Sept/ Oct 2017 AICC BoxScore by AICC, The Independent Packaging Association

May/June 2017 Sept/Oct 20173 Vol. 21, Issue Vol. 21, Issue 5

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September/October 2017 Volume 21, No. 5

A PUBLICATION OF AICC, THE INDEPENDENT PACKAGING ASSOCIATION

WEBSITE

BEST PRACTICES 10 STEPS TO BUILDING A WEBSITE THAT WORKS

ALSO INSIDE The Value of Marketing in the Packaging Industry Inside/Out Company Branding 2017 Print & Packaging Summit

TABLE OF CONTENTS September/October 2017 • Volume 21, Issue 5

COLUMNS

46 FEATURES

46 52

WEBSITE BEST PRACTICES 10 steps to building a website that works THE VALUE OF MARKETING IN THE PACKAGING INDUSTRY Effective marketing is essential to any successful business, whether that means hiring an agency to help or not INSIDE/OUT COMPANY BRANDING A strong employer brand can attract and retain invaluable talent

TION PETI COM

PE COM

YOU

TITION

52 58

BoxScore is published bimonthly by AICC, The Independent Packaging Association, PO Box 25708, Alexandria, VA 22313, USA. Rates for reprints and permissions of articles printed are available upon request. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of AICC. The publisher reserves the right to accept or reject any editorial or advertising matter at its discretion. The publisher is not responsible for claims made by advertisers. POSTMASTER: Send change of address to BoxScore, AICC, PO Box 25708, Alexandria, VA 22313, USA. ©2017 AICC. All rights reserved.

CHAIRMAN’S MESSAGE

SCORING BOXES

LEGISLATIVE REPORT

MEMBERS MEETING

ASK RALPH

SELLING TODAY

TACKLING TECH

SAFEGUARD

LEADERSHIP

MARKETING MIX

THE ASSOCIATE ADVANTAGE

THE HIDDEN FACTORY

FINANCIAL CORNER

THE FINAL SCORE

DEPARTMENTS

WELCOME NEW MEMBERS

GOOD FOR BUSINESS

MEMBER PROFILE

ICPF UPDATE

Visit www.aiccboxscore.org for Member News and even more great columns. Scan the QR code to check them out! BOXSCORE www.aiccbox.org

OFFICERS Chairman: Tony Schleich, Lawrence Paper Company, American Packaging Division First Vice Chairman: Al Hoodwin, Michigan City Paper Box Vice Chairman: Joe Palmeri, Jamestown Container Companies Vice Chairman: Jay Carman, StandFast Packaging Vice Chairman: John Forrey, Specialty Industries/Krafcor/ NuPack Printing DIRECTORS-AT-LARGE Jim Akers, Akers Packaging Kevin Ausburn, SMC Packaging Group Matt Davis, Packaging Express Marco Ferrara, Cartones Sultana Jana Harris, Harris Packaging Corp. Nelva Walz, Elegant Packaging DIRECTORS Doug Rawson, Superior Lithographics David DeLine, Deline Box Company Justin Mathes, Vanguard Companies Eric Elgin, Oklahoma Interpak Gary Brewer, Package Crafters Inc. Guy Ockerland, OxBox Finn MacDonald, Independent II Joe Hodges, Mid-Atlantic Packaging Larry Grossbard, President Container Group Peter Hamilton, Rand-Whitney Corporation John Franciosa, McLeish Corr-A-Box Coyle Packaging Group Humberto Trevino, Washington Box, S de RL de C.V. Kim Nelson, Royal Containers Ltd. President: A. Steven Young, AICC Headquarters

Immediate Past Chairman: Mark Williams, Richmond Corrugated, Inc. Chairman, Past Chairmen’s Council: Greg Tucker, Bay Cities Container Corp. Secretary/General Counsel: David P. Goch, Webster, Chamberlain, and Bean Counsel Emeritus: Paul H. Vishny, Esq. ASSOCIATE MEMBER DIRECTORS Chairman: Jeff Pallini, Fosber America Vice Chairman: Ed Gargiulo, Equipment Finance Corp. Secretary: David Burgess, JB Machinery Director: Pat Szany, American Corrugated Machine Corp. Immediate Past Chairman: Keith Umlauf, Haire Group ADVISORS TO THE CHAIRMAN Gene Marino, Rusken Packaging Jeff Pallini, Fosber America Tom Shallow, Fitzpatrick Containers PUBLICATION STAFF Publisher: A. Steven Young, syoung@aiccbox.org Editor: Virginia Humphrey, vhumphrey@aiccbox.org EDITORIAL/DESIGN SERVICES The YGS Group • www.theYGSgroup.com Editorial Director: Annette Gray Senior Managing Editor: Ashley Reid Senior Editor: Sam Hoffmeister Copy Editor: Steve Kennedy Associate Editor: Drew Bankert VP, Marketing Services: Jack Davidson Creative Director: Serena Spiezio Art Director: Jason Deller Account Manager: Brian Hershey

SUBMIT EDITORIAL IDEAS, NEWS & LETTERS TO: BoxScore@theYGSgroup.com CONTRIBUTORS Mike D'Angelo, Vice President Maria Frustaci, Director of Administration and Director of Latin America Cindy Huber, Director of Meetings and Conventions Chelsea May, Member Services Coordinator Laura Mihalick, Senior Meetings Manager Taryn Pyle, Director of Training, Education and Professional Development Alyce Ryan, Marketing Associate Richard M. Flaherty, President, ICPF ADVERTISING Information: Virginia Humphrey, vhumphrey@aiccbox.org Opportunities: Howard Neft, InTheKnow Inc. 847-899-7104 • thneft@aol.com Folding Carton and Rigid Box Advertising: Taryn Pyle 703-535-1391 • tpyle@aiccbox.org AICC PO Box 25708 Alexandria, VA 22313 Phone 703-836-2422 Toll-free 877-836-2422 Fax 703-836-2795 www.aiccbox.org

ABOUT AICC AICC, The Independent Packaging Association, is uniting and celebrating the success of inspired, independent packaging companies. We are a growing membership association which has served independents since 1974. AICC SERVES: Passionate professionals; The independent and united; The responsive and agile. AICC WILL: Connect and cultivate; Deliver success.

Chairman’s Message

AGILITY

am very excited about my final couple of months as chairman, which included some really great programs! With some very appreciated help from Mark Mathes (Vanguard Companies), Kat Armstrong (Englander dZignPak), Josh Sobel (Jamestown Container), and Sahar Mehrabzadeh-Garcia (Bay Cities)—of course, along with the amazing AICC staff—I hosted the Emerging Leader program in Bentonville, Ark., where we were exposed to some of the inner workings of Walmart and heard from some terrific speakers. Before our national meeting in September in Las Vegas, I also had the pleasure of seeing some of you at the Southeast Summit in Asheville, N.C. Hosted by Gary Brewer (Package Crafters), this interactive summit was focused on “relational capital” and building business relationships that last. A couple of short weeks after that, the Northeast Summit in Atlantic City, N.J., focused on how high-speed flexo folder-gluers, Washington, and personnel issues impact your bottom line. With this aggressive schedule, I found myself out of the office more than I was in the office for the day-to-day decision-making. It seems only fitting, then, that I left “agility” as the final installment of our five Principled Leadership values. Agility’s definition is: “Act quickly and decisively to create ‘killer’ solutions that make raving fans of our external and internal customers.” This speaks to how everyone within the company is empowered and encouraged to troubleshoot circumstances that ultimately result in happy customers. We have worked hard to delegate decisionmaking across the company, and we have definitely seen positive results—not only from customer satisfaction, but in engaged and happy employees as well. Through the year, I have walked you through how we define the values to describe Principled Leadership and that speak to our overall mission of our division. To recap: INTEGRITY — Always doing what is right over settling for convenience. CREATIVITY — Spirited exploration of intelligent results that “wow.” EXCELLENCE — Striving to always be better, celebrating victories, and improving from mistakes by having a prevailing attitude of innovative habits. BALANCE — Having fun and valuing relationships through an engaged culture of daily achievement and enjoyment. AGILITY — Act quickly and decisively to create “killer” solutions that make raving fans of our external and internal customers. I hope that some insight into our company over the past year has provided thought-provoking ideas that you may apply at your company. Finally, I am truly honored to have had the opportunity to serve you as chairman, and I certainly look forward to continuing to meet many of you and, of course, carrying on the many relationships that I am blessed to have within this incredible Association.

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

BOXSCORE www.aiccbox.org

Scoring Boxes

E-COMMERCE SALES ARE DRIVING BOX DEMAND GROWTH BY DICK STORAT

Box Shipments vs. U.S. Production of Consumer Nondurable Goods

BOXSCORE September/October 2017

SOURCE: FIBRE BOX ASSOCIATION, DEPARTMENT OF COMMERCE, FEDERAL RESERVE

130 125 Index (1992=100)

120

B C

115 110 105 100

Ind. Prod. Trend

Box Shipment Trend

Nonstore Retail Sales ($ Millions) $600,000

SOURCE: U.S. CENSUS BUREAU

$500,000 $400,000 $300,000 $200,000 $100,000 $0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

ince before the turn of the century, consumer nondurable goods have accounted for more than 75 percent of total demand for corrugated products in the United States, according to data published by the Fibre Box Association (FBA). Consequently, a correlation between growth in domestic production of consumer nondurable goods and corrugated demand should be expected. The chart at right compares production of nondurable goods and box shipments since 2000. In Region B of the chart, between 2006 and 2012, there is, in fact, a close match with the decline of U.S. goods production, caused mainly by growing imports and U.S. box shipments. Prior to that time, box shipments were flat or declining, while packaged goods production was growing or stable. Much of the shift during those years was due to increasing packaging efficiencies, such as moving from boxes to shrink-wrapped trays that used less corrugated per unit of goods production and increased use of returnable crates for distribution from wholesaler to retailers in geographically suitable situations. Starting in 2012, however, and accelerating in every year thereafter, box shipments grew faster than underlying goods production. In large part, that shift is due to the growing share that online sales or e-commerce constitutes of total retail sales. In 1992, nonstore retail sales consisted almost entirely of catalog and mail-order sales, amounting to $78 billion. Total retail sales that year amounted to $1.8 trillion, making nonstore sales about 4 percent of the total.

Of course, what makes these sales so interesting to independent corrugated converters is that they use substantially more corrugated packaging per unit of goods than those distributed to traditional stores. The bottom chart shows the explosive growth of these sales as online sales began to gain an increasing share of the total. During the 24 years since 1992, total

retail sales grew at an average annual rate of 4.2 percent, while nonstore sales grew more than twice as fast, at an 8.6 percent average annual rate. Only during the recession years of 2000 and 2008 did sales falter. The U.S. Commerce Department reported that online sales, excluding mail order sales, grew at 11.6 percent last yearâ&#x20AC;&#x201D;the fastest annual growth rate this century.

Scoring Boxes

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SUPERIOR SERVICE. Online sales now account for more than 10 percent of total U.S. retail sales, so the additional corrugated consumption has become noticeable in the monthly statistical data. Through May 2017, U.S. production of nondurable consumer goods has declined by 0.7 percent while box shipments have grown by 3.0 percent, according to the FBA. Amazon has been the major driver of this favorable trend. Last year, Amazon reported online sales that amounted to 53 percent of U.S. total online sales, a considerable share increase from 2015, when it accounted for 40 percent of all those sales. By maintaining a two- to three-day lead in shipping speed compared to its competitors, Amazon has sustained its advantage in this rapidly expanding retail trend. Historically, some 40 percent of all corrugated has ended up in grocery stores. Amazon has been experimenting with innovative approaches to grocery shopping for quite some time. In addition to revised-format brick-and-mortar test stores, they offer Prime Pantry, an online format in which grocery and related items from the core aisles of grocery stores can be ordered in everyday sizes and quantities to fill a presized box. Depending on the items chosen, two-day shipping is either free or $5.99. This format also results in a larger corrugated footprint for the size of orders shipped than does traditional grocery distribution through wholesale and retail channels. Additionally, Amazon’s recent acquisition of Whole Foods stores gives them hundreds of physical stores to implement decades’ worth of

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experiments in how people pick, pay for, and get groceries delivered. Not only that, but from these hundreds of additional physical locations, they may be well-positioned to further reduce delivery times in key markets. Amazon’s competitors are moving to catch up to them in online sales. Walmart announced that its first quarter 2017 growth in online sales hit 63 percent, albeit from a much smaller base than Amazon’s. With the acquisition of Jet.com last August, they are also investing in the online sales platform. Target is also investing heavily and focusing on e-commerce. It is paying off, as the company reported a 22 percent

increase in online sales for the first quarter, ahead of the industry average. With competitors now moving aggressively to match the format pioneered by Amazon, U.S. independent corrugated converters can anticipate a solid basis for continued strong growth of corrugated packaging that outpaces the underlying growth in nondurable goods production. Dick Storat is president of Richard Storat & Associates. He can be reached at 610-282-6033 or storatre@aol.com.

BOXSCORE www.aiccbox.org

Legislative Report

Photo courtesy of AICC

2017 PRINT & PACKAGING LEGISLATIVE SUMMIT

Vice President Mike Pence addressed the National Association of Manufacturers during the Summit.

espite continuing partisan turmoil in Washington, 64 representatives from the printing and paper packaging industries stated a unified case for the importance of a healthy printing and packaging manufacturing sector during the 2017 Print & Packaging Legislative Summit, June 20–21, in Washington, D.C. The event was held in conjunction with the National Association of Manufacturers (NAM) 2017 Manufacturing Summit, which this year saw keynote presentations by Vice President Mike Pence and Speaker of the House Paul Ryan (R-Wis.).

