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the front and rear fold at the same time, eliminating plowing and ﬁshtailing. If you’re looking to produce consistently square boxes to help your operation generate improved throughput and proﬁts, look to Mitsubishi—the higher power of folding perfection. Call us for all the details.
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A PUBLICATION OF AICC, THE INDEPENDENT PACKAGING ASSOCIATION
July/August 2017 Volume 21, No. 4
A DAY IN THE DESIGN LIFE
These unsung professionals keep creativity high, costs in line, and clients satisfied
ALSO INSIDE The Power of First Impressions Investing in the Future Drawing Up an Inkless Design in the Palm of Your Hand
TABLE OF CONTENTS July/August 2017 • Volume 21, Issue 4
THE ASSOCIATE ADVANTAGE
THE FINAL SCORE
A DAY IN THE DESIGN LIFE These unsung professionals keep creativity high, costs in line, and clients satisfied THE POWER OF FIRST IMPRESSIONS The importance of display and unboxing in your packaging INVESTING IN THE FUTURE Making the most out of resources and training DRAWING UP AN INKLESS DESIGN IN THE PALM OF YOUR HAND Augmented reality is improving customer experience while creating clear expectations
48 52 56
BoxScore is published bimonthly by AICC, The Independent Packaging Association, PO Box 25708, Alexandria, VA 22313, USA. Rates for reprints and permissions of articles printed are available upon request. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of AICC. The publisher reserves the right to accept or reject any editorial or advertising matter at its discretion. The publisher is not responsible for claims made by advertisers. POSTMASTER: Send change of address to BoxScore, AICC, PO Box 25708, Alexandria, VA 22313, USA. ©2017 AICC. All rights reserved.
WELCOME NEW MEMBERS
GOOD FOR BUSINESS
Visit www.aiccboxscore.org for Member News and even more great columns. Scan the QR code to check them out! BOXSCORE www.aiccbox.org
OFFICERS Chairman: Tony Schleich, Lawrence Paper Company, American Packaging Division First Vice Chairman: Al Hoodwin, Michigan City Paper Box Vice Chairman: Joe Palmeri, Jamestown Container Companies Vice Chairman: Jay Carman, StandFast Packaging Vice Chairman: John Forrey, Specialty Industries/Krafcor/ NuPack Printing DIRECTORS-AT-LARGE Jim Akers, Akers Packaging Kevin Ausburn, SMC Packaging Group Matt Davis, Packaging Express Marco Ferrara, Cartones Sultana Jana Harris, Harris Packaging Corp. Nelva Walz, Elegant Packaging DIRECTORS Doug Rawson, Superior Lithographics David DeLine, Deline Box Company Justin Mathes, Vanguard Companies Eric Elgin, Oklahoma Interpak Gary Brewer, Package Crafters Inc. Guy Ockerland, OxBox Finn MacDonald, Independent II Joe Hodges, Mid-Atlantic Packaging Larry Grossbard, President Container Group Peter Hamilton, Rand-Whitney Corporation John Franciosa, McLeish Corr-A-Box Coyle Packaging Group Humberto Trevino, Washington Box, S de RL de C.V. Kim Nelson, Royal Containers Ltd. President: A. Steven Young, AICC Headquarters
Immediate Past Chairman: Mark Williams, Richmond Corrugated, Inc. Chairman, Past Chairmen’s Council: Greg Tucker, Bay Cities Container Corp. Secretary/General Counsel: David P. Goch, Webster, Chamberlain, and Bean Counsel Emeritus: Paul H. Vishny, Esq. ASSOCIATE MEMBER DIRECTORS Chairman: Jeff Pallini, Fosber America Vice Chairman: Ed Gargiulo, Equipment Finance Corp. Secretary: David Burgess, JB Machinery Director: Pat Szany, American Corrugated Machine Corp. Immediate Past Chairman: Keith Umlauf, Haire Group ADVISERS TO THE CHAIRMAN Gene Marino, Rusken Packaging Jeff Pallini, Fosber America Tom Shallow, Fitzpatrick Containers PUBLICATION STAFF Publisher: A. Steven Young, firstname.lastname@example.org Editor: Virginia Humphrey, email@example.com EDITORIAL/DESIGN SERVICES The YGS Group • www.theYGSgroup.com Editorial Director: Annette Gray Senior Managing Editor: Ashley Reid Senior Editor: Sam Hoffmeister Copy Editor: Steve Kennedy Associate Editor: Drew Bankert VP, Marketing Services: Jack Davidson Creative Director: Serena Spiezio Art Director: Jason Deller Account Manager: Brian Hershey
SUBMIT EDITORIAL IDEAS, NEWS & LETTERS TO: BoxScore@theYGSgroup.com CONTRIBUTORS Mike D'Angelo, Vice President Maria Frustaci, Director of Administration and Director of Latin America Cindy Huber, Director of Meetings and Conventions Chelsea May, Member Services Coordinator Laura Mihalick, Senior Meetings Manager Taryn Pyle, Director of Training, Education and Professional Development Alyce Ryan, Marketing Associate Richard M. Flaherty, President, ICPF ADVERTISING Information: Virginia Humphrey, firstname.lastname@example.org Opportunities: Howard Neft, InTheKnow Inc. 847-899-7104 • email@example.com Folding Carton and Rigid Box Advertising: Taryn Pyle 703-535-1391 • firstname.lastname@example.org AICC PO Box 25708 Alexandria, VA 22313 Phone 703-836-2422 Toll-free 877-836-2422 Fax 703-836-2795 www.aiccbox.org
ABOUT AICC AICC, The Independent Packaging Association, is uniting and celebrating the success of inspired, independent packaging companies. We are a growing membership association which has served independents since 1974. AICC SERVES: Passionate professionals; The independent and united; The responsive and agile. AICC WILL: Connect and cultivate; Deliver success.
e have all experienced periods in which we reflect and say, “Where did the time go?” Honestly, I cannot believe that I am more than halfway through my term already! Doesn’t it seem as though time can really “fly”? Of course, we all fully understand that time is fixed and finite. And it is, in fact, what we choose to do with our time that really matters. To date, I have covered integrity, excellence, and creativity in these columns, and have offered you definitions of how these values drive our success at The Lawrence Paper Company’s American Packaging Division. Continuing with my principled leadership theme, I would like to introduce you to our fourth value “pillar”—balance. From a broad sense, principled leadership strikes a balance between the physical reality of our life and the values we embrace. In my case, I know I need to strike a balance between my responsibilities as president of the company and the spiritual and ethical values I hold, which in my case are drawn primarily from my obligation to my family and my belief in God. Or, the simpler definition for our operation, and one that focuses on work-life balance as well as stressing the importance of our interpersonal contacts, is: “Having fun and valuing relationships through an engaged culture of daily achievement and enjoyment.” It is too easy to fall into the trap of “going through the motions” of a typical day, one where it is setup after setup on a machine and phone call after phone call in the office. We forget to stop every once in a while and celebrate a victory—a nice order or perhaps a great run in the plant. We believe that it is necessary to recognize our daily achievements to serve as a reminder of why we do what we do, which ultimately leads to enjoying what it is that we do! We also believe that it is vital for our associates to be afforded opportunities to have a work-family time balance as well. With kids’ activities, family obligations, and personal interests, we all have things that pull us in many directions. However, with proper communication and support, we always find ways to cover those times when an associate needs to make a school activity or be with a family member. My eyes are set on what is certain to be an excellent fall meeting in Las Vegas from September 25 to 27, where I will step down as your chairman—and it will certainly be here before I know it! Until then, with the many terrific regional meetings and educational opportunities that AICC has to offer (check out the iCalendar at www.aiccbox.org), I will need to strike my own work-life balance. I hope you are having a safe and wonderful summer!
Tony Schleich President, The Lawrence Paper Company, American Packaging Division Chairman, AICC
WHY ARE BOXMAKERS SHIFTING TO RECYCLED CONTAINERBOARD? BY DICK STORAT
.S. independent boxmakers have a choice of furnish for the corrugated containers and related products they make. They can choose virgin unbleached kraft linerboard, semichemical medium, recycled linerboard, or recycled medium. Over the past decade, shifting domestic boxmaker preferences and pressures to supply overseas demand for virgin unbleached kraft linerboard have combined to produce a substantial shift in the aggregate supply of containerboard by U.S. mills to U.S. corrugated producers. The table on Page 6 lists in thousands of tons the amount of
virgin containerboard (unbleached kraft linerboard plus semichemical medium) and recycled containerboard (recycled linerboard and recycled medium) supplied to U.S. corrugated converters in 2006 and 2016. Over that 10-year period, the annual domestic supply was virtually unchanged, declining by only 2.4 percent. What does stand out, however, is the growing use of recycled grades by U.S. converters. In 2006, recycled containerboard grades made up 25 percent of the total containerboard supply. Last year, that share had grown to 37 percent,
a 48 percent increase. A shift in the medium grades was responsible for much of the difference. In 2006, recycled medium already commanded 40 percent of the U.S. supply of medium products. By last year the balance had shifted strongly, and recycled medium made up 58 percent of all medium produced in the U.S. Over that 10-year period, total U.S. medium production had grown by only 4.5 percent. Many factors contributed to the shift from virgin grades to recycled grades of containerboard. Among them were better technology for processing recovered OCC,
Unbleached Kraft Linerboard Produced for Export as Percent of U.S. Production
22% 20% 18% 16% 14% 12% 10% 12J
Percent (3-Month Moving Average)
BOXSCORE July/August 2017
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relatively lower capital costs to install recycled containerboard capacity, and improved performance of recycled grades in corrugated applications. In addition to these supply side factors, the growing overseas demand for virgin grades of containerboard has also been a major contributing cause of this dramatic shift to recycled grades in the domestic market. Virgin grades account for almost all of the containerboard made by U.S. mills for export. Last year, of the 5.09 million tons of containerboard produced for export, 95.7 percent was unbleached kraft linerboard or semichem medium. Exports of recycled grades totaled only 0.22 million tons. Unbleached kraft linerboard accounts for the lion’s share of container board exports. Last year, it amounted to 4.53 million tons, or 89 percent of all containerboard exports. Since 2012, unbleached kraft linerboard exports have been rising steadily. In 2012, about 16 percent of U.S. production was earmarked for export. By the beginning of this year, exports of this grade crossed the 20 percent threshold for the first time, as foreign demand for virgin linerboard held up even as the U.S. dollar continued to strengthen. Comparing the growth rates of various portions of containerboard production for last year helps put this shift in perspective. Overall U.S. containerboard production rose by 1.2 percent last year. Concurrently, containerboard made for export rose by
BOXSCORE July/August 2017
4.8 percent during 2016, and recycled containerboard grades grew by a healthy 4.0 percent. At the same time, U.S. production of virgin containerboard destined for U.S. mills contracted by 1.0 percent, as additional supply was shifted into export markets. At the same time that U.S. boxmakers are using more recycled grades, export pressures on the supply of OCC, the principal source of fiber used to make recycled containerboard grades, have been severe. They have siphoned off much of the growth in recovery of old corrugated containers, which has grown from 73.6 percent of U.S. containerboard supply in 2006 to 92.7 percent of supply last year. Since 2006, recovery of OCC has risen from 25.2 million tons to 31.6 million tons last year—a 25 percent increase. Over the same period, the amount of OCC used in the manufacture of all grades of paper and paperboard has grown by a total of only 6.4 percent, to reach 21.2 million tons last year— 67 percent of total OCC recovered. Over the same period, the amount of OCC exported has nearly doubled. It rose from 5.2 million tons in 2006 to 10.3 million tons last year, a 98 percent increase. Most of this growth has gone to China and other Asian countries that are experiencing rapid economic growth and the resulting explosion of demand for locally produced containerboard. Last year the trend continued, with
domestic consumption of OCC growing by only 0.3 percent compared to 1.7 percent export growth. Concerns about sufficient availability of OCC to supply U.S. boxmakers with an adequate and competitive supply of recycled containerboard extend beyond the appetites of foreign countries for U.S.-sourced OCC and U.S.-made virgin containerboard. As online sales of goods continue to soar at the expense of goods purchased in big-box and grocery stores, a larger percentage of the corrugated containers used to package these goods ends up at consumers’ homes instead of at the back end of stores. Over the years, traditional retailers have developed into reliable sources of OCC supply for U.S. mills, with issues of packing, quality control, and infrastructure having settled into patterns that supply U.S. mills well. Now and in the years ahead, though, an increasing fraction of used boxes will end up in municipal waste collection programs as they are disposed of by retail consumers. Very few of these programs collect source-separated materials any longer, which means that the quality of the OCC removed from the mixed waste stream will be of lower quality and some of it potentially not usable in recovered paper production processes. In summary, expectations for continuing strong export demand and the rapidly growing preference for online shopping are two reasons that independent boxmakers need to keep a watchful eye on developing trends in containerboard and OCC markets. Dick Storat is president of Richard Storat & Associates. He can be reached at 610-282-6033 or email@example.com.
Meeting Registration Now Open—to Register Visit www.AICCbox.org/meeting The AICC 2017 Annual Meeting will be held September 25-27, 2017 at The Encore Hotel in Las Vegas, NV. The annual meeting will feature a three-day series of workshop tracks, round tables, general sessions, networking, and social events. Special “box plant” group pricing will be offered, so more people in your company can attend this value packed week for one low price. The AICC 2017 Designers Lab & Independent Packaging Design Competition—“Welcome to Fabulous Design” will be held in conjunction with the meeting. The meeting is being co-located with PackExpo Las Vegas 2017 at the Las Vegas Convention Center. The Encore Hotel is an all suite hotel designed to be explored and discovered while exciting the senses of guests. Hailed as a luxury destination; the rooms are elegantly appointed and equipped with advanced technologies and panoramic views. Casual elegance describes the environment that is home to 20 signature restaurants, ultra-chic nightclubs, and luxury shopping that brings your Las Vegas experience to a new level of distinction.
