedgewood Pottery Co. during the depression of 1772. Demand for his products dropped, inventories

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rose, and prices were cut. Could he cut costs enough to avoid bankruptcy? His answer involved understanding cost accounting in enough detail to make informed decisions. Wedgwood was able to determine costs for materials and labor for each manufacturing step for each product. An attempt was made to allocate such overhead costs as breakage and interest as well as transportation costs. He could charge less for lower-cost items and was able to modify his production costs based upon the demand in the marketplace.

A hundred years later during the Industrial Revolution, when machinery began to dominate the manufacturing process, machine output and costs became more important measurements than labor costs. Machine center costs and cost allocation utilizing a planned level of activity became the new norm.

The champion of what is now called “absorption costing” was a 19th-century accountant by the name of Alexander Hamilton Church. He developed the machine-hour method of allocating and applying fi xed costs such as power, land, and building costs. Th is 150-year-old system is still what is in use today as the backbone of your estimating systems.

Costs are charged to each order based upon a complicated yet entirely rational system. Materials are charged directly to the order. Labor is charged to the order based upon a buildup of an hourly machine rate, which often includes an allocation of various factory overhead items. Other factory overhead items— repairs and maintenance, utilities, indirect labor—are charged to the order based upon their estimated usage. Fixed costs are allocated based upon a planned level of activity, and fi nally, a provision

for profit is added. In theory, this system is pure fi nancial poetry, and as long as you estimate your costs conservatively (that means high) and your planned level of activity (usually expressed in MSF or tons for converters) low, you will always make the desired profit. The cost of materials, plus the cost of labor, plus the cost of delivery, plus an allocation of all other costs, plus a provision for profit equals sales price. If you can apply this to every order, then you will always make the desired profit. It is neat, orderly, rational, and guaranteed to make you successful, right?

Based upon this full absorption costing system that you all utilize (whether you realize it or not), your estimating system calculates contribution and a return on sale for every order.

Contribution is the systems calculation of the variable profit of the order (sale price less variable costs). Return on sale is the amount the order is expected to contribute to net profit (contribution less fi xed costs). However, it is the market that determines the price, and you are probably not the lowest-cost producer for most of what you sell, so the market price is often lower than your estimating system says you need to charge.

So, the problem with all of this is that the real world is a very messy and in normal times a very competitive place.

Seldom do you achieve the planned level of activity or the budgeted level of cost.

Your competitors often charge much less than what you want to charge, and this is hard for you to understand. The cost accountants and costing consultants tell you that you need to update your costs and your machine efficiencies if you want to improve the situation. In their

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Strength in Numbers

minds, there is nothing wrong with the system that some regular maintenance won’t improve; but most of you don’t really trust your systems, so you go out of your way to put in artificial material costs and other artificial adders and fudges to get the system to calculate the prices that you want it to. You then price at a lower ROS for some items and at a higher ROS for others.

Right now, the levels of activity are much higher than you planned they would be (you are shipping more footage), and the budgeted levels of cost are also much higher than you planned (shortages and inflation). For the most part you are making more money because you are raising prices much faster than your costs are increasing, and the perception in the marketplace of paper and converting capacity shortages keeps the market dynamics in your favor. You’re in a good place right now, but will these dynamics last forever?

Almost everyone I talk to has equipment on order, which will dramatically increase converting capacities in the not-too-distant future, and there are millions of tons of additional mill capacity scheduled to hit the market in the next few years. So, the short answer is, probably not. Once these capacities go back to some kind of equilibrium, you will need to rely on your system again to decide what orders to accept and at what price. Right now, your customers don’t have a lot of options, and you can pretty much name your price. But what steps do you need to take to ensure your continued profitability in an up market and to limit your exposure in a down market?