BOXSCORE September/October 2017

“We had a tremendous turnout for this year’s event, and the scope of our visits and congressional involvement was greater than I have ever seen,” said John Forrey, president of Specialty Industries in Red Lion, Pa., and chairman of AICC’s Government Affairs Committee. “There certainly was a ‘buzz’ about this year’s event with a more pro-manufacturing administration in place,” he said. The Print & Packaging Legislative Summit, rebranded from the former “Corrugated Industry Legislative Fly-In,” featured industry leaders and key members of Congress on a host of issues, but none

resonated more clearly with attendees than health care and tax reform. Pence and Ryan Promote Agenda at NAM Luncheon Some members participating in the Summit first attended a June 20 luncheon hosted by the NAM, at which Vice President Pence and Speaker Ryan spoke about the need for congressional action on health care, tax reform, and workforce initiatives designed to help manufacturers recruit and retain qualified workers. Pence, noting the complexity of the

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Legislative Report

Speaking at a congressional welcome reception on Capitol Hill later that day, three Republican members of Congress, whose districts are home to a sizable number of print, packaging, and paper- related facilities, addressed the group about the importance of manufacturing and how attendees can help their legislators carry the message forward. Rep. Virginia Foxx of North Carolina’s 5th Congressional District spoke of initiatives for workforce

Photo courtesy of AICC

current U.S. Tax Code, vowed to follow through on President Donald Trump’s calls for a 15 percent corporate tax rate, 100 percent first-year expensing of capital projects, and the elimination of the estate tax for family businesses. Speaker Ryan, for his part, echoed the vice president, saying the No. 1 priorities in the House were bolstering the economy through passing a new health care law and reforming the tax code.

Photo courtesy of AICC

House Speaker Paul Ryan reinforced Congressional support for manufacturing in the U.S.

Comparing notes after the Summit, from left: Michael Makin, president of PIA; Jeremy Guest, president of Diansupply, representing IADD; AICC President Steve Young; and AICC Chairman Tony Schleich.

BOXSCORE September/October 2017

development. Foxx, chairman of the House Committee on Education and the Workforce, cited the lack of technical educational resources as one of the reasons why the manufacturing sector is scrambling now to find workers in a time of expansion. “We need you to tell your representatives to support the upcoming Perkins Reauthorization Act,” she said, referring to H.R. 2353, the Strengthening Career and Technical Education for the 21st Century Act, which reauthorizes the Carl D. Perkins Career and Technical Education Act through Fiscal Year 2023 and was scheduled for a House floor vote on Thursday, June 22. This issue was one of the principal talking points of this year’s Summit. (Note: The bill was passed by voice vote in the House of Representatives on Thursday, June 22; it has now moved to the Senate, where it awaits action in the Committee on Health, Education, Labor, and Pensions.) Congressman Sean Duffy (R-Wis.), representing the 7th District and a member of the House Financial Services Committee, spoke to the group about the tax code and the burdens its complexity places on small businesses. Congressman Bruce Poliquin (R-Me.) of the 2nd District, co-chair of the House Paper and Packaging Caucus, talked about the importance of the paper and printing industries to his district, which covers a large swath of territory in northern Maine. He told the group of his efforts in working with the paper industry’s Coalition for Paper Options, a group that promotes and preserves the option for printed paper investment statements, pharmaceutical information, and other federally required reports. At a dinner presentation later that evening, Republican Sen. Todd Young of Indiana told the group to keep up their efforts to promote a strong manufacturing sector by their annual visits and inviting their elected representatives to their plants. He encouraged members to educate their employees about the issues as well.

Thank you Education Investors

These companies are making a significant contribution to the online education available to all AICC members.

Become A Partner in Education Education Investor Program We invite you to partner with AICC as an investment to your company and the industry. Becoming an AICC Education Investor allows your company to be a thought leader in the industry. The Education Investor opportunity is available to 15 AICC member companies for $15,000, each. It is an annual commitment that offers companies: Involvement: • Opportunity to provide educational content, including videos, white papers, and other course materials for online courses. Promotion: • A commercial included in an online course Recognition: • Company logo on AICC online courses • Company logo included on “Thank you” page in each issue of BoxScore • Company logo included in National Meeting deck • Company name may also be included in emails specifically promoting online courses For more information, contact Mike D’Angelo, Vice President, at 703.535.1386 or mdangelo@aiccbox.org.

Legislative Report

Photo courtesy of AICC

plant sites so they can see our industry in action and understand its importance to the economy,” she said. “And do not forget to thank them when they support a position that is important to us.” Dennis Colley, president and CEO of the Fibre Box Association (FBA), gave an overview of the corrugated industry’s operating statistics for the previous year, noting especially the productivity gains made in the past several years. “We are producing more corrugated board now with 400 fewer plants than we were in the year 2000,” he said. He reminded members to talk about the sustainability of corrugated packaging and the forest products industry in general, saying that we work with a renewable resource that is recovered at a rate of 92 percent and is completely recyclable.

AICC Chairman Tony Schleich (center) with Congressman Neal Dunn of Florida (left) and Congressman Bruce Poliquin of Maine. Both Congressmen are members of the House Paper & Packaging Caucus.

Members Talk Issues With Their Congressmen and Senators On the morning of Wednesday, June 21, members gathered on Capitol Hill to hear briefing presentations from industry leaders. Key issues discussed by attendees at this year’s Print & Packaging Legislative Summit included health care reform, tax reform, smarter regulation, workforce development, and paper advocacy. Donna Harman, president and CEO of the American Forest & Paper Association (AF&PA), discussed the results of her group’s Washington Fly-In, held the

BOXSCORE September/October 2017

previous week. Noting the parallel issues such as tax reform, smarter regulation, and workforce development, she urged members to amplify the messages that paper industry advocates had conveyed in the previous week. “There is power in repetition,” she said, “and you on the converting side of our business are the best messengers.” She also noted that it is important to maintain an ongoing relationship with elected representatives, especially once members return home. “It’s important to invite your representatives and senators to visit your

Sen. Ron Johnson Sees Rough Road on Health Care, Taxes Sen. Ron Johnson of Wisconsin addressed the group about the health care and tax reform issues, saying both faced a “rough road” for passage in the Senate. Johnson expressed concern that all issues would depend on the passage of the health care reform bill. “Nothing can happen on tax reform until health care gets solved,” he said, predicting that if it were passed by September, then tax reform could proceed this year without becoming a major issue in the 2018 midterm election cycle. Johnson, who was introduced by Jim Servi, CFO of Automatän, received a plaque recognizing him for his work in the Senate Paper and Packaging Caucus. Meeting With Vice President Pence’s Domestic Policy Staff In addition to meetings on Capitol Hill, members participated in a private meeting with the domestic policy staff of Vice President Mike Pence. Arranged by Lisbeth Lyons, vice president of government affairs for Printing Industries of America (PIA),

A Unified, Expanded Industry Voice For the second year in a row, the Print & Packaging Legislative Summit was a joint effort among AICC, the FBA, and Printing Industries of America (PIA). “Our partnership with AICC and FBA was once again a wonderful experience,” said Michael Makin, president and CEO of PIA. Also joining the printing and converting side of the business in 2017 were the International Association of Diecutting and Diemaking (IADD) and the National Association of Printing Ink Manufacturers (NAPIM). Jeremy Guest, president of Diansupply, St. Louis, and president of IADD, said of his experience at the 2017 Summit: “It is great to know that small businesses like mine and other IADD members do have a voice, and that our voice is being heard.” For more information about the 2017 Print & Packaging Legislative Summit, contact Laura Mihalick at lmihalick@aiccbox.org or Steve Young at syoung@aiccbox.org.

Doug Rawson, Superior Graphic Packaging, and Tony Schleich, AICC chairman and president of Lawrence Paper Company American Packaging Division, wait for Vice President Pence’s speech at the NAM luncheon.

Photo courtesy of AICC

the hourlong meeting focused on health care and tax reform. Rebekah Armstrong, health care advisor to Pence, stated her view that conflicting issues within the Republican ranks could be resolved and that Senate leadership would amass the minimum 50 votes needed to pass, with the 51st vote being cast by Vice President Pence. Once health care is resolved, then Congress can move ahead on tax reform, said Stephen M. Pinkos, the vice president’s tax advisor. Attending the meeting on behalf of AICC were Doug Rawson, president of Superior Lithographics and regional director for AICC Region 1; Tony Schleich, president of Lawrence Paper Company American Packaging Division and chairman of AICC; and John Forrey, president of Specialty Industries and chairman of AICC’s Government Affairs Committee.

Photo courtesy of AICC

Legislative Report

At the NAM closing reception, from left: Mike D’Angelo, AICC vice president; Lisbeth Lyons, vice president of government affairs, PIA; and John Forrey, president of Specialty Industries.

BOXSCORE www.aiccbox.org

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Members Meeting

ANNUAL CHAIRMAN’S FIELD TRIP BY ALLIE O’BRIEN

Englander dZignPak and Bay Cities hosted a reception for the Emerging Leaders.

ICC understands the value of bringing together young professionals from around the country. The Emerging Leaders (ELs) program allows members to feel equal, important, valued, and respected. With these affirmations, ELs are free to be the innovative and creative individuals we are. AICC understands that when young professionals are empowered, they are genuinely responsible. Each Emerging Leader event unites the future of the industry one session at a time. Forty ELs gathered from across the United States for the annual Chairman’s Field Trip. We received an insider look at the daily operations of Walmart’s Bentonville, Ark., distribution center. Bentonville, the hometown of the world’s

BOXSCORE September/October 2017

The ELs networked during lunch in between the Walmart Distribution Center tour and visiting Englander dZignPak’s Bentonville office.

largest corporation, surprisingly has a population of just over 47,000 residents. We listened to industry veterans speak about their take on where the future of packaging is already heading—to shelfready packaging (SRP). We started the Field Trip in the Walmart Distribution Center conference room. The first session was led by Ron Sasine, principal at Hudson Windsor. Sasine, former senior director of private-brands packaging at Walmart, has more than 25 years in packaging and corrugated, and he proved he had no lack of expertise on where the industry has been with RSCs and where the industry is moving toward SRP. During the facilities walk-through, it was clear that the implementations and changes that packaging

is undergoing are necessary to service customers efficiently while eliminating waste and damaged products. Walmart’s main goal is to get an item in and out of the distribution center with as few touches as possible—in their case, one touch per package. This leaves the door open for innovative ideas in operations management and best practices. Loaders move, sort, and scan freight. Unloaders manage delivery and maintain freight records. Order fillers process orders, stack freight, and label shipments. These tasks are performed seamlessly from one job to the next through teamwork and process control. The sight was almost overwhelming as we walked out onto the 1.2 millionsquare-foot floor of the distribution

Members Meeting

Ron Sasine and Chet Rutledge answer questions from the ELs.

Delilah Gonzalez of Walmart present shelfready packaging.

center. There were aisles upon aisles as far as the eye could see, conveyor belts and rollers from ground to ceiling, and shrinkwrapped packages, stacking over a story high, skewed in every direction. Walmart’s unique labeling system allows for high volume and quick processing. Viewed from a platform above the ground of the facility, packages whiz by on a conveyor at an alarming rate, yet lasers rapidly scan item labels. The highspeed laser cues arms along the conveyors to push each individual package to its proper chute—eliminating extra touches. Following the tour of the Walmart Distribution Center, we had a session with speaker Delilah Gonzalez of Walmart at Englander dZignPak. Gonzalez discussed Walmart’s initiative to create an easier and more streamlined shopping experience for customers. One of the newest concepts is color-coding products by category in SRP. Delilah explained that by packaging goods in this way, staff and consumers alike can identify and locate products more quickly. She also enlightened us that through the use of color-coding, language barriers may not play as big a role during the shoppers’ experience. The last day, Sasine joined the ELs again to discuss the future of retail packaging, e-commerce, and new ways

to solve old problems. Then, Vanguard Packaging’s Chet Rutledge, director of marketing for retail-ready packaging, and Mark Mathis, CEO, discussed the company’s transition from using RSCs to bring product to the store floor to the more cost-effective SRP. Why Shelf-Ready Versus RSCs? SRP synonymous with retail-ready packaging, was a main topic during the sessions. Why are companies moving toward these shelf-ready packages? What are the benefits over a regular slotted container? SRP allows retail staff to easily identify products. This feature reduces placement error and increases efficiency when stocking. Along with being easy to identify, SRP is easy to shelve. A major concern for companies is damaged goods. Because SRP is easy to open and knives or scissors are not needed, the chance of products being damaged is greatly reduced. SRP saves space in both shipping and stocking. Even an extra centimeter on an RSC reduces the quantity of goods that can be transported in a truckload. Once all products are purchased from SRP, the product is easy to dispose of. And finally, SRP makes shopping easy for consumers. Packaging acts as a visual cue, improving the speed of product identification. In conclusion, shelf-ready packaging saves time, money, and labor while increasing efficiency at all levels, creating ease. How could this help you with your bottom line? Allie O’Brien is a third-generation sales associate for KemiArt US, Inc. She has been in the industry for a year and a half and covers a 23-state territory. She can be reached at 201-675-5982 or alexandra@kemiart.net.

Mark Mathes of Vanguard Packaging answers questions from the audience.

BOXSCORE September/October 2017

Save the Date AICC 2018 Spring Meeting & 5th Annual Independents Cup Charity Golf Tournament Monday, April 16- Wednesday April 18, 2018 Sheraton Wild Horse Pass Resort Phoenix, Arizona

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Dicar, Inc. ■ 10 Bloomfield Avenue, Pine Brook, NJ 07058 ■ 800-323-4227 ■ www.dicar.com Dicar, Equalizer, the Dicar logo and the color of blue used in Dicar products are registered trademarks of Dicar, Inc. Snap Sleeve is a trademark of Dicar, Inc. The Equalizer and Snap Sleeves are covered under one or more US and International patents or pending patents. Copyright © 2017. All Rights Reserved.