Image Courtesy of The Encore Hotel
Highlights 2017 Independent Packaging Design Competition—“Welcome to Fabulous Design”—Featuring 42 categories for corrugated, folding carton, and rigid box makers. Competition Registration will be open in June 2017. Designers’ Lab for Corrugated, Folding Carton & Rigid Box Designers—Opportunity for designers to learn new techniques in structural and graphic design, share knowledge and experience with peers and show off their skill and talent in the “Design Challenge.” Design Lab Co-sponsored by ESKO, Gerber Innovations and HP. PackExpo Las Vegas 2017—The most complete packaging show in the worlds largest market. All attendees will have complimentary access to attend Pack Expo.
Image Courtesy of The Encore Hotel
The Encore Hotel—AICC Room Rates Resort Suite King or Double Accommodations: $249/night* (*plus applicable taxes—currently 13.38%)
To make your hotel reservations call (866) 770-7555, and reference the AICC 2017 Annual Meeting Hotel Reservation Deadline: Friday, September 1, 2017
AICC • 113 S. West Street • Alexandria, VA 22314 USA • (703) 836-2422 • www.AICCbox.org
ONLINE LEARNING INCREASES MORE THAN 300% 2017
*Estimate based on performance as of 5/11/17
n 2013, AICC launched its online learning initiative, and it has been building its online learning curriculum ever since. AICC began a partnership with The Packaging School, a global learning platform for packaging professionals, in June 2016 to expand the quality and quantity of online learning opportunities. As of April 1, all AICC online courses are included with membership. Twenty courses are currently available,
and a dozen more are in the pipeline. General and Associate members from across the globe have ordered more than 400 online courses. The courses ordered most often are Safety Basics, Corrugated Basics, 18 Ways to Sell on Value Instead of Price, and Corrugated Containers. The newest course, Understanding Board Combinations, is quickly gaining popularity. Participation in April and May alone showed a 327 percent increase over
the entire first quarter of 2017. The growth of online learning has surpassed expectations, and Steve Young, AICC president, says, “This is a great testament to the need for relevant, industry-specific education for the employees of AICC member companies.” Greg Tucker, chairman, Bay Cities, Pico Rivera, Calif., says, “As a member of AICC, we take advantage of the courses AICC offers. The Packaging School gives us the benefit of documentation and record-keeping regarding employee training—a must for a growing company.” AICC will continue to grow the quality and quantity of available online courses, and 12 new courses are in the pipeline for the coming year. AICC will be seeking the support of its members to provide input and materials to create the best learning experience possible for members.
339 logins from 124 users: 123 course completions 50
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BOXSCORE July/August 2017
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How you will engage your customers Greater online experience with Self Service Real-time Tracking of Production & Delivery Instant Quotes and One Click Ordering
How you will manage your plant Electronic Signature Capture and Automatic Invoicing Paperless Workflow and Online Approvals Algorithmic Trend Detectors
How you will optimize your people Enable a Remote Workforce Create a 24/7 Culture Flexible, Multi-lingual Contact Darren Artillio: DArtillio@amtechsoftware.com
WELCOME NEW MEMBERS! ALL PACKAGING SOLUTIONS GREGORY MORRIS Vice President 29380 John R Rd. Madison Heights, MI 48071 Phone: 419-236-6125 www.allpacks.com firstname.lastname@example.org ATLANTIC CORRUGATED BOX COMPANY EDWARD D. BARLOW II President 1701 Ruffin Rd. Richmond, VA 23234-1830 Phone: 804-231-4050 Fax: 804-231-4227 www.acbc-inc.com email@example.com BENEFITS EXCHANGE ALLIANCE MICHAEL HAND Senior Vice President and General Manager 100 Corporate Pointe #210 Culver City, CA 90230 Phone: 310-251-8436 www.bxall.com firstname.lastname@example.org CARDINAL CONTAINER CORPORATION MIKE MARCUM Vice President 3700 Lockbourne Rd. Columbus, OH 43207 Phone: 614-497-3033 Fax: 614-497-3335 www.cardinalcontainer.com email@example.com
BOXSCORE July/August 2017
CST SYSTEMS INC. TERESA BRETTSCHNEIDER Operations 1590 N. Roberts Rd. Kennesaw, GA 30144 Phone: 770-425-3353 Fax: 770-425-3304 www.cstsystems.net firstname.lastname@example.org E. SMITH BOX INC. EDDIE SMITH Owner 1875 Rockdale Industrial Blvd. NW Conyers, GA 30012-3939 Phone: 770-593-4961 Fax: 770-981-2190 www.esmithbox.com email@example.com EKO EMPAQUES DE CARTÓN S.A. DE C.V. SERGIO MENCHACA FLORES Director General Carretera Panamericana Km 1 Cortazar, Gto. 38300 Mexico Phone: +52 411-155-0322 Fax: +52 411-119-0300 www.ekoempaques.com firstname.lastname@example.org FLEXI-VEL, S.A. DE C.V. ANA KAREN RAMÍREZ LÓPEZ Coordinadora de MKT y Diseño Carnicerito No. 25 Lomas de Sotelo 53390 Naucalpan, Méx. Mexico Phone: +52 55-50959015 Fax: +52 55-50959010 www.flexi-vel.com.mx email@example.com
GENCORR PACKAGING VINCE BARATTA Managing Director 12520 Lombard Lane Alsip, IL 60803 Phone: 630-797-8874 firstname.lastname@example.org GREENE HOUSE GROUP FRANK GREENE President 407 W. Imperial Highway, Suite H Brea, CA 92821 Phone: 714-939-8450 www.greenehousegroup.com email@example.com HYACINTH FINE PAPERS (USA) INC. FRANK CAI CEO/President 2805 E. Via Terrano Ontario, CA 91764 Phone: 949-232-5098 Fax: 949-709-2689 www.hfp-usa.com firstname.lastname@example.org ICASA CARLOS E. CANTÚ GONZÁLEZ Gerencia General Av. Rodrigo Gómez 1753 Norte 64190 Monterrey, NL Mexico Phone: +52 81-8-370-6050 www.icasa.mx email@example.com
INSPIRE AUTOMATION RANDALL LORENZ CEO 2911 Apache Drive Plover, WI 54467 Phone: 608-280-1725 firstname.lastname@example.org JAMAR PACKAGING JEFF HEISE President 1331 Howard Drive West Chicago, IL 60185 Phone: 630-293-1017 Fax: 630-293-1041 www.jamarpkg.com email@example.com MAQUINARIA BOIX MEXICO S.A. DE C.V. JAVIER FERNANDEZ S. Gerente General Prolongación Oleoducto 105 Int B 37490 León, Gto. Mexico Phone: +52 477-170-0000 firstname.lastname@example.org OKM MAQUINARIA GRÁFICA S.A. DE C.V. RICARDO SCHMIDT Director Ventas Prol. Calle 16 #226 01180 Mexico City, CDMX Mexico Phone: +52 55-5605-3883 www.okm.com.mx email@example.com
PACKLAND LLC ROBERT LUTZ Sales Manager 444 Brickell Ave. #311 Miami, FL 33131 Phone: 305-577-4444 Fax: 305-577-8859 www.packlandonline.com firstname.lastname@example.org PARTITIONS PLUS LLC MIKE LEWIS Co-owner 12517 County Rd. 99 Findlay, Ohio 45840 Phone: 419-422-2600 Fax: 419-422-2603 www.ptns-plus.com email@example.com PHOENIX-VETERANS PRINT BOB PAWLICKI Vice President of Sales 10430 Argonne Woods Drive Woodridge, IL 60517 Phone: 630-410-0260 Ext. 13 Fax: 630-410-0261 www.phoenix-veteransprint.com firstname.lastname@example.org
SÁNCHEZ, S.A. DE C.V. ERNESTO SANCHEZ ARRIBAS Director General Oriente 171 #367 Col. San Juan Aragón 07470 Mexico City, CDMX Mexico Phone: +52 55-5118-1000 Fax: +52 5530672618 www.sanchez.com.mx email@example.com WABASH CONTAINER CORPORATION STEVE BURTON President P.O. Box 127 1015 W. 9th St. Mount Carmel, IL 62863 Phone: 618-263-3586 www.wabashcontainer.com firstname.lastname@example.org ZÜND AMERICA INC. JOHN COTE North American Sales Manager 5068 W. Ashland Way Franklin, WI 53132 Phone: 414-433-0700 Fax: 414-433-0800 www.zund.com email@example.com
Photos courtesy of AICC
DISRUPTIVE TECHNOLOGY: DIGITAL PRINT SUMMIT A SUCCESS IN LOUISVILLE
Attendees enjoyed networking at “Downs After Dark.”
AICC Directors Eric Elgin, Oklahoma InterPak; Finn MacDonald, Independent II; and Justin Mathes, Vanguard Companies, hosted the Summit.
BOXSCORE July/August 2017
he 70 members and guests who attended AICC’s “Distilling the Digital Print Market” symposium, June 16–17 in Louisville, Ky., heard from independent market experts, digital press manufacturers, and digital technology users. The speakers from these distinct viewpoints told a story of a technology that is rapidly growing and whose application is expanding traditional packaging markets. One message delivered early on in the presentations was that digital printing is not just another way to print. “If we make digital all about just printing a box, we’ve killed it,” said Jeff Wettersten, a principal in Karstedt Partners. “Digital is a disruptive technology which is fostering growth in parallel packaging markets.” Wettersten was the lead-off speaker at the Bardstown Country Club, about an hour outside of Louisville. His presentation offered what meeting host Finn MacDonald of Independent II called
Digital print suppliers shared their knowledge during a panel discussion and tabletop trade fair.
a “30,000-foot view” of digital printing technology and its growth in recent years. Wettersten told the audience that his first presentation on digital printing as a market force occurred back in 2001, reminding members that its meteoric rise in the industry is not as recent as many think. “Capacity in the digital print market is expected to double in the next 18 months,” he said. Wettersten focused his presentation on the kinds of markets and sales strategies that independents might choose to pursue with digital technology. “Products which are ‘emerging’ or at ‘end of life’ offer the best opportunity for application of digital printing,” he said. He also advised members to conduct a thorough analysis of their customer base to identify their “strategic accounts,” “core accounts,” and “discretionary accounts,” saying that applications of digital printing are most effective in the discretionary accounts,
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posed by moderator Kevin Karstedt of Karstedt Partners. MacDonald explained that his own company, Independent II, had not yet made the leap to acquire the technology, but was using outside digital print vendors to achieve his immediate objectives. “We want to move from brown to brand to digital,” he said, adding that his company’s first goals are to understand the marketing requirements of brand owners and their need for color consistency and brand fidelity. In response to questions about cost comparisons, Lacy displayed a chart showing the relative direct costs of jobs run digitally and those utilizing lithographic labels. The conclusions reached by the panel suggested that members who have not yet acquired the technology can avail themselves of trade printers such as Tango Press and Color Hub to first test their markets before making a major investment in digital technology. Following the day’s program, members toured Barton Distillery in Bardstown,
Ky., and later attended the “Downs After Dark” events at Churchill Downs. “Distilling the Digital Print Market” was a nationally advertised event jointly hosted by AICC Regions 7, 4, and 3. Regional Directors Finn MacDonald, president of Independent II, and Eric Elgin, president of Oklahoma Interpak, welcomed members to the Louisville Marriott Hotel. Justin Mathes, vice president of Vanguard Companies, also a co-host, was unable to attend. “Just as digital print is a disruptive technology, AICC is taking a disruptive approach to our traditional regional meetings and making them larger and more content- focused,” said MacDonald. “This digital print symposium is an example of how AICC is changing the way it delivers content to its membership.” Sponsors of the event were Automatän; INX International; Independent II; Equipment Finance Corp.; Vanguard Companies; HP; American Corrugated Machine Corp.; BW Papersystems; Oklahoma Interpak; and Haire Group.
Photos courtesy of AICC
which are not legacy volume-dependent customers. “Above all,” he cautioned, “stay true to who you are,” adding that members can partner with trade vendors as good resources to “dip your toe in the water.” A panel of digital printing press manufacturers followed Wettersten’s presentation. William Webb of Zünd North America; David Carmichael of Sun Automation; Steve Shannon of HP; Steve Lynn of Fujifilm/Inca; Barb Willans of EFI; and Garrett Bradley of Gemini North America/Barberán all gave brief presentations on their products. Carmichael set the stage for the suppliers’ panel, saying, “As much as we all want our technology to succeed, we want your business to succeed.” Balancing out the digital press manufacturers was a panel of digital printing users. In an open-ended panel discussion, Finn MacDonald; Tim Harris of Color Hub; Bernie Lacy of Litho Press; John Ballentine of Tango Press; and Jeff Wettersten answered questions
Attendees learned the science and art of making bourbon during a tour of the Barton 1792 Distillery.
BOXSCORE July/August 2017
They also enjoyed a bourbon tasting.
