Nov/Dec 2015 AICC BoxScore

A PUBLICATION OF AICC—THE INDEPENDENT PACKAGING ASSOCIATION

November/December 2015 Volume 19, No. 6

Welcome,

Chairman Mark Williams!

ALSO INSIDE Unsung Heroes of the Corrugated Industry Folding Carton: Celebrating Every Employee The 2015 Annual Membership Report

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TABLE OF CONTENTS November/December 2016

•

COLUMNS

Volume 19, Issue 6

ON THE COVER AICC President Steve Young and (left)AICC’s and new AICC’s Chairman, new Chairman, Mark Williams Mark Williams

36

3

CHAIRMAN’S MESSAGE

4

SCORING BOXES

8

LEGISLATIVE REPORT

13

ASK RALPH

14

TACKLING TECH

16

NEW! LEAN LEARNINGS

18

LEADERSHIP

58

ASSOCIATE ADVANTAGE

60

FINANCIAL CORNER

64

THE FINAL SCORE

DEPARTMENTS

10

WELCOME NEW MEMBERS

FEATURES

23

GOOD FOR BUSINESS

36

30

POINT OF VIEW

34

MEMBER PROFILE

54

FOLDING CARTON

62

ICPF UPDATE

WELCOME, CHAIRMAN MARK WILLIAMS! A new AICC chairman has been elected. Meet the guy with the gavel.

42

UNSUNG HEROES OF THE CORRUGATED INDUSTRY A behind-the-scenes look at the diverse roles vital to success

46

42

40 YEARS OF AICC 2015 Annual Report

46

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. AICC is an international trade association representing a majority of independent North American manufacturers of packaging products and the suppliers to the industry. AICC members are represented by 538 boxmaking locations and 482 supplier locations, both segments of which are offered a full array of membership services, programs, and benefits. 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. ©2015 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: Mark Williams, Richmond Corrugated Inc. Vice Chairman: Tony Schleich, American Packaging Corp.

Vice Chairman: Al Hoodwin, Michigan City Paper Box Vice Chairman: Joe Palmeri, Jamestown Container Companies Vice Chairman: Jay Carman, Stand Fast Packaging DIRECTORS-AT-LARGE Jim Akers, Akers Packaging Brad Albright, Touchpoint Packaging Matt Davis, Packaging Express Marco Ferrara, Cajas de Cartón Sultana John Forrey, Specialty Industries Inc. Jana Harris, Harris Packaging Corp./American Carton REGIONAL DIRECTORS Region 1: Don Simmons, Empire Container & Display Region 2: Matt Davis, Packaging Express Region 3: Kevin Ausburn, SMC Packaging Group Region 4: Eric Elgin, Oklahoma Interpak Region 5: Gary Brewer, Package Crafters Inc. Region 6: Clay Shaw, Batavia Container Inc. Region 7: Finn MacDonald, Independent II Region 8: Joe Hodges, Mid-Atlantic Packaging Region 9: VACANT Region 10: Peter Hamilton, Rand-Whitney Corporation Region 11–12: John Franciosa, Coyle Packaging Group Region 14: Yair Caballero, CorrEmpaques Overseas: Kim Nelson, Royal Containers Ltd. President: A. Steven Young, AICC Headquarters Immediate Past Chairman: Greg Tucker, Bay Cities Container Corp.

Chairman, Past Chairmen’s Council: Mark Mathes, Vanguard Companies Secretary/General Counsel: David P. Goch, Webster, Chamberlain, and Bean Counsel Emeritus: Paul H. Vishny, Esq. ASSOCIATE MEMBER DIRECTORS Chairman: Keith Umlauf, Haire Group Vice Chairman: Jeff Pallini, Fosber America Secretary: Ed Gargiulo, Equipment Finance Corp Director: Kevin Widder, Automatän Immediate Past Chairman: Brian Kentopp, Bobst ADVISERS TO THE CHAIRMAN Tom Skinner, Phoenix Packaging Inc. Craig Hoyt, Buckeye Boxes PUBLICATION STAFF Publisher: A. Steven Young, syoung@aiccbox.org Editor: Taryn Pyle, tpyle@aiccbox.org EDITORIAL/DESIGN SERVICES The YGS Group • www.theYGSgroup.com Editorial Director: Annette Gray Managing Editor: Ashley Reid Copy Editor: Steve Kennedy Editorial Coordinator: Jordan Kell VP, Marketing Services: Jack Davidson Creative Director: Serena Spiezio Graphic Designer: Zon Buckley Account Manager: Brian Hershey SUBMIT EDITORIAL IDEAS, NEWS, AND LETTERS TO: BoxScore@theYGSgroup.com CONTRIBUTORS Director, Meetings: Cindy Guarino, cguarino@aiccbox.org Director, Latin America: Maria Frustaci, mfrustaci@aiccbox.org Director, Membership: Virginia Humphrey, vhumphrey@aiccbox.org Project Coordinator/Meeting Planner: Carolyn Patterson, cpatterson@aiccbox.org Administrative Assistant: Chelsea May, cmay@aiccbox.org President, ICPF: Richard M. Flaherty, rflaherty@icpfbox.org ADVERTISING Information: Taryn Pyle, tpyle@aiccbox.org Opportunities: Howard Neft, InTheKnow Inc. 847-899-7104 • thneft@aol.com Folding Carton and Rigid Box Advertising: Taryn Pyle 703-535-1391 • tpyle@aiccbox.org AICC BOXSCORE PO Box 25708 • Alexandria, VA 22313 Phone 703-836-2422 • Toll-free 877-836-2422 • Fax 703-836-2795 November/December 2015 www.aiccbox.org

2

Chairman’s Message

PERSISTENT LEADERSHIP DELIVERS CONSISTENT RESULTS

I

consider it a great honor to be serving as your chairman this year. Since my first involvement with the AICC board of directors 15 years ago, I have learned that this organization has not only been a great help to our business, but has also provided many lifelong friends along the way.

I grew up around boxes. My father, Dan Williams, founded Richmond Corrugated Box in 1971 with the help of his father, Dan Sr. Like a lot of independents in our industry, my dad previously worked in the integrated world, selling containerboard before deciding to hang out his own sheet plant shingle. I started working in the plant off and on after I turned 16 and went into sales after graduating from Virginia Military Institute (VMI) in 1985. Today, our company consists of Richmond Corrugated Box in Richmond, Virginia, and Wilmington Box, just outside of Wilmington, North Carolina. As a second-generation owner, I am assisted by a very capable secondgeneration top-level management team: Chuck White at Richmond Corrugated and Hobbs Goodwin at Wilmington Box. I am grateful to both of them for their support as I assume the chairmanship of AICC. My immediate predecessors have brought leadership themes to the forefront during their years at the helm. Kim Nelson introduced “authentic leadership.” Chuck Fienning and Mark Mathes focused on “dynamic leadership.” Greg Tucker shifted to “strategic leadership.” These leadership themes have struck a chord with our membership, and they are becoming increasingly important in our rapidly evolving industry. So this year, I would like to add “persistent leadership” to the mix.

My dad instilled the value of persistence in me. Long ago he shared with me the words of President Calvin Coolidge: “Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.”

A lot goes into making a box, and our organizations need leaders at all levels to champion parts of the process and persistently drive continuous improvement. John Wooden once said that he didn’t want the best players, but would rather have players who make the best team. Persistence is a big part of being the best team.

I’m looking forward to working closely with our Emerging Leaders and our Associate Members and to promoting the value that AICC provides to our industry. I’m also looking forward to visiting with you as I travel around the country in the coming year, understanding your business, your challenges, and how AICC can help you.

And given the mobility I’ll be seeing, my slogan will be “Let’s roll!” So let’s roll with persistence, agility, and an eye on our goal. I hope to see you soon.

Mark Williams President and CEO, Richmond Corrugated Inc. Chairman, AICC

BOXSCORE www.aiccbox.org

3

Scoring Boxes

HOW WHOLESALERS AND RETAILERS USE BOXES

BY DICK STORAT

I

n the United States, most boxes are used to package agricultural products, food, beverages, and other manufactured goods—most of them nondurable goods intended to last three years or fewer.

Collectively, shipments to manufacturers of one type or another amount to some 62 percent of box shipments, according to the Fibre Box Association. Another 16 percent of boxes are used to package fruit, vegetable, and nut crops, as well as meat and poultry products. The remaining 22 percent of domestic box production is shipped to wholesalers and retailers, who use the containers in their repackaging operations. This article will shed some light on the composition and growth patterns of wholesale and retail trade sales. Source

as production of nondurable consumer goods, a widely used yardstick of box market growth. According to the Fibre Box Association, about one-third of boxes headed into the wholesale distribution channel are used to package electronic components, most of which are imported in bulk and packaged for retail sale in the United States. Another 18 percent of corrugated shipments into the wholesale sector are used to package goods forwarded to grocery stores by wholesalers. Paper products accounted for another 17 percent of boxes used by wholesale merchants last year.

Electronics accounted for 10 percent of last year’s total wholesale sales. It is the fastest-growing wholesale category and has posted a 6.5 percent growth rate for

data on this segment is provided by the U.S. Bureau of the Census, which collects monthly sales and inventory data from wholesalers and retailers across the nation.

Let’s look at wholesale trade sales first, since they account for about two-thirds of the box shipments going into wholesale and retail channels—about 16 percent of last year’s total box shipments.

Wholesale trade amounted to $556 billion last year. During the first half of this year it decreased by 3 percent, owing to a sharp reduction in the wholesale value of gasoline and other petroleum products driven by the worldwide fall in oil prices. Excluding wholesale petroleum product sales, wholesale trade grew by 2.8 percent during the first half of this year, more than twice as fast

Merchant Wholesalers’ Sales ($ Millions, Seasonally Adjusted) 0.0%

480,000 460,000

-0.5%

440,000 -1.0%

420,000 400,000

-1.5%

380,000

-2.0%

360,000

-2.5%

340,000 -3.0%

320,000 300,000

-3.5% JAN

FEB 2013 2014

4

MAR

APR

MAY

JUN

2015 % Change 2015 YTD - Right Axis

BOXSCORE November/December 2015

JUL

AUG

SEP

OCT

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DEC

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Scoring Boxes

the first half of this year. Grocery store wholesale sales amounted to 11 percent of last year’s total wholesale value. It has grown at a slower pace of 1.7 percent during the first half of this year. Packaging of paper and paper products, including office papers, tissue, and toweling, is the third major wholesale consumer of corrugated containers. During the first half of this year, this sector grew by 3 percent.

About 6 percent of last year’s total box shipments were supplied directly to retailers, who packaged goods in corrugated containers for additional distribution to stores or for display on retail shelves.

Some of the corrugated going to retailers is also used for point-of-purchase displays.

Last year retail sales, including food service sales, amounted to $5.2 trillion.

Its growth rate of 2.1 percent for the first half of this year puts it above the 1 percent growth in production of non­durable consumer goods, placing the retail distribution channel in the above average growth category for box consumption.

Combined sales of food and beverages in bars, restaurants, and grocery stores

totaled 24.2 percent—nearly one-quarter of total retail spending by U.S. consumers.

Since the turn of the century, purchases of meals and beverages in food service establishments have been consistently growing faster than purchases in grocery stores for off-premises consumption, except during the 2009 recession.

As a result, the value of purchases in bars and restaurants now nearly equals that in grocery stores. Grocery store sales amounted to 12.5 percent of all sales during the first half of this year, while food service sales accounted for 11.7 percent of the total. The growth gap between these two choices consumers have for nourishment has never been larger. Food service sales grew faster than any other retail category, even nonstore retailers (catalogs and Internet sales), at an 8.8 percent rate during the first six months of 2015. The faster growth of food service sales is apparent in the difference between retail sales growth (1.3 percent during the first half of this year) and total retail and food service sales (2.1 percent growth rate over the same period). At the same time,

traditional grocery store sales advanced by only 3.3 percent. For independent corrugated converters, this shift has important implications in the design of packaging as well as its destination.