Ask Ralph

CATCHING UP BY RALPH YOUNG

have been writing this column now for more than 10 years, and what an honor it has been to share more than 35 years in containerboard and corrugated knowledge with you. While these articles are available in both print and digital formats, it is awesome that all this is readily accessible through our search engine on the website. So much of the base technical knowledge on containerboard manufacturing history and corrugated board development is archived in written books; just continue to contact me if you choose to dig deep into a subject and can’t find it on Google. About every three years, we publish a bibliography of articles—usually numbering around 20 since the previous update. This is the third edition of that effort, with the last one being the summer of 2014. So, what’s changed over the last 10 years? Here are a few examples: world-class papermaking technology that can clean and re-engineer recycled fiber to perform like virgin sheets; e-commerce; zero-crush converting equipment; digital printing and the speed at which it operates; 132-inch corrugators with reduced board degradation; e-learning; and the focus now on short column test instead of ring crush in describing component strength. Some topics include: • Old Corrugated Containers— An Overview and Primer • A Price Index for Recycled Containerboard • What New Hires Can Use—A Series • The Global World of Containerboard and Corrugated • Rightweighting, Continued

Just continue to contact me if you choose to dig deep into a subject and can’t find it on Google. • Rightweight Packaging Hits Mexico Again • Current Specifications for Microflute and Folding Carton Revisited … • Linerboard Weights Continue to Drop • Containerboard Prices Show Erosion After Long Period of Stability • Overview of the North American White Graphic Market, Parts 1, 2, & 3 • Box Performance Estimator— A Mobile-Enabled App • Setting Seven Performance Standards With Your Sheet Suppliers • Science of Paper School, Part 3 • That Still, Small Voice TAPPI/CORBOTEC I must once again make you aware of this fantastic free technical association that has delivered so much knowledge and so many network opportunities to me—and ultimately you—for more than 30 years. These are the best minds in the business and some of the hardest working men and women in the business. There are equipment suppliers, lab managers, adhesive suppliers, trainers, corrugator troubleshooters, and consultants, all connecting to bring excellence to our industry. The British Are Coming, the British Are Coming The Irish are already here! And Smurfit Kappa has expanded rapidly in the U.S.

Southwest and Mexico. At the time of this writing, the press announced that DS Smith of the U.K. has bought an 80 percent interest in Interstate Resources. In Europe, their focus is not only as an active acquirer of other companies, but a very lightweight component combiner and one that uses the DST torsional stiffness tester as an additional measure of box performance along with ECT. On the converting side, they create unique design structures as a global supplier to the largest CPGs. They are excellent at taking fiber out of the corrugated structure, utilizing linerboard weights as low as 20# and 18#. A new competitive force has arrived on the East Coast. SAICA, a Spanish company, looked to have a joint-venture paper mill in the Midwest, but deferred due to new ventures that developed in the area, such as Pratt, Cascades/GreenPac, Corrugated Supplies, and recently, Kruger. All of these mills’ systems using recovered fiber produce linerboards in the 18# to 35# range. R alph Young is the principal of Alternative Paper Solutions and is AICC’s technical advisor. Contact Ralph directly about technical issues that impact our industry at askralph@aiccbox.org.

BOXSCORE www.aiccbox.org

Selling Today

DO THE MATH: HITTING A HOME RUN WITH YOUR MARKETING AND SALES GOALS BY TODD M. ZIELINSKI AND LISA BENSON

n Michael Lewis’ 2003 book Moneyball and the 2011 film adaptation, the Oakland Athletics were faced with a severe financial disadvantage trying to bid on players against wealthier teams such as New York and Boston. It wasn’t until general manager Billy Beane hired Paul DePodesta, a number-crunching economics major, as his assistant that math was introduced to the art of scouting. The team abandoned traditional protocol and, instead, used a mathematical approach to pick players that other teams had rejected based on superficial flaws. This formula, which was based partly on the total number of runs needed throughout the season and measured a player’s ability to get on base, allowed the Athletics to pick up players with undervalued skills at a bargain price, making the team highly competitive with a small budget. The team won 20 consecutive games and set an American League record. Using the same idea, it is possible to hit marketing and sales goals by applying a mathematical model that allows you to start using a more scientific, repeatable approach. This process helps you reduce the inefficiency of decision-making by outlining a clear-cut path from your annual sales growth projection to the number of new contacts you must reach out to monthly. First Things First Similarly to Beane and DePodesta, you need to know where you want to end up to create a path to get there, but instead of total runs, you will need to know your projected annual growth in dollars.

BOXSCORE September/October 2017

Starting with your projected annual growth, divide it by the value of your average sale. Here is an example using the fictitious company called Bullpen Box Company. The company is planning to increase sales by $2 million next year, and its average sale comes in at about $167,000. This means Bullpen Box Company needs to close 12 sales to reach its goal. $2,000,000 ÷ $167,000 ≈ 12

What Are the Key Stages in Your Sales Process? The next step is to determine how many key stages are in your sales cycle. In the example of Bullpen Box, we are going to use a four-stage approach for the sake of simplicity—initial contact, qualification/ meeting, proposal, close. Once you have your sales cycle stages determined, you need to know what your conversion rate is at each stage. If you don’t know, make an educated guess, and going forward, track it and make adjustments as needed.

Proposal (Goal = 20) Bullpen moves 50 percent of its QLs/ meetings to the proposal stage. Therefore, to send out 20 proposals annually, it must qualify 40 prospects. 20 ÷ 0.5 = 40 Qualification (Goal = 40) For a prospect to move through the funnel and become a QL, it must do one or more of a determined set of actions, such as requesting a meeting, sending an RFQ, attending a webcast, etc. There may be many other steps between qualification and proposal that are relevant to your business and that you track, so you might have additional steps that would use the same math. Bullpen qualifies 10 percent of the prospects after initial contact, so it will have to reach out to 400 prospects annually to hit its goal. 40 ÷ 0.10 = 400 Initial Contact (Goal = 400) With a goal of 400 annual prospects, Bullpen will need to reach out to 33 to 34 new prospects per month.

Close (Goal = 12) 400 ÷ 12 ≈ 34 Using our example, Bullpen has a closure rate of 60 percent for the qualified leads (QL)/meetings that it sends proposals to. This means that to have 12 closures, it needs to send proposals to 20 QLs annually. 12 ÷ 0.6 = 20

It should be noted, this isn’t a one-anddone process. It might take anywhere from eight to 14 or more touches over a two- to six-week period to convert a prospect. To borrow baseball idioms, it is important that you keep your eye on the ball and follow through consistently.

Selling Today

Caveats to Consider The length of your sales cycle will greatly impact your annual closures in the first year, and you will need to make adjustments to account for this. If you have a four-month sales cycle from initial contact through close, you won’t see your first closure until April—assuming your fiscal year follows the calendar year—which means you may have closed only eight deals by the end of the year. If your sales cycle is over 12 months, obviously, you won’t see conversions to sales from this process in the first year. Looking at your whole program to find ways to compress your sales cycle may help. If you have estimated your conversion rates based on industry averages, or where you think they should be, and you are falling short of your goals, you will need to re-evaluate some aspects of your program. Some questions to ask include the following: • Are you targeting the right prospects? • Have you reached the correct decision-makers and influencers? • Does your messaging resonate with them? • Do you understand their needs and how your product or service fills the need better than your competitor’s? • Have you identified the most effective marketing strategies and outlets (e.g., trade shows, cold calling, advertising, direct mail, etc.) to introduce your products and services? • Do you have a repeatable process and skilled resources in place to effectively execute your new business development activities? • Do you have defined performance metrics to evaluate success and identify areas of improvement, as well as a process for making and evaluating improvements?

BOXSCORE September/October 2017

Monitoring Performance and Compensation To show the impact on your pipeline from your sales team’s activities, tracking is mandatory. The Athletics couldn’t have implemented a mathematical approach without having historical data (statistics). There are plenty of lead and pipeline activity tracking software products available on the market, but we have found a simple spreadsheet works well. Tracking can be done by sales rep, company, or some other segmentation. At a minimum, the following must be tracked: • The number of prospects touched every month—in Bullpen’s scenario it should be 33–34. • The number of touches it takes to convert to a QL. • The number of prospects that have been qualified—three to four QLs per month are required for Bullpen. • The number of QLs moved to proposal stage—for Bullpen that number should be on average two per month (20 annually). • The number of closures and the dollar amounts of each, either per proposal or annually—Bullpen needs on average one per month with an average value of $167,000. If average sales are coming in lower, the numbers will have to be adjusted to reach the annual sales growth goal. The keys to success with tracking are consistency and accountability. The person responsible for managing or overseeing the process is continually interfacing with their salespeople to ensure the numbers are being executed as planned and they are held accountable to these monthly. Motivating your sales team to hit their monthly goals can be challenging. One school of thought is that hitting sales goals is a requirement of the position, but our experience has been that additional

monthly monetary compensation helps keep the sales team focused. Bullpen Box Company’s sales team understands the monthly number of touches needed, and they know they have to deliver four QLs as a result. If they hit their numbers, they receive a monthly QL bonus. If exceeded, there is an additional bonus. The reason we suggest the monthly bonus structure is because if we look at our historical data, we know if we consistently hit the monthly goals, we will hit our annual goals. We also believe in the compensation concept of “show me how you will pay me, and I will behave accordingly.” This compensation structure supports that belief. Like the Athletics, you have to get men on base to score—or in this case, move prospects through the sales funnel to hit your goals. Continually tracking your prospects and leads as they move through the funnel, holding salespeople accountable, and making adjustments to your goals are fundamental to your success. If you are looking for a starting point to monitor your process, we can provide you with a free lead tracking spreadsheet template. Simply email Todd Zielinski from Athena SWC to request a copy of this template. Happy selling! Todd M. Zielinski is managing director and CEO at Athena SWC LLC. He can be reached at 716-250-5547 or tzielinski@athenaswc.com.

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

Tackling Tech

OPTIMIZING YOUR APPROACH TO BRAND AWARENESS AND TALENT ACQUISITION BY JOHN CLARK

asey Stengel, the legendary manager of the New York Yankees, having retired after winning eight World Series, decided to come back with the expansion New York Mets for another try. The lowly Mets were not the mighty Yankees and proceeded to lose a record 120 games. When asked if the Mets needed more players or better players for the next season, Stengel replied, “We need more better players.” And that is the situation many companies find themselves in today. Companies need “more better” employees and “more better” customers. But the question becomes, where to find them? And where to find them before anyone else? The best answer may well be in your pocket right now. Social media provides a web-based space to create and share user-generated content. Facebook is probably the bestknown social media site, with more than 1.2 billion members—1 out of every 6 people in the world. LinkedIn, the largest social network for business, is much smaller—its membership is only 467 million, or 1 ½ times the population of the United States. If the numbers alone do not get your attention, the fact is that workers in the generation now entering the workforce are receiving almost all their information from these interactive providers. If you want to get your business known to potential customers, or if you are looking to hire your next generation of workers, sales staff, and managers, your message must be digital, and it must be compelling.

BOXSCORE September/October 2017

And not just compelling as in telling a story—it has to resonate. In the noisy world of the internet and social media, you have to create content that will catch and hold someone’s attention. Topics such as environmental impact, sustainability, and community activities should not be overlooked. Short videos, interactive content, and constantly updated articles are some of the keys to a successful effort. You want to create “stickiness” to your products and your message. If your message goes stale, your audience leaves and is rarely likely to return. Content not only has to be informative and compelling, but it must also be fresh—fresh as in updated constantly, and fresh as in new and inventive. Nothing goes stale faster than content, and you need to serve two masters at the same time, creating new and compelling content without creating a financial or operational burden. A major factor in targeting your market is to be very clear about what market you are in and to tell a compelling story as to your involvement. People want to know the who, what, where, and why of your business, and more importantly, how your company can help solve problems or find opportunities for a potential client. Case studies, testimonials, digital plant tours, and employee interviews are some of the avenues available to you to help drive your message home. At all times, never lose sight of the fact that a primary reason for your marketing efforts and social media presence is to drive customers new and old to the commercial side of your business.

The transition to digital printing provides a perfect segue to rethink not only the converting side of your business, but how you are going to find workers with a “digital” mindset rather than an “analog” way of thinking. It would be hard to imagine anyone older than 50 who would think of customizing every single box with a personal message. But if you are Birchbox or Dollar Shave Club, that thought may present intriguing options. As an example, you could print a code on the inside of the box for grooming tips, food and drink recipes, or even puzzle pieces. Today, customizing a container for a single consumer is cost-prohibitive. In the digital world, it will be commonplace. And as always, knowledge is power. Growing awareness of your brand can really be proven only if you’re measuring what matters. Many platforms will provide engagement statistics— Facebook Page Insights will show the likes and shares your content enjoys. Take a look at your web analytics, too, to see which platforms and other sites provide the most referral traffic. Using these insights, you can learn what works and what doesn’t and respond with appropriate action to continually optimize your approach. John Clark is director of analytics at Amtech Software. He can be reached at jclark@ amtechsoftware.com.