The 1st word in
In corrugated converting, the paper board has a huge impact on printing quality. Pamarco provide detailed advice on anilox selection, which guarantees 100% consistency of print, for all your paper boards. ~James Chesley Technical Sales Engineer
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OLD CORRUGATED CONTAINERS — AN OVERVIEW AND PRIMER BY RALPH YOUNG
he most recent update on the large subject of recovered paper by the American Forest & Paper Association, May 10, can be found at www.paperrecycles.org/statistics. While “waste” would not be glamorous for most of us, since we do not consider it a primary product, it is a significant business; domestic OCC collection makes it the most recovered and reused material in the U.S. We are the most desired global exporter of used corrugated cartons because of the excellent quality of the inclusion of long-fiber Southern pine in U.S.-produced linerboard. The top five countries for exports of U.S. OCC are shown in the chart below. Total collection of OCC in the U.S. approaches more than 32 million tons per year. This translates to a 92 percent recovery rate. Domestically, International Paper and WestRock are the largest purchasers of OCC. The U.S. containerboard system uses about half of the OCC collected, and one major mill system uses up to 75 percent mixed office waste in its furnish. OCC is one of several categories under the broad umbrella of recovered paper, which also includes double-lined kraft WORLD
ALL OTHER (50)
Sources: RISI, Global Trade Information Service, Bill Moore, AF&PA
corrugated (clippings), mixed paper (China again receives about 51 percent of the 7.8 million tons exported), old newspapers, sorted office papers, hard white envelope cuttings, sorted white ledger, and coated groundwood sections. Prices are published monthly in RISI’s Pulp and Paper Week. The wide swings in pricing for this product are really well-covered in trade publications and with security analysts because the rapid upward advances in prices, and the speed of that upward movement, is usually the prime consideration for containerboard price announcements. But these wide swings have been greater than the tide movements at the Bay of Fundy. There was a $50 per ton price run-up in March and now a $35 decline. We have seen a $100 per ton increase in domestic containerboard since the fall of 2016, but now only an average realized OCC price increase domestically of $38 during that same period. In the U.S., the average recycled content of containerboard is about 46 percent, so you do the math! Export and domestic prices operate separately, as do containerboard prices and inventory levels by U.S. containerboard producers and Chinese mills. China appears to have been burned by less-than-stated quality levels and is instituting higher standards for incoming shipments. The National Sword is a Chinese inspection program on mixed waste, not OCC. In North America, quality is also an issue. Cascade states that Canada uses a single-stream system vs. the U.S., which mostly operates a dual recovery system. Canada also
AICC members have unlimited access to technical answers from Ralph Young, corrugated technical advisor; Tom Weber, folding carton technical advisor; and Doug Friel, safety and risk management advisor. Learn more at www.aiccexperts.org.
is constrained by extended producer responsibility programs. Reject rates differ between the two countries, with the higher rate in Canada being a possible reason Kruger’s new Trois-Rivières mill is the first in North America to install five-stage cleaning. OCC material generation may change slightly going forward as e-commerce grows. Most OCC collections are at big-box stores that see the product for its cash value. While I keep informed of these movements daily, you may just opt for your monthly electronic edition of Scoring Boxes, which shows up in your inbox the middle of each month as a benefit of your membership in AICC. Look at the chart comparing OCC and linerboard pricing over the last 10 years to see how they relate one to the other, please! R alph 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 email@example.com.
CONSIDER ALL OF THE OPTIONS BEFORE YOU DESIGN YOUR NEXT AICC PACKAGING AWARD WINNER! BY TOM WEBER
aperboard packaging designs can certainly be developed to meet the top three design conditions below: • Win any number of well-publicized major industry awards and proudly let it represent you. • Meet your customers’ marketing and marketplace demands, and make the package profitably. • Be kind to your operations team from both a supply chain and key manufacturing standpoint. This is what I refer to as the “trifecta of design”! First and foremost, how do we accomplish these wonderfully creative designs for our key clients, and win awards? You need to ask the client and your sales team some very basic—but essential—questions, in order to properly prepare your designer(s) to “do battle” on your clients’ behalf. The ones listed below are my “dirty dozen,” and there are others that I am certain should be added: • What is the package style and structure? • What are the critical package dimensions? Why? • How many colors (topside/inside)? • What type of coating(s) (functional, appearance, combinations)?
BOXSCORE July/August 2017
• What specialty applications may be used (foil, emboss, deboss, reverse cuts, etc.)? • What type of adhesive(s) will be involved in manufacturing, final package filling, and in what specific package locations? • What is the substrate and caliper of choice (SBS, CNK, CRB, microflute, hybrid, etc.)? • What is the desired finished pallet/ packing case size/weight? What are the transportation and distribution network considerations? • Is there a budgeted cost/acquisition price, and are multiple materials being considered? • What is the timeline for initial design submissions and ultimate completion? • Are there mechanical packaging requirements that must be considered, and what is the desired functionality of the perfect package design? • How will the success of the new package design be measured, monitored, and communicated? Secondly, how do our clients view their market(s), and what must we consider as options on their behalf … in advance of any design work? • Research. Have we done our work to fully understand our client, their
competition, the end-use packaging consumer, and lastly, how we may resolve these with a particular design strategy? • Visualizations and concept renderings. Have we had an appropriate number of design strategy sessions to create our internal options as a result of our team investigation? Can we “narrow it down” to the most creative, logical, and cost-effective solution(s)? • Color renderings and CAD samples. These should be fully vetted internally against all design criteria garnered, and then utilized for initial client presentations. • Prototyping to create the final “talking dogs” for a full marketing and client presentation. These will, in many cases, be fully mocked-up, digitally printed, coated, CAD cut/ scored, and glued packages that will be presented to the client’s end user … the retailer or club store, for example. • Customer approval occurs after a concept is selected, and the design is finalized through a cooperative effort between your creative team and the client. • Production … hurrah! At this point, all preparation turns to full manufacturing of the final approved package.
START SAVING YOUR SAMPLES! Categories for Corrugated, Folding Carton & Rigid Box Members
Held in conjunction with the AICC 2017 Annual Meeting in Las Vegas, Nevada Since 1981, AICC has been proud to distinguish, showcase, and reward independents’ who have met and exceeded their customers’ expectations of their packaging designs and displays. There is a category for everyone to compete in, and to receive the recognition they deserve for creating and manufacturing global packaging solutions. As always, competition will be intense for the Industry’s People’s Choice Award and the prestigious Judges’ Choice Award.
your company’s creativity, innovation, and excellence in package design and production capabilities!
Recognize the people behind the scenes who help to manufacture your best packaging designs including your employees, customers, and suppliers!
Enhance the independent box plant manufacturers’ level of professionalism in the industry! Competition Registration Will Open June 2017 at www.AICCbox.org/pdc
AICC • 113 S. West Street • Alexandria, VA 22314 USA • (703) 836-2422 • www.AICCbox.org
AICC members have unlimited access to technical answers from Ralph Young, corrugated technical advisor; Tom Weber, folding carton technical advisor; and Doug Friel, safety and risk management advisor. Learn more at www.aiccexperts.org. All AICC online education is included in membership and available to all employees at member companies. Want to better understand the basics? Check out Packaging Foundations and Paperboard Cartons. Learn more at www.aiccbox.org/thepackagingschool.
Lastly, what might you expect to see if you have indeed created a package design that “knocks it out of the park” for your client? • A compelling shelf impact for their brand(s) with a new package that breaks through the shelf clutter and increases sales, in a meaningful and measurable way. • Consumer appeal with specialized attributes that you have specifically designed, that compete effectively and efficiently against their toughest competition, and possibly store brands as well. • Brand identity that will support repeat sales and stand the test of time. • Cost savings that have been designed and developed into the package
design right from the research inception and concept stages. • Time savings that you have created through a process that you own and have personally developed to support your client’s concept to commerce strategies. Let the packaging design and development opportunities come forth. You and your client are ready to win! Tom Weber is folding carton advisor for AICC. He can be reached at firstname.lastname@example.org.
Know-how makes your business, our business. Providing equipment financing to the corrugated industry for over 15 years. At People’s Capital and Leasing Corp., we offer: • Capital access for new/used equipment • Corrugated industry expertise • Comprehensive financial resources Our industry knowledge and understanding of your business can give you an edge in the marketplace.
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203-591-2703 • Kevin.Hartney@peoples.com
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BOXSCORE July/August 2017
Thank you Education Investors These companies are making a signiﬁcant contribution to the online education available to all AICC members.
Become A Partner in Education Education Investor Program We invite you to partner with AICC as an investment to your company and the industry. Becoming an AICC Education Investor allows your company to be a thought leader in the industry. The Education Investor opportunity is available to 15 AICC member companies for $15,000, each. It is an annual commitment that oﬀers companies: Involvement: • Opportunity to provide educational content, including videos, white papers, and other course materials for online courses. Promotion: • A commercial included in an online course Recognition: • Company logo on AICC online courses • Company logo included on “Thank you” page in each issue of BoxScore • Company logo included in National Meeting deck • Company name listed in course description of all AICC online courses • Company name included in emails speciﬁcally promoting online courses For more information, contact Mike D’Angelo, Vice President, at 703.535.1386 or email@example.com.
WHY SALES MANAGERS FAIL AT COACHING BY ROBIN GREEN
n working with sales teams, I’ve found that managers typically spend less than 10 percent of their time coaching. Much of their time is spent managing sales metrics. Often, they view the formal performance review process as their No. 1 form of coaching. They supplement this once- or twice-a-year meeting with casual conversations. Coaching, unfortunately, is seen as an added burden to an already overwhelming workload, so managers focus their time on problem- solving activities. Coaching does add to the manager’s workload in the beginning. It takes
time to gain traction with the process. However, in the long term, coaching greatly reduces the managerial workload. It has a significant impact on sales force development and leads to greater performance from your team. The biggest challenge is how managers view their role. Too many salespeople see their manager as the CPS: chief problem solver. This focus on problem-solving prevents sales managers from fulfilling their true mission of developing the sales team. Unfortunately, managers usually accept this role and consider it a part of their job description. They spend their
time focused on the “problem of the day” and leave little time for the development of the individual team members. This creates an environment of “learned helplessness.” If managers were to ask the question “How would you solve the problem if I weren’t here?” they’d find the salespeople usually have the answers and could act on their own. Why Do Managers Fail at Coaching? Every manager can develop the skills needed to be a great coach. But many lack the willingness to commit to the action plan necessary to help their salespeople
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grow and develop. I’ve found that most managers have little formal training for their role. They were the best salesperson, and one day they were asked to lead the team and “teach them to do what you do.” Sometimes, they are simply overwhelmed with the operational, day-to-day troubleshooting environment that they have created. Being a great sales manager is more than tackling the “problem of the day.” It’s more than using authority as a club and pushing people toward success. This approach leads to creating a mentality where people do what they are told when they are told to do it— and they underperform. By spending more time in a coaching role and less in a supervisory role, managers can have a significant impact on the results their team achieves. But it takes a strong commitment, and it’s not without challenges. Common Pitfalls to Being a Better Coach To propel salespeople past self-imposed barriers and to help them be more self-sufficient, there are some traps to watch out for. UNCLEAR OBJECTIVES FOR THE COACHING SESSION
Each coaching session must have a solid, meaningful agenda that both parties agree to achieve. There needs to be an apparent benefit to the salesperson. They must see how completing the agenda will have a positive impact on them.
POOR FOLLOW-UP ON THE SESSION
Unless the manager and the salesperson commit to the necessary follow-up, the session will not be successful. The commitment should be unconditional. It should have immediate review points to make sure the salesperson stays on track.
COACHING ALL SALESPEOPLE THE SAME WAY
Each salesperson is unique. They have different experiences and filters that impact the way they go about their selling interactions. Coaching is not a “one-size-fits-all” world; it requires a customized approach.
L ACK OF TRUST
Meaningful growth cannot happen in the absence of trust. If there is not a high level of trust between the manager and the salesperson at the end of the first meeting, the manager should explore why this is the case. TOO MUCH TIME SPENT FIXING
Managers who habitually respond with “Here’s what I’d do if I were you,” or some variation, are not coaching. They are not helping the salesperson grow, and it creates an environment that lacks self-sufficiency and accountability. In such situations, the salesperson proceeds to do what the manager tells them to do, and if it doesn’t work, the accountability lies more on the manager. Salespeople cannot grow in this environment. TOO MUCH TIME SPENT TELLING
Managers, by virtue of their position or experience, often feel as though they must have all the answers. They spend most of their time telling people what they should do. Instead, managers should learn to ask strategic questions that are designed to help the salesperson uncover the answers on their own, think differently, and become more self-sufficient.
Robin Green is the president and owner of Ascend Performance Inc., an award-winning Sandler Training center in Richmond, Va. After a long and successful career leading sales teams for large organizations, he now works with a variety of companies to help them implement proven, reliable systems in the areas of sales, management, leadership, and customer service.
Robin Green will be presenting the following webinars on sales this fall: • The Four Roles of a Sales Manager — Tuesday, Sept. 12 • Staging Effective Sales Meetings — Tuesday, Sept. 19 • Grow Revenue Through Effective Coaching — Tuesday, Oct. 10 For more information on these webinars, as well as other AICC online education, please visit www.aiccbox.org.
PACKAGING DESIGN FOR MILLENNIALS AND BEYOND BY JOHN CLARK
othing is as consistent as change. And while change is around us continually, the pace of change facing the next generation of leaders in the packaging industry will make today’s pace of change feel downright glacial. Every generation thinks differently. Your grandfather probably never dreamed he could own a car. Your father was a hot-rodder and was not afraid to stick his nose under the hood. You were into muscle cars and performance, but you purchased power rather than investing sweat equity to increase performance. But your children, the next generation of decision-makers, don’t even want to own a car. They can get from place to place using Uber. They are turning a sunken cost into a marginal expense. The next generation sees transportation as a utility rather than a lifestyle. Your father’s generation of uniformity and your generation’s entrepreneurism are being tossed aside for groupthink and infinite customization to a consumer base of one. For better or worse, they just see the world differently than their parents did.