Nonstore retailers’ portion of retail shares has also been climbing rapidly, but it has slowed somewhat during the first half of this year, which showed only 5.3 percent growth. Still, it now accounts for 9 percent of total retail sales, up from 5.5 percent at the turn of the century.

Even though the lion’s share of corrugated packaging is still shipped to manufacturers and agricultural outlets, the wholesale and retail distribution channels provide key insight to understanding shifting consumption patterns that affect both the destination and the design of corrugated packaging.

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

1H2015 Retail & Food Service Sales Share and Growth Rate Food Service Sales-11.7%

8.8%

Nonstore Retailers-9.0%

5.3%

Health Care Stores-5.6%

4.4%

Bldg Supply Stores-6.0%

3.9%

Food & Bev Stores-12.5%

3.3%

Retail & Food Service-100%

2.1%

Retail Sales-87.2%

1.3%

General Stores-12.7%

0.6%

0%

6

BOXSCORE November/December 2015

2%

4%

6%

8%

10%

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Legislative Report

QUESTIONS I WISH THEY’D ASK THE PRESIDENTIAL CANDIDATES

BY JOHN FORREY

D

uring this silly season of the runup to the 2016 presidential election, the key focus seems to be what Donald Trump thinks of Carly Fiorina and how many emails Hillary Clinton deleted. Although this second point is certainly important from the standpoint of public integrity, what is very much missing in all the debates I’ve watched and articles I’ve read thus far is a serious discussion about the health of our economy, particularly our manufacturing sector.

According to the National Association of Manufacturers (NAM), manufacturing contributes $2.09 trillion to the U.S. economy. That’s 12 percent of the U.S. GDP. For every $1 spent in manufacturing, another $1.37 is added to the economy, the highest multiplier effect of any economic sector. What presidential candidate can ignore these numbers? And as for jobs, last year the average manufacturing worker earned $77,506 annually, including pay and benefits. Wouldn’t you want to hear how these candidates propose to protect and grow this dynamic source of well-paying jobs?

In fact, now that I think about it, if I had the chance to moderate the next nationally televised debate, this is what I’d ask the presidential candidates:

Q. How can the United States be the best place in the world to manufacture?

A. By creating a national tax climate that promotes manufacturing in the United States, that recognizes our vast energy resources, and that considers all forms of energy necessary to our global competitiveness; by ensuring that regulations are based on sound science and that they are fairly written and do not impose unnecessary burdens on our manufacturing economy; and by investing in and modernizing our transportation infrastructure to ensure efficient movement of people and goods.

Q. How can we have a workforce trained for a 21st-century global economy?

A. The manufacturing economy employs 12 million people—our corrugated industry alone employs 75,000, according to the Corrugated Packaging Alliance. We will have qualified employees only by encouraging a nationally recognized manufacturing skills program, similar to what we’re doing in AICC’s Packaging University; by fixing our immigration system to address the status of those currently here and simplifying procedures for visas for foreign workers; and most importantly, by reining in the National

“What is very much missing in all the debates I’ve watched and articles I’ve read thus far is a serious discussion about the health of our economy, particularly our manufacturing sector.”

8

BOXSCORE November/December 2015

Labor Relations Board (NLRB), which has issued rules and orders that undermine employer flexibility and harm employee relations.

Q. What will you, Mr. or Ms. Candidate, do on your first day in office to help improve the manufacturing economy in the United States?

While I can’t answer for the candidates on this one, I certainly would like to see this question asked. First, it will force a discussion of why manufacturing is the driver of our economy; second, it will lift the tenor of the debate to serious issues and relieve us of the personal tit-for-tat; and third, we’ll have a good idea of who our real advocates will be in the years ahead.

The coming year will be interesting, to say the least.

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

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New Members

WELCOME AICC’S NEW MEMBERS DALLAS CONTAINER CORP. ROD TURNIPSEED PRESIDENT 8330 Endicott Lane Dallas, TX 75227 Phone: 214-381-7148 Fax: 214-381-8279 rodt@dallascontainer.net www.dallascontainer.com

MARBLES LLC WILLIAM SCOTT MANAGING PARTNER 25243 Elementary Way, Suite 102 Bonita Springs, FL 34135 Phone: 888-433-5019 Fax: 888-433-5019 will@marbles1.com www.marbles1.com

J.W. MOORE, INC. MATT MOORE OWNER/VICE PRESIDENT 3011 Carrier Memphis, TN 38116 Phone: 901-345-2610 Fax: 901-345-5450 matt@jwmooreinc.com www.jwmooreinc.com

PACKAGEONE, INC. THOMAS KANDRIS CEO/MANAGING DIRECTOR 4225 Pell Drive Sacramento, CA 95838 Phone: 916-858-1300 Fax: 916-858-1331 tkandris@packageone.com www.packageone.com

PRICE & PIERCE INTERNATIONAL RAY WALL VICE PRESIDENT, CONTAINERBOARD SALES 99 Park Ave. New York, NY 10016 Phone: 212-301-8695 Fax: 212-519-6360 ray.wall@price-pierce.com www.price-pierce.com

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BOXSCORE November/December 2015

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Ask Ralph

OVERVIEW OF THE NORTH AMERICAN WHITE GRAPHIC MARKET: PART 3

I

t is important that a new entrant into the white top market select a silo upon which to focus. There is a proliferation of product offerings currently, and price points and value propositions are easier to establish in this arena than in conventional containerboard grades.

Changes in Pulp and Papermaking Wet-end chemistry changes in the late 1990s have positively impacted surface characteristics of the white substrates. Today, alkaline pulping has replaced acid pulping, and there is a difference in the sizing agents and fillers used today. Retention aids for capturing small particles have also changed. Cleaners and screens have improved to remove more contaminates that come with recovered fiber and other pulp substitutes. Most of these changes have been positive for the corrugated printing industry.

Changes in Flexographic Printing Technologies What is considered to be high-end printing can occur on a greater variety of substrates and combined board today. Unlike

PRODUCT

offset, with its printing and “stamping” of a single-ply board, printing on corrugated must occur with minimum crushing of the flutes. Even when the combined sheet has washboarding, the new photopolymer plates—with reduced thicknesses, lower durometers, and no backer sheets—allow improved print reproducibility on lower-​ quality print substrates.

It is estimated that only 25 percent of corrugated printers would be considered high-end (three or more colors), and the other 75 percent are medium and low-end.

Inkjet digital printers are changing the face of paper substrate printing. Not only are they now wide-format, but speeds as high as 8,000 sheets per hour are reported.

While this is not the high end of flexo printing at 25,000 sheets per hour, HP, SUN Automation, Océ, and Xanté have made significant penetration into the corrugated market. Bobst will soon enter the market.

Quality Silos The production of white graphic grades can be broken down into a few rather distinct printer/end-use categories. These categories

PRICE RANGE DIFFERENTIALS

PRICE SOURCES

42# Unbleached Linerboard

$ Base

RISI 10/16/15

42# Recycled Linerboard 16 point SBS 42# Bleached Liner 20 point SUS/CNK 20 point CCNB Coated White Top Premium, Coated White Top Uncoated White Top C1S 70# Litho Sheets

$ -40/ton* $545–$595 $365 $460–$565 $320–$340 $260 $385 $200–$210 $630–$720

RISI 10/16/15 RISI 10/16/15 APS Estimate RISI 10/16/15 RISI 10/16/15 APS Estimate APS Estimate RISI 10/16/15 RISI 10/16/15

were developed from very specific physical properties and image reproduction characteristics. There are more than 30 different attributes that can be used to describe a printing surface.

Anyone considering producing white linerboard for the markets must determine where they want to play. Different sub­ markets have different saturation levels.

Coated and uncoated bleached: International Paper, RockTenn, and GeorgiaPacific participate in this small-volume arena.

High-end coated white top: RockTenn (La Tuque and Tacoma) and Kemi dominate this silo.

High-end uncoated white top: RockTenn from all three mills populates this submarket.

Middle-market uncoated white top: This is International Paper at Mansfield.

Low-end white top: Here one could place G-P at Brewton.

Pricing Current pricing of the grades that can make their way into the graphic corrugated market are summarized below. Some are list prices, but they represent a relatively stable container­board industry, and the premium gaps between them are generally maintained by the manufacturers. Prices are indexed from a 42#/205g sheet.

Consolidations and mill closures during the last 10 years have had a major impact on price stability. Additional premiums apply for both lighter and heavier substances and compression-​based substrates.

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

Contact him directly about any technical issues at askralph@aiccbox.org.

*Price differentials between kraft and fully recycled linerboard depend on recovered fiber market conditions.

A smaller supply-demand gap causes the differential to shrink.

BOXSCORE www.aiccbox.org

13

Tackling Tech

WHAT IS ANALYTICS?

BY JOHN CLARK

A

nalytics is a branch of the mathematical discipline of data analysis.

It involves the study of historical data to uncover meaningful trends and patterns to help users understand the effect of certain decisions or actions, or to evaluate the performance of certain machines or processes.

The key strength of analytics is the use of data visualization to display trends, effects, and results.

As the old saying goes, “A picture is worth a thousand words”:

In the example above, inside one concise graphic layout you can see the monthto-month (MTM) or year-to-year (YTY) change in an individual plant’s volume, trends in machine utilization, changes in efficiency and downtime reported, as well as a host of other data points.

The graphic above is actually worth multiple thousands of words, because the graphic and display elements are dynamic. You can click on any element to go to another level

14

BOXSCORE November/December 2015

of analysis or insight. The possibilities and functionality are literally endless.

exciting ways to help you see your business in a brighter light.

Mining the Data The packaging industry has a long history of collecting plant information. In many plants, little has been done with all this data beyond comparing a plant’s actual production to its estimated production values, along with varying degrees of financial and operational reviews.

But what about the relationships that are not readily apparent? How will the trends

Processing and Organizing the Data In a well-designed analytics tool, the data structure is specifically designed to facilitate the reporting layer of logic. The required harvesting of the data elements from your ERP, automation of the extract, and transformation of the data, when required to “smooth out” multiple plant data sources, can be done without any staff intervention.

All this is done to ensure that the rendered display of data is clear, concise, and accurate.

you are not tracking affect your business?

Herein lie the beauty and strength of data analytics. Analytics uses all your transactional and historical data to help you understand your business.

Using preconstructed modules for customers, sales staff, and production, your data comes to life in ways you previously could collect, but not present in a meaningful fashion. Now data points that previously were not relatable can be used in new and

Presenting the Data Analytic tools can take mounds of information and present it in a graphic format that allows you to review, analyze, and manipulate the data to find understandable trends and tendencies.

Data fields can be added to allow you to group machinery in different categories so you can analyze plant performance in ways never before possible. This process can help you see what customers, machines, and orders are contributing to your success, and help you build on this knowledge.

On the financial side of the ledger, you will be able to run reports and show graphically how your clients rank, and you can develop trends to show payment slippage and other worrisome concerns before they become major issues.

Analytics and big data are not in your future—they are in your now. The advantage and insight that can be gained by using analytics cannot be overstated.

John Clark is director of analytics for Amtech Software.

He can be reached at jclark@ amtechsoftware.com.

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Lean Learnings

STAKEHOLDERS

BY MIKE NUNN

W

“More often than not, it’s the people doing the work who have the best ideas for improvement. All you need to do is ask them.”

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BOXSCORE November/December 2015

hen you redesigned the company’s ordering process, website, or forms, did you involve your customers? How about your customer service team?

The last time you did a setup reduction on your flexo-folder-gluer or rotary, did you involve the forklift or prepress teams?

How about your design request queue?

Has the sales team had any input?

A stakeholder is any person who touches a process, from customers to suppliers (internal and external), and of course, employees. Stakeholders can even be the bank or family. The concept could even be taken as far as to include your customers’ customers.