The key word that comes to mind is “simplify.” A system that continually spits out prices that are disconnected from the market that you are constantly tricking to give you the prices that you want is probably too complicated for your business. In my experience, full

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absorption costing systems make a lot of sense when you are making large batches of a homogenous product or products. Th is kind of costing in a paper mill makes perfect sense. The output of the mill is highly predictable, and therefore using a planned level of activity is a very sensible way to allocate costs. A sheet feeder or a corrugated plant that is dedicated to making the same packaging over and over for major customers will also lend itself to this kind of a system. However, a custom job shop that runs a multitude of different orders daily, where the overall output can vary significantly from month to month, is generally not a good candidate for this type of costing. It is way too complicated, and using output in terms of tons or square footage to allocate costs will lead to all kinds of over- and underallocations.

My view of this world—based upon many years of experience and a lot of financial and operational data—is that there are very few truly variable costs in most converting operations. If you change the definition of a variable cost to be an incremental cost of the order, then other than materials, commissions, and maybe contract labor for assembly and fulfillment, almost every other cost is relatively fi xed over a wide range of activity. If you have 100 plant employees, it is likely that you will have this number of people whether you are busy or slow on any particular day or month. Some months may have more overtime than others, but other than that, plant labor is a fairly fi xed cost. The same goes for variable factory overhead and delivery— these costs just don’t vary very much from month to month. So, if you simplify your systems definition of contribution and stop inflating the material costs, you will at least have a system that predicts the correct variable profit of the order.

Secondly, I would look at the profitability of the order in terms of how

many machine hours the order took up rather than how many dollars per square foot or ton you sold it for. Machine hours are the ultimate constraint in most converting plants, and when an order goes over multiple machines, this often gets overlooked. In addition, long runs with lower contribution percentages often look much better than shorter runs with higher contribution percentages when you look at them in this manner.

If the market turns downward and you continue to use the same flawed estimating system that you have always used, the race down to lower prices and lower profitability could be fast and furious. My advice to you in this era of profitability is to simplify your cost estimating and start focusing on machine hours. Change is often difficult, especially when your organization has been looking at fully loaded return on sale numbers and contribution calculations that include inflated material costs and allocation of fi xed costs for as long as it has been in business. It is often difficult to initiate change when times are good, but if you want to protect the long-term profitability of your business, you need to focus on the orders where you really have an advantage and not on orders that you can charge more for now based upon the current market dynamics. You can continue to rely on a 250-year-old system of cost accounting that has most recently been updated by a 150-year-old system of cost allocation and perpetuate the archaic alchemy that your costing system produces—or consider effectuating change now while you are still profitable.  Mitch Klingher is a partner at Klingher Nadler LLP. He can be reached at 201-731-3025 or mitch@ klinghernadler.com.

BREAKING DOWN BOXES

Compelling Conversations with Entrepreneurs with Hosts Gene Marino and Joe Morelli

Subscribe Wherever You Listen to Podcasts AICCbox.org/Boxes

Foundation for Packaging Education

AICC’s Foundation for Packaging Education Continues to Grow

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elieve it not, the Foundation for Packaging Education is already in the midst of receiving year-three contributions from its donors! The fund continues to grow, and with additional donors coming in and the two fundraisers set for this year, we are well on our way to achieving our goals.

Here is the latest list of corporate and individual donors: Michigan City Paper Box; Bay Cities Container; Jamestown Container; Greg and Bette Tucker; Oklahoma Interpak (in honor of John A. Schilt); SUN Automation; StandFast Group; DeLine Box; Harris Packaging; Package Crafters; Packaging Express; Wasatch Container; Central Package & Display; BCM Inks; Buckeye Boxes (in honor of Robert B. Hoyt); L.D. Davis; Welch Packaging Group; Adducco Communications (in memory of Michael Brunton); Mike D’Angelo; McLean Packaging; OX BOX; J.B. Machinery; Kolbus; Haire Machinery; Arvco Container; Equipment Finance Corp.; SMC Packaging Group; Akers Packaging Service; Tavens Container; Pamarco/ Absolute; Royal Containers Ltd.; Athena SWC; A.G. Stacker; Viking Industries (in honor of Steve Narva); Independent II; Tyoga Container (in honor of Steve Narva); The Day Before Golf (American Corrugated Machinery, Torosian Technical Services); Paige Packaging (in honor of Steve Narva); Commonwealth Packaging (in honor of Steve Narva); Nick Griffin; NV Publications (in honor of Michael Brunton); Geo. M. Martin Company; and Jay and Terry Carman.