Same, but Different Think of the shopping experience over the last four generations. Your grandparents ordered from the Sears catalog. Being able to purchase from a catalog offered many more choices than the local general store, and at a much lower cost. Packaging was an afterthought. Your parents shopped at the first generation of shopping malls that resulted from suburbanization. They were influenced by what they saw on TV and assumed
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the printed box they brought home contained some semblance of what they expected. You shopped at smaller specialty stores that catered to your particular tastes, and the packaging and displays played a critical role in your decision. You were conscious of “brands” and trends, and stores were staffed with knowledgeable professionals who understood your tastes. Your children order from Amazon.com, and it shows up in a brown box from UPS. It may or may not fit, but it can always be returned. Based on these observations, there are five major trends that will dominate the future of packaging solutions. Each of these will be implemented in ways yet unseen, but we can make some general observations and comments. The Death of Retail Real estate is expensive, and it represents dead money. Shrinking workflow and logistical demands can reduce costs and increase efficiencies. The hollowing out of major cities in the 1970s will repeat with malls and traditional purchasing patterns crumbling. Any retailer that does not plan to become virtual and logistical is in trouble. Any packaging company not helping their customers become virtual is in just as much trouble. It’s Digital or Dead Digital printing is here. While more and more plants are taking the digital plunge, few companies have a comprehensive strategy for the future. You will make large investments with larger risk than ever before. And by the way, the lifespan
of digital equipment will be a less than the machine(s) replaced. Analytics-Driven Solutions Analytic tools will help tie everything together, from who performs on the factory floor to understanding the changing purchasing and products you supply. There is an old saying that fortune favors the bold. Today, fortune favors the astute, who are investing heavily in analytics. Personalization/Customization With today’s digital technologies, there is no compelling imperative for mass consumption when you can tailor a solution for your clients. Imagine digitally printing corrugated boxes with each having a unique personalization. Augmented Reality Millennials are enamored with virtual reality. Millions turned out a few years ago to chase Pokémon characters that existed only in the ether. Presenting packaging designs in 3-D motion, making changes on the fly, will be the new norm. Final Thoughts Hugh E. Keough once wrote, “The race is not always to the swift, nor the battle to the strong; but that is the best way to bet.” Like it or not, you are going to make big bets that will affect the viability of your company. Bet smart. John Clark is director of analytics at Amtech Software. He can be reached at jclark@ amtechsoftware.com.
DESIGNING A DIGITAL EXPERIENCE BY MIKE NUNN
ack in 2012, Ideon Packaging ventured into the digital world with the purchase of an HP Scitex FB7600 press. We have since upgraded to HP’s 15500 corrugated press, complemented by two ESKO Kongsberg (XP and XPA) cutting tables. With the addition of digital, and being an early adopter of the technology, we have been able to carve out a new market in our local packaging industry for digitally produced packaging and POP solutions. In a recent article on Ideon’s digital print capabilities, our President and CEO Rick Van Poele explains that “with digital, we are able to design and deliver a highly customized mock-up POP display before we even meet with the customer, so it’s completely ready for them to see when they come in.” Rick goes on to say that “most brands have realized package design needs to be dynamic to entice customers, but many are now realizing that the concept has to extend to a memorable and unique POP display, in order to engage with the customer on a personal and emotional level.” Designing an experience is likely the most impactful element that digital brings to our business, and it also happens to be one of the primary deliverables of design for any product or service. Whether through variable print or data within an order, changing structure or graphics without additional tooling costs for the customer, or being able to do test or soft launches without sacrificing brand imaging, Ideon can create a brand experience for our customers—and their customers—that they get excited about. Think back to the groundbreaking
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Designing an experience is likely the most impactful element that digital brings to our business. products we have seen in recent years; they were all cases in which the experience created by the new product had not existed previously and broke customers’ existing paradigms—the iPod to music and Tesla Model S to automobiles, to name a couple. Digital allows us to do the same with packaging on a rapid and repeatable scale. Design-driven sales is an extension of designing an experience. Our design team regularly partners with our sales team to target certain customers and create a POP display that is a complete shift from what they’re currently getting. Our structure and graphic teams are given creative control to create a “wow!” experience. In some cases, we’re in a competitive situation, and in others the customer is not currently buying POP due to legacy paradigms. In either scenario, we come in with a full-production prototype, and customers instantly understand how they can benefit from digital. In some cases, potential customers have placed orders for the exact prototype our design team created. We brought them something they didn’t realize they wanted or didn’t know was possible. A shift in paradigms and educating the market has been one of the bigger hurdles for us. Externally, we have needed to educate customers on the advantages and benefits of digital compared to what they previously thought was possible,
open their understanding to letting their imaginations run wild from one order to the next, and engage marketing departments in the sales process. Internally, the design process itself is a lot different than in traditional corrugated, with electronic workflow and rapid version control needing to be a focus. I would be remiss if I didn’t put a lean spin on this digital topic. Granted, digital is not for everyone, and like all packaging solutions, digital has its fit. But in the area of small- to medium-run POP, container variations, and other forms of packaging, digital will help reduce waste for the benefit of your customers. • Reduced or eliminated inventory— buying exactly what is needed, no more tooling (good for you and your customer). • Reduced waiting—shorter production lead times. • Increased value—Superior print quality over flexo, stock, and other short- to medium-run POP options. Mike Nunn is vice president of operations at Ideon Packaging and is Lean Black Belt-certified. He can be reached at 604-524-0524 or miken@ ideonpackaging.com, or followed on Twitter @mikednunn.
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TEACH JUDGMENT BY SCOTT ELLIS, ED.D.
ules are made to be questioned. Questioning and testing the rules is how we learn the guidelines and guardrails in life and work. The development begins when we expect unquestioning obedience and learn to live with disappointment. We make these rules to keep people safe and productive, and we find that the ability and willingness to comply really requires understanding the why behind the rules. Those who are dependent on rules to govern behavior must be hypervigilant in monitoring for compliance. It is a drain on patience, productivity, and the retention of team members. Most of us are resistant to rules in general, and to those that appear arbitrary in particular. In many cases, our rules, in the form of policies and standard operating procedures, are created reactively to prevent the reccurrence of a costly mistake. We mandate that product for a certain customer should be triple-checked, thinking we can inspect quality into the product rather than teaching people to build quality into the process. When we do this, we make our own jobs more difficult; what we really desire is that people would exercise judgment. The problem is that teaching judgment requires investment of time and attention. People who exercise judgment are highly valued because they take on responsibility for outcomes rather than tasks. They adapt to changing conditions with methods that align with the company’s values and strategy. These people want to be trusted with responsibility and authority that will challenge them and advance their careers. When we invest the necessary time training and providing graduated degrees of
BOXSCORE July/August 2017
responsibility, they have the opportunity to practice judgment. As they develop prowess, their jobs get more engaging, and their mentors are freed to focus on higher-value activities fitting to their level of experience. We miss these benefits when we address the lowest common denominator and respond to noncompliance with rules alone. People fail to comply because they are either incapable, unwilling, or inexperienced. If we are incapable, it may be a matter of personal limits. I may be a highly motivated printer, but the challenge of my colorblindness is career-limiting. If we are unwilling, it may be due to a contrary nature. Americans’ pioneer spirit admires those who question authority—we probably ask for the reasons behind a rule more than any other nation. Unwillingness is also characteristic of an entitled percentage of the workforce that believes employers hold unfair advantage and that resistance to authority is a virtue. It is those who lack experience who deserve our investment in teaching judgment. Each day we neglect opportunities to develop judgment in our team members. To reverse this, I will recommend a number of strategies. First, if we are to succeed in becoming a learning organization, an incubator of judgment, we must do it intentionally. This will require us to show our work, as the algebra teacher said. It is not enough to plan in private and get the right answer. People will develop their own decision-making as they see your process and get involved. A second valuable opportunity is learning from every win and loss. Author Jim Collins called this discipline the “autopsy without blame.” It is a simple protocol
requiring self-control and paying huge dividends. In the AWB, the team reviews the positive and negative results while temporarily dismissing the rank involved in the hierarchy of the company and honestly addressing four simple questions: was our objective, or what 1 What was supposed to happen?
2 What happened? was the positive 3 orWhat negative disparity? 4 What can be learned? With this simple method focused on what happened rather than who did it, we can more effectively replicate winning means and prevent the reccurrence of losing methods. Development of standard operating procedures is completely ineffective when done without input from the people who will use them to guide their behavior. Rules that are made in isolation without user understanding and involvement will, at best, result in compliance in the presence of authority (e.g., I drive the speed limit when I sense the presence of law enforcement). If we want people to do the right thing when no one is looking, they must first share our goals. When they work together to establish an our way rather than the company way, the likelihood of best practices becoming common practices increases dramatically. Clarifying flowcharts of decisionmaking on key processes requires trust and time, but the task is well worth the effort. In many companies, tasks such
as pricing or machine routing are a bottleneck because only a few people are qualified. This constraint can be removed with the investment of an afternoon in front of a dry erase board with those who currently do the task and those we would like to train. Using the example of machine routing: Begin by flowcharting your approach. What question do you first ask when presented with a project? If question one is carton style, then what options does the company have in converting this box? The subsequent questions regard panel size, or number of print colors, or substrate, until the questions
are exhausted. The IF/THEN flow is then prioritized and reordered. The resulting decision tree will be a guide that will allow 70 percent of routing to be done by the trainees. The final box on the decision tree will be IF yes, then route accordingly; IF no, call me. It is a blessing when we hire a person prepared to exercise judgment. Rest assured, they did not arrive on the planet with any better judgment than did you and I. If they have not developed the wisdom and skills of experience though the investment of parents, teachers, drill sergeants, coaches, or past employers,
then I recommend the above strategies. Cultivation of these skills will grow your leadership and your company. Scott Ellis, Ed.D., is a partner in P-Squared (P 2) focused on leadership and process improvement. He co-authored AICC’s Welcome on Board and recently released Changed People Change Process: Build a Continuous Improvement Culture Where People Act Like They Own the Place. He can be reached at 425-985-8508 or email@example.com.
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BOXSCORE July/August 2017
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AICC INNOVATION ........................................ 33 TECHNOLOGY ................................................... 34
BOXSCORE TIPS, TRICKS, AND SOLUTIONS TO BETTER BUSINESS
RENEWAL SEASON: NEW GENERAL MEMBER DUES STRUCTURE EXPLAINED
enewals for the 2017–2018 membership year have begun, with a strong start with 225 AICC member companies renewing in the first few weeks. This year, in addition to adding all AICC online education to the member benefits package, AICC has also expanded the number of advisors available to you with Tom Weber, folding carton technical advisor, and Doug Friel, safety and risk management advisor. They build upon the support Ralph Young has offered to members for more than a decade as our corrugated technical advisor. In the coming year, AICC will host two national meetings, several “supraregional” meetings, called “summits,” as well as ongoing in-person education and training
programs in production, sales, and executive disciplines. To accomplish these goals, AICC’s board of directors has recently approved a restructuring of general member dues to a “dollars-per-unit-of-sales” model. This simplified model will do away with the many tiers of dues and will assess your company as follows: • Minimum dues: $1,500 • Up to $50 million in sales: $135/ million in sales • More than $50 million in sales: $80/ million in sales • Maximum dues: $25,000 AICC’s membership value has grown exponentially in the past years and will continue to deliver at ever-higher levels going forward.
US General Members Total Sales $50M or less $_______ (annual sales in millions) x $135= _______* Example, if your company’s total annual sales are $23M: 23 (annual sales in millions) x $135= $3,105 _______ _________ *Minimum dues are $1,500.
Total Sales more than $50M $_______ (annual sales in millions) x $80= _______** Example, if your company’s total annual sales are $175M: 175 (annual sales in millions) x $80= __________ $14,000 _______ **Maximum dues are $25,000.
Good for Business
HOW TECHNOLOGY DRIVES INNOVATION: DESIGN AND SPECIFICATION COLLABORATION
ow much time does your team spend creating new and innovative designs compared to searching for historical designs, answering client questions, and making sure everything is correct? Proactive design drives revenue and saves money. However, if you are like most packaging companies, then your team is spending more time on administrative tasks and not enough time on proactive design. If the bandwidth of your designers is maxed out, then the traditional strategy is to try to optimize your process by hiring more people. A lot of time, effort, and money are being poured into these people-driven supply chain improvements. We aren’t seeing dramatic change because we have not solved the core issue. The core issue is managing the DNA of packaging—the design and the specification. Bad specs = bad everything. The most cost-effective way to increase time spent on proactive design and innovation is to eliminate the waste created by bad specs. Perhaps it is time to look into technology to solve this conundrum. Specifically, it is time to look into a software tool that promotes collaboration between packaging companies and customers. Many longtime industry professionals believe that the software portal route has been tried with minimal success. The issue with existing vendor portals is that they are siloed within an individual vendor-client relationship. This unilateral nature does not promote collaboration, leading to limited usage,
BOXSCORE July/August 2017
especially for larger companies that are expected to use multiple portals. A common platform for collaborating across suppliers on all elements of packaging designs and specifications is an opportunity for packaging companies to enhance their value to customers. The tool must be a value-add for the companies and individuals that are purchasing the packaging. End users should want to utilize this platform. The packaging design is the nucleus of the specification, but the system needs to capture all specification data and files—from structural and print details to logistics requirements, with key information being easy to find and analyze. Everybody in the supply chain is now able to quickly view the same version of a design. Packaging companies currently store their own data sets and files. End users of packaging have some level of data in different systems. This lack of centralization creates concern over what is the correct version and inevitably results in busywork for designers. All parties need a central common platform that invites everyone in to do great things. When this is done, the amount of errors and therefore nonconformances drops, eliminating wasted time and energy for all. So now that all the busy, unproductive work is completed, what else can be done? With a common platform, designs can be shared quickly, new innovative materials
Image courtesy of Specright
BY MATTHEW WRIGHT
explored, sustainability increased, and cost reductions realized. This future is exciting with big data, machine learning, and artificial intelligence. Rather than prolonging the inevitable, embrace it. The packaging industry is a green field to showcase your progressiveness and provide innovative value to your customers through technology. Enable this technology for your end user today, and truly make your value offering unique. Matthew Wright is the founder and CEO of Specright, the spec system for the digital world. Wright has more than 25 years of experience in packaging and has held various operational and management roles with International Paper and TempleInland. While vice president for Temple-Inland, he ran a $500 million business unit. He previously owned and operated rightPAQ, too. He can be reached at firstname.lastname@example.org.
COLORHUB BY VIRGINIA HUMPHREY
COMPANY: ColorHub ESTABLISHED: 2017 JOINED AICC: 2017 PHONE: 616-379-9303
Photo courtesy of ColorHub
WEBSITE: www.colorhubprint.com LOCATION: Grand Rapids, Mich.