Heavily rooted in the foundation of a sustainable lean journey is the purposeful involvement of all stakeholders. Involvement takes many forms. It can mean: • Asking various people for help discovering the root cause when a problem happens, instead of thinking you have all the answers.

• Fostering a no-blame environment by looking to the process, not the individual, when defects occur.

• Ensuring you have identified all affected parties when making a change, then giving everyone, or at least every team, an opportunity to participate in a meaningful capacity.

• Asking good questions when doing your Gemba Walks—during both prosperous and challenging times.

Questions such as: “If you could wave a magic wand and fix one thing in our company right now, what would it be?” Then follow that up with, “If it were up to you to fix this, how would you do it?”

It can be easy to get caught in the trap of thinking you have the best answer—especially if you’re the manager, because isn’t that why you’re a manager in the first place? But more often than not, it’s the people doing the work who have the best ideas for improvement. All you need to do is ask them.

Leadership and management play the biggest role in making people feel like they’re being heard. Involving stakeholders doesn’t mean just inviting people to a meeting; true lean involvement is encouraging them to participate, listening to their ideas, asking great questions, and following up on ideas.

Whenever you are creating or changing a process, it is imperative that you seek the people who are on the front lines and doing the value-added work. I’ve been involved in a number of Kaizen events where an amazing solution or idea came from someone who, under nonlean circumstances, may not have even been included on the team.

Everyone, from the CEO to the person you just hired to tail a flexo, has the ability to make great change in your company.

Do you have the environment and culture to bring the ideas to the surface? If not, it’s time to start engaging your stakeholders.

Be continuous improvement!

Mike Nunn is operations team leader at Ideon Packaging and is Lean Black Belt certified. Mike can be reached at 604-5240524, miken@ ideonpackaging.com, or followed on Twitter @mikednunn.

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Leadership

DRIVEN TO IMPROVE COMMUNICATION

BY SCOTT ELLIS, ED.D.

H

ave you ever noticed how many people live under the delusional belief that they are good drivers?

Of course I am not talking about you … but have you noticed? In truth, if you drive a BMW I probably am talking about you, because I think you got a NASCAR license with the purchase. I will say that I am a defensive driver, while my passengers might call it aggressive. Regardless of tickets, fender benders, and passengers suffering from PTSD, I maintain my opinion; I’m good enough, smart enough, and darn it, I’m a good driver.

Another delusion that most of us comfortably maintain is that we are good communicators. Despite overwhelming contrary data from those I interrupt and

“Only when we make ourselves accountable will we have both the awareness and the sense of urgency necessary to accomplish this type of change.”

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BOXSCORE November/December 2015

those to whom I underlisten and overreact, I think I’m a darn good communicator.

Those desiring to improve their communication effectiveness must be willing to venture into reality. There are various ways to gather data on this topic.

There are leadership style assessments, like the Myers-Briggs Type Indicator and the DISC personal assessment program, that provide feedback and coaching for the common difficulties in communication faced by a person with your strengths.

Another method of gathering this data is to survey your co-workers. I will describe one method of accomplishing this, but first a word of caution: Carefully consider your level of commitment to improvement in this area before admitting your intention.

The people closest to you already know about the areas of needed improvement, but as soon as they know that you are aware of them as well, the expectation for improvement will be raised.

This is an exercise I developed for a recent Mastermind Group in which developing managers learn, discuss, and apply the skills of leadership. It is a full-circle communication survey that provides feedback from direct reports, peers, and team leaders that will coach you to greater effectiveness. The process of soliciting feedback about your communication will likely be met with nervous cooperation. Once they see you listening in a nondefensive way and

even applying some of their coaching, the process will begin to reward your working relationships. The results are for your use in developing an action plan.

Full-Circle Feedback It is called full-circle feedback because you will interview representatives from all perspectives about your effectiveness as a communicator. The challenge is to ask for and receive the feedback without attempting to argue or change the perspective of those being interviewed.

Step 1: Select three people you can trust to provide you with honest criticism.

Tell them you are working on improving your communication skills, and ask them for a few private moments to get their feedback. Select someone who follows your direction, select a peer, and select the person you report to most often.

Step 2: Ask each interviewee to rate your communication skills (from 1 to 10, with 10 being best) in the following areas: • Sends clear messages (electronically or in person).

• Listens well.

• Seldom interrupts.

• Tries to understand first, then responds.

Ask them to give you a rating for each and to give an example that would illustrate the rating they gave. You may even want to let them know in advance

Leadership

that your uncharacteristic silence is neither agreement nor disagreement, but that you are just gathering data.

Step 3: Ask one follow-up question: “If I were to work on one thing that would most improve our communication, what would it be?” Be sure to take good notes—it will give you something to do while you are biting your tongue.

Step 4: Complete your action plan.

This would be a great time to return to those you interviewed and let them know what you will be working on to improve your communication. Helpful hint: No one changes these habits overnight, so let them know how they can politely remind you of your plan when you fall into old habits.

Communication Action Plan Now comes the time for self-​ reflection. Use the following in your evaluation of feedback: The summary of my Full Circle Communication Survey tells me I need to work on enhancing my skills in the following ways: With those who report to me: With my peers: With my boss: From these interviews I learned or I was reminded that: The most important change that I plan to make in my communication skills is: I will follow up with those I interviewed in ______ days/weeks to check their perception of my progress.

You may choose to formalize this plan with the person you report to and provide them with a copy of the plan. Only when we make ourselves accountable will we have both the awareness and the sense of urgency necessary to accomplish this type of change. And by the way, if you drive a BMW and you were offended by my earlier comments, it’s probably because you misunderstood me; like I said, I am a good communicator.

Scott Ellis, Ed.D., is a partner in P-Squared (P 2).

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

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EMPLOYEE RECOGNITION 23 MEMBERS MEETING 24 YOUR ASSOCIATION AT WORK 28

BOXSCORE TIPS, TRICKS, AND SOLUTIONS TO BETTER BUSINESS

EMPLOYEE RECOGNITION 7 Best Practices for Your Employee Recognition Program

BY YEC Formally recognizing top employees can be easily overlooked. A simple program can boost morale and employee retention. Here are seven ideas to help you put together a formal employee recognition program.

1. Work with your team to define rewards.

It’s certainly worth learning how other businesses recognize employees, but you should work with your team to develop your recognition programs. Make sure the rewards are relevant and really excite your employees so they will be effective.

2. Be creative.

A plaque for employee of the month is oldschool. Be creative. Money doesn’t always do the trick. People like to be recognized in ways that affect their hearts. Thank their spouses or their children, award trophies for salesmanship or other accomplishments, and offer hand-written thank-you notes for exceptional work. Surprise your employees. Keep them guessing.

3. Ask their peers.

Crowdsource it. Usually recognition comes from management, but peers know what’s really going on in the day-to-day. Let them be the ones to recognize achievement and reward it.

4. Create contests.

Keep the recognition frequent and consistent. Use the hourly, weekly, quarterly, or annual benchmarks that drive your company forward to create contests with rewards for achieving those benchmarks.

They don’t need to be monetary if you focus on the ceremony (e.g., an award where you place the winner’s photo on a placard on the wall).

5. Cater to all personality types.

Recognition can be skewed toward the loudest and proudest extroverts. Implementing a system that allows peer review/praise and opportunity for the quiet achievers to be recognized as well is important.

Continued on Page 24

BOXSCORE www.aiccbox.org

23

Good for Business

EMPLOYEE RECOGNITION

MEMBERS MEETING AICC 2015 Annual Meeting Recap

BY CINDY GUARINO-HUBER AND LAURA MIHALICK

6. Praise effort. Reward results.

It’s crucial that the employee program encompass each role and position within the organization. Start by determining what is most important in your company, and choose the values that you will recognize.

7. Don’t overthink it.

Don’t go through the trouble of creating some elaborate point system, only to discover that it’s too much for people to keep track of. This could actually deter people from doing their job. The system that’s used to track employees for recognition is far less important than just having something in place to recognize those who have done well. People love to be recognized in front of their peers.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. YEC members generate billions of dollars in revenue and have created tens of thousands of jobs.

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BOXSCORE November/December 2015

More than 650 attendees and guests converged at The Omni Fort Worth Hotel in Fort Worth, Texas, Sept. 28–30 for the AICC 2015 Annual Meeting. The meeting offered a value-packed week of events, including AICC’s Independent Packaging Design Competition, 2015 Designers’ Lab, and networking and social events. Hundreds of attendees also participated in local-area plant tours that included AICC members American Carton Co., Liberty Carton Co., Lone Star Container, Smurfit Kappa Recycle Plant, and Thacker Industrial.

The meeting officially began on Monday evening with the opening night cocktail reception, where attendees came together to relax, unwind, and meet up with friends and colleagues.

Tuesday offered a full day of educational sessions, plant tours, and social networking events. The general session included a keynote presentation by succession planning expert Tom Deans, Ph.D., on “Willing Wisdom.”

Following the general session, three workshops took place on the following topics: “Protecting Your Wealth,” Tom Deans; “Using Your Brain to Win— Part II,” Holly Green; “The Human Factor” and “Digital Print—Use in the Market” panel discussion, featuring panelists Robert Seay, HP; Terry Amerine, Durst Image Technology; and Dave Carmichael, SUN Automation.

The discussion was moderated by Cordes Porcher, Corrugated Synergies International.

Continued on Page 26

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North American Office • 11204 McCormick Road • Hunt Valley, MD 21031 Phone: 410.584.7990 • Fax: 410.584.1252 • mhicorr@mhicorr.com • mhicorrugating.com

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MEMBERS MEETING Next, a networking luncheon was held for all attendees, with a keynote presentation by Willie Gault, former professional football player, actor, and businessman.

Following the lunch, four roundtable sessions were held on the topics of health-care reform, plant safety, sales compensation, and emerging and developing leaders.

The 2015 Independent Packaging Design Competition was open to attendees for viewing and offered the opportunity to vote for a “People’s Choice” winner. AICC received 126 entries from 31 member companies.

On Tuesday evening, the winners of the competition were announced

by Jim Nelson, AICC Package Design Competition chairman, during the awards happy-hour reception. Winners were awarded in three categories: corrugated, folding carton, and rigid box. Additionally, the coveted Judges’ Choice Awards were bestowed upon the top picks for corrugated structural, corrugated graphics, folding carton, and rigid box distinctions.

Also on Tuesday evening, AICC Region 4 hosted a “band” benefit for the International Corrugated Packaging Foundation at the Houston Street Bar & Patio in downtown Fort Worth. The evening featured live entertainment by local band Brushfire and performer Ashley Bradberry. The event was managed by American Carton/Harris Packaging, a local member of AICC. Wednesday morning began with a roundtable discussion session for Folding Carton and Rigid Box members and their suppliers, and featured a vendor showcase of what’s new in the market.

The second day of workshop sessions featured “Educating the Next Generation of Wealth,” Karin Prangley, Brown Brothers

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BOXSCORE November/December 2015

Harriman & Co.; “Exposing Yourself to Enhance Your Communications,” Holly Green; “The Human Factor” and “Digital Print—Use in the Market” panel discussion, featuring panelists Marty Englander, Englander dZignPak; John Tatum, Heritage Paper; and Andrew Fox, Bennett Packaging.

The discussion was moderated by Cordes Porcher, Corrugated Synergies International.

The “changing of the guard” also took place during the closing general session as Greg Tucker, Bay Cities and 2014–15 AICC chairman, handed over the reins to

Mark Williams, Richmond Corrugated Inc. and 2015–16 AICC chairman (see feature on Page 36).

The general session culminated with an economic outlook by Scott Clemons, chief investment strategist from Brown Brothers Harriman & Co., and a closing motivational presentation by Gene Stallings, former football player and coach.

Cindy Guarino-Huber is meetings director at AICC. Laura Mihalick is AICC’s meeting manager.