Safeguard

SAFETY KNIVES NOT SO SAFE BY LES PICKERING

want to focus on a common item you see in most packaging plants here in the U.S. It is so common that we no longer think of it or really observe it—the common safety knife. In most packaging plants, be it corrugated, folding carton, or flexo, the box knife is a common sight, usually seen on the hip of an operator or on the side of a machine. The operator does not go many places without a safety knife. In fact, in many facilities, a safety knife is issued when an employee completes the necessary onboarding process from HR. Many aspects of work require a knife. You see straps being cut by either the assistant or the forklift driver. Operators cut board that is damaged on the bottom of the load. Other examples include cutting dunnage, cutting the strap of a malfunctioned bundler, and cutting the retaining straps of a coil for the bundler. These and other numerous aspects of work depend on the operator and a safety knife. In order to improve safety, some plants have moved to a “hook-style” knife with a fixed, shrouded blade. No doubt it’s a step in the right direction, and while it can be used for many applications, it cannot be used for all. Despite incremental safety improvements, knives are plentiful in the world of packaging. You only have to walk past a Fastenal tool dispenser to see how readily they are issued. Additionally, you have the issue with used blades. How many facilities wrap used blades in tape and drop them in the waste can? How many used blade stations in the facility have to be replaced when full? Recently, I was lineside at a flexo folder-gluer (FFG) observing the change

BOXSCORE September/October 2017

of a 30-gallon circular glue drum. Once it was wrestled off the pallet, out came the knife to haphazardly cut the lid. The operator placed the plastic piece he cut from the lid onto a transformer, wet glue dripping down the transformer. Looking at the dried glue on the floor and side of the transformer, it had been some time since this had been cleaned. The glue line was inserted into the drum, and off the operators went to bleed the line of air and get the FFG going again. This happened every four days, with the possibility of a safety incident with the knife or a foot injury. Additionally, you have sort waste due to air being in the glue line and time loss bleeding the air. The observations got me thinking that it’s not about issuing a safety knife, but what could be done to remove the need for knives? This is not the first time I have had this thought. Some time ago in Canada, the plant was on the warpath for knives and blades because an old one had gotten into the product and into the customer plant, hence the urgent safety activity. The product that had the blade was returned and sorted for any other issues, and then redelivered. Interestingly, in Europe it has been a common procedure for a number of years for some items, such as food products, that if any foreign bodies are found on the delivering trailer floor, the product is

incinerated, not sorted. You see, the client cannot take the liability of a recall. In the eyes of the consumer, the client, not the vendor, is hurt from the poor publicity. So, we should not be focused on moving from a retractable-blade safety knife to a hook-style safety knife; we should be focusing on removing the need for a safety knife. Changing out the glue drum, you can use a tool designed to open the drum correctly. Bundle-strap manufacturers could change their restraining straps to a tear adhesive that the operator could pull to open. For the times when you could not remove the need for a knife, exchange the knife for a pair of shears. You could cut the sheet to measure caliper with a rotary cutter commonly used in design departments. You would save cost on disposal systems for the used blades—an ongoing cost for many. Safety knifes are a small point within the facility that will become a large problem if a blade makes it to your customer. Les Pickering is co-founder of Quadrant 5 Consulting, based in San Francisco. He can be reached at 415-988-0000 or leslie.pickering@ quadrant5c.com. Follow Les and Quadrant 5 on Twitter @Q5cLP.

Introducing the

SBX Scrubber Stacker

by Geo. Martin

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Leadership

READING WHILE LEADING BY SCOTT ELLIS, ED.D.

ith access to Kindle, Audible, podcasts, and analog books, I am usually reading three books at once. The common categories are professional, history, biography, and brain candy. The first three categories are filled with knowledge of worthy leadership principles and practices, as well as cautionary tales. The brain candy is useful for relaxation during long flight delays. For those who find reading to be a difficult discipline rather than a source of joy, I would ask you to consider taking another tack. Perhaps you shared my experience in the “Dodo” reading group, while those who enjoyed reading aloud sat with the “Eagles.” I later learned that there are many ways in which vision and brain wiring affect the ease, comprehension, and enjoyment of reading. Even with this history I became an avid reader and a lifelong learner. Starting with topics that I believed to be worth the effort, I read at my own pace until I found it rewarding. Later, our children overcame the same difficulty when we assigned them People magazine or comic books, knowing they would be asked to inform and entertain over dinner with

was Patrick Lencioni’s The Ideal Team a verbal book report. Another help was Player: “It’s an easy read, like a novel, learning the techniques of speed reading when in fact it’s practically walking you and exercising judgment as to when to through things that happen to most use them. owners/managers in their lifetimes.” As to the method of ingesting the art Thanks to Robert—I owe him a beer—for and science of leadership, I prefer reading also mentioning my new book, Changed to Googling in the same way I prefer savoring a meal to receiving it pre-chewed. People Change Process. AICC’s Taryn Pyle reminds us that I need context to help me understand, leadership is important in every job. test, and possibly apply knowledge. The She responded to my question by saying, author’s ideas and how she came to “My favorite book of all time was Taking them are an important challenge to the paradigms that would resist learning from Charge: A Practical Guide for Leaders. It was important to me because it helped detached facts. me understand that leadership could Having said that, when I Google exist in any role or position.” leadership books, I get a number of titles One respondent cited Coach Wooden’s by Maxwell, Lencioni, Kouzes and Posner, Leadership Game Plan for Success this way: and Blanchard. Most of these are great “Straightforward and simple, like the great contributions. My aim in this article is coach himself. Accessible lessons that to go a bit deeper into books that may show how to become a leader and exercise not be found in a cursory search. Some leadership through relationship-building, of these books are timeless; others were humility, balance, and an active eye meaningful because of their timeliness in for detail.” the development of the reader. In order Mark Mathes of Vanguard Packaging to provide you with a more useful list, I says that the first to come to mind was asked a diverse group of successful leaders The Goal by Eliyahu Goldratt. “It was the to tell me what books have influenced first business book I read that convinced their leadership, and why. As Google would have it, the first book mentioned by me that manufacturing isn’t as difficult as it appears if you break it down into Robert Niedermeier of Valley Container

ABOUT LEADERSHIP 1. The Ideal Team Player by Patrick Lencioni

6. His Excellency: George Washington by Joseph Ellis

11. The E Myth Revisited by Michael Gerber

2. Taking Charge: The Art of the Leader by Perry M Smith

7. Founding Brothers by Joseph Ellis

12. Daring Greatly by Brené Brown

8. The Killer Angels by Michael Shaara

13. Traction: Get a Grip on Your Business by Gino Wickman

9. Team of Rivals by Doris Kearns Goodwin

14. Changed People Change Process: How to Build a Continuous Improvement Culture Where People Act Like They Own the Place by Scott Ellis & the P2 Team

3. Coach Wooden’s Leadership Game Plan for Success by John Wooden with Steve Jamison 4. The Goal by Eliyahu Goldratt 5. Good to Great by Jim Collins

BOXSCORE September/October 2017

10. Seven Habits of Highly Effective People by Stephen Covey

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HP has reinvented the versatility, productivity and offset quality of corrugated printing so that you can help your customers differentiate themselves from their competition. From basic corrugated to high-value boxes, reduce delivery times on long and short runs with end-to-end support from HP. The HP Scitex 17000 and 15500 Corrugated Presses are designed for smooth, automated production of promotional displays and short-run packaging. The HP PageWide T400S Press is designed with preprint and digital all in one. The HP PageWide T1100S Press with Multi-lane Print Architecture lets you print multiple short runs of variable box sizes on a single roll. And the HP PageWide C500 Press delivers economic, litho-quality prints direct to board via a digital press. Take advantage of HP PrintOS, an open and secure cloud-based print production operating system, and get more out of your HP PageWide Web Presses. Simplify and automate your production processes, and enable new forms of collaboration. Call us at 1-877-303-1887 or find out more at hp.com/go/pagewidepress/corrugated, hp.com/go/scitex/corrugated and hp.com/go/PrintOS.

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Leadership

manageable bites. The second is Good to Great by Jim Collins. The message is that great companies exhibit essentially the same traits and that their success can be replicated.” My own list is long, so I will stick to historical leaders who are shaping the ways I lead. I learned a good deal about leadership from five American heroes, four of them presidents (go figure). Joseph Ellis wrote His Excellency: George Washington, which humanized the icon and highlighted his nation-shaping determination to give up power. Another book, Founding Brothers, depicts personalities who understood their place in history, and John Adams in particular, who valued his wife’s opinion and worked hard at being right rather than popular. I first read about my third hero, Joshua Lawrence Chamberlain, in The Killer Angels. It includes many stories of people going beyond themselves at the battle of

Gettysburg, none more than this young officer. Finally, I recommend Team of Rivals, which describes Lincoln’s courageous assembly of political opponents in his cabinet. More mainstream leadership books that have influenced me include Stephen Covey’s Seven Habits of Highly Effective People. I had the privilege of sitting under his training and leadership some years ago when I delivered training for his organization. If you choose to read this book today, I suggest listening to it and having the printed book available for your margin notes and review of charts. Many find the first 100 pages to be a gauntlet. Another is The E Myth Revisited, a classic that shows us how to work on the business rather than in it. A more current paradigm buster is Brené Brown. Her work on leading with vulnerability can be previewed on Ted Talks before

diving into Daring Greatly. Finally, if you read only one book on this list, I suggest Traction: Get a Grip on Your Business. There is a wealth of leadership knowledge to be digested. Reading is one of the best ways to access it and make it your own. Even though the love of reading is an acquired skill, we must give Mark Twain his due: “The man who does not read good books has no advantage over the man who can’t read them.” Scott Ellis, Ed.D., is a partner in P-Squared (P 2) focused on leadership and process improvement. He co-authored AICC’s Welcome on Board and recently released Changed People Change Process. He can be reached at 425-985-8508 or scottellis@psquaredusa.com.

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BOXSCORE September/October 2017

The 1st word in FACT:

In corrugated converting, the paper board has a huge impact on printing quality. Pamarco provides detailed advice on anilox selection, which guarantees 100% consistency of print, for all your paper boards. ~Mike Poppen Technical Sales Engineer

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Marketing Mix

CHECK IN ON THE CHECKOFF BY JOAN SAHLGREN

ust over two years ago, the industry joined together to fund a national promotional campaign, or checkoff program. Launched in 2015 with the Paper & Packaging – How Life Unfolds™ tagline, the advertising campaign is charged with helping stem the decline in paper and grow demand for packaging. To evaluate whether the campaign is having an effect, we measure in ways common to marketers. We report on product and campaign awareness and shifts in consumer attitudes. We measure

whether people like, share, engage with, or watch our news across both traditional advertising channels (TV, digital video, print advertising) and newer media (social media platforms, public relations campaigns, video views). As a checkoff program, we also use an econometric evaluation. Checkoffs, over their 50-year history, as well as the United States Department of Agriculture (USDA), have found econometric modeling to be the most effective method for the evaluation of these programs.

Preliminary results from econometric data modeled to understand the impact of the paper and packaging industry’s checkoff program show the promotional campaign helped generate in excess of 500,000 tons of additional paper consumption in 2016. Analysis from Harry Kaiser, Ph.D., Cornell University, independent economist and expert on checkoff program evaluations, reported that monthly data gathered from government and industry sources, and representing the five grades participating in the program, revealed the checkoff program’s positive contribution to the market. The econometric model takes into consideration outside variables, without advertising, that impact demand for forest products. Then the model looks at how the addition of advertising affects the outcome. “With two years of data since the campaign’s launch in July 2015, we are doing our best to meet the industry’s expectations for frequent and accurate reporting on their investment in the promotional campaign,” says Mary Anne Hansan, president of the Paper and Packaging Board. Further detail on the econometric modeling and additional campaign results can be found in the State of the Campaign Report to the Industry posted on www.paperandpackaging.org or in hard copy by contacting P+PB. Joan Sahlgren is director of public relations at Paper & Packaging Board. Joan can be reached at 703-935-5386 or jsahlgren@paperand packaging.org.

BOXSCORE September/October 2017

Amtech’s new iNext system will transform DIGITAL the way your customers buy, employees TRANSFORMATIONS work and business gets done. by Amtech

“You can’t build the business of tomorrow with the systems of yesterday. ” Cosmo DeNicola

How you will engage your customers Greater online experience with Self Service Real-time Tracking of Production & Delivery Instant Quotes and One Click Ordering

How you will manage your plant Electronic Signature Capture and Automatic Invoicing Paperless Workflow and Online Approvals Algorithmic Trend Detectors

How you will optimize your people Enable a Remote Workforce Create a 24/7 Culture Flexible, Multi-lingual Contact Darren Artillio: DArtillio@amtechsoftware.com

GOOD FOR BUSINESS

AICC TOOLBOX ................................................ 35 CUSTOMER SERVICE . . ................................. 36 AICC INNOVATION ........................................ 38

BOXSCORE TIPS, TRICKS, AND SOLUTIONS TO BETTER BUSINESS

AICC TOOLBOX

THE NEW FACE OF AICC, THE INDEPENDENT PACKAGING ASSOCIATION

n July, AICC launched a new website to offer members greater functionality, including messaging other members, a private directory, and online communities where you can ask other members your most pressing questions. To access these benefits and more, you have to log in. Here’s how:

Corporate Profile Each company now has an administrative login. This login can be used to renew the company’s membership and manage the employee roster. All primary contacts were sent the ID and password for the corporate account. Contact AICC if you need a reminder. Make sure all employees have a profile and can access all AICC benefits. If you receive emails from AICC, you have a profile. If an employee does not have a profile, it is easy to create one. Adding people to the company roster can be done in two ways:

in to the corporate account. You 1 Sign will be redirected to the profile page. In Information & Settings, select 2 Sub-accounts. Send the Sub-accounts direct link to 3 your employees. Where they select the member, type “Member: Employee...” and they can add themselves to the company roster.

OR can also go to 1 Employees www.aiccbox.org > Membership > Create or Find Your Profile. They will create a username and be 2 directed to complete the profile. In the “Organization” field, begin 3 typing the company name, and select it from the dropdown list. A company

must be selected here, or the profile will not be attached to the corporate profile. The administrative login can also be used to update employees’ information in the corporate roster. Also on the information–Sub-account page, you can update an employee’s email address or remove them from the corporate roster by marking them “suspended.” Personal Profile In July, all employees with profiles were sent a notice from AICC with their username and a new password. If you do not remember your password, it can be reset by clicking “sign in,” and then click the “forgot your password” link. Enter your email address, and click “reset password.” Personal profiles are used for accessing free online education, reading industry news, registering for AICC courses and events, and accessing industry reports, such as Scoring Boxes.

BOXSCORE www.aiccbox.org

Good for Business

CUSTOMER SERVICE

WHY VALUES MATTER TO YOUR CUSTOMERS

Rocky Romanella is a keynote speaker at the 2017 Annual Meeting, September 25–27, in Las Vegas. He will offer a keynote presentation on Balanced Leadership Tuesday, September 26.

BY ROCKY ROMANELLA

hether we realize it or not, we are all here to determine what our real intent is in life. That’s why teaching others about values is so important to me, especially in our current business climate, where each day we have a new headline of compromised values.

A simple formula I use to establish both personal and organizational values that will solidify your reputation, character, and your customer experience is to define, articulate, and institutionalize who you are, what you stand for, and what you will never compromise.