ColorHub, a startup digital trade printer for the corrugated industry, is led by (from left) Andrew Harris, Steve Pastoor, and Tim Harris.
hen Tim Harris saw a need, he knew there was room for him in the corrugated market. Partnering with his brother, Andrew Harris, and Steve Pastoor, they researched hard, ran the numbers, tested their model, and founded ColorHub, a startup company that is a digital trade printer, serving other corrugated companies with the latest, greatest technology. They’ve built their business model around a key piece of machinery—the Barberán Jetmaster 1260, a single-pass digital press. It is their flagship and what they describe on their website as being “as fast as a cheetah and as fierce as a hawk.” “Two and a half years ago, I saw a video while researching digital printing,” says Tim Harris. “The single-pass printing press blew my mind.”
BOXSCORE July/August 2017
Harris was then a salesperson for another corrugated company, one he says was not positioned to invest in such technology. His background was economics and math, and he describes himself as a big numbers guy. So, he pulled out a napkin and started chicken-scratching numbers on it to see if it was feasible. “I started developing financial models around it and never got to the point where it didn’t work,” says Harris. “And that is what brings us to today—two and a half years later.” Harris presented his business plan to Pastoor, the man who would become the operations guy—the COO. “I took it home and reviewed it for a couple weeks and tried to poke holes in it, tried to figure out if I felt it was valid or not,” says Pastoor. “Then we
FOUNDERS: Tim Harris, Andrew Harris, and Steve Pastoor
came back together and developed it a little further. I was introduced to Andrew, and we met a few times to make sure we all felt comfortable with each other.” Andrew Harris says their diversity has already proven to be beneficial. In the fall of 2016, they placed the purchase order for their machinery. As of May 2017, they had hired the first handful of people and were just getting up and running and close to being where they could take their first orders. For Pastoor, the Barberán press was the answer to the things he’d wanted to do with packaging in his previous position in the food service industry, but had been stymied at with multiplate presses. “I was extremely frustrated with what I could not do from a packaging standpoint
for the products I was producing,” says Pastoor. When he learned about the single-pass press and how it operated without print plates, it was an immediate light bulb to him. This, he says, is what he needed all along. The ColorHub team visited Bennett (profiled last issue) in Kansas City, Mo., where the first Barberán press was
installed. Andrew Harris says they were fortunate to have the benefit of Bennett's expertise and experience in being the first ones in the U.S. to ever work with Barberán. “We saw the first Jetmaster run, and we were blown away,” says Andrew Harris. “The quality of what you see on it is amazing, and it can print a sheet of cardboard in a second.”
Pastoor says the cooperation he’s seen in this industry has been refreshing, coming from a different industry. “People in this industry strive to help each other,” Pastoor says. “It seems like everyone within this industry is eager to share their knowledge and share their information. They care about each other.” The three made the decision to become a trade printer—to service other
WITHOUT THE RIGHT EQUIPMENT FOR THE JOB, COLORHUB WOULDN’T EXIST “ColorHub is based around single-pass digital printing,” says co-founder Tim Harris. “The rest of our equipment is additional pieces in our toolkit to add value to our customers. But it really is that single-pass digital printing of remarkable quality and true production speeds that make us.” The Barberán replaces traditional offset printing. What does the press do? • It has six colors (CMYK + Orange + Violet) UV ink. • The print heads are 49" wide. • There are unlimited print lengths. • It has 1,000 dpi optical resolution. • It can print 66,000 square feet per hour. Co-founder Steve Pastoor says it was what he has been wanting for years from the packaging industry, and this is the first press that would let him do what he used to want to do with packaging when he was in the food service industry. “If I had several similar products with varying product sizes and wanted to create custom packaging but at smaller volumes, the cost of all the printing plates was really high,” says Pastoor. “It forced you into running maybe one type of packaging and putting labels on that packaging to differentiate sizes and weights. It was never what I wanted to do from a packing standpoint.” Harris says they researched several manufacturers and settled on Barberán as the only viable option at this time. He says it allows customers to change their orders and create custom packaging in any volume without a difference in price. “When I was examining this business initially, I was talking to other companies [about why they don’t invest in single-pass presses],”
says Harris. “Everyone said they would have to invest one and a half million in the press, and now their salespeople don’t know how to sell it, their designers don’t know how to design for it, and they don’t have the art people to handle the prepress side. They would have to invest in all these other areas to justify putting the money down on a piece of equipment like this.” That, he says, is where ColorHub will be able to fill in the gaps. As they grow, he says, they will grow their graphics and structural design capabilities along with their sales assistants and training sites. They can then help their customers sell and design for the Barberán. While the press can do small runs, it is also capable of doing larger runs. “Our focus is the one-piece to 15,000-piece range. We’re already having people asking us to run higher quantities. The 200 to 10,000 is a great range for us.” The Barberán lets ColorHub be on the cutting edge of technology, something Pastoor says is becoming a driving force in the industry. “When we see the capabilities of the equipment we have, it continues to wow us,” says Pastoor. “I think we’re going to really benefit a lot of the small and mid-sized companies to continue to compete against some of the larger ones who might invest in this on their own.” The Barberán Jetmaster unlocks a lot of restrictions as far as the number of colors, the amount of detail in a picture or print, or the size of a run. “We looked at a lot of companies trying to develop a singlepass press, but Barberán is the only company that has been successful so far,” says Andrew Harris. “We believe everyone is going to want to have access to this.”
corrugated companies who did not have access to the type of technology they were going to invest in. “We believe everyone is going to want to have access to this,” says Andrew Harris. Tim Harris says it was important to differentiate himself in the market. He wanted to be cutting edge. He says the three of them analyzed what set them apart. He says there are 10 corrugated companies within 50 miles, and what none of them has is a massive digital press. “We didn’t need or want to be getting into competition with those 10. If they had access to it, they’d love to use it, so ColorHub is strictly for the trade,” says Andrew Harris. “Our customers know we will not cut them out, because we don’t sell to end users. There are roughly
BOXSCORE July/August 2017
eight of these presses in the world. Everyone else purchased it for their own internal use and their own differentiation against their competitors in the market. We purchased it to allow everyone to have access to it.” Their website describes them as dreamers and doers—something all three partners keenly relate to. They want to make sure that their creative spirit is matched with action. “That’s how we put the team together,” says Tim Harris. “I am more on the overall strategy side and the sales side. My other two partners, while we’re all involved in all of it, they’re very good at being the boots on the ground and putting it into action. “We want to be a very tightknit, family-oriented work environment for
us and our team,” says Andrew Harris. “There is a really creative, fun, and supportive environment. Our guiding philosophy is that we don’t ever want to be settled with the status quo. There is always new technology or new software or new ways of doing things that we can learn from other people. We want to always keep advancing the bar of achievement for what makes a good printing company in the 21st century.” Virginia Humphrey is director of membership and marketing at AICC. She can be reached at 703-535-1383 or email@example.com.
2017 Independent Sales Compensation Report Are You Competitive? See detailed information from independent corrugator and sheet plants about base compensation, commissions, bonus structure, beneďŹ ts and more in the 2017 Independent Sales Compensation Report. Regional information is also included.
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BOXSCORE July/August 2017
A DAY IN THE
THESE UNSUNG PROFESSIONALS KEEP CREATIVITY HIGH, COSTS IN LINE, AND CLIENTS SATISFIED By Robert Bittner
lient tours often highlight the biggest and fastest presses, the most eye-catching inks and foils, digital capabilities, turnaround speed, and environmentally responsible practices. But one of the most critical elements in any packager’s list of client-focused features is likely overlooked: the structural and graphic designers who make client-pleasing packaging possible in the first place. These are the skilled professionals who combine creativity with cost-effectiveness in unique designs that define, to an extent, what it means to work with one company versus the competition. When any machine and virtually any process can be bought or acquired by any packager, designers are part of the secret sauce that makes a company’s range of services stand out.
LEARNING TO JUGGLE If any one word describes these creatives, it is multitaskers. “I’m spread across multiple areas all the time,” says Keith Rae, graphic designer at Moore Packaging in Ontario, Canada. “In a typical week, I’m doing everything from designing boxes to putting clients’ ideas onto a package, and handling prepress and production. I also produce some original art, but it’s one of many, many tasks.”
Designers are part of the secret sauce that makes a company’s range of services stand out. For Lori Person, senior graphic designer at Mid-Atlantic Packaging in Pennsylvania, the responsibilities are even more comprehensive. “I consult with the salesperson regularly for the duration of a job. By that I mean maybe I’ll determine how many plates would be needed to run a job so they can pass along a price quote. Or they pass artwork along to me, and I evaluate that. If something comes along further along in a job, like not getting feedback from a customer on a mockup or ink approval, I’d consult with the salesperson. I liaise with the salesperson/ customer and our production team and often transfer information between plate makers and our production team.” This is far from the typical image of a package designer. “Within the independent corrugators community, I’d be considered something closer to an art director, which I don’t think you see that often in our industry. I’m more like a creative director for the art.” At Cardinal Container in Ohio, designer Pat Moreland says, “On a daily
basis, I’m working on four or five different things that have to do with some aspect of design. Anything produced in the plant requires a drawing. Most of my time is in providing those drawings, making sure specs are available for everything that goes through the plant.” In addition to being the company’s sole designer, he is also responsible for ordering some of the raw materials for the plant, including the paper used in Cardinal’s corrugated. The work these designers do day to day is just as varied as their backgrounds. “I came to Mid-Atlantic with only a year of corrugated packaging/POP display experience,” admits Person. “Before that, I spent a couple of years at a label manufacturing company. The job I had in corrugated/POP was through RockTenn. We’d create and render 3-D models, but that was the extent of my knowledge of how a display comes together. I knew about design and had done packaging in school, but knowing the technicalities of it, thinking about things in a 3-D way, understanding how graphics wrap around
Their focus is on finding fresh ways to serve the client and the product through functional and sometimes innovative design.
BOXSCORE July/August 2017
a display—I didn’t really have a good understanding of those things” until she joined Mid-Atlantic. Moreland came to design with an understanding of 3-D, but it was knowledge gained from starting his career as an architect. “Although I’ve been with Cardinal for 20 years, I’ve only been an official designer here for five. I started out in sales. Before that, I sold building materials. My background really was in architecture. In architecture, I had been designing buildings to contain space; now I’m designing boxes to contain material.”
CREATING SOLUTIONS None of these designers is creating original art or client logos on a daily basis. Their focus is on finding fresh ways to serve the client and the product through functional and sometimes innovative design. “I usually start with a creative platform,” Rae notes. “I look at the client’s marketing goals, who the customer is. Then I write up guidelines for what I think will work, based on the client’s budget. These steps are really all for me. They’re just to help me work through the process,
to keep my mind focused on the goals. Often, I’m working with the salesperson, who relays the client’s goals to me. But I’ve met with clients, and sometimes they reach out to me directly with changes or new ideas. “Typically, the first concept for a simple carton is approved with a few minor revisions. For more complex projects, it usually takes a few concepts to discover the ‘big idea’ they are looking for. We usually will send the concept to the salesperson to pitch to the client. With larger projects, the client may be invited here to meet with the designer(s). Seeing the smile crack on the client’s face—or the salesperson’s—when I know I’ve hit the mark is one of the most rewarding experiences as a designer. “The biggest challenge is simply staying on top of everything. That’s been a daily challenge for 17 years. We’re always looking to see what’s new and what can be done to improve our concepts. And our suppliers frequently update us with their capabilities as well as offer tours of their facilities to share their technology. Even though the same issues have been there since day one”—how to serve clients with packaging that protects and, if needed, promotes the product—“our industry is constantly changing.” Moreland’s approach draws on his own background and focuses on maximizing his resources. “When I design, I try to draw on my time in sales and what I saw there. I go in the big-box stores—like Walmart, Sam’s Club—and see what’s being done there. When I’ve noticed that something’s being phased out, I’ve even gone so far as to ask the manager if I can have their floor display, take the example that’s on the floor, and bring it here and pull it apart to see how we can
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“For designers who are just starting out, my advice is to dive in and try to immerse yourself in anything you can.” — Lori Person, senior graphic designer, Mid-Atlantic Packaging
do it better. For a large percentage of what we’re doing, you can’t cookie-cutter a design because there are a lot of hands-on things being done to make the product harder to duplicate or be taken from you by the competition. And then it has to be practical to produce. There are plenty of things I can design, but if we can’t run it here or effectively service it here, then it becomes a conflict.” FINE-TUNING THE TOOLS Person and Moreland both rely on PC hardware, while Rae uses a top-of-the-line Mac Pro. And while Person notes that some people in her department occasionally use Wacom tablets—which accept stylus input for hand-drawing—she, Moreland, and Rae do all of their work with keyboard and mouse. The real power comes from the programs that run on their machines. “We use ArtiosCAD and have the 3-D design builder,” says Person. “We’re also looking at some more graphically pleasing 3-D programs, things that would be nicer to show customers. Artios keeps everything very rigid, and you can’t build organic models very easily. For that, we would look to something like Strata or Blender. There’s also a subset of employees in our department that use SketchUp. I have a good working knowledge of Strata 3D, Adobe Illustrator and Photoshop, and the whole Adobe Creative Suite. I also go into PowerPoint from time to time;
BOXSCORE July/August 2017
we have a marketing team dedicated to customers, so we’re sourcing the files to them, roughing out and sizing for their presentations. I also work off of my Mac laptop at home.” Rae and Moreland also spend the bulk of their time in ArtiosCAD, but Moreland is working exclusively with their 2-D software. “We understand the benefit of 3-D, but staying with 2-D is a financial decision for us,” he explains. “CAD can cost $5,000 to $7,000 a year. For an individually held company like ours, that’s an expense that’s hard to swallow.” He admits that it is not an ideal situation. “The biggest challenge we have [working in 2-D] is trying to fold something together or see how it’s going to fit together on the computer screen. Sometimes clients are sending us images in 3-D that we need to incorporate.” To make sure everything comes together smoothly, he relies on his home Mac, which is equipped with 3-D software. THE BEST PART OF THE JOB For Moreland, the best part of his job is “doing the design and working with design concepts. I enjoy the challenge of every day being presented with a problem and trying to create a solution in corrugated as a medium.” When it comes to less-favorite parts of the job, he says, “It’s a personal hang-up, but I’m not one who deals well with criticism or when you go through
a design process and then don’t have the idea accepted. That’s a minor personal quirk. Most of the rest, I find very interesting. There’s always something new. I’m 57 now, and I’m still getting to do something I enjoy.” Rae echoes some of that when he points out that his favorite part of the job is the constant challenge. “No two days ever look alike. It’s never boring. For me, there’s not really a least-favorite part of the job. It’s a great career, and this is a great place to work. I look forward to coming in and doing great work. And the people here are just awesome.” Person has enjoyed being able to really hone in on her talents and interests, which have, surprisingly, taken her away from basic graphic design. “I’ve been able to discover that out of all the things I could possibly do here, the project management and production end of things is something I’m good at. Being in this company and in this industry—and being with the people I work with, who are great—has definitely brought me a lot further in my character development than I would have expected straight out of school.” For example, “I’m finally comfortable with having to confront and address tough situations diplomatically and respectfully.” FOR DESIGNERS-IN-TRAINING “For designers who are just starting out, my advice is to dive in and try to immerse
yourself in anything you can,” Person says. “I really enjoyed learning about the production end of things, being on press, doing press runs, having a better understanding of where what you’re designing ends up, and all of the steps needed to get you there. In order to stay current and to serve the customer best, I really think it’s essential to keep an eye on what’s out there on the shelves.” Moreland agrees, encouraging new designers to broaden their experience as much as possible. “I was involved in a different field from design,” he says, “and my years on the road dealing with customers and design on a daily basis gave me a different perspective. The other designers we once had here understood the software but didn’t understand the board and the quality of the boards, and what they can and can’t do, how the caliper of the board will be affected going through a die cutter or a flexo. You have to tweak some things in the software to account for that, and only experience will tell you that. I’ve been in a lot of classrooms related to the corrugated industry, but I don’t think I’ve learned as much in them as I did being out in the field.” “It’s definitely a slow build when you get into this industry,” Rae sums up. “Keep your expectations in check. I thought I knew it all coming out of college. But you start at the bottom and work your way through the ranks. You never know it all. It’s a great career to have, and it lets your creative side out. But you’re constantly learning in this job.” Robert Bittner is a Michigan-based journalist and author and a frequent BoxScore contributor.
