Sept/ Oct AICC BoxScore: New Math for Converters

A PUBLICATION OF AICC, THE INDEPENDENT PACKAGING ASSOCIATION

September/October 2020 Volume 24, No. 5

NEW MATH FOR CONVERTERS A comprehensive financial review for the independent

ALSO INSIDE Getting Lean Special Section: AICC Education Calendar Special Section: Salaries, Wages on the Rise

TABLE OF CONTENTS September/October 2020 • Volume 24, No. 5

COLUMNS

38

3

CHAIRMAN’S MESSAGE

4

SCORING BOXES

8

LEGISLATIVE REPORT

12

ASK RALPH

14

ASK TOM

16

SELLING TODAY

20

ANDRAGOGY

22

LEADERSHIP

24

DESIGN SPACE

64

THE ASSOCIATE ADVANTAGE

72

THE FINAL SCORE

FEATURES

DEPARTMENTS

38

10

WELCOME, NEW & RETURNING MEMBERS

26

AICC INNOVATION

30

IN MEMORIAM

34

MEMBER PROFILE

68

ICPF UPDATE

NEW MATH FOR CONVERTERS A comprehensive financial review for the independent

48

GETTING LEAN Automation-based production addresses critical challenges for boxmakers

56

SPECIAL SECTION: AICC EDUCATION CALENDAR

60

SPECIAL SECTION: ON THE RISE Salaries, wage rates in independent corrugator plants and sheet plants increase an average of 3% in 2019

48 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. ©2020 AICC. All rights reserved.

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

Scan the QR code to check them out!

BOXSCORE www.aiccbox.org

1

OFFICERS Chairman: Jay Carman, StandFast Packaging Group, Carol Stream, Illinois First Vice Chairman: Gene Marino, Akers Packaging Service Group, Chicago, Illinois Vice Chairmen: Jana Harris, Harris Packaging/American Carton, Haltom City, Texas Matt Davis, Packaging Express, Colorado Springs, Colorado Gary Brewer, Package Crafters, High Point, North Carolina Immediate Past Chairman: Joseph M. Palmeri, Jamestown Container Cos., Macedonia, Ohio Chairman, Past Chairmen’s Council: Al Hoodwin, Michigan City Paper Box, Michigan City, Indiana President: Michael D’Angelo, AICC Headquarters, Alexandria, Virginia Secretary/General Counsel: David P. Goch, Webster, Chamberlain & Bean, Washington, DC Counsel Emeritus: Paul H. Vishny, Esq., Chicago, Illinois AICC Canada Director: Renee Annis DIRECTORS West: David DeLine, DeLine Box Co., Denver, Colorado Southwest: Eric Elgin, Oklahoma Interpack, Muscogee, Oklahoma Southeast: Ben DeSollar, Sumter Packaging Corp., Sumter, South Carolina Midwest: Casey Shaw, Batavia Container Inc., Batavia, Illinois Great Lakes: Mike Schaefer,Tavens Packaging & Display, Bedford Heights, Ohio Northeast: Stuart Fenkel, McLean Packaging, Pennsauken, NJ AICC Canada: Terri-Lynn Levesque, Royal Containers Ltd., Brampton, Ontario, Canada AICC México: Pedro Aguirre Martinez, Tecnología de Cartón, Querétaro, México OVERSEAS DIRECTOR Kim Nelson, Royal Containers Ltd., Brampton, Ontario, Canada

DIRECTORS AT LARGE Finn MacDonald, Independent II, Louisville, Kentucky Guy Ockerlund, OxBox, Addison, Illinois Kevin Ausburn, SMC Packaging Group, Springfield, Missouri Nelva Walz, Michigan City Paper Box, Michigan City, Indiana EMERGING LEADER DELEGATES Daniel Brettschneider, CST Systems, Kennesaw, Georgia Cassi Malone, Corrugated Supplies Co., LLC, Chicago, Illinois ASSOCIATE MEMBER DIRECTORS Chairman: Pat Szany, American Corrugated Machine Corp., Indian Trail, North Carolina Vice Chairman: Joseph Morelli, Huston Patterson Printers, Decatur, Illinois Secretary: Greg Jones, Sun Automation, Glen Arm, Maryland Associate Board Director: Tim Connell, A.G. Stacker Inc., Weyers Cave, Virginia Immediate Past Chairman, Associate Members: David Burgess, JB Machinery, Weston, Connecticut ADVISORS TO THE CHAIRMAN Greg Tucker, Bay Cities, Pico Rivera, California Jerry Frisch, Wasatch Container, North Salt Lake, Utah Pat Szany, American Corrugated Machine Corp., Indian Trail, North Carolina PUBLICATION STAFF Publisher: Michael D'Angelo, mdangelo@aiccbox.org Editor: Virginia Humphrey, vhumphrey@aiccbox.org

SUBMIT EDITORIAL IDEAS, NEWS & LETTERS TO: BoxScore@theYGSgroup.com CONTRIBUTORS Maria Frustaci, Director of Administration and Director of Latin America Cindy Huber, Director of Conventions & Meetings Chelsea May, Education and Training Manager Laura Mihalick, Senior Meeting Manager Patrick Moore, Member Relations Coordinator Taryn Pyle, Director of Training, Education & Professional Development Alyce Ryan, Marketing Manager Steve Young, Ambassador-at-Large Richard M. Flaherty, President, ICPF ADVERTISING Information: Virginia Humphrey, vhumphrey@aiccbox.org Opportunities: Taryn Pyle 703-535-1391 • tpyle@aiccbox.org AICC PO Box 25708 Alexandria, VA 22313 Phone 703-836-2422 Toll-free 877-836-2422 Fax 703-836-2795 www.aiccbox.org

EDITORIAL/DESIGN SERVICES The YGS Group • www.theYGSgroup.com Vice President: Serena L. Spiezio Content & Copy Director: Craig Lauer Managing Editor: Jessica Price Senior Managing Editor: Sam Hoffmeister Copy Editor: Steve Kennedy Art Director: Alex Straughan Account Manager: Max Lalwani

ABOUT AICC PROVIDING BOXMAKERS WITH THE KNOWLEDGE NEEDED TO THRIVE IN THE PAPER PACKAGING INDUSTRY SINCE 1974 We are a growing membership association that serves independent corrugated, folding carton, and rigid box manufacturers and suppliers with education and information in print, in person, and online. AICC membership is for the full company and employees at all locations have access to member benefits. AICC offers free online education to all members to help the individual maximize their potential and the member company maximize its profit.

WHEN YOU INVEST AND ENGAGE, AICC DELIVERS SUCCESS.

Chairman’s Message

Grounded Together Through Crisis

A

s I have shared with you in previous columns, as this unusual, unprecedented, unrelenting year of 2020 reaches past the summer stretch, AICC has endeavored to keep pace with events. We have adjusted our scheduling, messaging, and access to programming to accommodate the new realities and the needs of membership.

On behalf of AICC, I want to thank all members for their ongoing support. To those of you who have given their suggestions and advice to the team, it is helpful, actionable, and appreciated.

In a year of firsts, AICC’s board of directors met virtually on June 11 to conduct our Spring Meeting. Given current circumstances, I do not believe it was our last virtual board meeting, but I can certainly hope that way. AICC members are meant to meet and to be together. The closeness and camaraderie of AICC membership is one our strongest value propositions. And, while you can feel it in a virtual conference, it is just not the same.

While your board made several decisions during the meeting, there is another first that I want to share with you. The COVID-19 pandemic hit North America about midway through AICC’s 2020 fiscal year. All on-site activities since the beginning of March were canceled. It appears that the first half of AICC’s 2021 fiscal year, July through December, will suffer a similar fate. Normally, AICC’s chair positions rotate at the time of the Annual Meeting, which was canceled along with SuperCorrExpo. We felt that this year, these are not the best of circumstances under which to “toss the keys” to a new chairman and turn over some board positions. As such, we have rolled over the chairs and the entire board of directors for the current 2021 fiscal year. Doing so is consistent with our bylaws, and AICC’s General Counsel David Goch has reviewed this action. The new board is usually endorsed by membership during a general session at the Annual Meeting. We will give the membership the opportunity to be heard on this matter, via a virtual poll, perhaps by the time you read these words.

AICC President Mike D’Angelo will share the 2020 financial results with you in the next issue of BoxScore, but I will provide a brief summary here. Financially, AICC was able to pivot on many expenses and mitigate several others as the COVID-19 situation took hold.

We will not completely escape the short-term financial hit from the pandemic and the related restrictions, but we are in fairly good shape. AICC is built for the long run.

Most encouragingly, membership renewals are coming in at a higher rate than at this time last year. This is the best testimony to the role and importance of your Association to you, your team members, and your operation, especially in a time of crisis. If you have not renewed your membership, please consider doing so shortly.

AICC will remain your trusted partner as the remarkable circumstances of this year continue to evolve.

Jay Carman President, StandFast Packaging Group Chairman, AICC

BOXSCORE www.aiccbox.org

3

Scoring Boxes

Easing of Coronavirus Restrictions Spurs Retail Sales

BY DICK STORAT

C

onsumer purchases reignited economic activity in May as restrictions to contain the coronavirus were eased across most of the United States.

Retail and food service sales, which include purchases at stores, restaurants, and online, rebounded strongly to mark the end of the first plunge of economic activity. These sales rose by an unprecedented 17.7% in May, more than erasing April’s record 14.7% nosedive. The wild swing in sales reflects the shock of shutting down an economy that had been growing at a steady pace and its surprisingly rapid initial rebound.

Amid these record-breaking changes, some sectors have fared better than others. This article will assess each of the major sectors of retail and food service

4

BOXSCORE September/October 2020

Retail Sales Percent Change January–May Retail Sales Percent2020 Change January–May 2020

12.7%

Grocery Stores

7.1%

Building Materials –0.7%

General Stores Retail Sales

– 3.7% – 6.6%

Motor Vehicles

– 10.1%

Drugstores –23.8%

Furniture

– 26.6%

Others Appliances

– 30.4% – 41.1%

Restaurants Clothing

– 63.9%

–80% Source: U.S. Census Bureau

–60%

–40%

–20%

0%

20%

40%

Scoring Boxes

sales to provide independent paper packaging converters with insight into areas of strength and weakness that may be valuable if the economy enters a roller coaster ride of ups and downs in the months ahead.

The chart on page 4 shows the percent change in retail and food service sales between January and May 2020 by major component. The table at right breaks down the five months into the downslide between January and its end in April and the subsequent gains in May. It also shows the change in share of sales at the beginning of the year and in May after substantial sales redistribution took place.

Nonstore retailer sales consist primarily of e-commerce sales. They grew the most of any component as quarantined consumers turned to purchasing goods online.

These sales grew by 27% between January and May, with 16% growth between January and April, when sales through every other retail channel except grocery stores declined. As a result of this rapid growth, nonstore retailers’ share of retail sales jumped from 12.9% in January to 17.8% in May, an increase of 38%.

As most restaurants and other eating and drinking places were open only for takeout and delivery service, grocery stores were the beneficiaries, with sales growing by 12.7% during the first five months of 2020. Between January and April, sales grew by 11%, mostly in March. Sales picked up by an additional 2% in May, as some restaurant activity returned. Grocery stores also saw a rise in share between the beginning of the year and May, as their sales rose from 12.2% in January to 15% of total retail sales in May. As a result of quarantine measures during the pandemic, restaurant sales tanked by 41% between January and May, exceeded only by decline in clothing store sales. There was a substantial recovery of 29% in May as consumers increased takeout and delivery orders and as restrictions

6

BOXSCORE September/October 2020

2020 Retail Trade Percent Change and Shares Sector Motor Vehicles Nonstore Retailers

Jan.–April April–May Jan. Share May Share –35%

44%

19.9%

20.3%

16%

9%

12.9%

17.8%

Grocery Stores

11%

2%

12.2%

15.0%

General Stores

–6%

6%

11.3%

12.3%

Others

–39%

20%

11.6%

9.3%

Restaurants

–54%

29%

12.4%

8.0%

Building Materials

–3%

11%

6.4%

7.5%

Drugstores

–10%

0%

5.7%

5.6%

Clothing

–87%

188%

4.2%

1.7%

Furniture

–60%

90%

1.9%

1.6%

Appliances

–54%

50%

1.5%

1.2%

Source: U.S. Census Bureau

were eased. While grocery stores and food service establishments each had a 12% share of total retail sales in January, the pandemic’s impact saw restaurants’ share decline to 8% in May, a 35% share decline from which total recovery will take a long time.

The other sector that saw growth as responses to the pandemic diminished overall economic activity was building materials. This category includes hardware, garden equipment and supply, and building and renovation material stores.

As families spent more time at home, remodeling and repair activities increased, so those sales grew by 7.1% during the first five months of this year. Eleven percent growth in May more than erased declines earlier in the year. These outlets saw their share of sales rise from 6.4% in January to 7.5% by May. General stores, a category that includes large-format stores and traditional department stores, managed to end the first five months of the year with only a 0.7% decline in store sales, as losses of 6% during the first four months of the year were nearly erased in May. Motor vehicle sales include both new and used transportation equipment, car

and truck sales, as well as repair parts. This category saw a 28% decline in sales during March, followed by further declines in April before a surprisingly strong 44% recovery in May. Five-month sales between January and May have dropped by 6.6%.

Clothing stores were especially hard hit by the economic turndown, posting a 63.9% loss in sales during the first five months of this year. Even though they recovered some lost ground in May, their share of retail sales dropped from 4.2% in January to 1.7% at the end of May. While the strong initial recovery in May provides a measure of relief to retail merchants, continued spending growth will depend on the labor market’s recovery and consumer attitudes toward spending at pre-pandemic levels. Other wild cards include how government and consumers will respond if there are coronavirus flareups and whether Congress extends pandemic-related benefits.

Dick Storat is president of Richard Storat & Associates.

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

With pizza boxes made from Leipa’s 100% recycled white-top linerboard, sustainability has never been

so delicious!