By hiring individuals with strong core values and by training your team on who you are as a company, what you stand for, and what you will never compromise, you equip them to institutionalize your values with every interaction.

Customers Are a Good Judge of Character Whether through institutional or personal values, customers are drawn to organizations and people who share similar beliefs. These principles make up the foundation of your mission and reputation. Take it from me, they are not merely words. They will become part of your character over time. Character is one of the most important traits of a leader and a company, and one that customers gravitate to or stay away from when given the choice.

Defining Your Individual Purpose Your true character is defined by your honesty of purpose. Your purpose is sacred and authentic. Honesty is what is at the core of your moral character. It is being trustworthy, loyal, fair, sincere, and true, even when it is difficult to be. It is not only how you create your values, but also how you add value to the lives of others. Academic excellence, character development, personal motivation, physical development, and leadership all require you to perform at your best—with honesty of purpose. You cannot develop your character, motivate yourself, or lead others unless you have truly defined your purpose—your intent.

Don’t Succumb to Pressure Even when there is pressure to perform— to hit internal key performance indices, custom service-level agreements, or quarterly financial projections—you have the responsibility to use your best judgment, weigh your options carefully, and make the right decisions—even when no one is watching. When you do that, you honor yourself and your values. Wherever your path takes you, know that your trustworthiness is your highest honor. For if you are a trusted leader, others will believe in your vision, mission, and values, and follow your lead. One of the biggest differentiators between good and great is the superior customer experience that is provided on a consistent basis. During every customer interaction, your reputation is on the line. That’s why values matter!

Being a Balanced Leader I believe companies enhance their growth momentum and reputation when they focus on three key constituents: customers, people, and shareowners. My principles of Balanced Leadership™ are: • Think like a customer by approaching each challenge as a true solutions provider. • Feel like a valued contributor by knowing your work matters and never compromising on safety or values. • Act like an owner by creating an environment where your team understands the business plan.

BOXSCORE September/October 2017

Your Values Are Your Compass Purpose-driven people put their morals, character, and honesty first. Without purpose, we drift. With purpose, we steer. In my book, Tighten the Lug Nuts: The Principles of Balanced Leadership, I discuss how leadership is about building a bridge to the future. Your values are the foundation of that bridge, which connects vision and strategy to your go-to market product or service.

Rocky Romanella is CEO at 3SIXTY Management Services, LLC. He may be reached at rromanella@3sixtyman agementservices.com

Good for Business

AICC NNOVATION

AICC LAUNCHES EDUCATION INVESTOR PROGRAM “Live as if you were to die tomorrow. Learn as if you were to live forever.” — Mahatma Gandhi

n April 1, AICC took the extraordinary step of shifting its lauded online education program from a pay platform to being included with membership. AICC members responded immediately by increasing their participation in the program by more than 300 percent. This increased utilization has shown no signs of decline in the ensuing months. AICC is fast becoming the core training program source for several of its members. The AICC Board of Directors has made it both a short-term and a long-term goal that AICC be the education leader in paper-based printing and converting. This goal encompasses all the disciplines that touch our great industry—manufacturing processes, substrates, consumables, selling, finances, human resources issues, safety, communication, management strategies, and leadership. Today, more than 30 courses are available online to every AICC member company and all its employees. AICC has a partnership with The Packaging School, a Greenville, S.C.-based enterprise that supplies a professional packaging curriculum developed by Clemson University and its packaging sciences program. The Packaging School hosts AICC’s online education program and works with AICC to develop new courses and course materials and to ensure the educational viability of the

BOXSCORE September/October 2017

overall slate of classes. AICC members also have free access to the Packaging School’s Certificate of Packaging Science program, which consists of a specific 12-course curriculum on various packaging media and methods. With so much to offer and engagement rates being so high, AICC, in order to ensure a growing availability of course content, has developed an “Education Investor” opportunity. Here is an outline of what is available for a $15,000 investment: • Provide ideas and materials (videos, documents, subject matter experts, etc.) on a topic that will be taken by AICC educators and the Packaging School and made into educationally viable online content. The investor would work with AICC educators and participate in the creation of the course. The investor’s logo may be shown clearly on materials, footage, and subject matter, but the course will not be commercial in nature—it will be educationally significant. • Supply a 30-second “commercial” that will run prior to the education piece. • Receive AICC recognition on a dedicated page in BoxScore and recognition with other education investors at national meetings. • Inclusion of the investor’s name with the online course descriptions.

The completed course would be posted on the AICC Packaging School website and hosted by The Packaging School. The course will remain online for as long as the content is considered educationally viable and has not been updated. AICC thanks its first three investors: Fosber, BCM Inks, and Sun Automation. The Education Investor program will be open to 15 companies annually. This is your opportunity to be a thought leader in our industry. Education has such a permanence in the lives and experiences of those who endeavor to learn. Virtually all polls of workers show unanimity in the opinion that workers want their companies to invest in them and in their ability to grow. The best and broadest way to invest in workers is to educate them. Access to education has also been shown to be one of the primary factors in employee retention. AICC has a long tradition of support from its general and associate member companies. It is an association that is volunteer-driven and -directed. AICC’s educational mission is one of the deliverables identified by members as having the highest value to them. The Education Investor program is sure to be a unique AICC sponsorship opportunity because of the number of people the “product” will touch and because of the esteemed way it will position the investor in the eyes of the industry. For more information, contact AICC Vice President Mike D’Angelo at 703-8362422 or mdangelo@aiccbox.org.

Your Rights & Responsibilities

Human Resources 3-Part Webinar Series Pre-Employment Testing: Rights, Responsibilities & Obligations Thursday, October 19, 2017 2:00pm EST

• Key considerations for employers who conduct substance testing. • When, and for what purpose employers may properly require medical exams of applicants or employees. • Requirements, and compliance tips for employers who conduct non-medical testing of applicants or employees such as, leadership inventories, skills assessments, etc.

Social Media and Its Impact in the Workplace Monday, November 16, 2017 2:00pm EST

• How the NLRA applies to non-union workplaces. • Tips for updating social media, and related policies to balance employers’ needs and employees’ rights. • Other common employment policies that are also impacted by the NLRA.

Workplace Harassment: Trends, Tips & Tools Thursday, December 07, 2017 2:00pm EST

• Productive tips, and advice from the experts. • Lessons learned from recent cases addressing unlawful harassment. • EEOC’s latest FY reports on changes and trends. • Efficient tactics for policy development and related practices.

Presenter: Christine V. Walters, JD, MAS, SHRM-SCP, SPHR Christine, has more than 25 years’ combined experience in management, HR administration, employment law practice, and teaching. She has received national and regional awards, presented at conferences across the country, been engaged as an expert witness for the defense, and testified before U.S. Congressional and state legislative committees and administrative agencies on employment issues.

BUILD YOUR TEAM. BUILD YOUR COMPANY. WWW.AICCBOX.ORG/CALENDAR

Member Profile

ATLANTIC CORRUGATED BY VIRGINIA HUMPHREY

COMPANY: Atlantic Corrugated ESTABLISHED: 1985 JOINED AICC: 2017

Photo courtesy of Atlantic Corrugated

PHONE: 804-231-4050 WEBSITE: www.acbc-inc.com LOCATION: Richmond, Va. CEO: Edward Barlow II

Atlantic Corrugated Headquarters in Richmond, Va., and CEO Edward Barlow II.

t Atlantic Corrugated, they know you cannot do everything alone. In today’s complex business world, which is spread out over wide geographic territories, a box company succeeds when it partners with others and expands its reach. Even its inception was based on the understanding that one company couldn’t do it all. Before Atlantic existed, Ed Barlow Sr. was running Boxes to Size, Inc. During the 1980s, it was growing rapidly and found it couldn’t be all things to all people. So, Barlow Sr. founded Atlantic Corrugated in 1985, a sister facility that could cater to smaller quantities and quick-turn orders that required a significant level of service. “In 1985, we started with one customer in an 18,000-square-foot facility,”

BOXSCORE September/October 2017

says Edward Barlow II, the founder’s son. “Today, Atlantic Corrugated is 32 years strong and operates debt-free in a 60,000-square-foot facility.” They service many industries, but have particular strength in the distribution of alcohol, tobacco, and food products. In 1996, the parent company was sold to Pratt Industries and no longer exists under its original name. Barlow started in the box industry when he was still a teenager. He worked for his father in the manufacturing facility of Boxes to Size. He did handwork, assembly, and hand-gluing. “Over time, I became involved with the manufacturing processes and eventually moved into sales,” Barlow says. “After graduating from Virginia Tech in 1990, I went to work for the sister facility,

Atlantic Corrugated. I began purchasing Atlantic Corrugated from my father in 1991 and own the business today.” Today, the Richmond, Virginia-based Atlantic Corrugated has grown from that single-customer start to serving customers in 20 states as far west as Arizona. They do this by forming partnerships with other companies to serve those customers in other states. Also, while they continue to be true to their original founding intention as a sheet plant company, they have branched out and grown beyond that original focus. “Atlantic Corrugated was founded on the premise of serving a particular niche: small quantities, fast turnaround with a high level of service,” says Barlow. “While we continue to serve this niche today, over time we added machinery to position

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Member Profile

ourselves for growth. The equipment we added allows for higher run volumes and different types of products.” (See sidebar.) Barlow also suggests the relationships they have nurtured with other corrugated manufacturers and suppliers of various packaging projects have let them expand their reach. They can now support the manufacture and distribution of their products to a customer base beyond their immediate region.

“In particular, these partnerships allow us to support a customer or customers with multiple locations across the United States,” says Barlow. Since their founding as a way to meet specific customer needs, Atlantic Corrugated continues to focus on service that sets them apart from their competitors. “Our central philosophy is ‘quality products and extraordinary service—every

Sometimes a piece of equipment can help a business reposition itself in the marketplace. Atlantic Corrugated has been able to reach new markets for the past 10 years because of investments it made between 2005 and 2007. It was during those years that they purchased a Langston 3-color flexo folder-gluer and a 2-color Koppers 66-inch rotary die cutter. Adding the die cutter allowed Atlantic Corrugated to provide point-of-purchase displays. The company also added a clamshell flatbed die cutter for running smaller quantity die cut headers and inner components for point-ofpurchase displays. In addition to being able to provide additional products and services, the folder-gluer and die cutter allowed Atlantic to focus on a larger customer segment, expanding from their original focus of catering to smaller quantities and quick-turn orders. “These two pieces of equipment allowed us to target a different customer niche, which provided the avenue for growth that we were seeking,” says Edward Barlow II, president of Atlantic Corrugated. The 2-color Koppers rotary die cutter comes equipped with a Staley rotofeed section, electric running registers, electric frame opening, print units, a rotary die cut section, and a spare anilox wiper and feed roll. According to Atlantic’s website, “Our converting equipment allows us to be a full-range supplier of boxes, displays, and more. The ability to integrate flexo, digital, screen, and litho printing into the converting process allow us to offer a wide range of packaging beyond the basic shipping container. Retail packages and displays are greatly enhanced with these applications.” This equipment has helped bolster Atlantic’s market and kept them servicing their customers for the decade. Barlow says their next purchase may be a specialty gluer. “We typically allow customer demand to dictate what type of equipment we need in our facility versus putting a machine in and then trying to fill it with work,” Barlow explains. “Due to current customer demand, we may find that we will have the need to add a specialty gluer in the next 12 to 18 months.”

BOXSCORE September/October 2017

customer, every time,’ ” Barlow says. “Our business practices center around putting the customer first.” In their efforts to become aware of each customer’s needs and cater their products and services to meet and exceed those needs, Atlantic offers solutions including but not limited to, the following: • Packaging design. • Warehousing and distribution for JIT. • Assembly and co-pack services. • Management of third-party distribution services for delivery of assembled, co-pack products across the United States. • VMI (vendor-managed inventory). • Accounting solutions for specialized customers with particular needs. • Procurement and distribution of molded fiber and foam products. Barlow has spent the past three decades helping grow Atlantic Corrugated into what it is today. He acknowledges, though, that technology has changed the industry a lot, as it has made huge strides, especially in the past 20 years. “Anyone entering our industry today should take advantage of any learning opportunity related to course studies or internships to help understand the evolution of our industry, as well as technology-based advancements such as digital print,” says Barlow. For Atlantic, membership in AICC has helped do that. The company has used it to offer online educational opportunities to employees. “This is a great asset, and we intend to remain involved with the online offerings made available by AICC,” Barlow says. Virginia Humphrey is director of membership at AICC. She can be reached at 703-535-1283 or vhumphrey@aiccbox.org.

Everyone Benefits from the Basics

Corrugated Packaging Fundamentals

Tuesday, November 14–Wednesday, November 15, 2017 Toronto, Ontario Canada

PRESENTATION TOPICS • Substrates & Applications • Manufacturing Variations • Sustainability • Package Design • Prepress • Printing & Converting

Build Your Team. Build Your Company. www.aiccbox.org/calendar

HANDS-ON ACTIVITIES • Containerboard Products • Manufacturing Effects • Corrugated Products • Characteristic Test Comparisons • Printing Comparisons • Die Cutting and Scoring

Software solutions for the corrugated industry

kiwiplan.com offices worldwide

Over 200 employees worldwide

Strength in numbers People | Knowledge | Software | Services

WEBSITE

BEST PRACTICES

10 STEPS TO BUILDING A WEBSITE THAT WORKS By Robert McGarvey

ere’s today’s blunt reality: Your business needs an engaging website; it had better be good, and it had better be suited to the times. Used to be, a business needed a Yellow Pages ad, definitely. Now? That’s up to you—some businesses swear by such oldschool methods, others don’t. But what is beyond debate is the need for a good web presence. That’s become essential for just about every business, of just about any size. Lack a website, and—harsh as this sounds—it’s as though you don’t really

BOXSCORE September/October 2017

exist. Even if the company has in fact been in existence for a century. To many 21st-century consumers, where they look first—and often last—for their answers is the web. You have to be there, and what you need is a 2017 website. That means a web presence crafted for today, and remember that the World Wide Web dates back to 1989, although it really took off with the debut of web browser Netscape in 1994. That means it’s been part of our lives for 20-plus years. And a website that worked in 1997 likely won’t meet the demands of today.