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THE POWER OF FIRST IMPRESSIONS THE IMPORTANCE OF DISPLAY AND UNBOXING IN YOUR PACKAGING By Kim Brown
BOXSCORE July/August 2017
Photo courtesy of Global Boxmachine
Global Boxmachine's K-7io Rotary Die Cutter can print inside the box.
he primary role of packaging has always been to contain and safely transport a product from point A to point B. The logistical function was center stage, with little consideration for alternative roles the box could play. The retail market and ever-increasing competition for shelf space forced a heightened awareness of the power of packaging to serve in a marketing function. The ability to capture the fleeting attention of the consumer with powerful graphics and intricate displays became a major consideration in brand awareness and growth strategies. There was a clear distinction between packaging plants focused on retail customers and graphics-driven, and those focused on the industrial brown box market. This separation, with very little change, described the box industry for many years. That is, until Apple. Steve Jobs elevated the marketing use of packaging into a branding tool unlike any we had seen before. Apple might not have understood the neurological science behind it, but the company understood the powerful connection it could create among its product, its brand, and its customers. Apple recognized the ability of packaging to act as a presentation of its product. Walter Isaacson’s biography of Jobs quotes Apple’s Jonathan Ive: “Steve and I spend a lot of time on the packaging,” said Ive. “I love the process of unpacking something. You design a ritual of unpacking to make the product feel special. Packaging can be theater—it can create a story.” The perspective that the packaging could create a story for the customer significantly elevated the marketing function it had previously performed. The aspect of product protection combined with graphics to drive awareness had now been replaced with the ability to create an emotional connection with the customer. This shift opened the door to the opportunity to create a powerful first
impression of the product inside. The packaging was now a tool used to support and enhance your brand image in the heart and mind of your audience—or conversely, one that created a challenging disconnect. Many companies would scoff at the idea of still using a website built in the ’90s. They recognize the need in our digital age to be current, visible, and relevant to their end user. Most participate in social media to drive awareness to their brand and traffic to their site. They are wise to understand the critical nature of
for products provided by companies committed to positive social and environmental impact. It is much more difficult to overcome a negative first impression than it is to build awareness. In addition, our internet economy magnifies the residual impact felt once a customer makes an unfavorable decision about your company and their willingness to purchase again. First impressions tend to remain, even when contradicted later by factual information. The message is clear: The powerful roles played by product packaging cannot be
The perspective that the packaging could create a story for the customer significantly elevated the marketing function it had previously performed. these areas in today’s competitive market. The millennial generation is entering their peak buying years, and ordering products through their connected devices is second nature. A report by Business 2 Community states that 63 percent of millennials report staying updated on brands via social networks, while another 46 percent rely on social media when making online purchases. The disconnect to the brand image occurs when the product is received. These companies recognize the need to have a strong online presence, while they are simultaneously packing their product in an oversized brown box filled with dangerous-to-the-environment Styrofoam peanuts and not recognizing the message this sends about their company, their brand, and their values. A 2014 Nielsen study found consumers to have a growing awareness of packaging’s impact on the environment, with 55 percent of global customers willing to pay more
overstated. The right packaging has the ability to tell a story, support increased product awareness, reflect brand image, and drive growth within present and future customers. The complexity of changing consumer lifestyles and purchasing patterns requires a constant vigilance in understanding and maximizing the role packaging serves. THE UNBOXING PHENOMENON The concept of creating an experience for the consumer came along with the belief that they would choose to share it with friends and family. Brand awareness and positive feedback have long been a goal of marketers. “The value of premium packaging extends far beyond the customer experience into residual marketing effects. The experience goes beyond the online order to when the customer actually opens the beautifully wrapped package and shares that experience across
A quick Google search of the term unboxing produces the following:
noun: unboxing; plural noun: unboxings; noun: un-boxing; plural noun: un-boxings an act or instance of removing a newly purchased product from its packaging and examining its features, typically when filmed and shared on a social media site. “You might want to take a look at the first two videos: We’ve included an unboxing, so you’ll see how your smartphone would arrive.”
The message is clear: The powerful roles played by product packaging cannot be overstated.
BOXSCORE July/August 2017
social networks. That act of online and social recommendations drives loyalty from your customers and promotes brand awareness,” says Maria Haggerty, CEO of Dotcom Distribution. The experience of product presentation and the desire of consumers to share this moment with the world grew well beyond what anyone could have predicted, and soon the YouTube phenomenon known as “unboxing” was born. Between 2010 and 2014, the number of YouTube clips with “unboxing” in the headline increased 871 percent. In 2013 alone, 2,370 days’—or 6.5 years’—worth of unboxing footage was uploaded to the site. This trend is not just in the United States; the traffic is worldwide, with participation from locations as far away as India, Sri Lanka, and Trinidad and Tobago. Apple’s drive to create an experience for the consumer has also resulted in their products being the most popular unboxing videos. Competition for these views is fierce, with many companies choosing to upload their own video footage to official
YouTube channels. This phenomenon isn’t just for high-end electronics. Everything from toys to makeup to live animals has made the cut. If you can buy it, an unboxing video of it probably exists. These videos allow shoppers an inside peek at products—one that doesn’t contain retouched images and paid actors, but shows what’s really in the box. People want transparency. These videos are research material for devoted comparison shoppers. It is not wise to simply dismiss this trend as another example of our digital obsession. YouTube watchlists show unboxing videos routinely rank in the top 10 of most-viewed spots, right beside music videos and the latest viral pranks. The reason for the popularity rises above the explanation of our always-connected internet lives. Experts support this claim with examples of kids watching videos of toys being opened and the belief that it provides more of an exploratory learning process—the ability to watch how others are learning about the product. How are they putting it together? How are they using it and playing with it? They contend that this visual foray into others’ imaginations and creativity opens the door to our kids making different connections and expanding their thinking. THE IMPACT OF E-COMMERCE The changing marketplace and massive growth of e-commerce will continue to challenge the most sophisticated manufacturing companies and their packaging partners as the expectations of box performance continue to rise. In 1994, Jeff Bezos introduced the Amazon.com concept, and by 2014 the company reported nearly $90 billion in revenue, with no signs of slowing down. E-commerce has completely changed the way we shop and is reshaping the
The packaging must reinforce who you are, what you’re about, and what message you are striving to convey.
U.S. economy in the process. Countless studies have been conducted, with subsequent articles and reports on the variety of industries disrupted and the vast changes predicted. The impact of e-commerce on well-known, long-established brick-andmortar stores can be seen on the nightly news. These retailers understand that if a product isn’t easily found on the shelf, the consumer will pull out their phone and find it elsewhere, and the retailer will lose the sale. This mandates a shift from low value to servicing the customer again. A local grocer in my market recently underwent a massive expansion. Many more available products, wider aisles, and better lighting were all part of the mix. However, the most noticeable change was the increased number of store employees present in the aisles and wearing neon vests with the words “How Can I Help?” printed on them in bold letters. Most certainly it was an attempt to prevent customer frustration with their ability to easily locate items in their new shelf space and to reduce the number who pulled out their phone to find them in a competitor’s space or online. The growth of online shopping and delivery of these goods will be a major contributor to the growth of the shipping industry, with the U.S. Department of Transportation projecting annual freight volume to increase by 45 percent by the year 2040. We will continue to see dramatic increases in the number of
distribution centers. The way we purchase and consume goods will create opportunities for new industries to emerge. The changing buying behavior of the consumer demands continual innovation in the world of packaging. The e-commerce supply chain is complex. The new shopping trends and evolving retail marketplace put greater demands and expectations on the various roles packaging serves. The structural integrity required to safely transport the product from point A to point B remains at the forefront. The increased handling through the new supply chain places greater challenges on box performance. Providing sufficient product protection through an unpredictable delivery process is a challenge; combine this with the added desire to deliver a strong first impression and brand experience, and it’ll task even the most knowledgeable packaging guru. The structural integrity of the box is only one consideration in package development. A major hurdle facing e-commerce companies lies in their lessened ability to build trust with the consumer. They have lost the opportunity to do this through face-to-face human contact as the brick-and-mortar stores were able to do. There is a continual need to build consumer awareness and deliver a smooth user experience. The ability to deliver the wow experience when the product arrives is where packaging must find the perfect blend of functionality and aesthetics.
PULLING IT ALL TOGETHER The first impression of the package sitting on the customer’s doorstep will either make the product inside better and the brand more desirable or instill a negative perception that will tarnish both. For many customers, this will be their first experience with your brand. The packaging must reinforce who you are, what you’re about, and what message you are striving to convey. The individual packaging components you choose send a loud and clear message about your company. Everything that makes up your product packaging represents the message associated with your brand and whether there is continuity to your online presence and the customer’s belief in the connection. The marketplace continues to change, and packaging must rise to meet the challenges presented with the expanded supply chain and subsequent structural demands. Consumer buying behavior requires packaging to play a significant role in solidifying brand awareness and loyalty. In an era of unboxing and online buying, be sure your packaging is worth sharing. Kim Brown is the founder of Corrugated Strategies. She may be reached at 317-506-4465 or kbrown@corrugated strategies.com.
BOXSCORE July/August 2017
INVESTING IN THE FUTURE MAKING THE MOST OUT OF RESOURCES AND TRAINING By Sara Shumpert
he world we live in today is radically different than where we were not only 50, or 20, but even five years ago. As Bob Dylan said, the times, they are a-changin’. Truly, only a decade ago the first iPhone was released into the world. Can you imagine your life without a smartphone now? With the commoditization of distribution, anyone can launch a product to the marketplace, and options are more plentiful than ever. New technologies are increasingly becoming integral parts of our daily life. How is one to keep up with it all? Why would we ever strive to? Especially when we operate in an industry whose key ingredient is as old as the Earth itself—trees! Packaging facilities are geographically dispersed, making it easy to simply focus on opportunities within the local vicinity. But, if we fail to look beyond our backyards, we may miss out on opportunities to increase performance or be caught unprepared when socioeconomic changes take a toll on our bottom line. Even keeping up with the 24-hour news cycle and scanning email headlines doesn’t go far to instruct you on how to utilize industry trends to your advantage. You have to develop a disciplined strategy to stay abreast of change and use it to remain relevant in our innovation-prolific society. Continuing education is the key to keeping up-to-date with new technologies,
best practices, and overall industry trends. Surely, you’ve heard this before. Hopefully, you already engage in some form of training, but perhaps you do not have a formal program in place. A constant rebuttal to the argument for providing continuing education and training is the cost incurred to send employees to seminars and workshops—paying for not only the session itself, but also travel and lodging costs. Not to mention the opportunity cost in the absence of those employees and slowed production. With the fairly high turnover rate common to our industry, you may even wonder if training is worth the investment. Maybe you’ve heard the old business joke: CFO asks CEO: “What happens if we invest in developing our people, and they leave us?” CEO: “What happens if we don’t, and they stay?” Human capital is your company’s most valuable resource. It is critical to train your employees, because it manages performance expectations, and increases productivity and employee retention. As Richard Branson said, “Train people well enough so they can leave, treat them well enough so they don’t want to.” PRODUCTIVITY Companies often keep careful track of how many candidates they’ve screened, how many made it to the full interview
Even when they are made aware of the lack of productivity among new employees, many CEOs and managers think they don’t have time to invest in training. process, and how many were hired. These statistics are interesting, but the most important indicator of business performance is missing: How many truly productive employees have they added? Because metrics surround only the employment status of hiring and firing, the real goal of being 100 percent efficient is overlooked. By measuring productivity, these companies would see that much of the time spent recruiting, hiring, and integrating is going to waste. Even when they are made aware of the lack of productivity among new employees, many CEOs and managers think they don’t have time to invest in training. Consider for a moment the scenario of enrolling members of your department in AICC’s Safety Basics online course. Let’s assume an average of three hours per student to complete the course.