Contact Sharp International Group for North American inquiries. www.sharpinternationalgroup.com Phone: (757) 410-3601 rbanks@sharp-international.com

Find Sharp International at the

October 7-8, 2020 Atlantic City Convention Center Booth # 733

Legislative Report

Helping Businesses Get Back to Business

BY ERIC ELGIN

8

BOXSCORE September/October 2020

Edinaldo Maciel / Shutterstock.com

T

he principal issue we’ve heard about from Washington, D.C., this year has been the national response to the pandemic, and rightly so. As reopening (and reclosing) has begun in most states, lawmakers have shifted their focus to addressing the economic effects postpandemic; thus, we are now seeing some positive proposals that our lawmakers are considering to help businesses get back to business.

Two of these come from the House Ways and Means Committee, where Republican members have introduced two new bills as part of their policy agenda to help Americans returning safely to a healthy workplace. These bills, the Healthy Workplace Tax Credit, introduced by Rep. Tom Rice (R-South Carolina), and the Workplace Testing Tax Credit, introduced by Rep. David Schweikert (R-Arizona), will help businesses safely and responsibly reopen our economy and protect the health and well-being of workers.

The Healthy Workplace Tax Credit will help businesses reopen safely and restore worker and customer confidence.

Here’s how: • Encourages and enables businesses to take the recommended steps to prevent the spread of COVID-19 in their workplaces.

• Provides a refundable tax credit against payroll taxes for 50% of the costs incurred by the business for COVID-19 testing, personal protection equipment, disinfecting, extra cleaning, and reconfiguring workspaces.

• Is limited to $1,000 per employee for a business’s first 500 employees, $750 per employees for the next

500 employees, and $500 for each employee thereafter.

The Workplace Testing Credit would allow businesses of all sizes to safely continue their operations and prioritize the health of their employees: • Provides businesses with a refundable payroll tax credit based on their average number of employees.

• Caps the credit between $250 and $500 per employee depending on the size of the business.

• Covers 50% of the COVID-19 testing costs for companies working to support and maintain a healthy payroll.

Another important development, this one in the Senate, concerns limiting liability of businesses, schools, houses of worship, and community organizations in the event of COVID-19-related lawsuits. This provision is still being negotiated as part of the next phase of relief, but it has the support of major business organizations such as the U.S. Chamber of Commerce and the National Association of Manufacturers.

To me, it is especially important to shield businesses from being the object of frivolous lawsuits related to COVID-19 illnesses or death. Any organization that has acted in good faith to protect employees and

customers under guidelines from the Centers for Disease Control and Prevention, state governments, or local authorities should be shielded from unjustified legal action. As those of us in our industry heard over the many weeks of AICC videoconferences, all AICC members were particularly mindful of the health, welfare, and safety of their employees and their families, and AICC provided daily and weekly updates of new and revised guidance.

In his column on page 72 in this issue, AICC President Mike D’Angelo points to the many partner organizations working with us in the legislative arena on our members’ behalf. Far from being “accidental,” this is intentional advocacy that benefits our entire industry. Therefore, as we look forward to a post-COVID-19 world, we will work with these partners in promoting legislation to help our businesses get back to business.

Eric Elgin is owner of Oklahoma Interpak and chairman of AICC’s Government Affairs subcommittee. He can be reached at 918-687-1681 or eric@okinterpak.com.

New Members

Welcome, New & Returning Members!

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GAPCHEK

LEAD GAP

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GapChek™, the latest corrugated vision system from Valco Melton’s ClearVision division, moves the measurement point to the bundle so that the lead and trail gaps are measured on finished boxes.

GapChek displays live measurements of each gap and per-bundle averages with statistical process control charts on-screen Users can look at per-job and per-box gap data and analyze historical trends for certain box designs or customers.

10

BOXSCORE September/October 2020

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Ask Ralph

The Times They Are a-Changin’

BY RALPH YOUNG

I

12

and Great Northern—have provided stock production samples for the testing.

How great is it that independents were asked by 3M to be a partner in this endeavor?

had shared in the last issue some industry dislocations that may create uncertainty in the future, as well as your need to stay close to your Association during these unprecedented times.

When Bob Dylan introduced “The Times They Are a-Changin’” in 1964, I was a freshman in college. Don’t try to do the math; let’s just say it was a long time ago! President John F. Kennedy had just been assassinated, and the Vietnam conflict was just beginning to escalate when I was offered an opportunity to participate.

Both of these events had a profound personal impact on my life. So began a journey that showed me, in this life, there is no solid anchor in the storm. Nothing surprises me today. So here are some current random events that may have an impact on your role in the organization you serve. Current events may be setting permanent milestones. Remember, we are here to walk alongside you.

Item 222 (or the ‘Cert’ Stamp) The National Motor Freight Transportation Associations and its Commodity Classification Standards Board held a Zoom meeting in June to discuss the bundling or consolidation of multiple tariffs. They reduced the number of categories for corrugated packaging on the basis not of weight but of densities.

Our sister products, paperboard cans and drums, also saw reductions in tariff classes.

These improvements should help your customers, but you may never be aware of these changes directly. After all these years, I’m still learning about our business.

UN Hazmat Packaging Because of our engagement with the Institute of Packaging Professionals’ (IOPP) Chemical Packaging Committee, we have third-party connections with the U.S. Department of Transportation and the Pipeline and Hazardous Materials Safety Administration. We meet twice a year to discuss U.N. hazmat packaging, which has continued to be focused on basis weight and Mullen and has never considered ECT as an option. The thought from the IOPP committee is that we present to the government agencies documentation from the industry of total packaging performance based on ECT. Ten-E is doing the heavy lifting on this project, and two independents—Liberty Carton

Digital Printing The June 1 Board Converting News cover story reported on the digital printing research by Karstedt Partners. The survey, covering about 70% of the industry, found that while independents produce only about 15% of all corrugated, they are the owners of 64% of the single-pass capacity in North America. And the adapters are showing a difference in their financial results.

Not only have we been early adapters of this technology, but Virtual Packaging in Dallas, a very custom printer, was the first in North America to invest in an even higher level of printing with the Landa S10 Nanographic printing press and Highcon Beam digital cutting and creasing machine.

BOXSCORE September/October 2020

Rightweighting It has been a lonely road for a few of us who have been crying out that the linerboard grades below 26# were coming.

Now Fastmarkets RISI has been upping the change and discussing the movement—with more than 20 machines, with the lightest weight announced by Schwarz for their new Catawba machine at 16#.

It is a good time to take these offerings more seriously. In another recent article, the news agency reported those that it contacted making 18/18/18, 20/20/20, 21/21/21, and 20/26/20. Unfortunately, the report forgot the details about the flute profiles to combine these grades. I doubt that the flutes would have been larger than E flute! One can also investigate R&D tax credits for sustainable packaging designs.

New Packaging School E-Learning Module Scott Ellis and I have started developing a new tool for full corrugated plants and sheet feeders on Why and How to Audit Your Corrugator. All too often, converting operations have thought that combined specific liners and mediums engineered certain ECT levels. This is not the case!

While corrugators have many more controls on them and containerboards have become much more “consistent” across more than 140 paper machines, studies have shown that variations in ECT can be as much as 25%.

Ralph Young is the principal of Alternative Paper Solutions and is AICC’s technical advisor.

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

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

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

Ask Tom

Supplier Development in Post-COVID-19 Supply Chains

BY TOM WEBER

S

uppliers are crucial to any supply chain. In today’s world of complex and integrated supply chain systems, the relationship between customer and supplier is more critical than ever. The days of trying to squeeze every penny of savings out of the supplier are gone, as procurement teams are beginning to truly embrace supplier relationships as a key to ongoing business success.

What is supplier development? Supplier development is a strategy that encourages working closely with suppliers to help boost quality, performance, and continued growth. It involves embracing the expertise of the supplier and aligning it with the goals of the purchasing organization and, most importantly, the company and their most highly regarded client base.

Key suppliers are engaged on an individual level to build relationships and create benefits for all parties. This strategy takes supplier relationship management and partnering to the next level!

There is no single approach to supplier development. The procuring company and supplier will typically choose a strategy that best suits their relationship, supply market, and the industries they serve.

The role of supplier development in supply chain success. Outlined below are just some of the reasons why so many companies invest heavily in supplier development.

Earn a competitive advantage. Through educating and mentoring diverse suppliers in their network, companies can partner with vendors who understand every facet of

14

BOXSCORE September/October 2020

their business, from pricing to turnaround to quality requirements. This, in turn, empowers the supplier to offer more competitive pricing and services in exchange for a long-term and secure relationship, along with significant client access.

Encourage collaboration between individual suppliers. Small, diverse suppliers often lack the resources, skills, or experience to meet complex or demanding business needs. Supplier development programs can encourage small suppliers to work together to offer solutions that they would otherwise be unable to provide alone.

This works exceptionally well in many packaging disciplines.

Communication drives innovation.

Encouraging diverse suppliers to work together to develop unique solutions can lead to out-of-the-box (no pun intended) thinking and increased innovation. This can result in the development of products and services not currently available on the market, thus creating an advantage that is both strategic and long-lasting for clients.

Create stronger long-term supplier relationships. Supplier development requires trust and collaboration. These elements encourage companies to foster long-term relationships with their suppliers, helping them gain the economic and business resources they need for continued success. This can eventually nurture a more beneficial partnership for all parties.

Client satisfaction, retention, and new business awards are easily measured and are cherished outcomes of supplier development behaviors.

Resolve performance and quality issues. One-on-one interaction with various suppliers offers opportunities for improvement on both sides. For example, the supplier can highlight ways in which the customer can provide support, such as improved communication of requirements or access to specification documents. Conversely, the customer can also highlight areas where the supplier’s service can be improved, which can add value for them with other clients they work with as well.

Enhance customer satisfaction. While supplier development is aimed at improving the performance of the supplier to the benefit of the purchasing company, personal relationships with the supplier can also have a positive impact on the end customer. Stronger customersupplier relations can lead to better communication, greater efficiencies, and ultimately, higher-quality end products.

Supplier development and relationships should be the primary focus of any organization that works with a diverse supplier base. Better supplier relationships permeate throughout the supply chain, translating to better products and enhanced customer satisfaction for all.

In the next issue of BoxScore, I’ll outline several helpful tips to identify new suppliers in the post-COVID-19 era.

Tom Weber is president of WeberSource LLC and is AICC’s folding carton and rigid box technical advisor.

Contact Tom directly at asktom@aiccbox.org.

Selling Today

After COVID: Where Do We Go From Here?

BY TODD M. ZIELINSKI AND LISA BENSON

I

n our last article, we discussed the importance of moving forward with new business development despite the ongoing pandemic. With traditional sales tactics (trade shows, in-person meetings, etc.) being put on hold, we discussed toning down your sales pitch, focusing on essential industries that had an immediate need, and using virtual sales tactics and phone calls to reach prospects. This article discusses how to keep your momentum as businesses discover their new normal.

As many states have reopened, some traditional sales methods can be reintroduced.

However, new waves of the virus may have companies exercising extra caution with social distancing measures. Therefore, having a wide range of tools available to accommodate your prospects’ needs will be essential moving forward.

Virtual meetings and plant tours, inbound marketing (SEO, engaging content, social media, etc.) and outbound marketing (email campaigns, direct mail, etc.) will continue to be essential to successful new business development strategy.

Equally important will be having a process around your business development activities—activities around maximizing the flow of leads into your sales pipeline and moving them through to resolution. A defined process with a wide range of tools for connecting with prospects will ensure that you can meet those prospects’ needs.

As with any process, consistency and follow-through are essential. Can you imagine manufacturing corrugated products by following your process only sometimes or completing a job when it’s convenient? Can you imagine not using metrics to ensure your products meet customer expectations, or can you imagine knowing a process is creating high scrap rates and not taking corrective action? The results would be

16

BOXSCORE September/October 2020

disastrous. But this is how many companies operate business development activities.

Creating Your Sales Process A sales process provides a steady flow of qualified leads into your sales pipeline and moves them through to resolution; it may also include increasing sales with current customers. Your sales process should consist of how to determine the number of prospects to target based on the stages and conversion rate of your sales cycle—how you define your target market and how you define a qualified lead. It should also include tools for reaching your prospects based on where they are in the sales cycle.

Once you know how many companies to target monthly or weekly to reach your sales goals, you can determine how much time you will need to commit to actively selling through calling, emailing, and meeting (virtual or in-person). A successful process will also include a nurture program for future interest opportunities, metrics for measuring success, and a method for process improvement.

Benefits of a Well-Designed Sales Process A study done by Harvard Business Review shows, on average, B2B companies that have an effective pipeline process—which includes a defined sales process, time allocated to pipeline management, and trained sales managers to manage it—see 28% higher revenue growth over those with ineffective pipeline management.

A well-defined sales process is predictable, repeatable, and results-driven.

When it is implemented, companies will see many benefits, which will lead to increased efficiency and revenue growth.

Additional benefits include: • Sales Forecasting. When you are working from a defined sales process,

you know precisely where every prospect is in the sales pipeline. If you have measured your success and have calculated your hit rates, your sales forecasting should be much more accurate. Having a defined process with visibility is even more critical when you have many sales reps. If each sales rep is doing something different and leads are not being consistently followed up on and tracked, it can be challenging for a sales manager to provide an accurate sales forecast.

• Focus. A structured sales process provides focus for the company and the individual salespeople. It helps the company create structure around the types of prospects it is interested in engaging with based on specific criteria, such as annual spend, industry, or geographical location. This provides salespeople the tools to focus on leads that are qualified and not chase those that won’t add to your overall sales objectives. Salespeople are juggling many tasks throughout the course of their day. It is human nature to focus on the easiest tasks that create the least amount of resistance or to push off something that doesn’t deliver immediate results. For a sales process to run efficiently, all components must be executed as planned. A systematic approach with sales prospecting key performance indicators (KPIs) will help staff to prioritize tasks so that no tasks or components of the process are neglected.