Ditto for a 2007 website. A lot has changed in recent years, particularly how we access the web—with what devices and at what speeds. So, what are the best practices in 2017? What are the must-do’s—and the must-nots? Here, web designers who work in the trenches, usually with small and midsized businesses, share the top 10 ideas for creating a website that sizzles. Even better, none of what’s suggested is that hard. It will take attention and some thought, but this recipe is well within the reach of just about every company.

STEP 1

Accept that it won’t necessarily be easy to find a good vendor, says Matt Roy, director of digital marketing at The YGS Group, a Pennsylvania-based communications company that, for the record, helped redevelop the website for AICC in 2015 (www.aiccbox.org). The point: Nowadays lots of people claim web expertise, and maybe they have it, but do they have skills in working with businesses like yours and in communicating with the customers you serve and those you desire?

Lack a website and — harsh as this sounds — it’s as though you don’t really exist.

BOXSCORE www.aiccbox.org

Enlist customers to help tell your story — typically with short quotations, possibly video — and that’s a powerful way to persuade new customers. That’s a central idea: An effective business website is a communication tool. And if it doesn’t communicate—no matter how beautiful and technologically slick it might be—it fails. Keep digging until the right vendor is identified.

STEP 2

Know your budget. How much do you need? Maybe less than you fear. Roy sets out what he calls an average budget range for an effective website for most smaller businesses: $30,000 to $50,000. Of course, there are websites that cost upward of $1 million, and some are built from templates that might cost under $10. But for a typical business, think in terms of the $30,000 to $50,000 range.

STEP 3

Ask about security, says Roy. “I’m surprised how few businesses ask.” Most business websites—probably 95 percent— reside on third-party web hosts. What security do they have? What backup procedures are followed? In an age of epidemic ransomware and hacker attacks on the one hand, and natural disasters such as Hurricane Sandy on the other, it’s crucial to know about security and backups before they are needed. View these three steps—vendor selection, budget, and security issues—as the

BOXSCORE September/October 2017

building blocks for an effective business website. Now, the creative fun begins.

STEP 4

Know your audience. For whom is your site intended? In most instances it will be potential and current customers—so, what interests them? Ask them. And ask them what they don’t like about websites. Start from that basis, and website design gets that much easier. Daniel Davidson of By Dan Design, a website company in Colorado, elaborates: “When you start with your customer, you ask all the right questions: Who is my customer? (Build out your customer personas.) Why are they on my website? (Map out your buyer’s journey.) What does the site visitor need?” In that vein, Nick Leffler, owner of northern California website design firm Exprance, says: “The rule for an effective business website in 2017 is to focus on the business’ customers first. The design of a website is very important, but what’s even more important is how well the website acts as a business tool.” Leffler adds, “A business website in 2017 should always be business-oriented first and look good second.” Paul Hirsch, co-owner of website design firm Studio 1337 in Houston, says likewise: “It’s amazing how many

businesses will put design ahead of function or will concentrate on how a site looks instead of focusing on how people will use it.” That last bit is crucial. Some websites fail because they are too cute and too technically slick by half. Dial back ingenuity in favor of maximizing effectiveness.

STEP 5

Key advice—from multiple sources—is to make the site about your customers, not you. Enlist customers to help tell your story—typically with short quotations, possibly video—and that’s a powerful way to persuade new customers. Customers like to read about customers like them.

STEP 6

A big 2017 must-do—“think mobile first,” says Daniel Lobring, managing director of communications at rEvolution, a Chicago marketing firm. He adds: “Sites built in 2017 are more likely to be visited on a phone, tablet, etc., so that site must be mobile-friendly and easy to navigate on the go.” That’s key, and by the way, always test sites before launch on a variety of platforms—particularly cellphones, and be sure to test on both Android and iPhone. As of late 2016, experts began to report that mobile web traffic had eclipsed desktop and laptop computers, and the gap has only grown. Won’t a mobile-friendly site be a big fail for viewers who come in on a desktop monitor? Nope. That’s because the 2017 trend in website design is what’s called responsive sites—sites that automatically configure themselves to provide an

Know-how makes

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“If it becomes too burdensome for a consumer to find the answers they need, chances are they will move on, and move on quickly.” — Daniel Lobring, managing director, communications, rEvolution

optimal experience for users coming in on any device of their choosing, from desktop computers through tiny cellphones, and also tablets such as iPads and Microsoft’s Surface. This has become a 2017 must in a world of diverse users, as well as people surfing from subways and coffee shops and while walking city streets.

STEP 7

Focus on content that maximizes SEO is advice from Adam Binder with Creative Click Media in New Jersey. That’s critical, because if people cannot find your site, they won’t visit it. What’s SEO? Search engine optimization—which nowadays means Google, because it already has the majority of searches, and its share is projected to grow above 80 percent by 2019, according to eMarketer. A site with good SEO scores higher in Google than one constructed without SEO skills. Lower-rated sites may never be noticed by users. How to get good SEO scores? Google continually tweaks its formula—and

BOXSCORE September/October 2017

never reveals all of it—but perennial advice is to make a site fast-loading, because Google marks down sites that load too slowly, even on slow 3G cellphone connections, and to make the site easy to navigate. Also, use keywords that are probably what the people searching for you will put into their Google search. Want more SEO advice? Go back to step one: Ask your website vendor what their approach to SEO is—a vendor who gets it. Then routinely test how your own site performs in Google searches. When many prime competitors score higher, it’s time for a rethink.

STEP 8

Don’t forget the entire world is not digital. “Make it easy to contact you,” says Lobring, and sure, provide an email address, but also give a phone number, even a physical address. Give website visitors choices, and let them pick what works best for them. Lobring ominously adds: “If it becomes too burdensome for a consumer to find the answers they need, chances are they will move on, and move on quickly.”

Remember: Most site visitors probably are mobile, and how do they like to initiate contact? Often with a phone call. Don’t think a website means you can turn off your phones. It just may increase the calling volume.

STEP 9

Know the answer to this question: Can you update your site yourself—or must you go through the website designer? Some companies want to go through the designer, and that’s fine. Others, with a stronger DIY streak, sometimes find that—practically speaking—they nonetheless have to go through the design firm for updates, because the site is built using obscure and technically complicated tools. Find that out after the site is up and running, and it can be a source of big irritation. Get clear on this on the front end.

STEP 10

Accept that a website is not forever. “Two years is the approximate lifespan,” says YGS’ Roy. That means not long after you put up a new site, it’s time to start the planning cycle anew. Will your site need to be totally redone? Maybe. Maybe not. But the pace of change in the world of the web has been blistering. Expect that to continue—and make sure your website continues to meet the expectations and desires of visitors. So, the process starts anew. Robert McGarvey is a journalist and blogger based in Phoenix.

Same Address, New Access

with the new www.aiccbox.org Visit the Help Desk

Connect with Social Link

You can message members privately, share content, post questions, join communities, share photos, and see up-to-date industry news.

Track History & Professional Development Points

Keep track of all previous or current invoices, events, membership history, or professional development all on your proﬁle.

Maintain a Corporate and Personal Proﬁle

Your company’s "Corporate Profile" is for your company information. This is where you can; • Update company rosters • Maintain company membership • Update information in the AICC iDirectory Your "Personal Profile," is for you. This profile allows you to register for AICC Meetings, Seminars and Webinars. Your "Personal Profile," also gives you access to SocialLink, the members only section of the website.

AL N R E INTEAM T

CY N E G A

BOXSCORE September/October 2017

THE VALUE OF

MARKETING IN THE PACKAGING INDUSTRY EFFECTIVE MARKETING IS ESSENTIAL TO ANY SUCCESSFUL BUSINESS, WHETHER THAT MEANS HIRING AN AGENCY TO HELP OR NOT By Lin Grensing-Pophal

oday’s competitive landscape for packaging manufacturers means that they can’t simply let their work speak for itself. While word-of-mouth continues to be an important way to build business, for most it is not enough. Increasingly, manufacturers are turning to marketing agencies to help them deal with what has become a very cluttered media landscape. Breaking through the clutter to gain awareness, generate preference, and ultimately, gain sales, is critical for all businesses. Packaging manufacturers, though, take a somewhat different approach to getting the word out than others.

The Unique Needs of Packaging Manufacturers Packaging manufacturers are in a business-to-business (B2B) industry. They’re not marketing direct-toconsumer; they’re marketing to other businesses or, more specifically, to individuals who work in other

Bringing in the expertise of an outside agency is an option that many organizations consider from time to time.

businesses. That can be challenging— both because of the increasing number of channels available to connect with various audiences and because of the increasing number of organizations attempting to do just that. Joe Morelli is the vice president of sales and marketing for Huston Patterson and was behind the development and implementation of the company’s recent marketing plan. The company, based in Decatur, Illinois, specializes in large- format printing and has been in business for more than 115 years, making it the longest-standing package printer in North America.

In a B2B environment, marketing is different, says Morelli, who points out that B2B marketers are limited in terms of the platforms they can use costeffectively to get the word out. “We don’t have 30-second commercials, and we don’t have a long viewing period, so we’re limited to print publications and trade magazines,” he says. “We really have a split second to catch the eye of somebody.” That requires, he says, the ability to grab attention quickly and then to deliver a meaningful and compelling message. “It forces us to get creative and try to figure out a way to catch somebody’s eye in a split second.”

BOXSCORE www.aiccbox.org

For those working with an external agency, relationships and open communication are everything. Huston Patterson worked with an agency back in 2007 to rebrand the organization. An ambitious initiative like that, says Morelli, required the outside expertise of a firm with experience in rebranding and the myriad of activities required to be successful. “We created a new logo, a new website, an internal newsletter, a biannual publication, blogs, and ads—we went all in in 2007, and because of that, we had to go outside of our walls to find the expertise to help us.” In addition to working with an agency at the time, Morelli says, Huston Patterson also hired someone internally to help manage the agency and the process of creating and executing the campaign. It was a valuable experience, he says. “They were an entirely encompassing organization that really did what we wanted them to do at the time, which was dive headfirst into the deep end of the marketing world.” Bringing in the expertise of an outside agency is an option that many organizations consider from time to time. There are certainly benefits; there can be some pitfalls as well. Pros and Cons of Working With Agencies There are definite benefits to working with an agency, Morelli says. Their experience is the big benefit. “They can tell you exactly what needs to be done and how to do it—that’s the avenue we went with in 2007.” That expertise and the singular focus on marketing that keeps agencies on the forefront of

BOXSCORE September/October 2017

trends and opportunities make them very valuable partners. There are drawbacks, though. Chief among these is the cost of working with an agency. Agencies, says Morelli, are expensive. For initiatives like their rebranding, that expense may certainly be worth the investment. Now, though, he says, “we do it all internally.” For those working with an external agency, relationships and open communication are everything. In addition to agency expertise in marketing and marketing execution, it’s important for packaging manufacturers to have a strong relationship with any agency they’re working with, Morelli stresses. “Obviously, you want to feel comfortable with them,” says Morelli. “For us it was a good working relationship in that they were willing to take what we wanted to do and put their expertise into it. They weren’t telling us ‘this is absolutely what you need to do to be successful’—they were taking the input from our people and our executives and going forward based on that.” That kind of strong working relationship, he says, is critical. “Trust and camaraderie are important from day one.” Kirk Kelso is vice president, sales, at Lewisburg Printing Company (LPC) in Lewisburg, Tenn. Established in 1898, LPC is now in its fourth generation of family ownership. Kelso agrees that a strong working relationship between agency and organization is very important. “A good marketing company

provides a service that understands the business culture and the message we want to deliver.” First and foremost, he says, “marketing agencies need to understand their customer’s business model and culture. This will allow them to be on the same page as upper management and how we want our message delivered to the market.” That deep and solid understanding of the business is a critical factor and one that has moved some in the industry to decide to handle their own marketing needs, drawing on their own deep knowledge of the packaging industry. In addition to the potential of lower costs when handling marketing internally, packaging manufacturers simply know their business better than anyone else, says Traci Strickert, director of marketing for Bennett, a packaging and retail displays manufacturing company with headquarters in Lee’s Summit, Mo. That can be a competency that’s hard to bring in from the outside. Taking a DIY Approach At Bennett, says Strickert, “we are the experts in our industry. It makes sense that we tell our own story.” And, she adds, taking the do-it-yourself (DIY) approach by creating an internal marketing team can be more cost-effective than working through an agency. All of Bennett’s marketing, except SEO/PPC is done in-house. Traditionally, says Strickert, Bennett has relied on direct sales as its primary

marketing strategy. Then, in 2016, after an investment in a large-format, direct-to-sheet, production-speed digital press, “it was decided that we needed to pick up our game. “It was imperative to get our story out, to educate the industry on this new capability and, at the same time, increase awareness of who Bennett is and what we do.” It’s a competitive industry, she says, making communicating distinct advantages critically important. The approach, she says, relies on integrated marketing—not so different from the approach taken in other industries. It involves a combination of communication initiatives that encompass PR, print, online, and social. Getting the word out in multiple ways helps ensure ongoing awareness. LPC also currently handles its marketing internally, says Kelso. “Currently, we insource our marketing,” he says. “We have a talented team assembled from different parts of the company. It’s beneficial to get ideas from various perspectives.” Marketing the company is “an integral part of our strategic plan,” says Kelso. “It gives us an opportunity to keep our name in the market, along with updating customers and prospects on what’s new at LPC.” Echoing Morelli and Strickert, Kelso agrees that lower costs and greater familiarity with company culture and goals are big benefits of taking the DIY route. “It also gives our staff the opportunity to be involved in our marketing deliverable and to have some fun building our themes,” he adds. The ability to engage staff is important because, just like consumers and customers, they also have a role to play in terms of spreading positive word-of-mouth about the organization and what it does. Recognizing the value of these internal brand advocates, Huston Patterson has also worked hard to make people part of their promotion and, says Morelli, that approach is paying off.