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YOUR ASSOCIATION AT WORK Bringing AICC to You

BY VIRGINIA HUMPHREY AICC has 14 regions. Each North American region hosts at least one local event per year. The meetings are designed by your peers—regional directors—who develop a program to meet the educational and informational needs of your region. These events connect you with other leaders of independent companies across the country. All meetings include a networking event and educational information that attendees can take home to their companies. We have seen

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BOXSCORE November/December 2015

record-breaking attendance at regional meetings this year; nearly 1,000 members have attended a regional event.

Topics covered at recent regional meetings include succession planning, retail trends, business acquisition, and industry updates.

Regional events give you current news on what is going on in the industry. Often associate members also share the latest happenings at their companies so you’re in the know when it comes to the latest innovations. Regional meetings have also featured nearly a dozen tours this year. Meetings also often include a golf tournament, skiing, or other sporting event, so there are plenty of

networking opportunities to complement the educational ones.

Regional meetings are an exclusive member benefit. Members are invited to register for meetings in any region—not just their home one. Visit www.aiccbox. org/education/eventcalendar.asp for a list of upcoming meetings, and start making them work for you!

Virginia Humphrey is AICC’s director of membership. Should you have any questions about making the most of your membership, contact her at 703-535-1383 or vhumphrey@aiccbox.org.

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Point of View

Q

Paper Packaging is evolving rapidly, and many AICC members have cited a shortage in qualified workers.

Additionally, with a mass retirement of long-term baby boomer employees, there seems to be a gap in knowledge.

In your opinion, what areas within your company will feel this lack of skills, training, and knowledge the most, and what steps are you putting in place to ensure you have a qualified and well-trained workforce?

Los Angeles has a lot of competitive sheet plants. In the past we have devoted resources to training a lot of people, only to lose them to our competitors. We have since changed our strategy.

1. We encourage the children of our hourly workforce to join us. We also set up long-term incentives (retirement, medical benefits) for the parents.

2. We identify qualified independent contractors locally. We encourage and show them how to set up their own business. We cannot afford to keep them full time, but we give them a retainer up front so they will come in an emergency.

3. We hire and train college summer interns, underscoring the fact that a career in packaging is a stable one. We also hire foreign college grads and sponsor them to stay in the country. We have sponsored people from Peru, Honduras, Panama, Argentina, Mexico, Korea, China, Taiwan, the Philippines, Vietnam, and Spain. — Fred Chau, president, Pacific Quality Packaging Corp.

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Almost every department in our company is feeling the shortage in qualified workers. We have started an internship program with our local high schools and colleges with strong graphics curriculums to help identify qualified and skilled labor. We are also going outside of our traditional geographic region to find qualified employees.

— Kirk J. Kelso, vice president, sales, The Lewisburg Printing Co.

It’s true, today it’s difficult to find qualified workers in the packaging industry. To address this problem, my team and I worked on the implementation of a system that develops and certifies the knowledge of the staff. I call this the “best employee system,” which is used to evaluate and provide feedback to staff so that they can identify their strengths and weaknesses to improve. — Hugo Orlando Maldonado Vasquez, corrugated manager, Papel Cartón y Derivados

Skilled maintenance techs are nearly nonexistent, followed closely by machine operators. We are trying to bring in young candidates to train and mentor for future personnel replacements, but the time it takes to create a knowledgeable tech or operator is one to two years. Our aging workforce is departing more quickly than we can train/sustain quality people. — Bill Sterkel, maintenance manager, Bay Cities

Regarding employee positions in the corrugated industry, the most difficult and significant areas lacking a wellqualified and skilled workforce, I would suggest, are the sales and machine operator roles. Anyone trying to hire for either sales or machine operator positions knows how hard it is to find qualified individuals. We are starting to look at candidates from trade schools and business schools to start bringing new talent on board that can be trained to replace retiring baby boomers. — Jim Nelson, president, Great Lakes Packaging

Within my company there is a distinct lack of knowledge and insight in the prepress department.

Structural design and graphics are rock solid, as many students learn the necessary skills and programs to accurately get the job done.

However, within prepress there are programs being used for workflows, layout, and manufacturing that most students and interested artists have never even heard of. Therefore, deploying a strenuous and lengthy training process is difficult to do with a heavy daily workload. — Chase Whittington, prototype package designer, American Carton Co.

Sound Packaging’s primary concern is production. We have been expanding, and this need for good, dedicated work talent is becoming greater all the time. So, we are addressing several areas: improving work conditions, readdressing the total compensation package, re-evaluating internal education and training, increasing networking through family and friends, and reaching out to junior colleges and tech schools. — Tyler Howland, vice president of business development, Sound Packaging

Sales — Qualified salespeople are in very short supply. The industry seems to be recycling the same talent through the pipeline. With most companies using noncompete agreements more aggressively, it’s become more difficult to find eligible candidates. We have begun recruiting from outside the industry and straight from universities.

Supervisors — A historically challenging position to fill for many reasons. Again, we are going outside the traditional industry sources to identify future leaders and train them on the industry.

Machine operators — The pool of hourly talent is very shallow in many parts of the country. The allure of manufacturing jobs is not strong. Educating people about the potential and career opportunities can present a challenge. — Rich Daly, general manager, TimBar Packaging and Display

I think for our operation, having customer service staff, supervisors, quality coordinators, and sales staff that have a good working understanding of our products and processes are areas of key importance. One of the things we are doing is publishing brief weekly emails describing basic industry terms, products, quality characteristics, and processes. We then follow those with brief one- or two-question quizzes, and we are working on finding ways to get those same employees more hands-on, in-plant exposure to design and converting processes. — Jory Gromer, general manager, Green Bay Packaging

With my experience in the structural design field, I am able to bring real-world knowledge into Esko. We can use that knowledge to assist our staff and develop training to complement our current basic ArtiosCAD introduction course.

This will bridge the knowledge gap regarding outgoing baby boomers to the new generation of designers. — Paul Connolly, global software support engineer – ArtiosCAD, Esko

For questions that I need answers to, I normally go to the Internet. For example, I am a member of many forums on LinkedIn. I will post my question there and usually get a response by the next day. If I know someone in the field that I have a question about, I’ll send them an email. — Alan Devitt, test lab manager, Mid-Atlantic Packaging, Inc.

Continued on Page 32

BOXSCORE www.aiccbox.org

31

Point of View

Q

What do you see unfolding in the world of digital I feel the sales, design There is definitely a printing? What changes the of the skill (structureare and on the horizon forshortage graphics), and sets we are in need of. industry? What trends are emerging? How will prepress departments At Fosber, we have will be the most entered into the local your company react?

As a supplier, it is our obligation to assist in making each company’s employees better at what they do. We conduct training seminars that hopefully do more than just give employees a break from their daily routine. All of us in corrugated who have experience owe it to the industry to help it grow and to continue to innovate. It is the responsibility of all of us to make it happen. — Andy Leff, sales/tech representative, BCM Inks

Sumter Packaging sees an issue with getting and retaining good employees most strongly at the operator level in the plant. For several years now we’ve taken steps to improve the quality of incoming employees to make sure that everyone coming in is capable of moving up to the operator level. With today’s equipment, the situation is very different from the past, when just a “pair of hands” would do.

As our needs have expanded due to growth and adding new machines, our maintenance needs have expanded, which is particularly tough because we need people who have the appropriate skills both on the mechanical side and for PLCs. For maintenance, it’s a multiyear training process even with someone experienced, so it’s best to start early. — Ben DeSollar, president, Sumter Packaging

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BOXSCORE November/December 2015

affected. We are looking at entry-level positions that go through all aspects of manufacturing. We want these people to understand what is required to ask the right questions with the customer, design what they need, and manufacture a quality product. That way, when there are problems, they have a better understanding of how to quickly correct them because they understand how the carton was developed and manufactured. — Chad Tyson, general manager, Corrugated Container Corp.

technical schools and colleges to meet students before graduation. We offer scholarships and internships to encourage entry into the packaging industry. We have also joined a local association that works with the educators to help develop curriculums that are relevant to our needs. Finally, we use our existing workforce to lobby friends and family with the proper skill sets to consider employment with our company.

We pay a finder’s fee to any employee who helps us to find and secure a new employee. — Jeff Pallini, president, Fosber

Stop being a victim.

This is a problem well within all our circles of influence to solve.

First off, to attract attractive people, you have to be attractive.

If people are leaving your company and new ones aren’t lined up to join, then your first hard look should be at the work environment you have. Is your company clean, well-lit, organized? Does it have open communication, is it safe, friendly, and fun?

Second, design a hiring and training practice that selects only the best candidates and gives them the resources and knowledge to help them and you succeed.

Lastly, keep your people engaged. Ask for feedback, provide performance objectives, celebrate wins, learn from mistakes, and reward positive behaviors. — Mike Nunn, operations team leader, Ideon Packaging

No question, it is a concern from all over the industry in all facets. We are looking to implement programs for succession planning, working with packaging schools as well as local trade schools. We have to develop young talent.

The greatest need I am finding is for service technicians who have both the mechanical and electrical experience we desire. It is a labor-intensive job that many of the younger generations are not willing to pursue. — Greg Jones, North America Sales Manager, SUN Automation Group

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Member Profile

GREAT LITTLE BOX COMPANY

BY TARYN PYLE

COMPANY: Great Little Box Company ESTABLISHED: 1982 JOINED AICC: 1996 Photo courtesy of The Great Little Box Company

PHONE: 604-301-3700 WEBSITE: www.glbc.com LOCATIONS: Richmond, British Columbia, Canada Victoria, British Columbia, Canada Kelowna, British Columbia, Canada Everett, Washington

W

hen Robert Meggy says people are the greatest asset Great Little Box Company has, he’s not joking around. Nor is he just spouting a truism.

At the Great Little Box Company, this accountant-turned-CEO invests in his people and treats them as the most valuable part of the business. And others have taken notice.

Every year since 2005, Great Little Box Company has been named one of Canada’s Top 100 Places to Work, and BCBusiness gave it the “Best Companies to Work For” award in 2006. The Financial Post calls it one of Canada’s 10 Best Employers, and they’ve received Platinum Status as one of Canada’s BestManaged Companies.

If longevity says anything, the parking lot filled with 20- and 30-year

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BOXSCORE November/December 2015

employees’ cars also speaks to how employees feel about working for Robert Meggy and the Great Little Box Company. His second employee is still with the company, and their turnover is very low.

What makes them so special? Meggy lists a series of policies and practices that help take care of the employees who take care of the business. It starts with hiring and includes an open book and profit sharing. From there it expands to undertakings as large as company trips to Vegas or Mexico and to details as small as fruit in every department.

Being Thorough and Open It’s not a quick journey to become an employee of Great Little Box Company.

They conduct seven to nine interviews before hiring someone.

“We know right away whether [potential employees] have the background we need, but the biggest thing for us is the culture,” says Meggy. “The people that fit in stay a lot longer and are much more interested in the company. We have people who are interested in things outside of work, people who like to go away on holidays, and these are better employees. We have a lot of social events.

People who go to the social events last a lot longer. People who don’t go to social events, 80 percent are gone within a year.

Most of the job is people, and everything revolves around people. We make sure we get nice people.”

From the beginning, Meggy says, it was important to be open all the time. The company has meetings every month where they share the financials with all employees, and there is 15 percent profit-sharing

attached to the financials along with rewards for meeting goals.

“Everyone in the company is very interested in doing better because everyone gets a share,” Meggy says. “The open book is the best thing I’ve ever done. If you know what is happening with the company, you feel better about it.”

Employee Recognition Meggy also has several programs designed to recognize employees. There is an award of excellence every month, and the top parking spot goes to that person. The parking lot is divided so that executives park with everyone else. Meggy says they measure everything in the company, and what gets measured gets recognized.

They also have what Meggy calls BOX— Big Outrageous eXtravaganza.

“We look at the budget, and we’ll increase it by a few percent,” says Meggy. “If we make that budget, we take all 270 people on a trip together—this will either be to Vegas or Mexico. We take the entire company and pay for everyone. It averages every 2¼ years. We can’t ever be closed down, so we split every department in half. Half the company

goes Saturday through Wednesday, the other half goes Wednesday through Sunday, and we have a party Saturday with everyone together.”