• Accountability. A well-executed sales process provides accountability. Often the word accountability has negative connotations, driving fear throughout your organization, which is something you want to avoid. Accountability

Selling Today

helps your sales team to achieve their goals, presumably driving higher commissions for them. Your process should have communication built in so that everyone knows exactly what to do, how they should do it, why it is important, and what to do if something isn’t working out. Tools such as a CRM and a marketing automation system can provide visibility and allow for easy tracking and management of goals. Instead of using accountability to drive fear and punishment, it should be used to see where process improvements can be made.

• Ease of Onboarding. Onboarding salespeople and integrating them into your organization becomes consistent with a sales process. When expectations, responsibilities, and outcomes are clear, getting new employees up to speed is faster, and employee retention improves.

• Continuous Improvement. Similarly to your manufacturing processes, when KPIs are set, measured, and monitored for your sales process, any inefficiencies, bottlenecks, and issues become apparent. This allows you to take a step back, review your processes, and course-correct before you get too far off track. Encouraging your salespeople to share any market intelligence they receive will also provide insight into whether you are resonating with the market.

for meetings and tours when required, investing in a CRM and marketing automation system, updating your website and optimizing it for SEO if it’s outdated, but most importantly, developing and executing an effective process around your business development activities.

Todd M. Zielinski is managing director and CEO at Athena SWC LLC. He can be reached at 716-250-5547 or tzielinski@athenaswc.com.

Moving Forward When the pandemic hit, we were all left scrambling to find our footing. Now that states have reopened, it’s time to ensure that you have all the tools you need to feed your sales pipeline and minimize any setbacks. Some things you might want to investigate are ensuring your video capabilities are sufficient

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

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BOXSCORE September/October 2020

Natural Gas Management

Energy Efficiency

Andragogy

Boosting Education While Flattening the Curve

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

I

in expanding his horizons beyond his n an effort to combat the spread of corrugated expertise, so the Certificate COVID-19 and “flatten the curve,” of Packaging Science was a perfect fit. we’ve stayed in—learned how to work While enrolled in the program, he used Zoom for conference calls and regular calls with family and friends, baked bread, the course information as reference points in his daily communication with team made the latest trending coffee beverage members and customers. (dalgona coffee, anyone?), labored over Kyle McCormack, outbound freight way too many puzzles, and of course, coordinator at Moore Packaging Inc., hoarded toilet paper. But for some, this started the Certificate of Packaging extra time at home meant the perfect Science to broaden his knowledge of opportunity to continue their education, metal, glass, and plastic packaging, since and AICC was ready to answer the call. he already had a solid background in AICC’s partnership with The corrugated packaging. McCormack is Packaging School allows for member one of six graduates of the Certificate companies and all respective employees of Packaging Science from Moore the value-add of free training programs.

Packaging—a company building a These programs offer more than 80 fantastic culture of continuing education online courses in both English and and self-improvement within its walls. He Spanish, all related to the packaging enjoyed the online courses because they industry and the manufacturing gave him the freedom to complete the environment. Among these offerings is required study at his own pace, and he the Certificate of Packaging Science, a could work on the courses anywhere there 12-course online curriculum that teaches was internet connection. McCormack the materials, processes, and influences felt the extra time afforded to him by the shaping the advancement of the packagpandemic, as well as the support given to ing industry.

AICC member employees Chris Marsh, him by his company, greatly accelerated his learning.

Kyle McCormack, and Richard Baker, Richard Baker, production manager among many others, ramped up their at Cal Box II, took to AICC’s free own training efforts while quarantining online courses to brush up on new as a way to obtain a more holistic processes and procedures being introunderstanding of the packaging industry. duced in the packaging arena. He felt Let’s hear their stories. it was important to stay abreast of Chris Marsh, regional sales manager industry changes and innovations in at Jamestown Container Cos., was order to remain competitive. Along motivated to take AICC’s free packaging with Baker, numerous supervisors courses in order to speak to the details of within his company have been investing packaging with his team of degreed packtheir time in these courses. Speaking aging engineers, designers, and account to this point, Baker offers this advice: managers, all of whom have many years “Supervisors are a key element in our of experience in the corrugated industry. industry—they are on the front lines, Because his company touches all facets so to speak, and have the most contact of packaging daily, Marsh was interested

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BOXSCORE September/October 2020

with floor personnel. All new employees seeking to advance will be guided by the supervisor as they’re instructed on how to do something or why they are doing something.” Overall, he believes that furthering the education of the supervisors paves the way for them to be confident and inspiring in their role as leaders and representatives of the company. And that leads to an improved and inspired workforce.

Marsh, McCormack, and Baker were not alone in the educational journey they made during this unprecedented time. Since the pandemic began, AICC has seen more than 1,000 active users make the most of their new normal by taking advantage of the free courses offered

by AICC and The Packaging School.

While we all hope our world soon sees the light at the end of what has been a long and dark tunnel, there are lessons we’ve learned and changes we’ve made that we need to carry with us into the future. And that future should most definitely include bettering ourselves through online education.

Julie Rice Suggs, Ph.D., is academic director at The Packaging School.

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

Alli Keigley, who assisted with writing this article, is production coordinator at The Packaging School.

She can be reached at alli@packagingschool.com.

w w w. p amarc o . c o m

Leadership

Meeting Madness

BY SCOTT ELLIS, ED.D.

D

id you ever go to a meeting and wonder why you were there? With the ease of convening online meetings, I observe that the number of attendees has increased. During more than one company turnaround, I have attended confusing morning and afternoon meetings. I am suspicious of any meeting named for its time frame. These meetings were a particular waste of time and productivity because they included 15–18 people, and the only agenda was to keep everyone informed by going around the table allowing everyone to talk.

Much of this talk was focused on missing information, issues of production, or shipping of critical items. Also included were items of general interest, unvetted rumors, and celebrations of various kinds.

There was likely 10 minutes of valuable information for each person, but then they sat while someone else got the information they required. This took 45–60 minutes twice a day and occurred with no sense of urgency. I was astonished.

This was ingrained in their culture. Did they not understand their company was on the verge of collapse? They seemed to

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care about their jobs, as well as getting good products to customers. Why had they succumbed to meeting madness?

We did not have any time to waste with the bankers howling at the door. Quick action was required. As usual, it began with questions.

What Is the Purpose of This Meeting?

The answers made it clear that the meeting had multiple purposes, including production goals, shipping priorities, and awareness of obstacles (e.g., personnel or maintenance issues) that would require the group to adapt. They also discussed pending jobs.

Who Needs to Be Here?

The customer service manager, the production manager, the scheduler, and the shipping manager were required to deal with the day’s expectations and adjustments. When the discussion turned to new jobs and challenges, they would bring in a salesperson, a specific designer, or customer service person, and perhaps the purchasing agent would be needed. Distinct groups needed to be there for each meeting purpose. Donuts being included ensured that the meeting took on the quality of a roach hotel—once joined, always a member.

How Much Does This Meeting Cost?

A quick approximation of the hourly cost of the present collective of 15 people was conservatively estimated at $454. With the two daily meetings averaging a total of 1.5 hours, that is a $681 meeting cost per day, $3,405 per week, and $177,060 per year. This cost includes only the wages; think of the opportunity cost of

Leadership

all those hours doing something that added value.

Once the purpose and the cost became known quantities, the large meetings were canceled and replaced with more appropriate alternatives. All celebrations were then scheduled during the lunch hour. This resulted in more money being spent to recognize people and incurred an overall savings.

The production meeting gathered with the required five people who stood at a high table with the expectation that the 15-minute discussion would focus on exceptions rather than the prior round robin. Only jobs in danger of failing to ship, safety issues, and any pertinent maintenance information were shared.

The afternoon meeting was abandoned.

The new-jobs meeting took the form of a huddle. When information for a new job was complete, the required people, including the specific customer service representative and designer, spent no more than five minutes at the stand-up table gaining the answers they needed.

Were feelings hurt when the meeting was canceled? Of course, and it was made clear to all concerned that missing the social time was preferable to allowing this, and many other wasteful practices, to result in the business being shuttered.

By the following week, productivity was up, and the meeting went unmourned.

If you do find yourself in a meeting, I think it is OK to ask why you were invited. What is the contribution you should make? What information or decision-making should you be focused upon? If the meeting leader does not have a clear answer or admits that they invited you only to spare your feelings, you will be free to spend that time more effectively.

Every meeting should begin with a statement of purpose, for example, “The purpose of today’s meeting is to clarify goals and measures for the third quarter.”

The meeting agenda should reflect the

topics to be discussed, and it can often be added to by the members. Using a flip-chart “parking lot” is a helpful way of ensuring that off-topic ideas will receive the appropriate attention at the proper time.

The agenda is intended to help keep the meeting on track. The action items list will promote accountability to stay on track after the meeting. It encourages attendees to share the load of the various tasks to be completed and to assign specific target dates for check-in or completion. When responsibility for action items is shared by everyone in the meeting, a greater sense of buy-in is created. Being part of implementing a change, staff will be more inclined to cooperate with the change and remind others to do so as well.

We may not be able to stop all the madness in the world, but ending the cost and distraction of meeting madness is within our power.

Scott Ellis, Ed.D., of Working Well provides the brutal facts with a kind and actionable delivery when a leader, a team, or a company needs an objective, data-based assessment of the current state of operations and culture. Training, coaching, and resources develop the ability to eliminate obstacles and sustain more effective and profitable results. Working Well exists to get you unstuck and accelerate effective work.

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BOXSCORE www.aiccbox.org

23

Design Space

Developing Grocery Display, Learning Along the Way

BY LAUREN KOZAK

M

y first part-time job was at a local grocery store. It was such a great company to work for, and who knew they would still somehow be connected to my packaging career? I started as a cashier in 2009 and stayed there through my four years at the Rochester Institute of Technology in New York. On my last day there I was a week into my first full-time job here at Buckeye Corrugated Inc. (BCI) Rochester Division (formerly BCI Koch Container).

It was such a nice transition after graduating that summer. I never really left my first work family, but I did gain another one here at BCI. Fast-forward a year into the late summer of 2015; I was given my first structural design project: creating a corrugated display to hold various-sized planters. Not going to lie, I had no idea what I was doing—how the heck does one make a display out of corrugated that is just as structurally sound as the wireframed version the customer was currently using?! Turns out, that kind of project is what any new designer needs to tackle to teach them how to figure things out from scratch. These kinds of challenges only broaden our capabilities and skill set.

Our account executive who handles this grocery store account received a request directly from the CEO for a floor display that could hold multiple items and products. Customers were buying single items at their stores but then shopping at club stores for bulk items. They wanted loyal customers to know that they have everything right here in the same place.

The customer started by providing us with bulk health and beauty items, such

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BOXSCORE September/October 2020

as two packs of 1.5-liter mouthwash, refill bags of hand soap, and four-packs of Q-tips. These and other bulk pack products would go in these displays, and we needed an overall size to get started.

Any designer will tell you that they need to have a size and an approximate weight the package or display needs to hold to start any project. Do they have a particular style in mind? What quantities are they looking into? In this case, will it ship loaded or be filled at the store? How many sides needed to be shopable? These are examples of questions we asked the customer upfront.

Now that we had a rough size based on the largest product, the next step

was providing style options. Did the customer want a dump bin-style display (products piled in a bin-type structure with multiple compartments)? Or maybe stackable trays, either one full-size tray covering the entire pallet with x number of layers or smaller stackable trays, typical of what you would see at a BJ’s or Costco?

There were also options such as a quarteror half-pallet display, which typically sit directly on the floor. If each store wanted the ability to put these displays on pallets for easy maneuverability throughout the aisles, we would stick to the standard overall 40-inch by 48-inch footprint.

At this point, I sought advice from my fellow designers. A year in, I

Design Space

had worked on a countertop display tray here and there, and maybe one quarter-pallet display previously, but a full-pallet display was not under my belt just yet. Incorporating the design team’s collaborative ideas, as well as what we had done for other customers in the past, we suggested providing the customer with 3D renderings. This is a great way to share style ideas without putting in hours of design time on sampling and sizing. A great tool we would highly recommend for any box/display designer, is the Illustrator Studio plugin for ArtiosCAD. This may be dated now, but we were able to create the 3D renderings in Artios and bring them into Illustrator to output higher-quality rotatable PDFs with simple graphics for the customer to review. Artios itself has these capabilities but not to the full effect and quality of the plugin.

After narrowing down style options, we were ready to start drafting structural samples for review. We started with a stackable tray at a size that would fit in a modified chimney-stack configuration on the pallet. With windows requested on three sides, it was our job to make sure it was also structurally capable of holding up under two to three layers. Think about a two-pack of 1.5-liter mouthwash; that weight adds up fast! For the main feature of the display, we ended up going with a club-style tray that folded up from the bottom, with a rollover both on the front lip and at the top to keep everything locked together. The top also acted as a larger surface area for the next layer to sit on, with additional tabs sticking up to secure the next layer from shifting out of position.

Once initial structural approval was received, we put together further renderings with artwork that the customer provided. Virtual renderings are great; however, a better way to evaluate before moving forward with production is to digitally print directly

onto the full-sized corrugated substrate.

We would recommend mockups and/or a test run for any company trying out new point-of-purchase or retail-ready designs. Our customer was able to see how the full-sized displays looked in the store and gain feedback after customers shopped off them. We were then able to make changes without having to buy brand-new cutting dies and printing plates. Keep in mind that digital prints are not an exact color or quality match compared to direct print flexography.

Standard digital printing uses UV-based inks with CMYK. If you have a color specialist, you can match PMS colors as closely as possible, but it’s still not the same as water-based PMS formulas made for direct print flexography, which is how the final displays were printed at BCI in Rochester.

After our local digital print supplier printed this mockup order and shipped it to our fulfillment supplier, we evaluated the pieces. This was such an important project that we made sure to be present during assembly at the fulfillment supplier. Anything that did not go together correctly was going to teach me a great lesson as one of the designers. It also provided feedback on how easy or challenging each part was to fold up. It made sense to make it efficient for the employees who would be assembling hundreds of them. If you are a structural designer, have you ever asked the question, “Who designed this?!” while folding up an intricate die cut—right after designing it yourself? I am sure I’m not the only one. But this kind of experience can help you live and learn, and then incorporate the findings in future projects.