BENEFIT OF SAFETY TRAINING IS DOWNTIME PREVENTION 1 employee 2,000 annual work hours 3 hours of training
Say that you have 10 students register— that’s 30 hours of training in total. Next year, those 10 people will work a total of about 20,000 hours for your organization. If the safety training efforts result in a 1 percent decrease in employee downtime, it gains your company the equivalent of 200 hours of productivity. All for 30 training hours. PERFORMANCE EXPECTATIONS How do you know whether or not an employee is meeting expectations? You clearly outline expectations by training them for the job. By not training your people, you set forth no foundation for performance management. By utilizing training, you ensure expectations are outlined and understood from the start. By using online training, in particular, you are able to craft consistency in learning across all departments.
10 employees 20,000 annual work hours 30 hours of training
RETENTION Recently, a business owner had one of his most productive press operators, Henry, leave to pursue a managerial position with a competitor. The CEO reached out to Henry, thinking he might have been unhappy, prompting him to leave. As it turned out, he was very happy at the company—he just never thought a similar opportunity existed where he was. By outlining performance goals and setting forth a training track that an employee can complete to enter the pool of candidates qualified for a promotion, you encourage them to reach their goals. ONLINE LEARNING FITS OUR MODERN LIFESTYLE Back to the ubiquitous smartphones. They enable us to access information at rapid speed and in short bursts. Think about the last time you wanted to look
Your last encounter with online education may have felt antiquated, but the times, they are a-changin’ in this realm, too.
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0.01 or 1 percent improvement on 20,000 = 200 hours uptime
something up: Did you get out a textbook and skim the table of contents, or did you hop on your smartphone and do a quick search? Your last encounter with online education may have felt antiquated, but the times, they are a-changin’ in this realm, too. The Packaging School uses a technology platform that is not only accessible on any device, but is also organized in a way that allows for learning in short, easily consumable portions. BITE SIZE IS THE RIGHT SIZE We use a technique called MicroLearning to break difficult topics down into lessons of bite-sized chunks that the learner can engage with on any device. These lessons take the form of infographics, quick readings, videos, animations, discussions, and interactive slides. This delivery method empowers you to complete courses on your schedule and gain essential education. You can rest easy that the content is up-to-date, correct, and meaningful to your work. Short, focused sessions avoid mental burnout and cater to adult learning styles. ACCESS ANYTIME, ANYWHERE Once you’ve completed a course module, you retain access to it, and it can be used
as a performance aid or quick problem- solving tool on the job. So, what does this all mean for you? Thanks to AICC’s partnership with The Packaging School, member companies and all their respective employees now have the value-add of training programs online for free. The Certificate of Packaging Science is a 12-course online program that teaches the materials, processes, and influences shaping the advancement of the packaging industry. This packaging e-learning program provides relevant and comprehensive education on the role packaging plays globally in business and society. Employees at AICC member companies can take advantage of this membership benefit immediately. As your human resources and training managers are looking at strategic planning initiatives for 2017 and beyond, have them begin by visiting www.aiccbox.org/packagingschool, and start registering all your associates for any online course. Sara Shumpert is director of The Packaging School. She can be reached at 864-986-3033 or sara@packagingschool. com.
All AICC online education is included in membership and available to all employees at member companies. Check out Fingerprinting the Flexographic Press, Navigating Time: Job Shop Time, Understanding Board Combinations, and much more at www.aiccbox.org/packagingschool.
The of anilox rollers and rubber wiper rollers
Skilled flexo printers know any variation in humidity, temperature, substrates and a host of other conditions will affect quality. Cleanliness of lines, accuracy of colors and softness of shades can make or break a job. And to maximize profits, you need to optimize uptime and speed. The anilox and wiper rollers in your presses are only as good as the science behind them—the technology of precision. ARC matched roller sets are built to exact OEM specs. Cell geometries are designed for efficient ink usage and precise volumes. Wiper rollers are engineered with optional durometers and materials. Contact ARC today or visit our website to learn more about what the science of flexography from ARC International can do to ensure the beauty and consistency of your graphics. HV Extended Cell
Optional Durometers & Materials
See us at CorrExpo booth #831. HG 60° Cell
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INKLESS DESIGN DRAWING UP AN
IN THE PALM OF YOUR HAND
BOXSCORE July/August 2017
AUGMENTED REALITY IS IMPROVING CUSTOMER EXPERIENCE WHILE CREATING CLEAR EXPECTATIONS By Chuck Delaney
AUGMENTED REALITY’S IMPACT ON OTHER INDUSTRIES There are many applications for augmented reality. It was initially developed for military use and expanded to encompass industrial and medical applications. Its potential uses are far-reaching and have already made an impact on education, health care, air and space, journalism, travel, real estate, skilled trades, automotive, marketing, and retail. This article primarily addresses the last two. Using augmented reality improves clarity and understanding on behalf of retailers and consumers alike. Tommy Hilfiger and AT&T outlet stores give consumers the opportunity to try a VR headset and watch 360-degree runway shows. When making vacation plans, buyers can go on a virtual Carnival cruise. Whether in-store or online, augmented reality can help individuals gain a better understanding of their potential purchase.
Photos courtesy of GrowRT
ugmented reality (AR) is a live view of a real-world physical environment with characteristics supplemented by computerized input. Simply put, the technology adds digital media to its user’s reality. While virtual reality (VR) replaces the real world with a simulated one, augmentation exists in real time with its user’s real-life experiences, and this technology is revolutionizing dozens of industries.
Using augmented reality software, 3-D renderings of store displays can create a real-life view.
Augmented reality improves customers’ shopping experiences in-store and online. The typical online shopper’s probability of purchase while browsing a retail site ranges from 2 percent to 4 percent. The purchase rates for brick-and-mortar retailers are between 20 percent and 40 percent, totaling a $3.9 trillion revenue in the United States.1 There is an innate set of benefits that comes with online shopping, but the e-commerce experience can leave customers with a feeling of uncertainty. A customer’s confidence hinges upon the retailer’s reputation, customer reviews, and the delivery process. Many customers shop online and buy in stores. By using augmented reality, buyers have the opportunity to know exactly what they
Using augmented reality improves clarity and understanding on behalf of retailers and consumers alike.
are getting, and the confidence in their purchase increases. L’Oréal uses augmented reality for retail and online sales. Maybelline ran print magazine ads instructing its readers how to virtually “try on” the company’s new color range. The average reader engaged for more than four minutes. In addition to the engagement, more than 10 percent of users shared the campaign on social media. The campaign also helped Maybelline predict which colors were trending week to week. Companies that provide their customers with advertisements with augmented reality experiences aren’t just clearly informing them about their products; they’re creating space for buyers to freely enjoy them. Coca-Cola Germany uses augmented reality to address a number of challenges previously met by its sales team. When selling its beverage coolers, selecting the appropriate designs and sizes to find the ideal fit for each store proved difficult. To demonstrate to customers how the coolers would look in their space, Coca-Cola
AR allows customers to see how new products would look in their homes.
AR can bring potential in-store displays to life with 3-D renderings.
Germany began using augmented reality, which provided a solution that enabled customers to quickly reach a full appreciation of the product and layout. Company and app developer Augment linked its sales-force-based retail execution app with Coca-Cola Germany’s sales team, and they are now selling coolers with much clearer communication and efficiency. Product size and fit are no longer an issue for Coca-Cola Germany’s sales team as a result of Augment’s real-time access to 3-D cooler models right from their customer relationship management platform. Augmented reality is catching on, from manufacturer to shopper. According to Augment, 40 percent of customers would be willing to pay more for a product if they could experience it through augmented reality. Seventy-two percent have purchased items that they weren’t planning on because of augmented reality, and with more than 2 million Augment app downloads, the market is growing.2
potential for creative expression and improved communication. Early adopters have had time to work out the bugs and have established user-friendly modes of delivering and manipulating the technology. The rise of Instagram filters and games such as Pokémon Go! prove that the public is now on board, as well. What once seemed like sci-fi is becoming an everyday part of the consumer’s experience. Apple CEO Tim Cook believes people will “have AR experiences every day, almost like eating three meals a day. It will become that much a part of you.” The time is right for augmented reality to revolutionize the design process in the packaging industry. Augmented reality technology has caught up with yesterday’s futurists. It is now possible to optimize in-store, online, and call-in relationships so manufacturers, designers, and retailers have every opportunity to produce exactly what they envision.
THE TIME IS RIGHT Recognizing the potential of virtual reality is not a new phenomenon. In 1965, Ivan E. Sutherland published The Ultimate Display, in which he stated, “The ultimate display would, of course, be a room within which the computer can control the existence of matter.” Projecting the imagination on a digital platform into reality offers limitless
HOW AUGMENTED REALITY STREAMLINES THE DESIGN PROCESS The process that allows customers to better understand their potential purchase translates into the packaging industry as well. Shoppers are forcing supply chains to become faster and more responsive. To keep up with increased demands for speed and efficiency, industry has to adapt across the board to meet customers’ expectations. AR streamlines the process through design automation. Manufacturers used to require about 10 months to deliver products from design to conception—now it is a matter of days. Augmented reality demystifies the process of design and visualization, providing clients with an interactive, digital, 3-D prototype, they can manipulate on screen in real time.
By using augmented reality, buyers have the opportunity to know exactly what they are getting, and the confidence in their purchase increases.
BOXSCORE July/August 2017
Additionally, using the technology is genuinely enjoyable. Dusobox packaging specialist Jason Hays says, “There is something magical about our customers being able to manipulate a model that doesn’t exist yet and place it in multiple places to see what it looks like.” By leveraging augmented reality, Dusobox iterates faster, testing new designs in retail settings in real time. In doing this, deals are closed and sales are made in a more efficient way. An all-digital platform permeates the entire process, including workflow, creation, distribution, and fulfillment. Dusobox CEO John Kelley recognizes the benefits of streamlining the design process: “Now we can get into collaborative discussions regarding POS needs and work with the team in real time, as opposed to days or weeks. … It allows everyone to achieve the largest dividends by capitalizing on the dollars previously wasted on trying to get it right with our visualization first.” By utilizing AR technology, Dusobox has the capacity to instantly create a rendering of display packaging in the real-world environment. The same technology that allows buyers to try on eyeliner or dial a phone in the palm of their hand now provides clients with the ability to make better-informed decisions about product placement, design, and arrangement. At Dusobox, the packaging in which the product is shipped has become its in-store advertisement and display. Now, by using augmented reality, the client can see exactly how it will look to the everyday shopper, instantly. THE CHALLENGES OF AR Working with new and improving technologies always provides challenges. Kelley states, “The factory of the future will continuously foster and incubate innovation within our industry.”
With AR software on a tablet, 3-D renderings can be projected to a larger screen for meetings.
Making an effort to be a pioneer will always carry the potential for harsh consequences, but greater reward. AR provides unique challenges and opportunities in this regard. Within any process of automation, there are sacrifices of intuition for expediency. What looks perfect in the customer’s hand on their screen still has to undergo the process of being set up and positioned by retail workers occasionally untrained for the task. This is the only step of the process that regularly experiences variables. Since the designer, manufacturer, and AR partner cannot be present in every store to install the displays, compliance can be challenging. To combat these challenges, it is essential to track compliance by validation of proper on-site setup at any given time— whenever and wherever. HOW AR AFFECTS THE CUSTOMER’S DECISION-MAKING Quality sales and marketing is about clear, concise, collaborative communication. Gone are the days of talking
1. www.smartinsights.com/ecommerce/ecommerce-analytics/ecommerce-conversion-rates 2. www.augment.com/augment-for-manufacturers
someone out of their money for personal benefit. Using AR is all about customer education. By providing real-time 3-D digital renderings to customers, they are able to see exactly how a POP display will appear. It eliminates variables and provides the manufacturer, designer, and customer with a clear expectation of the final product. AR also helps retailers visualize the product from their customers’ standpoint. In doing this, AR creates a streamlined mode of communication and provides customers with all the information they need to make an informed decision. In short, there is no simpler way to improve the communication and expediency between supplier and retailer. Using AR to create clear expectations is just the right thing to do. Chuck Delaney is managing director of GROW Retail Technologies. He can be reached at 708-491-5090 or cdelaney@growRT.com.
The Associate Advantage
FREE IS STILL VALUABLE ED GARGIULO EQUIPMENT FINANCE CORP. VICE CHAIRMAN EGARGIULO@EFC-FINANCE.COM
JEFF PALLINI FOSBER AMERICA CHAIRMAN PALLINIJ@FOSBER.COM
DAVE BURGESS JB MACHINERY SECRETARY DBURGESS@JBMACHINERY.COM
ree is a word with many uses and definitions. When used in the context of cost, Webster’s dictionary defines free as “without charge, at no cost.” That definition does not include any reference to “value.” If something is free, it is not necessarily without value. Recently, AICC greatly increased the value of membership with the ability for all AICC member employees to utilize AICC’s online education free of charge. This program allows your employees to log on and utilize the numerous educational programs at times that may not interfere with their daily work responsibilities. During my many years of involvement in working within the industry, the one overriding complaint/problem I have heard from owners and upper management is the issue of personnel. It is difficult to impossible to find
motivated, hardworking employees. Clearly, this issue has continued to get worse, not better, and there is no indication of a turnaround. While no education program can fix a bad employee, good education options can convert motivated individuals into long-term, valuable employees. Such a major concern affecting the future success of your operation requires similarly serious solutions, and the AICC online education program, in conjunction with good interview and hiring practices, can help alleviate personnel issues. Use the online educational services your AICC offers to ensure the growth and success of both new and current employees to help your businesses prosper. This article was written by Ed Gargiulo.