But that’s not the only trip they take.

Every year they hold a Christmas party and a golf tournament, and they get almost 100 percent attendance for each, with the company picking up the tab for everything. They also hold a holiday party for the children of the company. Meggy does all the shopping for the kids after working with the parents to find out what the kids want. He spends an average of $75 a present.

“Those kids will never allow their parents to quit,” Meggy jokes. “We have a volunteer Santa Claus, presents, and different crafts the kids can do while there.”

They also have what he calls “secondary” events—hamburger days, bowling nights, hiking trips, or bringing in an ice cream truck on a hot day.

“If you get to know people personally, you’ll enjoy your job a lot more,” Meggy says. “You’re going to work where your friends are.”

They also focus on employee work life.

They pay people to quit smoking. They’re

built on the Fraser River so that their building faces the water. There is a park on the water with horseshoes and picnic tables. They have a gym that is open 24/7, and they trained one of their people to become a personal trainer.

They give away free fruit every day in each department. They sponsor races.

Meggy says they also donate a lot to charities, matching whatever employees want to put into the causes. They also took a company trip to Mt. Kilimanjaro, climbing to the top of the African peak to raise money for heart attack and stroke research.

Evaluation Evaluations are a key part of recognizing and communicating with employees. Employees meet with their supervisor every quarter, and the supervisor asks four questions: 1. How are things going?

2. How am I doing?

3. Is there anything I can do to help you?

4. Is there anything I can do to improve?

The supervisor writes everything down.

This way, Meggy says, if an employee has a problem, they know about it and can solve it.

“It makes it so there are no issues between the employees and the supervisors.

Elsewhere, people leave for things that could be solved, but no one talks to each other.

This way, everyone is scheduled to do that, and it works great. If someone ever leaves here, we know why.”

Together, these things have earned the Great Little Box Company the special status of one of Canada’s top employers.

Taryn Pyle is the director of marketing and communications for AICC. She can be reached at 703-535-1391 or tpyle@aiccbox.org.

BOXSCORE www.aiccbox.org

35

BOXSCORE

Richmond Corrugated’s team poses outside their plant in Sandston, Virginia, 36 November/December 2015 from left: Chuck White, general manager; Mark Williams, president; Dan Williams Jr., chairman; and Dan Williams III, production.

Welcome,

Chairman Mark Williams!

A new AICC chairman has been elected.

Meet the guy with the gavel.

BY GEOFF WILLIAMS

O

nce again, the gavel has been passed.

AICC, the Independent Packaging Association, elected its officers and directors at the Association’s annual meeting in Fort Worth, Texas, during the waning days of September, and Mark Williams is now the chairman. But for those who are wondering exactly who is leading the charge, we caught up with Williams shortly before the annual meeting to learn more about him. We made some small talk about his family, the family business, and the direction of the box industry in general. And because of Williams’ rich history in the industry, there’s a lot to unpack.

Mark Williams is the president of Richmond Corrugated Box Co., a sheet plant in Sandston, Virginia, a suburb of Richmond. It’s a family business that was founded in 1971 by his father, Dan Williams, and his grandfather, Dan Sr. Mark Williams grew up around the business, working in the plant from the age of 16 during summers and school breaks. He took on every role he could, from baler to slitter, and worked the saw and feeder. After high school, he attempted to get into the University of Virginia but was rejected, and so he wound up at Virginia Military Institute in 1985.

“I hated VMI,” Williams admits, “but I would do it again in a heartbeat and highly recommend it to anyone looking at colleges. VMI isn’t actually a college but an institute and, in my opinion, provides the best bang for the buck. At

BOXSCORE www.aiccbox.org

37

VMI, you are constantly under stress, and that prepares cadets for real-world stress.”

After college, Williams went to work for his father, starting in sales; his territory was eastern Virginia.

But if Williams’ educational experience was rocky, his career and personal life have been on much more stable and enjoyable ground. He has been married since 1989 to Alston Williams. “I’m lucky to have her,” he says. “She’s a great person and spouse.” Williams has two children: Margaret, who is 23 and an orthopedic nurse; and Wallace, in his second year at the college that wouldn’t take his father— the University of Virginia.

BoxScore: So, your daughter is a nurse.

Will your son join your company?

Williams: I’ll find out at some point. He has gone through the same apprenticeship that I did. This past summer, he went to the industry fly-in with me. I took him to meet our sheet supplier and other vendors and sales reps. He also had a chance to work

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BOXSCORE November/December 2015

in customer service and design. At this point, he is going to seek his own fortune, but after he gets out of school and works somewhere else for three years, if he wants to come back, I’d certainly welcome him back.

BoxScore: That seems to be a strategy a lot of family businesses employ these days. You educate your kids, you let them work for someone else, and they can pick up some experience and make mistakes on someone’s dime, and then they can return, more worldly and wiser than they might have been.

Williams: Exactly.

BoxScore: Tell me about your dad, who founded Richmond Corrugated.

Williams: He’s 78, and he’s been a great mentor. He instilled the value of persistence in me. I was never the best student, but my dad always supported me despite my average grades. He assured me I was smart enough and encouraged me to “stay after it, keep your head down, and do the best you can.”

His values have definitely rubbed off on me—some more than others. But I’ve always been glad to have him around.

Whenever I’ve messed up, he’s been very supportive. So has my mom. I can’t leave her out. She’s always been a loving and nurturing person.

But Dad started in containerboard sales and then moved his family up to Boston in the late 1960s, but he had a desire to get back to his hometown of Richmond.

So he started his own sheet plant, Richmond Corrugated Box, and his goal was to be the fastest box plant in town.

He was a serial entrepreneur. We have the two businesses now, and my office is right where his first office was, but he probably started six or seven businesses

and served on a lot of boards of local agencies. Any organization that has needed energy and somebody who can get out there and get it done, he’s been happy to help with. He is definitely a good corporate citizen, and he’s always tried to give back to the community.

In the years since Williams joined Richmond Corrugated, the box company has seen a lot of changes.

In the early 1980s, Richmond Corrugated started contract-manufacturing small paper bags for a major bag manufacturer in town; several years later, they would spin it off into its own company and sell it.

But that allowed Richmond Corrugated to invest in box converting equipment

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“My goal is to build on the leadership foundation my predecessors have laid with my own little twist of persistent leadership.”

“In business, a persistent leader embraces change, does all in his power to enhance communication skills, and displays a high level of commitment.”

and make other changes, including acquiring Wilmington Box from Durham Box Co. in 1986. In the years since, they’ve expanded and acquired and added new contract-manufacturing operations. For seven years, they were producing aluminum foil bags for Reynolds Metals Co. “It ran its course and was shut down

by Alcoa,” Williams says, referring to the famed metal company.

As it stands now, Richmond Corrugated, Inc., is the parent company of Richmond Corrugated Box and Wilmington Box. Williams works with his brother, Dan Williams III, and they carpool to work every morning, working from 7 a.m. to 3:30 p.m., Monday through Friday.

BoxScore: Would you have guessed when you started out in this business that someday you would be the chairman of AICC? Williams: No. I got involved because of [industry veteran] Tom Skinner, who was part of Pinnacle Corrugated, and he encouraged me to get involved with AICC. He said, “Not only will it help your business, you will be serving with people who will become your lifelong friends.” And he was right. I had served as regional director three times, but I was

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BOXSCORE November/December 2015

reluctant to move to the chairmanship, frankly. I’m terrified of public speaking, and I knew that was a big part of the job, and I was kind of reluctant to get involved in that capacity, but then I decided I really wanted to see it through.

BoxScore: Have you had to do any public speaking for AICC yet?

Williams: Well, Greg Tucker will hand me the gavel on Wednesday, so that’ll be the first opportunity for me to try and say something intelligent. There will be 600 people in attendance.

BoxScore: What is your main goal as chairman? In other words, what do you hope to achieve in the next year?

Williams: I want to expand upon the leadership themes introduced by the previous three chairmen. For instance, Chuck Fienning introduced the concept of dynamic leadership. Dynamic as an adjective is characteristic of constant change, and I think what Chuck was getting at was leading through change. For me, there were two big takeaways. No. 1, clear communication is critical, and No. 2, anybody in an organization can lead.

Mark Mathes followed Chuck and introduced the Emerging Leaders Program. The main message to come out of that is that Mark addressed the graying of our industry with that program.

Leadership has an endpoint, but organization should not. Leadership development is key to an organization’s longevity.

And then last year Greg Tucker introduced “strategic leadership” and transforming your company from a lifestyle company to a professional one.

My goal is to build on the leadership foundation my predecessors have laid with my own little twist of persistent leadership.

BoxScore: Persistent leadership? Can you tell us what you mean by that?

Williams: Sure. Somewhere along the way I learned about the “great eight” leadership characteristics: smart, strong, selfless, resilient, charismatic, reliable,

inspiring, and persistent and resilient.

Those are actually nine characteristics, but the last two are synonymous. Anyway, leadership should foster followership, because nobody likes a quitter, and people are naturally drawn to determination and perseverance. In business, a persistent leader embraces change, does all in his power to enhance communication skills, and displays a high level of commitment.

BoxScore: You mentioned, of course, that your father taught you a lot about persistence. If one wanted to be a persistent leader, what would that look like?

Williams: The persistent leader is a continuous learner and is committed

to the education and training of others.

Persistent leaders are positive people and have good attitudes. They follow up on things that stem from conversations or meetings by taking action. And persistent leaders emphasize the need for planning and paying attention to details.

And we want and need more leaders in our companies. The box industry isn’t some get-rich-quick scheme. It takes doing a lot of little things well over a period of time, like negotiating sheet prices, controlling your waste, and not just preaching safety but policing it. And so, persistence comes in very handy. And because we’re in the service business, our customers

put a lot of demands on us, and you get a lot of curve balls every day. We’re constantly processing the demands of our customers and beating expectations.

It’s a juggling act, and that’s why we need leaders who can excel in a lot of different things, because there are a lot of parts to the whole package.

Geoff Williams is a freelance journalist and author located in Loveland, Ohio. This is his first contribution to BoxScore.

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BOXSCORE www.aiccbox.org

41

UNSUNG HEROES I OF THE CORRUGATED INDUSTRY

A behind-the-scenes look at the diverse roles vital to success

BY LIN GRENSING-POPHAL

t takes a lot of people working together to serve clients in the packaging industry. Some are on the front lines interacting directly with clients; others are behind the scenes, but just as critical to the effective delivery of high-quality, strategically focused packaging solutions. Whether these individuals are in maintenance, scheduling, customer service, structural or graphic design—or a range of other roles—their skills and talents are critical to serving client needs.

Here we take a look at their contributions and perspectives on the roles they play in the boxmaking process, the challenges they face, and how they have worked to overcome those challenges as part of an effective and efficient packaging team.

One Man’s Story Back in 1981, when Mike Wakefield was running a press on a production line, he

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BOXSCORE November/December 2015

never thought he’d become addicted to his work. But, as a former boss in the corrugated industry predicted, that’s exactly what happened. Years later, he’s still in the industry as a designer, creating container systems for new and regular customers, representing wineries, breweries, and other industries, large and small. His main focus is “coming up with designs that fit the customers’ products while keeping costs down,” he said during a recent interview from his Rochester, N.Y., office. And that, he says, is the best way to serve his company, Jamestown Container Companies, with designs that work for the customer and promote more business.

Even something as simple as converting a design that requires one seal instead of two can be a money saver, which is something customers won’t forget, he says.

Consolidation of skills is another example

of a redesign that can save money through materials reduction.

Wakefield says an important first step in determining improvement areas is reviewing the customer’s existing packaging. And, to alert current customers to money-saving opportunities, Wakefield works with sales managers to offer packaging audits in which the customer’s entire line of packaging is assessed with an eye toward redesign and cost savings.