Once this trial run was in stores and loaded with product, we decided to make a few structural changes. It was also a great way to ship-test the overall design and see how they held up on our truck.

Even though these displays shipped empty,

we took the opportunity to eliminate any surprises for the future production run.

Once the final structural approval was received, we moved on to the artwork approval. Once color and proofs were approved, tooling was ordered, and press date finally arrived, the design team was right there with the machine operators to make sure color match was on point and die cuts folded up properly. A designer can do only so much to mimic a cutting die on the sample table. Taking in the correct allowances and knowing just how much the rubber would crush the board is something you figure out over time and may never master exactly. Being present on press and understanding how each machine does what it does are among the greatest learning tools for a structural and graphic designer. Just one dimension can make the difference between a production run lasting eight minutes or eight hours.

One of the proudest moments in my career so far was walking down the bulk pack aisle in the Brockport store and seeing a sea of these displays. It was an incredible feeling to stand next to these structures we had spent so many months working on and to see the designs come to life in their final forms, environment, and uses. And I know you are thinking it; you bet I took a picture in front of them!

Partnering with grocery stores has always been a fun and fulfilling experience. In the end, these displays helped the customer gain a 40% increase in their bulk-pack sales line. We look forward to continuing to work with them on any project, and I will continue to make an effort to learn something new every day Lauren Kozak is lead packaging and display designer at BCI Rochester Division. She can be reached at 585-924-1600 or lkozak@bcipkg.com.

BOXSCORE www.aiccbox.org

25

INNOVATION Virtual Training

Introducing the AICC All Access Pass

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eep your training costs low and payments streamlined with the AICC Access Pass. For one payment of $1,695, all employees at AICC member companies can register for all AICC webinars. Pass holders will be given a code that all employees can use during registration and get access to all webinars scheduled September 2020 through August 2021. See the most current Education Calendar on page 56.

While virtual conferences and hybrid courses are not included with the All Access Pass, AICC currently has 50 webinars scheduled, and more are being added and will be available. Average registration for a webinar is $250. If your team members attend just seven of the 50, your company will save money and time by not having to process multiple payments.

All employees can register for webinars that are important for their development, knowing they are already approved.

The All Access Pass is available for AICC members in good standing. It offers the best way to meet your team’s professional development needs.

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BOXSCORE September/October 2020

When you invest in professional development, you invest in your organization’s potential. You equip your team with shared knowledge that helps them perform at a high level, and you position your organization to attract and retain top talent—professionals who value continuous learning and career growth.

The All Access Pass gives ICC members: • Flexibility to choose educational offerings and decide which team members take them.

• Simplicity and accuracy in budgeting for professional development.

• The best available price for AICC webinars, even before they are offered.

• An easy way to leverage the value of AICC. To purchase the All Access Pass, visit www.aiccbox.org/pass or contact Taryn Pyle, director of education and leadership development, at 703-535-1391 or tpyle@aiccbox.org.

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AICC Innovation

Professional Development

Collaborating With the Generation Above

BY LAUREN FRISCH

W

e all want to experience success in our life—success in our business, personal relationships, finances, and the overall impact we leave on the world—but how do we find fulfillment in these areas of our life?

There is not a simple answer on how to find success, but I know happiness and success start with surrounding yourself with good people. There is the old but true saying that you are the average of the five people you spend the most time with.

Think of your top five people. What are your conversations, your actions, your hobbies, and your attitude when around these people? Hopefully, they are positive and progressive, because eventually these actions will shape you into who you are.

According social psychologist David McClelland, Ph.D., of Harvard University, the people you habitually associate with determine as much as 95% of your success or failure in life.

On average, we spend more than a quarter of our life at our company—and if you are in a family packaging business, you know it is more time-consuming than that. For you to excel in your professional life and your company, it is imperative to have strong mentors surrounding you.

Most successful business owners attest to the power of a great mentor. A mentor relationship can last for a conference meeting, a phone call, a couple of months, or a lifetime. Bill Gates attributes part of his success to his mentor Warren Buffett. Gates praises Buffett for teaching him how to deal with tough situations, simplify complex problems, and think long-term. Almost always, the mentor

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BOXSCORE September/October 2020

benefits equally and is empowered by the mentee as well. Buffett admits that he admires and has learned from Bill Gates’ view on how to benefit society based on his wealth.

As Emerging Leaders (ELs) in AICC, we have a phenomenal and unique opportunity to create mentor relationships with a diverse group of boxmakers who have already traveled down the path we are embarking on. We need to take advantage of their experiences, successes, and mistakes to save us precious time and mental energy to get ahead of the game.

Many AICC meetings have discussed the generational shift and how to deal with us ELs entering the workforce. We millennials need to learn from and collaborate with the generation above us. The differences that exist between millennials and baby boomers should be treated as an asset, not as a liability. We need to utilize our generational differences and skill sets to strengthen our box plants, not destroy them.

The younger generation needs to continually educate on new technology and innovative processes and offer their diverse, fresh perspectives, while older generations need to share their institutional knowledge and values.

Each generation should lean on the other to grasp the best skill sets of both generations to implement into your company.

Again, there is not a simple secret sauce to finding success, but I do know it all starts with surrounding yourself with good people in your personal and professional life. Surround yourself with people who lift you, lend you knowledge, and help you learn from your mistakes regardless of your age difference.

Lauren Frisch is in sales at Wasatch Container. She can be reached at lauren.frisch@ wasatchcontainer.com.

In Memoriam

Remembering Paul H. Vishny, AICC’s Founding General Counsel

P

aul H. Vishny, former general counsel and secretary of AICC, passed away on Wednesday, April 22, 2020, in Beachwood, Ohio. He was 89.

Vishny was born in Chicago in 1931. He was a graduate of the University of Illinois and the DePaul University School of Law. He was also an ordained rabbi, having received his rabbinical degree in 1957 from Hebrew Theological College in Chicago.

Over the course of his legal career, he was a partner in several Chicago firms, including Kopstein & Vishny, D’Ancona & Pflaum, and later, Seyfarth Shaw. Vishny served as general counsel and corporate secretary of AICC for 40 years—from the day of the Association’s founding in 1974 until his retirement from legal practice in 2014.

In the early days of the Association, when the corrugated industry was rocked with antitrust suits and unethical dealings on seemingly every front, it fell to Vishny to be the voice of calm amid the storm.

He was the attentive, sometimes assertive presence at the meetings of the board of directors and its various committees of the day. He acted as secretary, parliamentarian, umpire, and even father-confessor.

He was the moral compass for the Association’s actions.

Vishny’s role made him a confidant and close collaborator of AICC’s elected leadership, and many have come forward with special memories and tributes. Past AICC Chairman Greg Tucker, chairman and CEO of Bay Cities in Pico Rivera, California, knew Vishny for more than 35 years and remembers him as the “ballast” and the “conscience” of the Association. Echoing that theme, Past AICC President Jim Davis, formerly of

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BOXSCORE September/October 2020

DeLine Box Co., says, “His rabbinical sense of justice kept us on the straight and narrow.”

Chuck Fienning, former owner of Sumter Packaging, Sumter, South Carolina, and past AICC chairman, says, “In all the years I knew him, he demonstrated the professional demeanor, knowledge, integrity, and concern for AICC that helped guide our leadership over the decades.”

Past AICC Chair Cindy Baker, formerly of Scope Packaging and now with New-Indy triPAQ in Cerritos, California, called Vishny “a true gentleman in every sense. When I think of him, I have nothing but warmth in every memory.”

Bob Thacker, yet another past AICC president and former owner of Thacker Container Co., remembers Vishny for his “wise counsel” and as a “peacemaker.”

He adds: “In the evening, with a glass of red wine in hand, he was my drinking buddy, too.”

Past AICC President Joseph R. Palmeri, chief operating officer of Jamestown Container Cos. in Falconer, New York, recalls the “privilege of working with Vishny on many projects such as SuperCorrExpo and FirstPak. He was always helpful and available for any question I may have had.”

Past AICC President Craig Hoyt agrees, saying, “I specifically remember what great advice he gave to us during our negotiations for our long-term SuperCorrExpo agreement with TAPPI.” Says Greg Arvanigian, another past AICC chairman, says, “Vishny was always the calm voice of reason in the room.”

Larry Cooper, former owner of C&B Display Packaging in Mississauga, Ontario, and past AICC chairman, calls Vishny “the wonderful, steady hand that guided AICC through the years. He will be missed.”

Andrew Pierson, past AICC chairman and former president and

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In Memoriam

CEO of Mid-Atlantic Packaging in Montgomeryville, Pennsylvania, says simply, “We have lost a treasure.”

Vishny’s influence and persona resonates with those whose history with AICC is far shorter. Says AICC General Counsel David Goch, who succeeded Vishny on his retirement in 2014, “Despite his unmatched tenure as AICC’s general counsel, he willingly, with no hesitation, entrusted his ‘baby’ to me.”

AICC President Mike D’Angelo, says, “For me, an AICC meeting didn’t truly start until Paul spoke. He had the most wonderful voice. ‘Gentle steel’ is how I referred to it then and how I recall it now. It was one of those things that made AICC, well, AICC.” Vishny is also remembered along with Dick Troll, a founder, past president, and the first executive director of AICC,

as the architect of the International Corrugated Packaging Foundation. He authored several editions of our antitrust guidelines, the first of which was drafted in the wake of the Houston Corrugated Container Case, and he was instrumental in the development of an industrywide antitrust education program following.

Vishny recognized the contribution of the industry’s suppliers and urged AICC into profitable partnerships in industry trade and machinery shows, where suppliers and members could come together. AICC’s current, longtime partnership with TAPPI in our jointly owned SuperCorrExpo franchise is one of the fruits of his work. He also worked with the U.S. Department of Justice and the Canadian Bureau of Competition to lay the groundwork for our FirstPak program.

For all he did for AICC, he was named into the Association’s Hall of Fame in 1991.

Outside his service to AICC, Vishny also served as general counsel for the Telecommunications Industry Association and authored legal treatises on international trade. He was also a scholar of Judaic law, and authored The Siddur Companion, a book to help others of faith to better understand the prayers of the Jewish people.

Vishny was preceded in death by his wife, Michele, in March 2019 and is survived by three daughters—Deborah S., Miriam L., and Renana A. Friedman—and four grandchildren. Memorial contributions may be made to Vinney Hospice of Montefiore, 1 David N. Myers Parkway, Beachwood, OH 44122, or the Alzheimer’s Association.

John S. Carman, StandFast Packaging Products

J

ohn S. Carman, founder, former owner, and president of StandFast Packaging Products (now StandFast Packaging Group), Carol Stream, Illinois, passed away on Thursday, July 2. He was 90 years old.

He was born on April 18, 1930, in Chicago and graduated from St. Gregory’s High School and Loyola University. He was a U.S. Army veteran and served in the Korean War from 1953 to 1955. After his military service, he began his career in the corrugated packaging business working with Georgia Pacific. In 1967, he joined his colleague John Morris and founded StandFast Packaging Products in Addison, Illinois, beginning with only a bandsaw set up in his basement. Today, StandFast

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BOXSCORE September/October 2020

Packaging Group is a $50 million company that employs 120 people. It is led by his sons Jay, John Jr., Keith, and Scott Carman.

Carman was a founding member of AICC in 1974 and was active on AICC’s board of directors in the 1980s, first as regional vice president of AICC’s Region Six (Illinois and Wisconsin) and then as a director at large. He served on the Membership and Containerboard and Sheet Supply committees. He was also a founder and member of what was known as the Sheet Plant Owners and Operators Club—the “SPOOC Group”—an informal club of AICC members whose primary purpose was an annual ski outing in Vail, Colorado.

Recognizing the success of StandFast Packaging Products, the University of llinois Institute for Entrepreneurship Studies in 1985 named Carman to the Chicago Area Entrepreneurship Hall of Fame.

He is survived by his wife of 64 years, Patricia; five sons, John Jr., Jay, Keith, Scott, and Jeffrey; a daughter, Kristin; and 10 grandchildren and four great-grandchildren. Expressions of sympathy may be sent to the family c/o, StandFast Packaging Group, 710 Kimberly Drive, Carol Stream, IL 60188.

Memorial remembrances may be made to the Chicago Alzheimer’s Association at www.alz.org/illinois or to Mercy Home in Chicago at www.mercyhome.org.

Thank You, Education Investors These companies are making a significant contribution to the online education available to all AICC members.

For more information, contact Mike D’Angelo, President, 703.535.1386 or mdangelo@aiccbox.org.

Member Profile

Cauthorne Paper Co.

BY VIRGINIA HUMPHREY

COMPANY: Cauthorne Paper Co. ESTABLISHED: 1912 JOINED AICC: 2018 PHONE: 804-798-6999 WEBSITE: cauthornepaper.com LOCATIONS: Ashland, Virginia OWNER: Mark Williams

Y

ou probably know Mark Williams from his days at Richmond Corrugated (RCI), the company his father and grandfather started in 1971.

Perhaps you recognize him because you worked alongside him on several different AICC committees. Maybe it was his frequent stints on the board. Williams served as AICC chairman in 2016.

But how familiar are you with the Mark Williams of Cauthorne Paper? After selling RCI in 2017, Williams found himself with some time on his hands. He took a sabbatical traveling around the country, including a stop in Las Vegas for what he thought would be his last AICC meeting. But by fall of the same year, he was itching to get back to work and began looking for a company in his hometown, Richmond, Virginia, to invest in or buy.

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Williams considered quite a few possibilities but finally settled on a local business—Cauthorne Paper. “The owner, John Lewis, was nearing 70 years of age,” he says. “He had grandkids and a beach house, and he was just ready to check out of work and move into the retirement lifestyle.”