As a reminder, the foundation is AICC’s second 501(c)(3) education foundation. It is focused exclusively on ensuring that means are always

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available to support the development and continuity of training programs for those already employed within the paper-based packaging industry—in other words, your team members.

As an example, AICC’s Packaging School is just one of the employeefocused training curriculums available to box plants. If you are not aware of how AICC’s education programming impacts the industry and your operations, in February AICC’s Packaging School recorded its 10,000th completed course since January 2017.

The AICC Independents’ Cup fundraiser was held in April, and the next fundraiser for the foundation will be held at Kiawah Island, South Carolina, November 8–10, at the Sanctuary. There will be events for golfers and nongolfers.

Visit www.packaginged.org to learn more about those events.

If you have not yet pledged your support for the foundation, please consider joining your many peers in doing so.

Remember, you are making an investment in your future. Visit www.packaginged.org to make your donation today! 

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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

2022 Holiday Weekend in New York – Register Early!

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egistration is open for ICPF’s 2022 Holiday Weekend in New York, scheduled for Friday, December 9 through Sunday, December 11. Register

by July 31 to save $200. Bring your spouse or guest for holiday shopping, sightseeing, dining, Broadway plays, 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, sponsored by

Pratt Industries. ICPF guests will view a Saturday matinee of one of the latest Broadway hits, sponsored

by BW Papersystems (matinee to be announced). Saturday night, participants will be treated to a reception and dinner at a special New York restaurant. The reception is sponsored

by Fosber America, and the dinner is sponsored by estRock. Greif also is a sponsor of the weekend.

In addition to saving by registering

by July 31, ICPF’s New York holiday event always sells out early. Space is limited to a first-come, first-served basis! We recommend you register this month but no later than August 31 to ensure participation. Request a registration form by emailing registration@icpfbox. org, or visit www.careersincorrugated. org to download.

ICPF’s University Awards Program

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o date, ICPF has placed almost $13 million in testing equipment, presses, CAD tables, grants, and other donations at partner universities around the nation, and millions of dollars more in Artios and Arden design software. In just the past 13 years, ICPF additionally has created new packaging programs at 11 universities across the country by introducing structural design into their graphic communication programs.

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Over the past year alone, ICPF has provided testing equipment to expand the packaging labs at North Carolina State University and Cal Poly; donated a large-scale flatbed printer and placed 53 seats of Arden-donated Impact software at Virginia Tech; donated 20 computers and 20 sets of computer desks and chairs to expand the design lab at the University of Texas at Arlington; and provided a third-annual grant commitment to Indiana State University that enabled the

expansion of the university’s packaging engineering technology program by 24%.

Upon the signing of partnership/asset agreements by the two universities, ICPF anticipates further expanding Indiana State’s program by providing a large-scale flatbed printer, as well as anticipates providing a grant to the University of Florida packaging program to fund 50% of the cost to replace the CAD table ICPF donated to the university to jumpstart its corrugated curricula in 2006.

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

Charles E. Hodges Inducted Into ICPF’s Circle of Distinguished Leaders

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n the evening of April 11, during the ICPF presentation at the Fibre Box Association (FBA) annual meeting in Laguna Beach, California, Hood Container Corp. President and Chief Operating Officer Charles E. Hodges was inducted as the 26th member of ICPF’s Circle of Distinguished Leaders. Through the assistance provided to ICPF by Hood Container Corp. and Hodges’ family, friends, and former fellow employees, the lifetime recognition was received as a total surprise to Hodges.

The Circle of Distinguished Leaders honors exceptional visionaries whose energy and talent have moved the industry forward in remarkable ways. These leaders are recognized for demonstrating a strong commitment to the continuing success of the global corrugated packaging industry.