Customers benefit, too, from the testing lab that Wakefield can access at his employer’s Jamestown, N.Y., plant.

“We can simulate how containers will travel cross country by truck and conduct drop tests,” Wakefield says.

That can be particularly beneficial for sensitive materials such as glass or electronics that may need corrugated and foam materials for packaging and shipping, he notes.

Another customer benefit is the software Wakefield uses to simulate box sizes and board grades. He also uses the software to determine which pallet layouts will be most efficient for shipping and handling.

When presented with a difficult or unusual packaging request, Wakefield says, he has access to six designers from Jamestown Container Companies’ other facilities.

The collaboration with fellow designers, test labs, computer-aided design, and other specialized software are a far cry from the way Wakefield worked initially as an entry-level designer, when he used a pencil to sketch containers, an X-ACTO blade to make a prototype, and a pizza cutter make the scores.

A Wide Range of Roles Ted Luczak is director of creative services with Vanguard Companies but, he says, “I am no longer an active director.” For

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43

“The people I work with on all levels are my ‘family.’ They, without exception, are my friends first and my co-workers second.” — Margerie Ridout, Jamestown

Container Companies

the past year, Luczak has been involved in Vanguard’s major display programs—large multiple-display seasonal promotions or multiple-repetitive-display programs that run for a couple of years. “As acting director,” says Luczak, “I was making sure that all displays we produce are up to our high standards. We are a very strong company in the area of structural integrity and functionality of every display we produce, and it all starts with creative design and the structural discipline of every designer.”

Over the years, Luczak has had a significant impact on Vanguard. When he started with the company in 1997, he says, it was primarily a packaging company with a few display accounts.

Then, Vanguard’s management made the decision to expand more into displays.

“This was exactly the type of company I was looking for,” says Luczak. “We were lucky that a new customer required very high-level, sophisticated displays, and I was the only person that could design them and had knowledge [about] how to manufacture them. In a very short time, Vanguard became primarily a display company.”

Luczak loves the work he does and says, “Every day presents a new challenge— there is always a new problem to solve. I like interacting with our customers and vendors and brainstorming with them to come up with the best solution for them and for Vanguard.”

Tom Russomanno is scheduling manager with Acme Corrugated Box Co. Inc.—a role he has recently stepped into after working in the shipping department.

Russomanno does the planning for the corrugator lineups and the converting lineups on a daily basis, including all

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BOXSCORE November/December 2015

machine centers in the facility. Acme has five converting flexo machines, one jumbo flexo, two die cutters, and eight different auxiliary machines.

“My impact on our operation was our ability to adapt on reverse-scheduling the plant,” says Russomanno. “Basically our shipping department prepares their delivery plan, and we corrugate and convert to the plan.” That’s not an easy task, as Acme is running 18–24 different board grades every day. But, says Russomanno, “We are successful at maintaining a high on-time delivery rate and an efficient plant operation.”

Russomanno says he enjoys the challenges of his role, and he’s proud of Acme’s ability to turn orders around very quickly—in as little as three hours, if needed.

Debbie Boone is client relations manager at Acme Corrugated Box Co. Inc. She has been with the company for 17 years, starting in customer service and moving into her manager role, which she has held for about 10 years now. The job is different every day, says Boone. There can be a tendency, she notes, to think of boxes as not very important—she knows differently. “Our clients cannot ship their product without the cartons. Things move very fast here; we turn most of our orders in less than three days.”

Not all unsung heroes are part of the product process, of course. There are other functions critical to any business. Jennie Becker has been a controller for Acme Corrugated Box Co. Inc. for 10 years.

“I make sure our financials are processed correctly so that we can monitor the company’s financial strength to make sure the business thrives for many years to come,” says Becker. “I provide data to all departments so they can measure their

progress. I make sure we keep our receivables collected timely and pay all vendors correctly. I monitor inventories to keep them at acceptable levels and measure shrinkage. I also assist with IT.” The reporting function of her job is critical to ensure that managers and other company leaders are armed with the information they need to make well-​ informed decisions. Providing data to other departments, she says, is essential to achieve continuous improvement.

Margerie Ridout with Jamestown Container Companies also handles a very important financial function—ensuring that employees are paid on time! Ridout has worked for Jamestown Container Companies for 36 years, starting in the production department and now as the corporate payroll manager. “I pay about 350 employees every week. I also produce all the tax reports and payments connected with payroll. My other responsibility is to handle the day-to-day banking and report a daily cash situation to the controller,” says Ridout.

“I feel that happy employees help to make a company successful,” says Ridout. “Let’s face it, every employee in a company is working for the paycheck. I do my best to make sure every paycheck is correct, and I go out of my way to make sure the checks are out on time.

Sometimes ‘out on time’ involves doing two days’ work in one if there is a holiday, or reprinting checks if UPS has lost the first ones in a snowstorm.”

Ridout takes a very personal perspective on her role. “The people I work with on all levels are my ‘family.’ They, without exception, are my friends first and my co-workers second.”

“Know your machines. Be flexible and patient. ... And constantly look for improvements in the industry to make your difficult job easier for you and the organization.”

— Tom Russomanno, Acme Corrugated Box Co. Facing and Overcoming Challenges Our unsung heroes have faced various challenges in their work, but they say there’s much to learn from addressing these hurdles.

One of the most significant challenges Luczak has faced in his career was the threat of a lawsuit for displays that were “falling apart in the warehouse.” The customer was missing an opportunity for their largest promotion ($800 million of merchandise) to get into stores on time.

Fortunately, Luczak was able to prove “that the issue was 100 percent with the customer’s assembly and handling in the warehouse, not with the display, and Vanguard managed to produce replacement displays in time to hit the due date.”

The biggest challenge that Boone faces is capacity, she says. “We can only run so many cartons per day on each machine.

We are growing, and we rarely say no, so that puts us into an overtime situation.”

Addressing this challenge requires communication and collaboration. “We have two production meetings every day so all supervisors understand what is required and I can communicate back to my team if we are going to have any delays upfront,” says Boone.

Joe Wells is the plant scheduler at Atlas Container, a position he has held for about eight years. His job is to schedule every order that comes through the plant—his greatest impact is ensuring quick turnovers. “We pride ourselves in being the FedEx of the box business,” says Wells, who notes that Atlas can get an order at 10 or 11 a.m. and produce and ship it out the door within four to six hours. That, he says, gives him a great feeling of accomplishment. “As the scheduler, there is a lot of pressure to make sure

everything ships—and ships on time. One of the biggest challenges is maintaining that on-time delivery. Between machines going down or just being overbooked, it can be a real juggling act to move jobs around and to find creative ways to get orders through the plant.”

Those everyday challenges, he says, are what he enjoys most about his job.

Others agree; despite the fast-paced, quickly changing environment and daily challenges, all say they love their work and the ability to support colleagues in serving customer needs.

Pearls of Wisdom The experiences of these unsung heroes have placed them in key positions to provide advice to other professionals in the packaging industry.

Luczak’s key piece of advice: Don’t panic. With displays, he says, the primary function is structural integrity. “The display has to hold the product and arrive to destination. Everything else is irrelevant if the display fails structurally.” His advice for other designers is to think beyond the traditional to look for creative solutions.

“Don’t get trapped in usual or standard,” he advises. “You are not a software operator; you are a designer! We have to use our imagination to run entire processes in our mind—from printing, label mounting, die-cutting, assembly, transport, distribution, all the way to retail and the shopping environment.” Creativity counts!

So does communication, notes Boone.

Her advice: “Address issues very quickly, communicate with all departments on a daily basis. Be an internal advocate for the client.”

Wells’ advice for other schedulers is to “take pride in your work and try to enjoy

it. Learn as much as you can about your business; learn from all the people above and below you.”

Russomanno’s advice for other schedulers is very simple, he says. “First and foremost, know your machines. Be flexible and patient. Get your leadership to hold all supervisors accountable for 100 percent on-time delivery to your own shipping department. You are the ambassador to all departments; remain professional at all times. And constantly look for improvements in the industry to make your difficult job easier for you and the organization.”

Finally, says Ridout: “I have managed to meet the challenges over the years by taking each day as it came and not stressing over what was going to happen next. The day I started here, October 24, 1979, I was a bit overwhelmed. That night when I went home, I said, ‘I will give it until Christmas.’

Each day got better, and eventually I felt like this was where I belonged. Maybe I will retire some year at Christmas.”

While sometimes those we work with every day in various capacities are overlooked, it’s important to remember that a company is only as strong as its weakest link. A single grain of rice can tip the scale, and without strong people in every facet of your business, it will not be a success. Every productive team member, regardless of his or her role, is a true industry hero.

Lin Grensing-Pophal is a freelance writer based in Wisconsin. She is a frequent contributor to BoxScore.

BOXSCORE www.aiccbox.org

45

A

BY THE NUMBERS Annual Report for the 40th-Anniversary Year

By Steve Young

t its founding more than 40 years ago, AICC was a chip-in, ante-up, and divvy-up organization: The volunteers who participated footed the expenses by passing the hat. There was little in the way of resources— financial or human—to support the vision they had in those early years.

Today, however, it’s a much different picture. Through volunteer commitment and professional leadership—a theme that Chairman Greg Tucker emphasized in the past year—your association has grown into a financially secure, professional organization capable of achieving the goals and objectives that the board of directors sets on behalf of the membership.

This report will outline some of the key performance results of the fiscal year ending June 30, 2015. AICC’s vitality as an industry organization, 40 years after its founding, is revealed by the performance metrics and financial picture painted by this annual report.

Membership AICC membership numbers continued to grow in the past year, with dues revenues reaching a record $1,134,744 in FY 2015, up from $1,040,744 in FY 2014. AICC welcomed 47 new members in the fiscal year, and we enjoyed a general member retention rate of 94 percent. The total number of member companies worldwide was 505.

Education and Training AICC’s industry-specific education and training programs reached more than 1,300 employees in the industry and brought in $303,000 in revenue in FY 2015. This was up from $261,263 in FY 2014, or an increase of 16 percent. The increases were fueled in large part by the introductions of new on-site courses in maintenance and e-learning courses in leadership, communications, and fundamentals of financial management. AICC’s webinars continue to reach a larger number of member-company employees due to their relevant subject matter and relatively low expense and time commitment.

National Meetings, Regional and Special Events Attendance at AICC’s national meetings and other events topped 2,500 in the fiscal year ending June 30, 2015, fueled largely by a very successful AICC/TAPPI Corrugated Week in Long Beach, Calif., in September 2014.

Continued on Page 49

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BOXSCORE November/December 2015

Corrugator: 63

Other International: 7

Mexico: 24

Associate Member: 215

Canada: 24

Folding Carton: 16

Canada:24

Rigid Box: 4

AICC Members

AICC Members

by Geographic Distribution

by Company Type US:449

Other International: 7

Mexico: 24 U.S.: 449 Canada: 24

Corrugator: 63Sheet Plant: 197

Associate Member: 215 Sheet Supplier: 10

Webi Folding Carton: 16

Canada:24

Rigid Box: 4

AICC Members

AICC Members

by Geographic Distribution

by Company Type US:449

U.S.: 449

Sheet Supplier: 10 Seminars & Workshops: 299

Webinars: 1,020

Sheet Plant: 197

Regional Meetings: 468 2015 Industry Fly-in: 44

: 16

Online Courses: 14

4

Number of Employees Trained

National, Regiona Meeting, & Industr Fly-in Attendanc

by Course Type

97

Seminars & Workshops: 299

Regional Meetings: 468

2015 Spring Meeting, Naples, FL: 690 2014 Corrugated Week, Long Beach, CA: 1,356

2015 Industry Fly-in: 44

Online Courses: 14

Number of ployees Trained

National, Regional Meeting, & Industry Fly-in Attendance

y Course Type

2015 Spring Meeting, Naples, FL: 690 BOXSCORE www.aiccbox.org

47

AICC Canada and AICC Mexico Offer Dynamic Member Events

AICC’s North American scope is reflected in the dynamic membership bases in Canada and México.