Lewis turned over the 106-year-old company to Williams on May 31, 2018, knowing the company and its employees were in good hands.

Cauthorne had an excellent reputation in the industry, and Williams wanted to honor that by keeping the name.

Williams also kept all the employees and added benefits such as a 401(k), a Christmas club savings program, group medical, dental, disability, and life, and a bonus plan paid out quarterly.

“I wanted the employees to know I was investing in all the assets of the company, not just the equipment,” explains Williams.

Since then, Williams has lost a couple of people but also has gained a few. Today, Cauthorne has 10 full-time employees, including a management team with more than 100 years of experience combined.

That’s been an asset as Williams continues to learn this new business.

He also gives his management team credit for Cauthorne’s reputation as being problem-solvers and the provider of quality products. Special credit goes to his operations manager, Steve Newsome—the “Paper Doctor”—who has been with the company for more than a quarter-century.

But equally important to Williams are the company’s experienced converting

Photos courtesy of Cauthorne Paper Co.

Member Profile

operators and a truck driver who always has a smile on his face.

Part of Williams’ success is that he appreciates the knowledge his team members have, actively listens to their advice, and observes how they do things. Only when he finds an area where his contribution can improve the process does he jump in and make changes. Changes such as bringing the company into the 21st century with computer upgrades and end-to-end process software.

“The learning curve was substantial, but maybe less so than it would have been in one of the other businesses I considered buying,” Williams says. “I liked that the company was a niche converter. Paper converting is different [from] but similar to converting boxes.”

Cauthorne’s size is comparable to that of a sheet plant running about 2 million square feet per month of a value-added mix. However, a significant difference is that sheet plants tend to have just a

ON OPERATIONS Today Cauthorne Paper Co. operates out of a 43,000-square-foot building in Ashland, Virginia. Most of Cauthorne’s revenue comes from niche converting.

What is paper converting? The most straightforward answer is that a paper converter such as Cauthorne takes one form of paper—think a massive roll of kraft paper—and turns it into another paper product. Examples of Cauthorne’s niche converting capabilities include paper rolls a half-inch wide by 23 inches (outer diameter) that are used to wrap razor edges or rolls of lightweight polypropylene fabric used to make surgical masks.

Cauthorne’s finished products serve diverse markets, including electronics, pest control, automotive, food and

beverage, printing and publishing, and health care.

Cauthorne’s suite of equipment includes two slitter rewinders—one with a narrow-width niche and one that can run very lightweight to heavy materials. “We recently ordered a third slitter rewinder that will be able to convert narrow-diameter rolls for a company that manufactures sustainable insulated packaging solutions for cold chain shipments,” Williams says.

Among the company’s other pieces of equipment are a corrugated slitter (purchased from Packaging Express), a sheeter, two die cutters—a Bobst SP 1260 E and a Pioneer FDP 80 roller— three guillotine trimmers, a small pouch machine for bottom fold/sidesealed pouches, and a Gerber M3000 sample table.

few suppliers. Cauthorne has several dozen paper, paperboard, and nonwoven suppliers. They have access to a variety of materials and can cut almost anything in roll or sheet form, as long as it is within their machine tolerances.

Another difference is that while many boxmakers tend to concentrate on a local market, Cauthorne’s ability to convert very niche products has won customers over from around the globe.

At 57 years old, Williams says he’s in what he calls the fourth quarter of his career and wants to finish strong.

He has goals for Cauthorne, and he’s looking forward to celebrating them with his team. While not planning on going anywhere just yet, Williams thinks about transitioning the business to the next owner. He doesn’t know who that is going to be yet, but for now, he’s happy to continue improving the business.

Even during these stressful times, Williams says sleepless nights are rare.

Occasionally, he might worry about being behind on a deadline or the occasional cash crunch. However, these days, he’s more concerned for his daughter, a nurse on the front lines of the COVID19 pandemic.

“A bad day at the office for her is a lot worse than it is for me, so I try to keep that in mind,” Williams says. “But I do worry about my children and family members more these days. That’s the stuff that keeps me up.”

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Member Profile

Before relocating north to Ashland, Virginia, the original Cauthorne Paper Co. facility in Richmond was the company’s headquarters for decades.

He hasn’t had to worry about employees, because the nature of the converting business allows for social distancing.

Typically, only one person is running a machine. They did have a setback in May when one of their customers had to shut down for economic reasons brought about

by COVID-19, and overall, there has been a decrease in demand.

Of course, this is how paper converters and boxmakers can support one another during both good times and bad. “All our customers use boxes, and certainly, many boxmakers have customers with requirements for paper,” Williams says.

“This is where the overlap between our businesses is.”

Williams is looking forward to continuing and strengthen the relationships he has made through AICC over the coming years—perhaps even working and collaborating with boxmakers in a whole new way.

Virginia Humphrey is director of membership and marketing at AICC. She can be reached at 703-535-1383 or vhumphrey@aiccbox.org.

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BOXSCORE September/October 2020

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BOXSCORE September/October 2020

NEW MATH FOR CONVERTERS A comprehensive financial review for the independent

By Mitch Klingher

I

’ve been writing about a lot of different financial topics in BoxScore and in other periodicals for the past 25-plus years—anything from shipping and delivery costs, to credit and collection methodology, to recession planning, to cost estimating, financial reporting, performance measurement, and a host of other topics. I’ve been teaching financial courses for both financial and nonfinancial managers since 1993, as well. AICC has asked me to do a review and summary of the key points and issues that I have raised over the years in an effort to tie it all together into a more comprehensive view of finance for independent converters.

Let’s start with some of the basic premises that I think will help you in your efforts:

• Conventional accounting theory has saddled you with a 500-year-old system of double-entry accounting and a 250-year-old system of cost accounting that severely limit the information that is available to you. In addition, pretty much all of the enterprise resource planning, or ERP, software systems available to you embrace and perpetuate these limitations.

• The most finite resource that you have at your disposal can best be expressed as a function of time, yet your systems do not comprehensively measure time in the same way that they measure dollars and other things.

• Most costing systems are better suited to large, complex manufacturing projects in which a plant is set up to run a small product line that repeats

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over and over again, while most converters run custom job shops that fill hundreds of fairly diverse orders every week.

• The true variable profit of the order plotted against time is the key relationship that must be measured by the converter to have a greater understanding of its profitability (throughput and velocity).

• Conventional financial reporting, with its focus on a homogenized gross profit and very broad cost buckets, is an impediment to needed profitability measurements.

Understanding profit centers and being able to manage cost centers is a more sensible approach to internal financial reporting.

• The best way to incentivize employees to do better is to give them timely accurate information and, conversely, keeping them in the dark makes them feel disenfranchised.

• A system of daily measurement and reporting of key financial and productivity factors is an essential part of any reporting system.

• Month-end financial reporting systems need to integrate nonfinancial measurements to make them more meaningful.

• Financial reporting can and should be prepared from multiple perspectives to enhance their usefulness to management and ownership.

The current pandemic has caused many of us to rethink and reengineer our businesses. More people are working remotely and, without the daily trip to the office, have time on their hands to consider alternatives to the current situation. We thought this would be a good time to review the financial side of the converting business in an effort to get you thinking about how to effectuate meaningful change to improve your understanding of your business and its various reporting systems. Let’s take a deeper dive into

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these issues and see if we can come up with something that is actionable.

Antiquated Accounting and Costing Concepts You may argue that pretty much everybody uses the same types of systems, and in point of fact, you are correct. However, that doesn’t mean that you shouldn’t try to augment these systems to make them more effective. Double-entry accounting was invented in the Middle Ages by an Italian monk and was a quantum leap over single-entry accounting. The addition of a second dimension to accounting systems represented a major improvement to the information that could be gleaned from accounting records. The question I have for you is whether two dimensions are sufficient. What about machine hours, people hours, quality, speed, efficiency, and other key factors? Where and how are they measured, and how are they integrated into the system?

Similarly, cost accounting, which was invented during the 1700s and created a method of allocating costs to product that gave businesses a much more rational and scientific methodology for costing and pricing their products.

These concepts were then enhanced during the Industrial Revolution to add a planned level of activity that further improved these capabilities. So, we now have fairly complex costing systems that seek to allocate all costs, at a planned level of activity, to the products produced and the services provided, to enable businesses to make rational pricing decisions and give them greater insight into their profitability.

It sounds really good in theory and provides important information for many manufacturers who produce large numbers of fairly homogenous products and product lines and whose output is fairly predictable. For example, while a paper mill produces different grades and sizes of paper on its machines, each paper

machine is very compartmentalized, and its output is highly predictable, so these concepts work perfectly. But a job shop that runs multiple orders over multiple pieces of equipment every shift and cannot predict from week to week exactly what orders it will run can make some very bad decisions utilizing this type of system.

In response to this, the costing systems have become more and more complicated, to the point that no one really takes the time to reconcile them to the actual costs the company incurs nor really understands what the systems are telling them.

In order to do it right, every month, actual costs from the system (materials, labor, and overhead) must be reconciled to the actual costs in the general ledger, and actual output must be reconciled to planned output. The difference between actual costs and the costs in the system is called a “budget variance,” and the difference in output is called an “activity” or “volume variance.” Only by frequent analysis of these variances can a costing system ever be “trued up” to the actual results of the business. This takes a lot of time and a lot of work and, at the end of the day, will probably not influence behavior greatly, so converters generally shy away from it.

Time The first question to be asked is, what additional dimensions should I add to my

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accounting and reporting systems first, and I think the clear winner here is time.

Once the equipment has been put into place and the employees have been hired, the basic cost structure is set. At this point, we can start to measure our activity in terms of dollars, units of measure, and time. Measuring dollars is fundamental to all accounting systems, and the units of measure in converting can usually be expressed in terms of tons and square footage converted and shipped, although other units of measure are used for different aspects of the business. Time, however, can encompass many things, and in fact, all converters do measure various aspects of time, although not cohesively and consistently, the way they measure dollars.

I would argue that in a capital-intensive, machinery-centric business, machine hours are your most finite resource, and therefore you should begin

your measurements there. Looking at the financial statement of a converter without understanding how many machine hours were available and were utilized, and what they yielded in both output and dollars, gives an incomplete picture of the period that is being reported on.

While almost all of you measure machine hours in one fashion or another, precious few of you integrate this information into your financial reporting systems.

While I think that there are many elements of time that can and should be integrated into reporting, machine hours is at the very top of the list. I also recommend that you not do this casually, but treat machine hours the way you treat dollars, in that you should have a ledger that accounts for every machine hour used and unused, which is reconciled at least monthly and integrated into your books and records. Only then can we

begin to relate the hours to the dollars that they both cost and generate.

Costing Mythology and Alchemy Cost allocation is supposed to be a science, although the best system designers seem to consider themselves artists who develop elegant and sublime systems that will ensure company profitability. In practice these systems can be problematic, and most converters have figured out how to “game� their systems to get the results that they desire. They will accept a certain category of orders at what the system considers to be a low level and try to make up for this with extra volume or by taking other types of orders at much higher levels. The decision-making process then becomes more intuition and alchemy than anything based in science or reality.

What is needed is a simpler system that differentiates between the incremental

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“You may argue that pretty much everybody uses the same types of systems, and in point of fact, you are correct.

However, that doesn’t mean that you shouldn’t try to augment these systems to make them more effective.” costs of the order and costs that will be there whether or not you accept the order (i.e., the true “cash cost” of the order).

The projected sales price of the order less the incremental costs of accepting the order is called the “throughput dollars” of the order. The key issue here is that not every so-called variable cost really varies directly with the acceptance of each order.

Items such as electricity, repairs and maintenance, and plant supplies do go up if you run more orders, but it is not a linear relationship.

Direct labor in most instances is also a fairly fixed number, because the plant employees work faster when they are busy and slower when the plant isn’t busy, and at the end of the day most of you pay your employees for a 40-hour week, because you don’t want them to start looking for another job. The only variable cost comes from overtime, and that is hard to predict. Delivery also has a very large fixed component, and the cost of the drivers will also generally be 40 hours a week or more, because you don’t want to lose them either.

So, at the end of the day, most analysts will define throughput dollars as sales less materials less commissions. Thus, throughput is easy to calculate and, most importantly, easy to reconcile to your actual books and records. If you can accept that almost all of your other costs are fairly fixed over a wide degree of plant activity, then this is the way to go. If your operation includes other costs that can really be directly tied to an order, then you should deduct those costs in calculating throughput, but

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BOXSCORE www.aiccbox.org

43

understand that throughput has become the new “contribution” that most of your more successful and forward-thinking converters are using.

Throughput and Velocity Once you develop a system of calculating the true variable cost of the order and can accurately calculate its variable profit or throughput, you must plot this number against the machine hours that it took to generate the order.

Throughput in terms of dollars divided by velocity, which is measured in terms of hours, will give you the variable profit per hour of the order. This needs to be measured consistently on every order and in the aggregate. A converter needs to know how many throughput dollars per hour he averages at every machine center and combination of machine centers to have a better understanding of both how to price future business and to understand the profitability of the current book of business. Simply expressing sales price as a function of units shipped or accepting the system’s fully absorbed cost calculation of profit is not nearly enough information. Once you gain this understanding, you can model your entire business based upon the sale of machine hours at a certain level of throughput, and you can look at the effect of taking on new business utilizing the same metrics.

You can and should also start integrating these calculations into your financial reporting. Sales and throughput per hour can and should be looked at from multiple perspectives, because this is the most important relationship in your financial statements. You need to understand this relationship by product lines, customers, geography, industry, salesperson, and probably other marketplace dynamics to effectively plan strategies to maximize future profitability. In order to do this, you must create a system to account for all machine hours—which many of you do in a separate system—and you need

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to integrate this data into your financial reporting.