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TION PETI COM

YOU Making People Part of the Promotion At Huston Patterson, people are part of the promotion—and a big part of a recent campaign that has received a lot of positive traction among current and prospective customers, says Morelli. The campaign, titled “Real People,” was created to highlight Huston Patterson’s people in an attention-getting way—“not just the people that are in the field, but the people doing the work day-to-day,” says Morelli. The approach resonated not only with external audiences, but internally as well, he says. The opportunity to be part of the campaign was motivating

Creating an opportunity for involvement and participation can be a win-win-win for all involved. 56

BOXSCORE September/October 2017

for staff, he says. “They don’t get a lot of acknowledgment a lot of times—for them to be chosen to be in an ad in a publication created this really cool environment around our plant and in our company.” The ads are attention-getting and, says Morelli, “people have said a lot of good things about them outside our walls.” Creating an opportunity for involvement and participation can be a win-win-win for all involved. The company benefits from the input and participation of employees, employees benefit from positive attention and engagement—and customers benefit as well, as they’re allowed a glimpse into the “inner workings” of their packaging providers. People personalize a campaign—and help generate buzz, as Morelli has discovered. When an Agency Becomes a ‘Must-Have’ Although many organizations choose to handle marketing efforts internally for reasons previously described, there are certainly times when agency expertise can become a must-have, as Huston Patterson’s ambitious rebranding initiative

illustrates. Sometimes the required expertise simply doesn’t exist internally. Making the choice to work with an external agency requires carefully researching, evaluating, and selecting a firm that will serve as a good partner. “As we continue to grow, our evaluation of outside firms will include their ability to understand the message we would like to deliver to the market, their timeliness, and the costs associated with their services,” says Kelso. “Marketing agencies need to understand their customers’ business models and cultures first and foremost. This will allow them to be on the same page as upper management about how we want our message delivered to the market.” A wide range of options is available in the agency landscape. There are full-service agencies like the one Huston Patterson worked with on its rebranding initiative. There are more boutique-type agencies that may handle very specific elements of marketing—similar to the SEO/ PPC firm with which Bennett works. Each organization will need to choose

the right combination of talent—internally and externally—based on its capabilities, its needs, and of course, its budget. What makes an agency valuable and an agency relationship worthwhile? Certainly, the agency’s ability to understand the business—and the target audience. The agency’s technical and professional skills and capabilities are also critical elements in making an agency choice. Ultimately, though, Morelli points out, what organizations are looking for from their agency relationships are results. “Everybody is striving to get some sort of return on investment,” he says. “Ultimately, a good marketing company would be one that achieves an increase in sales because of what they’re doing. To me, that’s the end goal.” In addition, he notes: “Marketing companies that succeed are the ones that create some sort of engagement with their audiences—some sort of emotional connection. Ultimately, that’s our goal when we put ads out there. We want to create some sort of engagement, or conversation, that makes people say ‘wow!’ ” Standing Out Whether working with an agency or taking a DIY approach, it’s important, says Morelli, “to stand out—to differentiate ourselves from everybody else.” After all, he says, “we have a lot of the same equipment, and we have a lot of the same services. We sell the same quality, and we’re all selling the same thing. It’s our marketing that differentiates us and helps us put our best foot forward. “At the end of the day, the goal for us is to put ourselves out there in a different way than our competitors do.” Lin Grensing-Pophal is a writer based in Wisconsin. She is a frequent contributor to BoxScore.

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INSIDE/OUT COMPANY BRANDING A STRONG EMPLOYER BRAND CAN ATTRACT AND RETAIN INVALUABLE TALENT By Tom Weber

uccessful company “social branding” captures not just a job or career, but also a lifestyle, a cause, and a higher purpose. To do that successfully, the employer needs to truly understand what its very best employees need and want, and then make a strong emotional connection to link those things to its own mission, vision, and culture. The company’s products or services must be explored in detail. Why are they important? How are employees recognized

BOXSCORE September/October 2017

for accomplishments by leadership, their boss, and their peers? How can employees contribute to the success of the organization’s big picture? Their work environment, culture, job growth, and career opportunities? Work-life balance; compensation and benefits; opportunities to receive training, coaching, and mentoring are all a part of the story to be told. Your employees are part of your social branding each and every day; they are telling your story right now! Is it the

one you would prefer to be told about your company? Read on if you are questioning the story being told about your company or if you want to script a better one: • According to a 2016 Glassdoor U.S. Site Survey, 69 percent of active job seekers are more likely to apply for a job if the employer actively manages its employer brand. • Additionally, a survey put out by Monster the same year found that

75 percent of employees believe work should have a greater meaning than simply earning a paycheck. • CEOs are now saying that one of their biggest concerns is that they won’t have the people and, in particular, the skills and knowledge they need for their businesses to accomplish what they want to accomplish in 2017 and beyond. • Millennials have a different viewpoint on work and the relationship they should have with work. Millennials are much more in tune with how a company’s culture aligns with their core values and beliefs. This viewpoint is why millennials have high expectations for what they want out of a work experience, and that is why they are willing to change jobs. That’s why millennials have a reputation for job-hopping. • According to Gallup, millennials are most willing to act on better opportunities. Thirty-six percent report they will look for a job with a different organization in the next 12 months if the job market improves, compared with 21 percent of nonmillennials, who say the same. • Eleven percent of job seekers said they would decline a job offer from an employer with a bad reputation, even if they were unemployed, according to Glassdoor. Keeping in mind the statistics above, it’s important to have a strong employer brand in place because it controls—and manages—your reputation. The internet has provided a transparency that we’ve never had before. Job candidates can view company career pages on websites such as Indeed, Glassdoor, and Facebook to find reviews and comments posted about the business. If your company is having a hard time attracting new talent or employee turnover is a concern, that’s a good

indicator it may be time to introduce an employer brand—or overhaul your current employer brand—if the best candidates are turning down job offers from your company. An internet search says little about what it’s like to work at your company. Employees feel unappreciated and don’t see how they are

like, and understanding what reward and recognition programs are offered. Side note: A bad employer brand is worse than no brand recognition at all. If a Google search brings your prospective employees to a slew of poor reviews on Glassdoor from current and former employees, your company has a lot of

If your company is having a hard time attracting new talent, or employee turnover is a concern, that’s a good indicator it may be time to introduce an employer brand. making an impact. Current employees are leaving your company for “greener pastures.” Employees complain about lack of communication, unclear direction, and priorities. The company brand doesn’t align with the “true” work experience. Employees don’t appreciate the benefits and perks offered by your company. An internet search turns up negative comments about working at your company. Qualified candidates are not applying to your job postings. Your employer brand should target the people you want to hire. Think Harley Davidson: It’s not a bike—it’s a lifestyle. You should also make sure prospective employees can easily find your job postings and that the job description is accurate and consistent. Candidates need to experience the brand during your interview process. Highlighting benefits and career opportunities on a piece of paper isn’t enough. They need to live it with every visit, email, call, and text during the interview process. People want to get an authentic feeling of what it’s like to work at a company by hearing from current employees, seeing what the culture is

work to do to repair its image. One way you can stay on top of what’s being said about your company is to set up Google Alerts. Recognizing employees should be fun, dynamic, and highly visible to your teams. Frequent and immediate rewards through an employee recognition program have the most impact on engaging employees and reinforcing the right behaviors to influence business results—and increase employee loyalty. In fact, 75 percent of employees recently surveyed by BambooHR who were recognized by their managers once a month reported being satisfied with their job. Signs Your Company Needs an Employer Brand • Current employees are leaving your company for “greener pastures.” With a strong employer brand, your company will have an easier time not just attracting, but also retaining top-tier talent, thereby preventing a mass exodus. In short, you need an employer brand strategy to fight fire with fire.

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• Employees don’t appreciate the benefits and perks offered by your company. Your company may be shelling out millions of dollars in compensation, incentives, and employee benefits, as well as offering cool and unique perks. But if those programs aren’t continually put in front of your people, with dollar values attached, they are soon forgotten and not appreciated. Your financial investment is not getting its full ROI. Employees need to be shown what’s in it for them early on and often. • Staff complains about lack of communication, unclear direction, and priorities. Unless you’re hiring mind readers, employees need information, clarity, and a purpose spelled out for them. And they need to hear it, see it, and experience it regularly. If they don’t get this from management communications and it’s not built into the employer brand, they will be uninformed, less engaged, and even misguided. • The company brand doesn’t align with the “true” work experience. Your employer brand is not just a slogan or a statement; it needs to reflect reality and have a legitimate connection with your company brand. When there’s inconsistency, it’s definitely noticeable. It feels disingenuous, leading to lack of clarity, distrust, and disengagement. A Two-Pronged Approach One tool employers can use to determine their employees’ satisfaction and how they can align their employer brand strategy with each employee’s needs is an employee engagement survey. The most useful surveys will reveal not only what your company does well, but what matters most to employees in terms of their engagement and intent to stay.

BOXSCORE September/October 2017

After carefully examining your employees’ wants and needs, it’s time to begin your research phase. The two-pronged approach to implementing a sound employer-brand strategy starts with doing the research and ends with communicating that research to the entire team. Let’s break it down. Step 1: Research Your Competition. When defining an employer brand, it’s critical that whoever owns the project understands the importance of research and how it should drive the development of the brand strategy. For example, your employer brand should somehow distinguish your company from others within the competitive landscape. One way to ensure that this is the case is to size up your competition. See what your competitors are doing to attract talent, and assess whether it’s working by looking on websites such as Glassdoor for insights on employee happiness. It’s also important for human resources to understand the particular pain points of the various people within the organization so they can communicate with each one of them effectively. This is a key step in getting employee buy-in. It’s also an important part of the research you should be conducting when planning and mapping out your employer brand strategy. Step 2: Communication. It’s also crucial that your employees are part of the employer branding strategy conversation, as they will be participating in the program. Additionally, they will be communicating with new hires and prospective employees via word-of-mouth avenues, such as Facebook, Glassdoor, and Indeed. From the time the idea of having an employer brand starts being floated around—or that improvements are being made—let your employees in on the conversation. Tell them that the initiative is happening, and explain to them why it’s happening. You also

want to make sure you include them in your research and update them on your findings throughout the entire process. Roll out the employer brand internally before announcing it externally; this will turn your employees into proud ambassadors for your branding effort. When your employees feel like they’re part of the company’s larger goals, you’re already halfway there when it comes to getting their buy-in. Making the Connection In a world where information about what it’s like to work for a company is just a Google search away, employer branding will make a difference in whether or not your company attracts top-quality talent. When you operate in a knowledge economy, you need good, talented people for your business strategy to succeed. If you’re facing a shortage or fierce competition for the best and the brightest, that’s really the simplest connection regarding the ties between employer branding and business outcomes. So many companies—if they want to expand or grow or become more profitable, or whatever it is they want to accomplish—don’t rely on the people who work there … How sad for all of them. Done right, a strong employer brand will result in attracting and retaining the talent your company needs to achieve its overarching business goals. It will also build a workplace and lifestyle that keeps your people engaged, challenged, rewarded, and contributing their best for the greater good of your most cherished asset—your clients! Tom Weber is folding carton technical advisor for AICC. He can be reached at tweber@aiccbox.org

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BOXSCORE September/October 2017

hree years ago, at an AICC regional meeting, I was asked to make a presentation regarding current and projected future interest rate markets. At that time, our market projection at Equipment Finance Corp. was that rates would remain low for the foreseeable future, since there seemed to be little pressure for increased rates. I therefore stated our recommendation to continue to utilize LIBOR-based floating-rate debt for business financing. The one caveat to that advice was my assertion to “watch the U.S. Federal Reserve” (“the Fed”), stating that once the Fed begins to raise interest rates, and the economy and stock market absorbs the same without ill effect, that would be the time to convert floating-rate debt to fixed-rate. Well, we now look to have reached that point. In December 2015, the Fed began its attempt to increase interest rates. At that time, 30-day LIBOR, which had been at or below 0.22 percent for many years, rose to 0.45 percent, almost exactly equal to the increase in the Fed discount rate. After several starts, stops, and mixed signals, the Fed has now embarked on its stated sustained push for higher interest rates. The Fed has now increased its discount rate four times by 0.25 percent, or a total of 1 percent. As we forecasted, each Fed move has resulted in a corresponding rise in LIBOR, increasing from its low of 0.17 percent in December 2014 to approximately 1.22 percent today.

This has resulted in a rise of more than 1 percent for all floating rate borrowing. The present concern for borrowers is that the Fed has made clear its intention to continue these rate increases. During its recent meeting, the Fed announced its plan for two more 0.25 percent rate increases during 2017, plus three in 2018. Based on that information, LIBOR projects to reach approximately 2.5 percent by the end of 2018. Furthermore, if the obstructionists in Washington can finally be pushed aside and a business-friendly tax reduction package is adopted, it could push the Fed to move rates up at a more aggressive pace. Fortunately, there is a way to insulate yourself from this future rate increase. Since the first Fed rate bump in December 2014, swap rates—the fixed-rate market index for fixed-rate loans—have increased only by approximately 0.2 percent while short-term rates have risen by approximately 1 percent. The historically low short-term LIBOR interest rates were a huge benefit to commercial loan borrowers over the past several years. On the other hand, the Fed has clearly signaled that this favorable floating-rate market cycle has ended. The time has now come to lock in your borrowing cost at the still historically low three-, five-, seven-, and 10-year fixed rates available in today’s lending market. This article was written by Ed Gargiulo.