AICC ONLINE EDUCATION IS GROWING Step out of your everyday substrates and learn about: Metal Packaging. This course covers the metal packaging industry and outlines raw materials and processing. Gain a stock container selection strategy for food, beverage, pharmaceutical, cosmetic, industrial, and chemical metal packaging applications.
PAT SZANY AMERICAN CORRUGATED MACHINE CORP. DIRECTOR PSZANY@ACM-CORP.COM
Polymers in Packaging. Speak this language and bring value to the table on your next project that includes plastic. Learn about the different types of polymers, their roles, functions, pros and cons of each, and real-world applications. Take an in-depth look at: Packaging Machinery. This course focuses on how machines are classified, proper terminology, how the structural design of a package influences the efficiency of the line, and how you can optimize packaging designs and machinery to produce the most proficient packaging line possible. Package Printing. With a focus on the intersection between print and packaging, this course reviews various printing methods such as flexography, lithography, gravure, screen printing, and digital printing.
KEITH R. UMLAUF THE HAIRE GROUP IMMEDIATE PAST CHAIRMAN KUMLAUF@HAIREGROUP.COM
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Sustainable Packaging. This course covers LCA, closed loop systems, energy sourcing, design optimization, and effective recovering. All AICC online courses are free to all employees at all AICC member companies. Take advantage of these new courses. Learn more about all available courses at www.aiccbox.org/packagingschool.
Northeast Summit: HOW HIGH SPEED FFGS, WASHINGTON, & PERSONNEL IMPACT YOUR BOTTOM LINE Thursday, August 17 - Friday, August 18, 2017 Atlantic City, New Jersey Learn about high speed FFGs and determining ROI from industry suppliers. Then, hear best practices for ﬁnding and keeping the best people during the Human Resource Roundtable. Finally, Gene Marks shares the latest trends and issues that will impact your cash ﬂow and proﬁts, including the impact of the administration.
Keynote Speaker Gene Marks, Columnist, Author, Small Business Owner and CPA Through his keynotes and breakout sessions, Gene helps business owners, executives and managers understand the political, economical, and technological trends that will aﬀect their companies so they can make proﬁtable decisions. Gene owns and operates the Marks Group PC, a highly successful ten-person ﬁrm that provides technology and consulting services to small and medium sized businesses.
Golf Tournament Stockton Seaview Golf Club–Pines Course Host of the 1942 PGA Championship, this artfully sculpted track winds through the scenic pinelands on the west side of Stockton Seaview, the 18-hole Pines Course covers roughly 6,700 yards of challenging golf with a course rating of 71.7.
Hosted by AICC Directors Joe Hodges, Mid-Altantic Packaging and Larry Grossbard, President Container.
Learn more at WWW.AICCBOX.ORG/CALENDAR
THE NEED FOR SPEED VERSUS THE QUEST FOR ACCURACY BY MITCH KLINGHER
monthly financial statements done within a noble cause, but is it practical? Should three business days of month end. Others some things be tied out to the penny no said that this was impossible in their matter how long it takes, and should environments, while still others said that other things simply be materially correct while it was doable, it was not advisable because extra time needed to make them due to a perceived loss of accuracy. In more precise either takes too long or costs too much money? Who should be making my opinion, many companies devote way too much time and effort trying to these decisions? get their monthly financial statements Part of the problem is that most owners “perfect.” The keys to a successful and general managers do not come monthly statement are having a reliable from the world of finance, so they have inventory system and a reliable purchase difficulty managing and motivating their order system, making sure the purchase financial managers. Another serious issue and sales cutoffs are correct, and using is that many financial managers do not common sense estimates for everything get intimately involved in operations, else. If some accruals are missed, does so much of what they do is based upon it really matter? Isn’t it more important what they learned in the classroom and to get the “materially correct” results to in previous positions, or what they are management quickly? I certainly think so. told by operational people. Additionally, You need to let your financial professionevery company’s “culture” has created als know that “materially correct” is OK lots of standard operating procedures in a monthly statement, and that speed is that are rarely questioned. So, in most more important than very high accuracy. cases you have financial professionals who are cautious by nature, not generally Cost Accounting Analysis too involved in operations, feel bound by industry convention and company culture, Most converters spend a lot of time updating costing systems, and the finanand have no clear mandate to change cial professionals have been taught that anything. Here are two instances how these issues might affect real-life behavior. costing is a science. Without allocating your costs back to machine centers and orders, the company will not be able to Monthly Financial Statements ascertain what things cost and are likely During our meeting, many of the finanto make poor decisions on what to charge cial managers stated that they could get for products and services. Converters typically price based upon a level or index that is created by their costing systems. Many companies compensate their salesAll AICC online education is included in membership and available to all employees at people on a sliding scale based upon these member companies. Want a better handle on the numbers? Check out An Understanding levels and indices. Yet everyone knows of Accounting and Financial Statements and Keeping Score: How to Read Financial that every month there will be significant Statements. Learn more at www.aiccbox.org/thepackagingschool. variances between the assumptions used
recently facilitated the School for Financial Managers in conjunction with AICC. We have been running this course annually since 1995, with a couple of exceptions, and based on my count, this was the 20th time the course has been offered. This year I hosted 21 financial professionals just outside of Chicago, and we had discussions on converting operations and ways that financial professionals can make an impact on their companies. A common theme was the issue of speed versus accuracy in many facets of their responsibilities. Accountants, as a group, tend to be more cautious and seek greater precision in their approach to things than the general public. We have been taught that our books must balance. The worksheets must cross foot and tie into the balance being analyzed. We set up and monitor controls and procedures, and deviation from these controls and procedures can open the company up to defalcations. Many financial professionals see their core function as bringing security and integrity to the company’s books and records. The real world, however, is not usually a neat and tidy place in which to operate. For every rule, there are always exceptions. Events don’t always occur as you expect, and people make mistakes. Seeking perfection in a very imperfect world may be
BOXSCORE July/August 2017
in creating the costing system and the actual results shown by the company. First, there will always be a volume variance based upon the planned level of activity at each machine being more or less than what was used in the system design. Secondly, there will be a budget variance due to the actual expenses being different from the budgeted expenses contemplated in designing the system. Thirdly, there will be a performance variance whereby setup times, run speeds, and quality will be different than planned. Many feel that what is needed here is to update the standards used in the system more frequently and to measure the variances each month as a means to fine-tuning the system. In my opinion, there is no sure-fire way of allocating all of the costs back to all of the orders. In my opinion, an attempt should be
made to get the contribution component shown in the system to within a few percentage points of financial statement contribution and move on. Pretty close in this area that can best be described as “fuzzy math” should be more than close enough. Bank reconciliations, accounts receivable, payable analysis, and things like payroll calculations and tax filings must be tied out to the penny, but much of what transpires in the world of operations is imperfect. Attempting to add a high degree of accuracy to reporting is often fruitless and counterproductive. The financial professionals and I discussed many ways in which performance measurement systems, financial and operation reporting systems, and costing and profit prediction systems can be enhanced and changed. The discussion
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BOXSCORE July/August 2017
was lively and interesting, and I think many of them would like to be the agents of change and improvement. What we need to do now is get owners, general managers, and other key executives to join the discussion. Even though I hate the “bean counter” tag, financial managers get traction on other issues by giving owners and managers “fast, materially accurate beans,” timely sales, and operational analyses. The quest for high precision in a very imprecise situation will decrease their effectiveness. Mitch Klingher is a partner at Klingher Nadler LLP. He can be reached at 201-731-3025 or mitch@ klinghernadler.com.
Strategy Gets You From Point A to SUCCESS SALES STRATEGIES: 3 PART WEBINAR PART 1: THE FOUR ROLES OF A SALES MANAGER Tuesday, Sept 12 • • • •
Diﬀerentiate between coaching and training. Utilize tools for tracking performance. Employ a 5-step plan for coaching your sales team. Exercise deliberate time management concepts that ensure eﬀective team leadership.
PART 2: STAGING SALES MEETINGS THAT GET RESULTS Tuesday, Oct 10
• Develop a preparation checklist that will streamline your processes and save time. • Create an eﬀective meeting agenda focused on the right items. • Manage the various personalities to bring out the best in all of your people.
PART 3: GROW REVENUE THROUGH EFFECTIVE COACHING Tuesday, Nov 14
• Utilize a process for evaluating the team’s behaviors and set appropriate goals for skill development. • Build trust and expand comfort zones in those they lead. • Employ a Seven-Step coaching process to maximize coaching impact.
REGISTRATION $750 members $1000 non-members
Learn more at WWW.AICCBOX.ORG/SALES
International Corrugated Packaging Foundation I N T E R N AT I O N A L
F O U N D AT I O N
SKILLSUSA PILOT FOR PLANT FLOOR WORKFORCE NEEDS — FIRST STAGE SHOWING SUCCESS
s initially reported in the January/ February edition of this column, an exciting new partnership has been launched with SkillsUSA to test the potential for corrugated packaging plants, working with local SkillsUSA chapters, to prepare high school students for plant floor operations and maintenance. The Chicago region was selected last fall for the pilot. Four plants were paired
The WestRock New Lenox plant tour for Grundy Area Vocational Center SkillsUSA students included a briefing from General Manager Brian Eggleston and a pizza box challenge.
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with four chapters that were personally selected by the SkillsUSA Illinois state director. After successfully acquiring local SkillsUSA and school board approval in three of the four chapter areas, three pilots were launched this year to test the creation of local educational programs to assist in recruiting new high school graduates for plant floor operations.
StandFast Group is working with the Elk Grove High School SkillsUSA chapter, and Packaging Corporation of America’s Chicago Container Plant is working with the York Community High School chapter. The WestRock New Lenox plant is working with the Grundy Area Vocational Center SkillsUSA chapter, which serves Coal City High School, Gardner-South
International Corrugated Packaging Foundation I N T E R N AT I O N A L
F O U N D AT I O N
Photos courtesy of the International Corrugated Packaging Foundation
SkillsUSA students from York Community High School tour Packaging Corporation of America's Chicago Container Plant as part of the pilot's first phase.
Wilmington High School, Minooka High School, and Morris Community High School. The faculty and administrators from the three SkillsUSA chapters participated in a tour and introductory meeting at their respective plants, where plans and objectives for the year were discussed. The exchange of plant floor job descriptions and current lesson plans immediately followed the meetings, along with school tours for each of the plant management teams, and plant tours for SkillsUSA students. One of the plants participated in a career fair with its local SkillsUSA chapter this spring, and two plants are planning to offer student internships in the near future. Along with the SkillsUSA administrators and faculty, the plant management teams are very excited about the
potential of the pilot, as recently expressed by Brian Eggleston, WestRock’s New Lenox general manager. “Speaking for WestRock, even in its early stages we are excited about this very promising program. WestRock, SkillsUSA, ICPF, FBA, and AICC all hope this pilot program will result in recruiting in the second or third year. We also hope and believe that it may lead to a program platform that can be used by other corrugated plants across the country in meeting this critical employee need.” Richard Flaherty is president of the International Corrugated Packaging Foundation.
The Final Score
DESIGN CHALLENGES LOOM: ARE WE PREPARED?
ere’s an interesting thought: The management of RISI, publishers of Pulp & Paper Week, have begun a pilot program to gauge whether a performance-based containerboard price index will work in our industry. What does this mean? It means that if this new index were put in place, your customers would be looking at an index that reports “transaction prices” for both virgin and recycled containerboard meeting a minimum ring crush value of 70 for linerboard and 35 for corrugating medium. If this pilot proves successful—meaning enough data points are secured to make it statistically reliable—then this index will likely replace the current “Price Watch” parameters of 42# (basis weight) linerboard and 26# semi-chem corrugating medium. In a way, this move makes sense, because performance-based packaging has been with us for 23 years, since the adoption of alternate Rule 41 and Item 222 back in 1994. Those of you who have been around long enough will remember when the alternate rule changed the industry. Reacting to changes in the distribution system and the growing recycled fiber base, the industry moved in a relatively short time from a material specification, that is, a Mullen specification dependent on the combined basis weights of the constituent liners, to a combined board specification—the edge crush (ECT) value of combined board. We moved from knowing a given parameter of the raw material (its basis weight) to the variation inherent in the combination of those raw materials. This shifted the responsibility from mills to the box plant, which had to learn fast how its procedures, processes, and quality control affected the quality of the finished box delivered to the customer. I think this experience better prepares us for what might lie ahead in the RISI experiment, because I don’t think we as an industry did a good enough job back then in educating our members about the alternate rule and how it affected boxmakers and their customers. If you’ve read enough of Ralph Young’s articles, you know that he is a proponent of the ring crush value and ECT as better predictors of box performance than basis weight. Ralph, our AICC technical advisor, insists that variations in the ECT values of combined board coming off a given corrugator can vary widely—as much as 44 percent, according to studies he’s done—and so, relying on a more stable parameter such as ring crush makes more sense, in his view. In a way, it’s a return to a material spec such as basis weight, which puts the onus back onto the mills to deliver the quality stated on the roll tag. Regardless of the way the RISI index thing plays out, good design resulting in proper raw material selection and application will always be the most important factor in achieving results for the customer. Take advantage of all of AICC’s many resources in this area— especially Ralph Young’s writings and blog posts on it. Our Ask the Experts blog is a good place to start, or send an email to Ralph at firstname.lastname@example.org. Be prepared for the design challenges ahead.
Steve Young President, AICC
BOXSCORE July/August 2017
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Together, we win.
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©2017 Xanté Corporation.
251.473.6502 • xante.com
The premier magazine of AICC, The Independent Packaging Association, created for the independent.
Published on Aug 8, 2017
The premier magazine of AICC, The Independent Packaging Association, created for the independent.