Profit Centers and Cost Centers Sales less cost of goods sold equals gross profit. Everyone learns this in Accounting 101, and it is a fundamental bottom-line concept that will show whether or not a company’s gross margin is increasing or decreasing over time. However, the underlying details of what makes up the increase or decrease in gross margin and its relationship to the changes in the overhead structure of the company are what need to be understood. Conventional financial reporting, which then takes this gross profit number and subtracts overhead expenses in broad categories, such as “selling expenses” and “general and administrative expenses,” doesn’t tell much of a story about what is going on. What is needed is a focus on profit centers, with the direct costs of each profit center deducted from those profits and the common cost centers that support these efforts aggregated by key function.

Products, salespeople, industries, customers or groups of customers, and machine centers are all examples of possible profit centers that you may want to measure. The key here is flexibility in financial reporting and the willingness to look at the same periods financial reporting from multiple perspectives. Examples of cost centers are customer service, design, maintenance, delivery, plant labor, selling, marketing, and accounting. In my opinion, it is far more important to know the total cost of your design department than it is to look at these costs as a component of selling expenses.

Most of you have been looking at the same financial statement structure month after month, year after year, and you have gotten used to it. Change is hard and often disruptive, but to be able to drill down to exactly what is driving the profitability or lack thereof of your business is well worth the effort. Eighty

percent or more of these changes can be set up in a few days, so what do you really have to lose?

Performance Measurement Most of you measure a number of key performance indicators (KPIs) and publish these results on a consistent basis, but very few of you integrate these measurements into your financial statements.

I see an awful lot of machine reporting, such as uptime, downtime, maintenance, setup times, average pieces per hour, MSF converted per hour, number of setups per shift, efficiency, OEE, and other measurements. I see calculations of on-time delivery and delivery statistics such as cube utilization, miles driven, miles per trip, stops per trip, and dollars per mile. Maintenance is measured by major machine center, by PO, and preventative maintenance is often differentiated from repairs. Salesperson performance is often measured by such things as new customers, new items, new contacts, etc.

I don’t generally see a lot of performance measurement in the areas of design and customer service, but some of you are measuring the number of orders processed, the number of designs processed, the timeliness of response, and other factors.

Almost none of you integrate this data into your periodic financial reporting.

Everything is usually looked at as a percentage of sales or per ton or per MSF, but why not have other operational data shown in conjunction with the financial information to give the reader a better

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“The first aspect to creating good performance measurement systems is to create cost centers that are appropriate to your business. Once the cost centers are created, you can start measuring activity in terms of hours, orders, timeliness, etc.” metric for which to evaluate the financial performance?

The first aspect to creating good performance measurement systems is to create cost centers that are appropriate to your business. Once the cost centers are created, you can start measuring activity in terms of hours, orders, timeliness, etc.

You can then evaluate the effort of the cost center in terms of dollars and activity, but you need to do this on a consistent basis and make these calculations part of your books and records. Having a daily report is a good thing, but being able to sum those daily reports and relate those details to your actual financial reporting is the gold standard.

Incentivizing Employees Consistent and accurate performance measurement systems for all cost centers and every significant category of employee become the backbone of employee effectiveness and improvement.

In most cases, a little bit of money goes a long way in modifying behavior.

If customer service employees know that the number of orders that they process accurately figures into how much money they can make and they buy into the measurements being made as reasonably accurate, then they will find a way to improve in that aspect of their jobs. If machine operators understand and buy into the measurements being made in the plant and can make a few more bucks by improving those statistics, then they will likely try to do so. Many managers believe that just giving employees the data and factoring it into their periodic employee

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evaluations is just as effective at modifying behavior as putting money on the table, and they are probably correct, as well. I don’t profess to fully understand the psychological aspects to this, but I have seen that companies that have accurate and consistent performance measurement systems tend to have more highly motivated and effective employees.

In addition, by creating cost centers that are based upon key function, the managers of those functional areas will have a much better idea of the costs in their departments. Many managers are hesitant to give their employees too much financial information, but by creating cost and profit centers intelligently, components information of the financial statements can be shared more readily with employees. Having this information generally makes them more content, and it makes it easier to hold them accountable for their areas.

Bringing It All Together If creating a financial reporting system that includes key plant and operational metrics is the goal, then the key to meeting this goal is to start slowly and be flexible. A monthly income statement can and should be looked at from multiple perspectives. Looking at gross profits in the aggregate has its application, but being able to look at the top part of the statement starting with throughput (or contribution) dollars by major customers, major industries, salespeople, major product lines, and by major machine center is far more important to understanding what is going on in your business.

Focusing on machine-hour profitability will give you great insight into how you are employing your most important and finite resources. Creating meaningful cost centers that can be analyzed and measured will help facilitate improved efficiencies and help you incentivize employees at all levels. Integrating performance measurement and other KPIs into the statements will help you keep your finger on the pulse of your business and facilitate both strategic and tactical planning.

And the best news is that you don’t have to spend hundreds of thousands of dollars on new software systems and hire a ton of new employees. What is required is a willingness to effectuate meaningful change and a desire to look at things from a different perspective.

I will be doing a three-part webinar for AICC in early November to help you get started in this process. Please contact Taryn Pyle, AICC’s director of education and leadership development, at 703-535-1291 or tpyle@aiccbox.org to get more information about this course and possible future courses that we will offer in this area. Start giving some thought to all of the things that you currently measure and how you might integrate them into your financial reporting, and let’s all reconvene in November to discuss these concepts.

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

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GETTING LEAN Automation-based production addresses critical challenges for boxmakers

BY ROBERT BITTNER

“I

f you want to have a viable converting business, you’d better be automated,” says Bob Cohen, president of Acme Corrugated Box. The reasons are compelling. Automation helps boxmakers meet customer needs while reducing or eliminating some of the industry’s critical challenges. Automated processes also are at the core of companies committed to lean production, a comprehensive approach to streamlining manufacturing.

What It Means to Be Lean According to Cohen, lean production means maximizing the capabilities of both human resources and automated processes, “which allows us to reduce waste and improve efficiency.”

Because of those benefits, he has made the commitment to automate as many steps in the production process as possible.

“All of our six flexo lines are totally automated,” he says. “From the pre-feeder to the palletizers, as the product comes off it gets collated into units and then is sent

down to a final banding operation, which is also totally automated.”

One of the main reasons to embrace lean production and automation is the resulting improvement in production speed. For example, Paul Gilliam, vice president of application engineering at Inspire Automation, says, “We’re working with a customer now who has a couple of Signode strappers. The operators are controlling them manually—advancing units into them, hitting the button to place straps, and so on. One of our products is a strap-positioning system for automatic banding and strapping finished units. So we’re proposing he move to our automated system, which includes a bar code scanner and an interface to their scheduling software. That allows [our equipment] to scan a bar code and query their database to get the unit information. Based on that, we can automatically apply straps in the proper location for this unit and send it through the entire system unattended.”

Gilliam notes that, given the diversity of box plants in the United States,

there is no “right way” to automate, no one-size-fits-all approach. “Some plants have a lot of automation, and some have very little,” he says. “Sometimes our solution will be as simple as installing a powered conveyor to advance material 50 feet down the line instead of having somebody with a lift truck drive it down there. Or maybe it’s just a gravity conveyor so someone doesn’t have to push a product down the line. That’s very simple automation—just powering up systems that would otherwise be manual—but it can make a big difference in the long run.

It’s so basic that some people don’t even consider that kind of thing automation at all. But it is. And if someone in a very simple manual plant is just wanting to get started with automation, that would be a great first step. The simple automation of moving things on conveyor will reduce damage, which reduces cost.”

Choosing the best automated solutions will depend on a plant’s specific goals: What are you wanting to achieve, and how can automation help you get there?

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“There’s no point in investing in technology for technology’s sake. The best approach is to go in with an overarching, integrated understanding of the entire automation process and how it can improve efficiency.”

—Matt Miller, director of information technology, SUN Automation Group “Most of our technology endeavors revolve around equipment efficiency, production quality, and consistency, looking at how technology can help to improve on those things,” says Matthew Miller, director of information technology with SUN Automation Group. “There’s no point in investing in technology for technology’s sake. The best approach is to go in with an overarching, integrated understanding of the entire automation process and how it can improve efficiency. Otherwise, you risk

creating these silos of information or capability, and they don’t necessarily feed into or play well with the other technology on your production line. It takes a holistic approach and an understanding of how these systems are going to integrate effectively to produce the best-quality product.”

Not surprisingly, it also takes trained employees to oversee these new computerized and robotic co-workers. But the issue of balancing human and automated resources is not straightforward.

Filling the Employment Gap In recent years, many boxmakers have been forced to run leaner than they have wanted to, due to widespread employee shortages.

“In the last few years, plants have had a really tough time finding qualified employees for various positions,” Gilliam notes. So they have turned to automation, such as robotic systems to automatically feed converting machines or for the takeoff of a flexo folder-gluer to automate bundle stacking.

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STRONGER TOGETHER As we navigate this crisis, we are here for you.

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“Maintenance is a major requirement for automation. That means part of lean process for us involves focusing on a comprehensive maintenance program.”

—Bob Cohen, president, Acme Corrugated Box

Cohen has felt the squeeze as well.

“Finding new hires has been difficult,” he admits, noting that his region has seen unemployment hit a historical low. His company’s response was to automate whatever they could. “If you’re in a manufacturing environment, you have to find ways to not be dependent on people.”

The challenge goes beyond general low unemployment. Cohen points out that manufacturing has not been a particularly attractive career path for many young people entering the workforce. And those who do join the industry may have no industry background and, often, even little basic education. “Getting them up to speed can be expensive and time-consuming, sometimes requiring education and training far beyond what’s required for their jobs,” he says. “One key reason to go to automation is to avoid dealing with human issues in the workplace.”

Nevertheless, there is still a strong need for a human presence on the plant floor. “A lot of times, automation does not actually remove labor,” Gilliam says. “Automation will give you a more consistent flow and, therefore, more predictability in your operation, but you’re not necessarily always reducing labor or eliminating a lift truck.” The irony is that those are typically the areas customers point to when justifying an investment in technology.

“As systems get more technologically advanced, that requires plant people—plant maintenance people, particularly—to increase the depth of their skills,” Gilliam adds. “It’s not just about turning a wrench anymore. You’ve got to have somebody out there who can

52

BOXSCORE September/October 2020

diagnose a complicated control system that may include programmable logic controllers as well as standard computers.”

Cohen agrees, noting that the more invested a plant is in automation, the more it needs to support that investment with skilled maintenance. “Automation enables us to be a low-cost supplier, because we’re able to minimize setup times and maximize run speeds,” he says. “We’re prepared to run job after job after job.

You can’t do that if you’re not taking care of your equipment. Maintenance is a major requirement for automation. That means part of lean process for us involves focusing on a comprehensive maintenance program. We do what we call ‘blitzes’ on machinery: We go through each machine, front to back, on a rotating basis. We talk to the operators about what we can do to make their lives easier, how we can help them to run more efficiently. Because every day these guys come in to make boxes. We can either facilitate their work or we can ignore issues and make it harder for them to be successful. I want to make it as easy as possible, to allow them to use automation as much as possible. And when human intervention is required, make sure that intervention is cohesive and leads to better quality and better production times.”

Future Focus Like all technology, automated processes in box plants are constantly and rapidly evolving, which means that lean

production is likely to get even leaner in the years to come.

At Inspire Automation, Gilliam is particularly excited about the increased use of automated guided vehicles (AGVs) in box plants. “I’ve seen them used in hospitals, where they’re just moving down the aisles delivering medicine,” he says. “I’ve seen them in other industries.

But they haven’t been used much in corrugated, at least in the U.S. I think that’s a big change that’s coming.

Right now, if you look at the material-handling system in a typical box plant, it’s a bunch of right angles. An AGV integrated into the production workflow would allow greater flexibility—greater efficiency—in your material-handling layout, because the AGV can take a corner.”

Miller is seeing notable advances in software development focused on predictive analytics and artificial intelligence.

The goal is to replicate the function of a very experienced maintenance person who can quickly diagnose existing problems—but who is also able to predict future issues. “Our systems can go

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BOXSCORE September/October 2020

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above and beyond telling you what is a problem now and actually give you some real dates around when a component is likely to fail,” he says. “The key selling point is going to be identifying the conditions that lead to the failure of an anvil drum or something like that, and being able to predict with some accuracy that this is going to happen within a certain time frame so the customer can address that proactively.” Based on that data, managers can plan when to bring a machine down for maintenance and avoid unexpected downtime.

It is an idea with wide appeal. “This isn’t something that only the integrateds are asking about,” Miller adds. “We’ve gotten interest from a lot of independents as well. We canvassed our customer base from large to small last year, and there was enthusiasm across the board.”

Pain Prevention Greg Jones, executive vice president at SUN Automation, says, “I don’t believe there are many pain points in production that automation isn’t able to solve.” But automation cannot begin to address those pain points until it is installed and mastered. Only then will it deliver the benefits that come with lean production.

As far as Cohen is concerned, the sooner that happens, the better. “Most of my immediate competitors are spending the money necessary to stay in the game,” he says. “But if your business ignores technology, if you don’t upgrade your machinery, then you’re going to turn around in less time than one would imagine and realize it’s too late.”

Automation is no longer a business differentiator; it’s an expectation.

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

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SPECIAL SECTION

AICC EDUCATION CALENDAR

AICC is the leading educator for independent corrugated, folding carton, and rigid box converters. With more than 80 free online courses—many of which are available also in Spanish—instructive seminars, virtual conferences, and topical webinars, AICC can help everyone in your plant maximize their potential and your company maximize its profit.

The following is a list with dates of new, AICC, web-based, programming that is separate from the free courses available at any time to members at the AICC Packaging School. The webinars are eligible for the AICC All Access Pass.

Now more than ever, education and training are paramount to driving greater continued success of your company.

AICC encourages you and your team to participate in the many benefits available.

When you invest and engage, AICC delivers success.

Key

Webinar A webinar is a 60- or 90-minute live presentation, with time for Q&A with the presenter. Webinar series are also offered, which include multiple sessions over several weeks.