AICC Canada, aligned with AICC from its founding in 1974, consists of 35 members and has an independent board of directors.

Marco Studer of Independent Corrugator serves as president. In the 2015 fiscal year, AICC Canada hosted six events, attracting more than 750 attendees. AICC Canada’s membership meetings, held in the fall and winter, feature presentations on market trends in containerboard and corrugated; printing technology; and the state of the Canadian economy. The winter meeting, co-hosted every other year with Canadian Corrugated and Containerboard Association (CCCA), also features a tabletop trade fair for supplier members. In addition to these educational meetings, AICC Canada hosts an annual Presidents’ Luncheon, where the region recognizes outstanding contributions to the Canadian industry through its Hall of Fame award. In fall 2014, Tom Gerrity of Gerrity Corrugated was named the year’s recipient. Social events include an annual Christmas party and golf tournament, each attracting more than 120 members. For more information about AICC Canada and its events, contact

Jana Marmei, executive administrator, at 905-727-9405, or jmarmei@aiccbox.ca.

To the south, AICC México continues to expand its membership offerings through specialized training and an annual meeting and trade fair. In 2015, AICC México held its annual meeting in Monterrey, Mexico, attended by more than 175 members. A tabletop trade fair, the largest in AICC México’s 14-year history, was attended by 50 suppliers. The annual meeting program regularly features keynote speakers on market dynamics in the containerboard sector, an outlook for the Mexican economy, technical presentations by supplier members, as well as motivational speakers. The annual programs also feature specialized training sessions in production, sales, finance, and other subjects of interest to members.

AICC México’s board of directors is headed by Yair Caballero of CorruEmpaques of Querétaro. In 2016, AICC México will celebrate its 15th anniversary June 8–10 at the JW Marriott Hotel in Cancún. For more information about AICC México, contact Maria Frustaci at 703-836-2422, ext. 1382, or mfrustaci@aiccbox.org.

Misc.: 6

ek, 56

Website Banners

Design: 16

Sustainability: 10

BoxScore Pages: 223

iDirecto

HR: 166 Sales: 119 Misc.: 6

Advertising Sold 7 Website Banners:

Publications Sold Design: 16

Sustainability: 10

by Function Area

by Type

BoxScore Pages: 223

iDirectory: 83

HR: 166

ales: 119

Safety: 11

Publications Production: 95

Sold

Industry: 18

by Function Area

fety: 11

Production: 95

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BOXSCORE November/December 2015

Industry: 18

Advertising Sold

by Type

Hassle-Free Transition to ISO 9001:2015 and ISO 14001:2015

Income from AICC’s national meetings was $1,235,604 in FY 2015, down from $1,332,877 the previous year. This decline of 7 percent was due not to decreased attendance, but rather to a phenomenon that occurs when AICC partners with TAPPI in events such as the Corrugated Week in Long Beach. These events feature a lower registration fee per attendee, and the resulting revenue-sharing brings in less overall revenue for AICC. AICC’s Regions remained active in FY 2015, with more than 18 events held domestically and six internationally. (See sidebar on AICC Canada and AICC Mexico.) The U.S. regional events were attended by more than 600 members and guests. AICC’s annual Washington Fly-in, co-sponsored by Fibre Box Association (FBA) and held in conjunction with the National Association of Manufacturers (NAM) Manufacturing Summit, attracted 44 members from the industry to meet with their legislators to advocate on behalf of economic and social policies beneficial to the manufacturing sector.

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Continued on Page 50

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BOXSCORE www.aiccbox.org

49

BALANCE SHEET

2015

2014

2,668,103

2,371,623

568,948

539,865

Other Assets

56,778

54,085

TOTAL ASSETS

3,293,829

2,965,573

Current Liabilities

1,037,730

847,622

56,714

55,021

TOTAL LIABILITIES

1,095,444

902,643

Unrestricted Net Assets

2,198,385

2,062,930

TOTAL LIABILITIES & NET ASSETS

3,293,829

2,965,573

2015

2014

TOTAL REVENUE

3,151,450

3,111,370

Operating Expenses – Program

2,610,331

2,297,542

438,739

425,956

TOTAL EXPENSE

3,049,070

2,723,498

TOTAL INCOME

135,455

487,334

Current Assets Property & Equipment

Long-Term Liabilities

INCOME STATEMENT

Operating Expenses – Management

Continued on Page 52

50

BOXSCORE November/December 2015

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Continued from Page 50

Publications and Advertising AICC’s publications and advertising services continued their steady growth in FY 2015, bringing in a combined $353,426—consisting of $301,502 in website and print (BoxScore) advertising, and $51,924 in publication sales. Nearly 450 titles were sold during the course of the fiscal year. The following charts

Assets

$3,293,829 as of June 30, 2015

52

show the quantities by subject area and type in AICC publication and ad sales for the fiscal year.

Financial Results AICC’s operations in FY 2015 brought in $3,151,450 in revenue and realized expenses of $3,049,380. This resulted in a net operating income of $102,380.

Liabilities

$1,095,444 as of June 30, 2015

This income, combined with $35,075 in nonoperating income from AICC regional activities, resulted in a total net income of $135,455. AICC members who wish to receive a copy of AICC’s audited financial statement should send a request in writing to Steve Young, president, AICC, P.O. Box 25708, Alexandria, VA 22313, or email syoung@aiccbox.org.

Revenues

$3,151,450 in FY 2015

Expenses

$3,049,070 in FY 2015

CASH: $821,969

ACCTS. PAYABLE: $374,661

D1: $134,744

MEMBERSHIP: $303,500

INVESTMENTS: $1,653,918

DEFERRED REVENUE: $663,069

NATL. MTGS.: $1,235,604

NATL. MTGS.: $1,428,402

ACCOUNTS RECEIVABLE: $61,461

DEPOSITS: $1,900

ED & TRAINING: $303,190

ED & TRAINING: $388,173

PREPAID EXPENSES: $72,371

OTHER: $55,814

ADVERTISING: $301,502

PUBLISHING: $278,776

PROPERTY & EQUIPMENT: $568,948

PUB SALES: $51,924

PUBLICATIONS: $155,792

INVENTORY: $58,348

MISC.: $16,813

MANAGEMENT: $438,739

OTHER: $56,778

INVESTMENTS: $46,047

BOXSCORE November/December 2015

Folding Carton

CELEBRATING EVERY EMPLOYEE: A PROGRESSIVE APPROACH TO LEAN MANUFACTURING

BY ROBERT BITTNER

L

ean manufacturing has been the watchword of the last decade.

Converters both large and small are focused on reducing excess waste in all its guises. Yet one form of waste is frequently overlooked, according to Bruce Hamilton, a lean manufacturing consultant and speaker: the waste of human creativity.

In his article “Six Keys for Lean Managers,” Hamilton explains: “Lean managers unlock employee creativity by developing a corps of lean learners, experimenters, and problem-solvers. For lean managers, learning and practice of the tools, the know-how, is the means not only to higher productivity, but also to developing the know-why: an enduring culture of continuous improvement.”

In an issue of BoxScore that highlights the “unsung heroes” in our industry, it’s worth considering the ways companies of every size and product range can create and promote an environment that recognizes every employee’s achievements, leaving no one’s contribution “unsung.”

A Superior Approach By all accounts, California-based Superior Lithographics was, for most of its life, a high-quality yet typical manufacturer, known for being the state’s leading large-format printer of litho labels, top sheets, and folding cartons. Then, in 2013, founder and President Doug Rawson attended a printing conference where he heard speaker Capt. D. Michael Abrashoff, author of the management book It’s Your Ship. There he learned about

lean manufacturing—but with a twist that focused on company culture. The message was transformative.

“As soon as I got back to work, I sat down and met individually with every single employee—that was around 80 meetings—and asked them what we could do to make the company better,” Rawson says. That was the first step in creating a company culture that continues to flourish today.

“A lot of people approach lean manufacturing as material and product and waste and the bottom dollar,” says Jeff Ku, Superior’s vice president of lean manufacturing. “But if your culture only focuses on that, it’s not a long-term solution. We’re taking a more holistic approach. We focus on the culture and the people, so in the future they can drive forward for themselves. It’s less of a top-down approach and more a case of managers providing vision and support.”

Spreading the Word One key to Superior’s success is communication. A smaller rigid box or folding carton company might convey the president’s goals around a single table in the lunchroom. But with about 100 employees currently, Superior must consistently and cooperatively work to convey the corporate vision—or risk having management’s message misconstrued or ignored altogether.

It can be as simple as a companywide email signature.

“Everyone has the same signature line that follows our contact information,”

notes Vice President of Sales Megan Simmons. Every month that signature line is changed out, often highlighting one of the company’s six core values.

In September, for example, each email included the line, “Superior Value #5: Teamwork. Use the power of team collaboration to make everyone’s job easier.” Because these signatures are seen by every email recipient, the message is clear: Teamwork is as much a customer benefit as it is an internal goal.

“We also address teamwork when we do our companywide all-hands meeting,” adds Ku. “When managers work with their folks, they also pass down their values regarding teamwork. At the end of the day, we end up talking about it a lot.”

The Look of Lean So what does it really mean to be “lean”?

How do the values that define a lean company impact daily business?

“Well, let’s say we have a problem we need to solve,” says Ku. “We’d gather departments—even departments not otherwise directly involved—to work to figure it out. We might call in someone for an alternate point of view. We rely on cross-departmental teams.

“We also collaborate with our customers. We work on their problems, even sometimes when we don’t cause them.

One really significant thing we do is bring our whole team over so clients can get to know them face to face. That way, they see that it’s not just the salespeople who work with them; it’s a real team.”

Continued on Page 56

54

BOXSCORE November/December 2015

ONE OF THE TOP TEN REASONS TO JOIN AICC

STRENGTH 1. YOU BUILD A BETTER BOX,

WE’LL HELP YOU BUILD A BETTER COMPANY AICC represents a majority of the independent packaging manufacturers and their suppliers. We are dedicated to strengthening the independent’s position in the marketplace, empowering our members to compete successfully in a rapidly changing industry and an increasingly competitive and global business environment.

10.

5. KING WOR

GROWTH

NET onnect witrhs to

2.

PARTNERSHIPd

e C memb other row your g ess. busin

Manufacturers ang suppliers sharin 4. information and COMMUNICAT IO knowledge.

Be part of a cultu N that allows you tore ask questions an d share ideas.

3.

DEVELOPMENT Learn how to inspire and motivate the next generation of leaders.

Grow your business with best practices and strategic planning.

9.

7.

INFORMATION

6.

Gain the practical know-how to grow and prosper.

KNOWLEDGE Stay competitive with industry information and benchmarking surveys.

N EDUCATcaItiOon you

Get the eduere and need wh ed it: e when you n iversity, n Packaging Ud industry n a , seminars ngs. meeti

LEADE8.

RSHIP Join a

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To learn more about AICC or getting the most out of your membership, visit AICCbox.org or contact Virginia Humphrey, Director of Membership at vhumphrey@AICCbox.org or call 703.836.2422.

113 S. West Street • P.O. Box 25798 • Alexandria, VA 22313 • Phone +1.703.836.2422 • www.aiccbox.org

Folding Carton “For lean managers, learning and practice of the tools, the know-how, is the means not only to higher productivity, but also to developing the knowwhy: an enduring culture of continuous improvement.”

— Bruce Hamilton

“Our clients have embraced that,” Simmons adds. “They like having multiple points of contact at the company. It’s not like they have to talk with different people to order or that they’re left wondering who to call if an issue arises; they are simply drawing on different areas of expertise. For example, one of our customers also has a VP of lean manufacturing, and he will get in touch with Jeff Ku to coordinate.”

The company has also launched an extremely successful employee-suggestion program, acting on more than 400 suggestions. “We implement every employee suggestion,” Rawson says, “as long as it is safe and affordable. We are open to trying everything. And if an employee expresses a need for something, they get

it—whether management thinks they truly need it or not.”