Hodges was nominated for induction

by ICPF board members as well as by corrugated packaging firms, AICC, and FBA, which made donations in his name to support ICPF operations.

Vocational and Technical College Program for Plant-Floor Recruiting

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CPF is constantly focusing on expanding existing programs and creating new initiatives. The foundation has recently launched a new pilot program in the Atlanta region to assist plants in working with two-year vocational and technical colleges to educate and recruit students for plant-floor operations and maintenance. To date, half a dozen packaging manufacturing operations are participating in the pilot. ICPF will use

this pilot program as a prototype to work with two-year colleges in other cities around the country.

For those ICPF Corporate Partner firms that wish to contact vocational and technical colleges in their areas in advance of the completion of the ICPF pilot program, ICPF has compiled a list of contacts at two-year institutions of higher education in eight additional metropolitan areas, including Chicago,

Detroit, Grand Rapids, Indianapolis, Cincinnati, Columbus, Green Bay, and Milwaukee. These lists are available by contacting info@icpfbox.org.  Richard Flaherty is president of the International Corrugated Packaging Foundation.

BOXSCORE www.aiccbox.org

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The Final Score

21,024,000 Minutes

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wenty-one million twenty-four thousand minutes; 350,400 hours; 14,600 days; 480 months.

Forty years in printing and converting machinery sales and service and industry association management.

On June 1, it will be 40 years to the day that I walked through the doors of BOBST Inc. for what I thought would be a short stint at the long-established machine manufacturer. I was armed with a newly minted degree in city and county planning, a field in which the job market was tight at the time but sure to explode soon, and then I could get on with my life.

I spent 32 years at BOBST. Then, a comparatively short 2½ years at Goss International. Now, I’m deep into year five at AICC. Many of you know the happenstance that got me to BOBST. A question at a neighborhood picnic from a family friend as to how my job search was going: “Why don’t you interview with my company? We have an entry-level position. You have to do something.” That family friend was the late Chuck Krueger, BOBST’s vice president of sales.

Sure, the journey is somewhat about the where, but more importantly it’s about the experiences, and that means the people. This point was driven home by my sitting in on the taping sessions of the AICC podcast series, Breaking Down Boxes. AICC Chairman Gene Marino and AICC Associate Committee Chairman Joe Morelli have been doing a wonderful job interviewing industry leaders who have shared their stories about the successes and failures that have gotten them to where they are. AICC releases new episodes the first Monday of each month. If you haven’t listened to one, you should, and then listen to them all. You can access Breaking Down Boxes at any number of podcast-streaming applications.

The point is the fragility of the experience. The fine line between success and failure. The pure chance of getting started and of being in the industry or not. Or staying in it. The people who have mentored and helped you along the way—your network, your friends, your peers. Those who have motivated you and, yes, those who perhaps stood in your way or discouraged you.

I’ve been very fortunate to have had the experiences that I’ve had. I’ve worked for first-class organizations, and I have traveled broadly in North America and the world. I have been in scores of corrugated, folding carton, rigid box, flexible packaging, newspaper, and publication plants. I’m still waiting to have the government mistakenly kick in my door in the middle of the night because I had to be fingerprinted to get into the Social Security check printing plant in Beckley, West Virginia.

I know that many of my accomplishments are well earned. But many of those accomplishments became possible because people took a chance on me. In the last issue of BoxScore, I paid tribute to the late Dick Grey. If he hadn’t spoken up for me at BOBST, I may have ultimately made that move into city and county planning and been a bureaucrat my entire career. If Philippe Michel had not tapped me to lead a business unit at BOBST, who knows where my path would have led me? Same for Greg Tucker, Mark Williams, Tony Schleich, and Steve Young for the AICC experience I am currently enjoying.

I know many of your stories and journeys, so I know that mine is neither special nor unique in the big picture. But each pixel of that big picture is cherished by me, even more so in this milestone year of service to this wonderful industry.

So many of you have been so good to me with your time, your knowledge, your hospitality, and your counsel.

Michael D’Angelo I have 40 years of thankfulness for you.

AICC President

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