2020 September FMLA Updates – What’s Old Is New Again Thursday, September 10, 2 p.m. EDT

Virtual Conference A virtual conference is a week long and has multiple sessions and workshops, some concurrent, with live presenters. Full registration gives attendees access to all sessions and recordings. Guest registration allows only for attendance in a few sessions.

Tax Breaks for AICC Members Friday, September 11, 2 p.m. EDT

Hybrid A hybrid course may include prework, homework, workbooks, group work, and activities. The live portion, with presenters, takes place over multiple days. Then come follow-up activities (e.g., a group forum, coaching, etc.).

Anilox Selection and Maintenance and Ink Management and Control Wednesday, September 16, 2 p.m. EDT

COVID-19 Videoconference: COVID-19 & FFCRA Updates – What’s Now & What’s Next Friday, September 18, 11 a.m. EDT

The Leadership Mirror: Take Charge of Your Personal Leadership Development Friday, September 18, 2 p.m. EDT Friday, September 25, 2 p.m. EDT Friday, October 2, 2 p.m. EDT

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BOXSCORE September/October 2020

New Standards in Chamber Design and Development of the Ink Circuit Tuesday, September 22, 2 p.m. EDT Infrared Dryers for Improved Productivity, Improved Press Efficiency, and Better Graphics Tuesday, September 29, 2 p.m. EDT

October Executive Strategies: Incorporation of Hazmat Regulations for Box Fabricators Thursday, October 1, 2 p.m. EDT Hazmat: General Awareness and Security Tuesday, October 6, 2 p.m. EDT Anatomy Complete! Tips on What Plates Work Best!

Wednesday, October 7, 2 p.m. EDT Hazmat Awareness for Salespeople: Value-Added Opportunities Without Regulatory Risk Thursday, October 8, 2 p.m. EDT

Hazmat: Marking and Labeling Tuesday, October 13, 2 p.m. EDT Maximize Sales Results: Develop New Sales Skills for Todayโ s Market Thursday, October 15, Time TBD Thursday, October 22, Time TBD Thursday, October 29, Time TBD Thursday, November 5, Time TBD Hazmat: Box Fabrication Functions Tuesday, October 20, 2 p.m. EDT How to Expedite Your Digital Transformation and Maximize Your Productivity with Digital Workflow Friday, October 23, 11 a.m. EDT Simply Controlling Color Wednesday, October 28, 11 a.m. EDT

FREE ONLINE COURSES FROM THE AICC PACKAGING SCHOOL The following courses are available to all AICC members and their employees free. Please visit www.aiccbox.org/packagingschool to get started on your journey toward a more knowledgeable workforce!

18 Ways to Sell Value Achieving Higher Levels of Productivity Avoiding Antitrust Liability Benefits of ERP Software Solutions for the Packaging Industry

Delegation DIY Designing Your Training Space Digital Transformation for Corrugated Printing Distribution Essential Principles of Water-Based Flexo Inks Faster, Better, Smarter With Value Stream Maps Fingerprinting the Flexographic Press

Build a Visual Workplace With 7S

Flexographic Print Fundamentals

Communication for Coaches

Flexographic Print Plates

November

Cรณmo Especificar una Caja

Corrugated Essentials Wednesday, November 4, Time TBD

Cรณmo Optimizar la Impresiรณn Flexogrรกfica

Fundamentos de la Impresiรณn Flexogrรกfica

Thursday, November 5, Time TBD Friday, November 6, Time TBD ADA News You Can Use: Trends, Tips & Updates Thursday, November 5, 2 p.m. EST Financial Reporting and Analytics for Converters: Level 1 Tuesday, November 10, Time TBD Wednesday, November 12, Time TBD Thursday, November 13, Time TBD

Giving Motivational Feedback

Conceptos Bรกsicos de Corrugado 101

Glass Packaging

Conceptos Bรกsicos de Corrugado 102

Go Team! How to Make Your Team More Productive

Conceptos Bรกsicos de Corrugado 103 Convergent Selling Corrective Counseling Corrugated Basics 101: History and Industry Overview

Maintenance Budget Metrics Tuesday, November 17, 2 p.m. EST

Corrugated Basics 102: Corrugated Board and Its Uses

Manufacturers Think Tank Friday, November 20, 2 p.m. EST

Corrugated Basics 103: Manufacturing and Converting Corrugated Containers Fundamentals

December Rotary Die Cutting Operations Tuesday, December 1, 2 p.m. EST

Fundamentos de Seguridad

Comprensiรณn de las Combinaciones de Cartรณn Corrugado

Creando un Lugar de Trabajo Visual Usando las 5S o las 7S

How to Help an Upset Customer How to Spec a Corrugated Box How to Train Anyone to Do Anything Implementing a Scheduled Routine Maintenance Process Internal Staff Development Guide Introduction to Polymers Introduction to the Rigid Box Keeping Score: How to Read Financial Statements

BOXSCORE www.aiccbox.org

57

SPECIAL SECTION Rightweighting vs. Board Combinations Thursday, December 3, 11 a.m. EST Driving Organic Growth Thursday, December 3, 2 p.m. EST Impactful Initial Sales Meetings to Drive Revenue Friday, December 4, 2 p.m. EST Maintenance Strategies and Tactics Wednesday, December 9, 2 p.m. EST

Key Performance Indicators

Paperboard Cartons

La Eficiencia General del Equipo (OEE) en la Industria del Empaque

Preventative Maintenance Optimization

Machinery Maintenance Mapping

Understanding Our Capabilities to Meet Customer Expectations

Matemáticas Para la Producción de Empaques

Tuesday, December 8, 2 p.m. EST

Maximize Training ROI

Thursday, December 10, 2 p.m. EST

Mentoring Best Practices

Tuesday, December 15, 2 p.m. EST Thursday, December 17, 2 p.m. EST

2021 January Corrugated Printing Tuesday, January 12, Time TBD Wednesday, January 13, Time TBD Thursday, January 14, Time TBD Manufacturers Think Tank Friday, January 15, 2 p.m.

Digital Applications in Printing Tuesday, January 19, Time TBD Wednesday, January 20, Time TBD Thursday, January 21, Time TBD Maintenance – Facility Assessment Friday, January 22, 2 p.m. EST

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FREE ONLINE COURSES FROM THE AICC PACKAGING SCHOOL (CONTINUED)

Metal Packaging

Project Planning: MAPP the project for Success Proposals, Problems, and Projects With A3 Reducción de Configuración Rightweighting Rotary Die Cutting Operation

Navigating Time: Time Management for the Job Shop

Safety Basics

OEE for the Packaging Industry

Setup Reduction

Optimización del Mantenimiento Preventivo

Situational Leadership

Optimizing the Flexographic Printing Process Package Printing Packaging Design Workflow Packaging Foundations Packaging Production Math

Standardized Work Sustainable Packaging The Corrugator Understanding Accounts Receivable and Cash Understanding Anilox Rolls

Packaging Regulations

Understanding Combined Board Combinations

Pandeo y Cómo Controlarlo

Warp, and How to Control It

February

Moving From CS Manager to Leader Tuesday, January 26, 2 p.m. EST

Which Flexo Folder Gluer Is Right for the Job? Tuesday, February 2, 2 p.m. EST

Data Management Series: Manpower Thursday, January 28, 2 p.m. EST

Data Management Series: Machinery Thursday, February 4, 2 p.m. EST

BOXSCORE September/October 2020

Principios Básicos de las Tintas a Base de Agua Para Impresión Flexográfica

The Top 5 Sales Skills That Deliver the Maximum ROI Wednesday, February 3, 2 p.m. EST How to Reduce Risk in Major R & D Projects With Confidence Tuesday, February 9, 2 p.m. EST

Data Management Series: Methods Thursday, February 11, 11 a.m. EST Marijuana in the Workplace Thursday, February 11, 2 p.m. EST Delivering Impactful Value Statements: Salespeople and Sales Managers Tuesday, February 16, 2 p.m. EST Data Management Series: Materials Thursday, February 18, 2 p.m. EST Aligning Customer Service With Corporate Goals Tuesday, February 23, 2 p.m. EST

AICC ONLINE EDUCATION AT WORK

87 courses

99.8% testing pass rate

1,774 users

5,020 course completions

Increase Revenue: Identify and Target Your Ideal Customer Profile Thursday, February 25, 2 p.m.

Manufacturers Think Tank Friday, March 19, 2 p.m. EDT

March

How to Facilitate Margin Improvement Tuesday, March 23, 2 p.m. EDT

All About Packaging Printing Tuesday, March 2, Time TBD Wednesday, March 3, Time TBD Thursday, March 4, Time TBD Stages of a Selling Process Wednesday, March 10, 2 p.m. EST Maximizing Prospecting Effectivenss Leveraging Linked In and other Social Media Tools Tuesday, March 16, 2 p.m. EDT

Creating Virtual Relational Capital to Drive Sales Results Wednesday, March 31, 2 p.m. EDT

92.8 % participation rate

June Boiler Room, Boilers, and Steam System Tuesday, June 15, 2 p.m. EDT Manufacturers Think Tank Friday, June 18, 2 p.m. EDT

July

May

Blue Ocean Strategy Wednesday, July 14, 2 p.m. EDT

Maximum Productivity Wednesday, May 12, 2 p.m. EDT

September

Manufacturers Think Tank Friday, May 14, 2 p.m. EDT

Manufacturers Think Tank Friday, September 10, 2 p.m. EDT

Other Upcoming Events (Dates TBD) Corrugator Roll Audit Corrugating Roll Equipment Machine Safety System Circuits and Emergency Stops Dry End Control – Theory of Operation

Leverage Design Theory and Packaging School Calipers to Improve Graphic and Structural Design Design Machine Maintenance

Safe Equipment Operation Sales Conference The Influence of Sustainable Package Design on Buyer Behavior

BOXSCORE www.aiccbox.org

59

SPECIAL SECTION

ON THE RISE

Salaries, wage rates in independent corrugator plants and sheet plants increase an average of 3% in 2019

S

alaries and hourly wages of employees in U.S. independent corrugated converting operations rose an average of 3% in 2019, according to AICC’s 2020 Salary, Hourly Wage & Benefits Report. The biennial survey was conducted from March through May and is the industry’s most comprehensive report of key employee salaries, wages, and benefits being paid by independent corrugator plants and sheet plants in the United States. The survey is

SALARY, HOURLY WAGE & BENEFITS REPORT 2020 EDITION

60

BOXSCORE September/October 2020

conducted by Association Research Inc. in Gaithersburg, Maryland, an independent third-party research firm.

For the 2020 edition, data was submitted by 24 independent corrugator and/ or sheet feeder plants and 51 sheet plants.

These companies employed 7,805 workers across AICC’s six U.S. regions. Overall, 28 management positions were surveyed along with 87 “other,” or hourly, positions.

Across all companies reporting, the average management employee has been in his or her position for 11.5 years and

saw an average increase of 3.5% in base salary between 2019 and 2020. For nonmanagement and hourly positions, the average full-time employee has been in his or her position for 6.1 years and received an average pay increase of 2.8% between 2019 and 2020.

Breaking this information down further, sheet plant respondents reported higher increases than their counterparts in corrugator plants.

The increase for salaried management employees in sheet plants averaged 3.7%, while salaried management employees in corrugator plants saw their base salary increase 3.1%. Similarly, the hourly wage rate change in sheet plants averaged 4.2%, while corrugator plants’ wage rates increased 2.5%.

Complete data on salaries, hourly wages, and benefits can be found in AICC’s 2020 Salary, Hourly Wage & Benefits Report. The survey is available at no charge to participants.

Nonparticipants wishing to purchase a copy may scan the QR code on this page or go to www.aiccbox.org/store. The price is $395. For more information, contact Maria Frustaci at 703-535-1382 or mfrustaci@aiccbox.org.

2020 Average Management Position Total Compensation Corrugator Plants – U.S. Only GM (not an Owner/Partner)

$215,400

Sales Manager

$181,845

Marketing Director

$166,020

GM (Owner/Partner)

$161,490

Controller

$136,046

Plant Production Manager

$134,210

MIS/IT Manager

The collection of data for AICC’s 2020 Salary, Hourly Wage & Benefit Report began in March, just as the COVID-19 shock was affecting our economy. Since the survey period for the 2020 report covers 2019 only, it does not reflect any short- or long-term effect that the COVID-19 crisis may have had on wages in essential manufacturing businesses such as corrugated packaging, folding carton, and rigid box operations. The long-term effects of any such changes may be minimal, but we thought it would be instructive to see some of the pay scale practices and ongoing challenges brought about by the pandemic.

$125,434

Graphics Manager

$109,063

Maintenance Supervisor

$106,918

Design Manager

$103,249

Customer Service Manager

$95,431

Sales Representative

$95,321

Logistics Manager

$93,599

Converting Supervisor

$93,373

Production Manager

$91,916

Quality Assurance Manager

$89,410

Human Resources Manager

$89,363

Accounting Manager

$86,277

Purchasing Manager

$84,915

Planning Manager/Scheduler

$75,705

Shift Supervisor/Superintendent

$75,155

Shipping Supervisor

$69,221

Supervisor

$66,660

Line Foreman (Lead Man)

‘Bonus’ or ‘Hazard’ Pay A random sampling of AICC members brought differing responses on the question of whether they had offered “bonus” or “hazard” differentials in their pay scales. While most in our thumbnail survey said they did not, a few did. One company offered bonuses to all employees, office or plant, regardless of where they were working. This owner said, “We felt we shouldn’t penalize those employees working from home [at our request].” The amount of the bonus reported was $1.50/hour for regular hours and $2.25/hour for overtime hours. Salaried employees received an additional $500, $375, or $250 per month, depending on their salary level.

Another member, this one located on the West Coast, reported also paying a bonus to employees but did so based on total hours worked from March 19 to mid-July. In the Mid-Atlantic area, a member paid a premium for a six-week period for those who reported to the plant but not to those who worked remotely.