“People’s input has made a great difference here,” Simmons acknowledges. “It has completely transformed the company.

“We don’t want to have unsung heroes,” she says. “We’re striving to celebrate everyone here, because everyone here has a gift.

It’s our job as a leadership team to recognize those gifts. We feel we’re a very progressive company in how we approach this.”

Robert Bittner is a Michigan-based author and freelance writer. He is a regular contributor to BoxScore.

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BOXSCORE November/December 2015

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The Associate Advantage

THE POWER OF LEAVING YOUR MARK

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

JEFF PALLINI FOSBER AMERICA VICE CHAIRMAN PALLINIJ@FOSBER.COM

ED GARGIULO EQUIPMENT FINANCE CORP. SECRETARY EGARGIULO@EFC-FINANCE.COM

O

ccasionally, after a long and productive week, I find myself pondering life’s deeper thoughts. As I sat by a campfire this weekend, my mind drifted, and I began wondering what people thought when they first experienced fire.

Was it started by flint or by two sticks, or was it just a happy accident? How much did this one discovery change the course of daily life?

In our world, it seems monumental change and enhanced technology are the norm, and our industry is no exception.

Evolving widths, flute configurations, and graphics keep us always looking to the future. It is this drive that has turned the corrugated packaging business into a multibillion-dollar industry. But like the advent of fire that changed our world, I wondered, “Where did it all begin?” What was the start to this ever-changing industry that we work in every day?

Interestingly, the corrugated packaging industry is one that has evolved greatly over time.

1856 Meeting the need of lining for tall hats, pleated paper is patented in England.

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BRIAN KENTOPP BOBST NORTH AMERICA INC. IMMEDIATE PAST CHAIRMAN BRIAN.KENTOPP@BOBST.COM

58

BOXSCORE November/December 2015

1871 Looking for a way to wrap bottles and glass chimney lanterns, Albert Jones of New York City patents corrugated fiberboard on December 20. The original form of corrugated consisted of pleated paper with a single liner sheet on one side.

1874 By adding another linear sheet to Jones’ design, Oliver Long is awarded a patent for his improvements. This currently serves as the corrugated product we know and

use today. During this same year, the first machine for producing large-scale quantities of corrugated is invented by G. Smyth.

Mass production begins!

1890 The first fiberboard box is invented—by accident. Robert Gair, a Brooklyn-based paper bag maker, was printing an order of seed bags when a metal ruler, normally used to crease bags, shifted in position and cut them. Gair realized that by cutting and creasing, he could make prefabricated boxes.

The first corrugated box was created by mere accident—surprising, to say the least.

It was not the workings of an integrated company or of an independent. Rather, this monumental invention was the work of one man’s hands. And while the accomplishment of this one man was amazing, it was the collective work of independent entrepreneurs who have raised and must continue to raise the bar in our industry. Working together, we can continue to push for more opportunities and industry growth.

The corrugated packaging industry is filled with independent boxmakers extending to fourth, fifth, sixth, and even seventh generations. These companies have led and inspired the spirit and outgrowth of competition that has resulted in thousands of independents globally, with the majority here in the States. It’s with this spirit that we must press on, continually innovating and providing ongoing value for our customers.

Everyone working in our industry has the opportunity to create history. Fifty years from now, when someone writes about the history of our industry, will you have left your mark?

This article was written by Keith Umlauf.

BOXSCORE www.aiccbox.org

59

Financial Corner

EVALUATING KEY COST CENTERS

BY MITCHELL KLINGHER

M

aterials, people, capital, systems, and infrastructure are the broadest groupings that I can think of to describe the expenses incurred by converters. In looking at a typical financial statement for most BoxScore readers, materials are almost always the largest expense, and a fair amount of resources is devoted to tracking the material component of each order, evaluating the quality and performance of the materials that are purchased, and negotiating the best terms that are found for their procurement.

But is that all there is? What about people and capital and systems and infrastructure? What are the key cost centers that you require to run your business efficiently? What resources do you devote to managing these costs, and how can your financial people help you in this regard?

Let’s start by discussing the difference between a profit center and a cost center.

A profit center is a measurement of the profitability of a definable segment of your business. The contribution of that profit center less the fixed costs directly allocable to that segment of your business would yield its operating profit. This is the most fundamental reporting unit of any business. Costs directly allocable to that profit center should be costs that would “go away” if you no longer had that segment. A profit center can be a machine center, a grouping of machine centers, a type of business, or even a grouping of customers. A cost center is a grouping of costs that represent a common endeavor that supports one or more profit centers. For example, customer service and design may be a cost center, or it may be a group of cost centers if some of the customer service reps and

60

BOXSCORE November/December 2015

designers are dedicated to one particular profit center or group of accounts.

It would be easier to manage your business if you began to measure the profits of each definable profit center on a consistent basis, and in order to do that, you must begin to give thought to what they are in your reality. You must also think about how to group your expenses in a way that helps you understand the costs associated with each profit center and the common cost centers that are required to run your business. I know it sounds complicated, but it really isn’t—it simply requires you to give some thought to what it is that you are doing and to be willing to make meaningful change in your recordkeeping.

Many of you are afraid of change, and most of your financial people simply dread it. I’ll let you in on an old accounting joke: Q. Why did the accountant cross the street?

A. Because he looked in last year’s closing work papers and that’s what they did last year!

Not a very funny joke, I agree, but it has a serious ring of truth. We accountants are often so focused on processing paper and reconciling accounts that we have no desire to change anything unless we can prove that it is necessary. Which reminds me of an old saying that goes something like this: “We have met the enemy, and he is us!”

Sales less cost of goods sold equals gross profit, and gross profit less operating expenses equals operating profit. These measurements are time-honored and unfailingly true, and they offer a bottom-line scorecard that is necessary and useful. But they don’t really help you manage your business, do they? And at the end of the day, we can give you so much more; we just have to be motivated to do it. In order to motivate us, we need three things: 1. Financial professionals have to believe that such change can help you run your businesses better.

2. We have to believe that management will actually participate in the process and use the results.

3. You may have to devote more resources to the dismal science of accounting and finance.

A good way for you to get a jump on all of this is to participate in AICC’s financial training. Sending your financial people and key management personnel who have P and L responsibility will help you move forward quickly and effectively. Visit the Packaging University tab on aiccbox.org for upcoming opportunities.

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

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

PACKAGING

CORRUGATED

F O U N D AT I O N

ICPF’S CAREER PORTAL IS A GREAT RECRUITING TOOL FOR YOUR FIRM’S FUTURE

F

or those ICPF corporate partners that have entry-level openings or wish to offer a student internship, one of the best tools to use for recruiting is ICPF’s Career Portal. Not only do you get direct applications from new or upcoming college graduates, but the posting of an opening allows your firm to search ICPF’s online Résumé Bank, that has more than 100 student and college-graduate résumés.

Also, ICPF has more than 700 current students and upcoming college graduates who have indicated interest in corrugated packaging and displays careers on ICPF’s corrugated packaging career social network. In addition to those students referred by ICPF’s college and university partners, these students and upcoming graduates are regularly encouraged to visit ICPF’s career portal.

If your firm has entry-level openings in packaging design, graphic design, sales, business, supply chain management, or engineering, or you wish to locate a student intern for this coming summer, visit www.careersincorrugated.org and go to the “Career Portal.” This is a free benefit for ICPF corporate partners. Entry-level and student internship postings are unlimited. For those corrugated firms or suppliers considering a corporate partnership pledge, ICPF also offers a free 90-day posting. Email rflaherty@icpfbox. org for specifics.

Only student internships and entrylevel positions for new college graduates that do not require industry experience can be posted. Firms that use the portal or Résumé Bank must alert ICPF of the name of the resulting hire. Names are kept confidential and used only for internal tracking purposes.

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BOXSCORE November/December 2015

Tips on Using ICPF’s Career Portal to Recruit Student Interns and New Grads

include it in your posting. It could double the responses from applicants.

1. Customize position descriptions to get the best response. ICPF’s Career Portal is used only by students seeking internships and new grads seeking entry-level openings.

If your posting indicates that experience is preferred (other than a previous internship or part-time work), they will not apply.

7. Alert ICPF of your posted position and its progress. ICPF’s social network has more than 700 students and upcoming graduates who have indicated an interest in corrugated packaging and displays careers. Through this network, ICPF can alert additional students and faculty of posted openings.

2. Student internships are a great recruiting tool for your future. Student internships offer a great opportunity to get to know and cultivate a future candidate for a full-time opening. Most graduates select the offer from the firm at which they earlier interned. Samples of internships from firms and faculty are available from ICPF. 3. For student internship openings that will be available in summer 2016, post the openings as soon as possible. Many students will make their commitments to student internships for the summer of 2016 by the fourth quarter of 2015.

4. Be specific in the location of the position. Potential applicants best respond to positions that are area-specific. If the firm has similar openings at multiple locations, post a separate opening for each location.

5. To ensure the best response to openings, identify salary or hourly wage range. Do not list position compensation as “subject to experience and capability.” Check with ICPF for ranges in your region.

6. Consider potential housing options for student interns. If you plan to offer a housing allowance or location assistance,

8. Promptly let every applicant know you received his or her résumé and identify the specific time frame of the interview process. And, keep in contact with the candidates throughout the process. Often, companies lose the best applicant simply because they were not in regular contact.

9. The new packaging design programs established by ICPF produce graduates that have both a packaging design and a graphic design education. Also pay close attention to the major, minors, and part-time work experience. It is possible to recruit a candidate who can fill multiple needs.

10. After posting a position on ICPF’s career portal, remember, to access ICPF’s Résumé Bank. The Résumé Bank has more than 100 résumés of students who have indicated an interest in a student internship or corrugated packaging career upon graduation.

Richard M. Flaherty is president of the International Corrugated Packaging Foundation. For more information, visit

www.careersincorrugated.org.

The Final Score

GOOD ‘FOLLOWERSHIP’ IS A HEROIC VIRTUE

W

e hear a lot about leadership in our Western culture, whether it’s political leadership, business leadership, sports leadership, or even the leadership in your local Rotary. We have read book after book; we have heard speaker after speaker extol the shining attributes of good leaders—they inspire, they lead by example, they care, they have empathy, they are decisive, fair, and good. These are all noble attributes to be sure, yet in my mind good leadership is only half the equation. For if we don’t have good followers, what purpose do the good leaders serve?

So I’d like to us to think about what it means to be a good follower. Good “followership” also has its place in our discussion, especially our discussion in this issue of unsung heroes. Unsung heroes are the excellent followers—they make the leadership qualities I cite above come forth. So what are the true qualities—the true virtues—of the unsung heroes in your company and your life? Let me suggest a few: Good followers have a positive outlook. People who see things positively, who smile easily, and have an upbeat outlook are naturally good followers. They find reasons why things can be done, not reasons why they can’t.

Good followers are eager to work. A good work ethic is a prerequisite for good followership. Diligence and duty take precedence over good followers’ own convenience and needs.

Good followers want to improve. Do you want to encourage a culture of continuous improvement? You need good followers to do that. Good followers have a “Nike attitude”—they have the initiative to spot how to improve things and just do it.

Good followers can take direction. Even when they’re not working with their own initiative, good followers can take direction. When they understand the task, they’ll confirm. If they don’t understand, they’ll ask.

Good followers can take correction. If a good follower makes a mistake, they own it.

No excuses and no blaming others. And a bonus: A good follower, when corrected, will learn from his mistake so as not to repeat it.

Good followers live in the present. They don’t harbor grudges or nurse past wrongs.

They are never easily offended, and they give the benefit of the doubt.

What are the attributes of your unsung heroes—your good followers? I’d like to know.

Steve Young President, AICC

64

BOXSCORE November/December 2015

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The intelligent Ultima™ technology platform is the result of focused collaboration with our cus-

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