$51,302 0

50,000

100,000

THE COVID-19 INFLUENCE: ‘FRONT-LINE BONUSES’ AND THE EFFECT OF ‘BONUS UNEMPLOYMENT’

150,000

200,000

250,000

Contrary to this view was one expressed by a member in New England, who said, “I stressed the fact that during the early stages, most everyone was out of a job and didn’t know where their (Continued on page 62)

BOXSCORE www.aiccbox.org

61

2020 Average Management Position Total Compensation Sheet Plants – U.S. Only GM (Owner/Partner)

$289,839

GM (not an Owner/Partner)

$223,103

Sales Manager

$150,835

Controller

$132,350

Marketing Director

$120,347

Plant Production Manager

$100,794

MIS/IT Manager

$99,170

Production Manager

$98,059

Sales Representative

$91,892

Accounting Manager

$89,616

Design Manager

$89,200

Logistics Manager

$81,678

Graphics Manager

$80,383

Maintenance Supervisor

$78,029

Human Resources Manager

$77,698

Quality Assurance Manager

$77,570

Customer Service Manager

$75,782

Purchasing Manager

$70,846

Converting Supervisor

$69,188

Office Manager

$63,948

Shipping Supervisor

$62,217

Supervisor

$61,774

Shift Supervisor/Superintendent

$61,670

Planning Manager/Scheduler

$57,895

Line Foreman (Lead Man)

$49,056

Finishing Supervisor

$47,921 0

62

50,000 100,000 150,000 200,000 250,000 300,000 350,000

BOXSCORE September/October 2020

(Continued from page 61) income or benefits would come from in the future.

For our companies, we were working 40-hour weeks and still had the same financial situation we did prior to COVID. I stressed that we all should be jumping for joy at that, since it is a situation most could not boast about. Most people, if not all, I think understood that and were happy to be working.”

The Bonus Unemployment Challenge The federal assistance legislation passed at the height of the coronavirus crisis provided for extended unemployment benefits for laid-off workers. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27 and provided an additional $600 per week in unemployment benefits through July 31. In May, the U.S. House of Representatives passed the HEROES Act, which would extend this additional benefit until January 2021, a move opposed in the U.S. Senate and one that many in the business community have questioned because it will provide a disincentive to returning to work.

An article appearing in the May 31 issue of Fortune cites research by University of Chicago economist Peter Ganong and two of his colleagues, who found that because of the extra $600, two-thirds of laid-off workers are receiving benefits that exceed the paychecks they previously earned from working. One-fifth could receive at least twice their previous pay, they concluded.

One AICC member encountered just such a situation, when some employees reported “friends who were making more off unemployment by staying home.” The message communicated then to these employees was that this bonus would end for their friends and that the employees receive valuable health care and related benefits. Another member company similarly relied on the generosity of its benefits package to retain workers, reporting, “We have not experienced issues with unemployment pay hindering our ability [to bring back workers], but our positions are paying a minimum of $18/hour plus gainsharing and benefits.”

The debate over extension of unemployment benefits continues as of this writing, but alternatives such as a $450/week employment incentive are also being discussed to entice workers back to the job.

The Associate Advantage

Embracing Change, Investing in Your Association

BY JOE MORELLI JOE MORELLI HUSTON PATTERSON PRINTERS VICE CHAIRMAN JMORELLI@HUSTONPATTERSON.COM

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

GREG JONES SUN AUTOMATION GROUP SECRETARY GREG.JONES@SUNAUTOMATION.COM

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

DAVE BURGESS JB MACHINERY IMMEDIATE PAST CHAIRMAN DBURGESS@JBMACHINERY.COM

64

BOXSCORE September/October 2020

C

hange is difficult. Even changes for the good can take people out of their comfort zone and push limits that may not have been pushed in the past. At Huston Patterson, we’ve seen change—time and time again over the past 100-plus years. Although it can be tough, we enjoy it. We embrace it, and it is one of the reasons we continue to grow each year.

AICC facilitates positive change.

Whether it’s through weekly updates during this uncertain time or through their expansive library of training offerings, AICC is a platform for all of us, as General or Associate Members, to engage in bettering our companies. CEO groups, advisory groups, seminars, webinars, and Emerging Leader groups are all programs that over the years have helped companies adapt to the current industry climate and assist in propelling companies into the future.

When I look around the room at AICC events, I see numerous examples of companies who have invested in change.

Out went old logos, the conservative marketing approaches, and focus on outdated services and technology. In came new, modern looks, aggressive marketing approaches, and in many cases, incredible investments into the corrugated packaging industry with new equipment and tools never seen in the industry before. Many of these companies were extremely successful before their changes, and many company leaders admit that a lot of people questioned their reasoning for change.

But it is these same companies that are now seeing exponential growth.

Bay Cities, for example, has seen growth of 81% since joining AICC. Michigan City Paper Box has seen an increase of 88%. SMC Packaging is up a staggering 122%. In our case, since joining AICC, Huston Patterson is up 77%. There are dozens of these examples proudly displayed on buttons and posters around AICC national meetings, but what strikes me is that these same companies are often the most engaged in AICC programming.

AICC’s mission statement is simple: When you invest and engage, AICC delivers success.

Change can be difficult to accept, and it can be even harder to attack. But for many of our companies, it will continue to be a foundation of our success. Change can be a good thing. By embracing it and investing and engaging in the resources AICC provides, we all can change for the better during these uncertain times.

Joe Morelli is vice president of sales and marketing for Huston Patterson Printers and is vice chairman of AICC’s Associate board.

AICC MEMBER BENEFITS VIRTUAL SUMMITS

HYBRID EVENTS/ WEBINARS

This Fall you can participate in virtual plant tours and online networking.

AICC is offering virtual training unlike anything you have seen before. With pre-work, followup coaching, new topics for new time, we’ve got professional development for all departments.

EMERGING LEADERS PROGRAM Dedicated to providing the rising stars of the industry with the information needed to develop and thrive in the paper packaging industry.

AICC INBOX AND BOXSCORE MAGAZINE Every Monday, we send out an email newsletter to help you stay up-to-date on what’s happening in the industry and with our association.

FREE ONLINE TRAINING COURSES

Our BoxScore Magazine is filled with tips & tricks, and solutions written by industry professionals to help you better your business.

Over 80 courses to help build your employees’ industry knowledge that saves member companies over $150K! (Spanish and English available.)

GROW WITH AICC When you invest & enage, AICC delivers success.

NATIONAL & INTERNATIONAL MEETINGS Hosted twice a year, they include innovative programming, keynote speakers, workshops, networking opportunities, panels & much more!

ACCESS TO THREE INDUSTRY EXPERTS Unlimited access to our three technical advisors in folding carton, corrugated and safety & risk management!

KEY INDUSTRY REPORTS & PUBLICATIONS 24/7 access to industry statistics including multi-year forecasts, quarterly statistics, and benchmarking data specific to the independent marketplace.

VIRTUAL INHOUSE TRAINING Define your pain points and AICC will develop a course based on your needs, and bring industry trainers directly to your plant to train your machines.

ADVISORY GROUPS These groups allow participants to confide in peers, share ideas, receive honest feedback & give advice to help businesses grow.

BUILD INDUSTRY RELATIONSHIPS Build your network, establish strong relationships and gain relevant advice from other industry professionals at any AICC event or advisory group.

AICC HEALTH CARE A Fortune 500-type benefits buying and enrollment experience for your employees and their families with NAM Health Care.

AICCbox.org/Benefits

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

PACKAGING

CORRUGATED

F O U N D AT I O N

Begin Recruiting 2021 Student Interns, New Graduates Today!

T

he International Corrugated Packaging Foundation (ICPF) continually works to attract the best and the brightest students for available jobs and internships within the industry. Every year, over 750 packaging engineering, sales and marketing, graphic design, packaging design, business, supply chain management, chemical engineering, mechanical engineering, industrial engineering, and related students and upcoming graduates demonstrate interest in corrugated packaging careers by joining ICPF’s Corrugated Packaging Career Network, posting their résumés, and applying for openings through ICPF’s Career Portal and participating in ICPF’s educational programs and interactive broadcasts.

On average, over 120 student interns and new graduates are hired annually through ICPF resources by ICPF’s official Corporate Partners.

If you are an ICPF Corporate Partner or considering becoming a partner, you can gain a competitive edge by recruiting early. August through October is the best period to begin posting 2021 summer internships/co-ops and openings for upcoming 2021 graduates on ICPF’s Career Portal. It is simple and fast.

Contact info@icpfbox.org for information on posting openings and accessing ICPF’s Résumé Bank for upcoming graduates and students. For those seeking applicants for immediate entry-level openings, there are some upcoming December 2020 graduates available as well.

The following is a cross section of student interns and upcoming graduates who currently are available through ICPF’s Career Portal.

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BOXSCORE September/October 2020

Elizabeth A. (Clemson University, packaging science major with an emphasis on food and health care packaging, graduating December 2021) was awarded an ICPF travel grant to participate in ICPF’s Student/Executive Dialogue Dinner and ICPF’s Teleconference on the Business of Corrugated Packaging & Displays this past February. Elizabeth completed a six-month co-op at Tyson foods this past summer. “My areas of interest within corrugated packaging and displays include sales and manufacturing/production. I am seeking a corrugated packaging internship for May 2021–August 2021 and a full-time employment opportunity upon my graduation in December 2021.”

Ben M. (University of Florida, biological engineering major with specialization in packaging, graduating June 2021) additionally has an AA degree in engineering from Santa Fe College. “I have an interest in multiple corrugated packaging and displays positions, including manufacturing/production, project engineering, structural engineering, and sales. I am available to start a full-time position in June 2021.”

Sofia J. (Virginia Tech, packaging systems and design major, graduating May 2021) has an educational background in packaging science/engineering, software/ hardware design, and graphic design. “I am interested in packaging systems engineering and the IT systems areas. I am especially looking for opportunities that can promote my skills in solving pertinent automation/control system problems to provide extensive solutions for the corrugated packaging industry. I will be available for full-time employment in June 2021.”

Ryan N. (Clemson University, packaging science major, graduating December 2020) is an Air Force veteran who has placed an emphasis in studying packaging materials. “My career goal is to excel in the field of research and development, creating new packaging that exceeds customer requirements and promotes a sustainable future.”

Nicholas G. (Clemson University, packaging science major with a concentration in design, graduating May 2022) was nominated by his professor and subsequently awarded an

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ICPF travel grant to participate in ICPF’s Student/Executive Dialogue Dinner and ICPF’s Teleconference on the Business of Corrugated Packaging & Displays this past February. “My corrugated packaging internship and career interests are in sales or design. I am currently looking for an internship/ co-op beginning in January of 2021.”

Sarah W. (Michigan State University, chemical engineering major, graduating May 2021). “My areas of interest in corrugated packaging are in design, production, and engineering. I will be able to begin full-time employment in August 2021.”

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BOXSCORE September/October 2020

Wesley S. (Clemson University, graphic communications major and packaging science minor, graduating December 2020) has completed two internships at WestRock as a continuous improvement and special projects Intern. “During my two internships, I worked with the printing and finishing department finding ways to improve efficiency in production.

As a graphic communications student, I have a lot of lab experience learning about the different printing processes and the science behind inks and substrates. As a packaging science minor, I learned about the laws, machinery, and science of packaging materials. I would enjoy being a part of the production process.”

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Layla S. (Michigan State University, packaging science major with double minors in environmental and sustainability studies and food processing and technology, graduating May 2023). “I am seeking internships for fall 2021 and spring 2022. I will be available for full-time employment in June 2023. I am interested in the design, production, and sales aspects of the corrugated packaging industry.”

Richard Flaherty is president of the International Corrugated Packaging Foundation.

The Final Score

The Accidental Advocate

B

y the time these words appear in published form, I will have passed my fourth anniversary as a proud member of the AICC staff. Yes, it went fast. I have had the opportunity to learn a lot about the association business and the paper-based packaging business. I’ve had the pleasure to continue decades-long relationships with some members and to embark on new friendships with others.

The purpose of this column is not to serve as a four-year retrospective. Rather, it is to confess that in the last five months of this wonderful experience, I have been involved with issues into which I never expected to deeply wade.

I am not complaining—every AICC member can likely cop to the same statement. That is the reality of a pandemic. So, it is time to share some COVID-19-adjacent commentary regarding the aforementioned issues.

AICC, in my opinion, does so many things well, all focused on the membership. “When you invest and engage, AICC delivers success” cannot just be a slogan, it has to be a deliverable. Virtually every program AICC provides for membership is created by a staff member or staff team and often also includes the direct input of a member, a group of members, or an AICC committee. Networking, education and training, engagement, partnership, technical expertise, leadership groups, publications, seminars, and webinars—you know them and are familiar with them.

Advocacy is another member benefit that we provide, but in this regard, we work with the AICC Government Affairs Subcommittee and with partner organizations that have the boots on the ground to ensure that points of view important to AICC members get heard. The National Association of Manufacturers, the Small Business Legislative Council, and the Center for Association Leadership do tremendous work on behalf of AICC, and we liaise with each of them closely. These efforts supplement what should be a strong relationship that you have with your local representatives.

Until COVID-19 arrived, this way of advocacy worked well for AICC and for you. With the pandemic upon us, state governments and the federal government were all hyperactive, endeavoring to deal with all the issues that came with the virus. Our advocacy partners also went into overdrive and were a tremendous value in alerting us to fast-moving developments. AICC has had to distill so much information. Essential businesses, nonessential businesses, the Paycheck Protection Program, the CARES Act, the Families First Coronavirus Response Act, and the like certainly kept us on our toes. AICC staff have spoken to state employees and been on countless phone calls and Zoom calls. Good thing, too, because it has allowed us to share timely, relevant, and actionable information with you.

Your calls and emails to AICC on these programs and still-developing ones have given me newfound appreciation of the work that our partners do for us and the importance of our networking with them for you.

We had not really been in the deep end of this pool unless the issues were specifically related to the packaging business. I am glad we are now, though.

Mark Twain wrote: “That’s the difference between governments and individuals. Governments don’t care. Individuals do.”

So does AICC.

Michael D’Angelo AICC President

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