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MADE TO MEASURE BY CHUCK DELANEY

unning a business without measuring its success is a bit like competing in football without a game plan. I watched one of my sons play for a coach for four years in high school without there being a clearly communicated plan in place. They had no idea how they were measuring up to the competition and didn’t know how to improve as a team. They were one of the more athletic teams in the division. If they’d been given objective goals and feedback, instead of frustrated emotional responses, they certainly would have had more wins and a greater sense of satisfaction. Because there was no measurable path for improvement, his team experienced a lot of losses, frustrations, and injuries. The results in business aren’t much different: Measuring productivity, quality, and safety decreases losses, frustrations, and injuries. Measuring informs the customer, empowers the worker, and equips the manager. It provides everyone with a sense of confidence and value to their particular function. Whether you’re in management or manufacturing, your work was made to be measured. Many industries, by virtue of what they produce, are innately challenging to measure. However, the packaging industry—whether you’re a small printer, major rigid box manufacturer, or a paper plant—lends itself to measurement. Presumably, you’re tracking your company’s or department’s operational productivity and financial health. It’s also advantageous to track waste, machine operation time, turns of inventory, and units shipped, given materials and cost of labor. Different types of businesses have

BOXSCORE September/October 2017

varying degrees of nuance involved in their measurements. For the remainder of this article, I’d like to offer two pieces of cautionary advice. 1. Don’t let measuring change the culture of your workplace. Measurement and data collection value technical perfection and statistical accuracy, and they can introduce methods that are precise, but ignore a manager’s day-to-day challenges. Any manager will confirm that productivity indexes can seem out of touch. My father-in-law, who was my business mentor, used to say, “Rules are for when the brain stops working.” One way to avoid this pitfall is to focus on labor dollars per product instead of dollars per hour. An article titled “No-Nonsense Guide to Measuring Productivity” in the Harvard Business Review, by W. Bruce Chew, states: “When deciding whether you need greater measurement precision, ask first whether greater precision will make a real difference in subsequent actions to improve productivity. Executives should seek the measure that promises the greatest impact, not the measure boasting the greatest accuracy or technical elegance.” 2. Before you purchase equipment, have a plan to measure its value. I’ve seen my fair share of businesses burdened with the expense and challenge of operating new equipment. It doesn’t matter how great the deal is or how much better your product will be if you have no capacity to measure. The first and simplest form of measuring

is making a list. Think about the times you’ve gone to the grocery store without a list to buy your meals for the week. I am quite certain you’ve generated much more waste, produced less quality food, and made unhealthy choices. Likewise, before considering a major equipment purchase, it’s imperative to create a list of your equipment requirements. You may find that you’ll save costs in unexpected ways, or you may identify something you should outsource. Bear in mind there are always unseen costs to developing new competencies. New equipment means new training and safety protocols, and there will be a learning curve. Have the tools and protocols in place so you can measure your employees’ readiness and the quality of your product. Emotions and gut instincts have their place in business, but in my experience, it’s better to leave them out of management practices and equipment purchases. If you wish to manage something, then you have to measure it. Measuring your work sheds light on your company’s processes and productivity and leaves little room for gray areas. It also provides a clear path for employees to have greater success in their jobs. Measuring gives us the truth of a situation, and the truth will always set you free. Chuck Delaney is managing director of GROW Retail Technologies. He can be reached at 708-491-5090 or cdelaney@growrt.com.

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Financial Corner

ANALYZING INVESTMENTS IN EQUIPMENT BY MITCH KLINGHER

onverting has always been a pretty capital-intensive business, and the latest wave of innovations in equipment has ramped up the need for expensive upgrades rather dramatically. Thirty years ago, a 20-minute setup with 5,000 pieces per hour of throughput and pretty good print registration was state of the art. Now, state of the art is two-minute setups with 25,000 pieces per hour and very high-quality printing. Corrugators are faster, wider, and allow for the change of rolls at very high speeds. Specialty equipment to make retail-ready packaging and other pointof-sale and point-of-purchase packaging being demanded by retailers is now becoming more and more common. Digital printing technologies are still evolving rapidly, but are now running at such high speeds with absolutely beautiful printing that many are predicting they will soon be in line with corrugators and finishing equipment. Flexography may be on the way out as the preferred way that converters print and may be giving the lithographers a run for their money as well, at the very high end of printing. Retooling an entire plant with state-ofthe-art equipment could cost between and $10 million and $50 million, depending on the size of the plant and the diversity of the converting being done. All of this has of course been part of the reason for consolidation of converting operations. We just don’t need as many plants as we used to, since each plant can now produce many times what they could produce 25 years ago. But can this kind of investment be justified? Can a converter not begin to make these kinds of investments and stay competitive?

BOXSCORE September/October 2017

Capital investment decisions should be made based upon an internal rate of return (IRR) calculation. IRR is defined as the interest rate at which the net present value of the cash flows (both positive and negative) of an investment equal zero. So, if you were to purchase a piece of equipment for $1 million that you thought would have a useful life of seven years and it were to generate additional profit of $100,000 in the first year, increased by an additional $100,000 in each subsequent year, the calculated IRR would be 25 percent (per the IRR function in Microsoft Excel). Since most of you aren’t making close to 25 percent, this sounds like it would be an outstanding investment! Unfortunately, the “real world” isn’t such a neat and tidy place, where you know exactly how long an investment will go before it needs additional capital or becomes obsolete, and you know exactly how much cash flow the investment will generate in each subsequent year. Calculating the investment within some reasonable margin for error is possible, although there are always unknowns. How much training will my staff need? Will all of my plates and dies fit the new machine? How much do I need to invest in spare parts? What is the resale value of my existing equipment? Similarly, calculating the incremental annual cash flow to be generated by the investment is also fraught with guesswork. How much additional sales will I generate by having this new piece of equipment? What will the additional operating costs and operating savings be? What additional infrastructure investments will we have to make to support this investment (designers, plant personnel, software,

space, etc.)? So, what should a converter do in analyzing the effect that equipment investments will have on his operation? What type of equipment justification can and should be done? The biggest effect fast-setup, high-throughput equipment will have on an operation is in the contribution dollars per hour of each order and on the total number of machine hours available to be sold. An order for 25,000 boxes that has $5,000 of contribution run on a machine that runs at 5,000 pieces per hour will yield contribution per machine hour of $1,000. Running the same order over a machine that can produce 25,000 units per hour will yield contribution per machine hour of $5,000. In addition, if the old machine is fairly busy and doesn’t have a lot of additional machine hours to sell, then the company has to consider adding additional shifts or producing orders with overtime pay. The newer, faster machine will give the company many more—potentially five times as many—machine hours to sell. So, at the end of the day, if the company is successful in selling the additional

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additional sales to cover the incremental costs of the new equipment. This should be done at a conservative contribution level. So, if a company has been averaging 35 percent contribution levels on their existing business, they should project the incremental business at a lower rate. If the incremental cost to the company of owning the new equipment is $500,000 per year, they need to generate $500,000 of additional contribution to break even. Since the machine is so

much faster than their existing one, they can show a much higher contribution dollars per hour than they are showing now and have many more machine hours available to sell, which will allow them to be somewhat more aggressive in the marketplace than they are with their existing equipment. At the end of the day, the newer equipment that is available today offers converters the opportunity to sell more machine hours at a much higher contribution rate per hour than they are currently able. The key question is: Can they sell the additional hours? Mitch Klingher is a partner at Klingher Nadler LLP. He can be reached at 201-731-3025 or mitch@ klinghernadler.com.

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Has it kept pace with your evolving business? You have invested in new machines. Customers have more challenging requirements (more orders, less volume, shorter lead times and more last minute changes). Products are more complex and yet you want to manage working capital effectively. In this new world, you need to efficiently manage your assets to deliver the perfect order. The OMP solution supports your ever changing business aligning your strategy & operations with your customer’s demand. SUPPLY CHAIN DESIGN •SALES & OPERATIONS PLANNING•ORDER PROMISING•MASTER PLANNING•CORRUGATOR OPTIMIZATION•PRODUCTION SCHEDULING•SHOP FLOOR INTEGRATION•TRANSPORTATION PLANNING Optimize your supply chain management. For Excellence in Supply Chain Software: www.ompartners.com

BOXSCORE September/October 2017

â&#x20AC;&#x153;An investment in knowledge pays the best interest.â&#x20AC;? BENJAMIN FRANKLIN

EFC has been financing corrugated equipment for over 20 years. Our extensive industry knowledge and experience allows us to now offer qualified clients a new 15-year Amortization Finance Program covering 100% of the cost of major items of corrugated equipment. For example on a $2.5 Million purchase, a 15-year amortization program can provide payments which are up to $15,000 per month lower than that of 7-8 year bank term loans. This new program includes early prepayment options, thus providing your operation with both the lowest possible payments and maximum financial flexibility. At Equipment Finance Corporation, we put our knowledge to use for you in ways other financing companies do not. Contact Ed Gargiulo for more information at 800-469-1082 x13, 770-714-0662 or ed@efc-finance.com

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 — A BUSINESS OPPORTUNITY

f you regularly follow this column, you are aware of a number of ongoing and new initiatives that the International Corrugated Packaging Foundation (ICPF) conducts throughout the year. Programs such as the launch of a new pilot to assist corrugated manufacturers in preparing local high school students for the plant floor, various work with colleges and universities to advance and maintain corrugated packaging curricula, and the recruiting of students and graduates with educational backgrounds in corrugated packaging design, sales, graphic design, packaging engineering, chemical engineering, supply chain management, and business.

table to ICPF that was used to jump-start the packaging design track at University of Texas–Arlington. Gerber Innovations donated parts, installation assistance, and training for the faculty. Consider serving as a classroom speaker on corrugated packaging at one of ICPF’s 22 university partners. Many of the speakers provided by ICPF additionally organize plant tours, provide student internships, and serve as advisors and mentors to students and faculty. ICPF also recruits manufacturing executives who can serve as industry speakers at its annual Careers in Corrugated Packaging Teleconference, in which over 500 students and faculty

These initiatives would not be possible without the contributions and time provided by individual companies. These initiatives would not be possible without the contributions and time provided by individual companies. And, there are many ways to get involved and help support ICPF’s mission. ICPF welcomes donations of surplus CAD tables, corrugated testing equipment, and other resources for college packaging labs. Most recently, Arden Software provided ICPF with design software for Appalachian State University’s packaging lab, and JB Machinery installed a new KleenPlate System on the Workhorse press that ICPF earlier placed at Fox Valley Technical College in Wisconsin. Vanguard Packaging donated a CAD

BOXSCORE September/October 2017

from 18 campuses participated earlier this year. Though more regional in attendance, ICPF additionally seeks executive speakers for the Student Packaging Jamboree, which is organized and conducted by packaging students at a different campus each year. Some of the companies recently providing teleconference and jamboree speakers include Mid-Atlantic Packaging, WestRock, Green Bay Packaging, NEWW Packaging & Display, Wasatch Container, Georgia-Pacific, PCA, Smurfit Kappa, StandFast Packaging, Greif, Liberty Diversified International, Jamestown Container, and Landaal Packaging.

ICPF corporate partners use ICPF’s career portal to recruit new graduates and student interns who, by ICPF design, usually evolve into full-time employees upon graduation. Throughout the graduation season (February to early June), an average of seven qualified upcoming graduates apply for each opening posted. This fall is a perfect time to post openings for upcoming December graduates and for next season’s spring graduates, and to recruit student interns for next summer. ICPF’s corporate partners annually send executives to ICPF’s Student/ Executive Dialogue Dinner, where they help in promoting corrugated packaging and displays careers. Many of the participating students accept student internships and full-time openings upon graduation that are offered by the executives they meet there. Several of the recent participants have included KapStone Paper and Packaging, Welch Packaging, Green Bay Packaging, Mid-Atlantic Packaging, WestRock, Georgia-Pacific, Buckeye Corrugated, Inc., Landaal Packaging, Greif, Liberty Diversified International, Tavens Packaging, and Pratt Industries. There are many firms that annually participate, sponsor, and promote ICPF’s Holiday Weekend in New York. In fact, there are too many firms to list here. It is a special weekend when manufacturing and supplier executives, with their spouses or guests, can support ICPF while socializing and enjoying the best of New York City during the holiday season. This year’s event (December 8–10, 2017) includes the latest Broadway play hit, and receptions and dinner at the renowned New York restaurants Sardi’s and Le Cirque. As of this writing, space remains available for additional couples.

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

Email registration@icpfbox.org for more information on the event. Individual firms also have hosted independent fundraisers for ICPF (most recently Harris Packaging, Bay Cities, and BW Papersystems) that have ranged from a Texas Band Benefit, to a California Cruise, to a Karaoke Singathon. Other firms or their executives have supported ICPF by nominating a deserving executive to ICPFâ&#x20AC;&#x2122;s Circle of Distinguished Leaders,

by providing gifts of stock or cash at the end of the year, and by naming ICPF as beneficiary of a trust, IRA, 401(k), or will. All donations are taxdeductible. ICPF is a 501(c)(3) nonprofit corporation co-sponsored by AICC and the Fibre Box Association. If you wish to learn more about these opportunities or would like to consider becoming an ICPF corporate partner, visit www.careersincorrugated.org, or contact me directly. It is the assistance provided

by firms like yours that enables ICPF to continue expansion ofÂ its outreach in educating and influencing the career decisions of talented upcoming high school and college graduates. Richard Flaherty is president of the International Corrugated Packaging Foundation.

BOXSCORE www.aiccbox.org

The Final Score

WILL THE LAST INDEPENDENT LEAVING OUR INDUSTRY PLEASE TURN OUT THE LIGHTS?

he billboard pictured here appeared in Seattle in April 1971, during a time known locally as the “Boeing Bust.” It was the brainchild of two local real estate developers as a way to put a little humor into the Pacific Northwest’s dire economic straits of the time. Seeing this billboard, I am reminded of our own industry and the continuing trend of buyouts and mergers among independents, a phenomenon that might tempt some to paraphrase the message: Will the last independent leaving our industry please turn out the lights? Of course, I do not believe that independents will disappear from our industry any more than I believe that Congress will actually get anything done this year— but I digress. In fact, as I have written before in these pages, the acquisitions of independent companies show a healthy industry, one that is constantly renewed by players entering, growing, merging, and departing. While the number of independents may be fewer, their share of industry output remains strong. According to the 2016 FBA Annual Report, sheet plants—and these are predominantly independent—have retained a consistent 20 percent of the annual production of corrugated board. In fact, a look at the entire industry shows that as the number of plants has declined by more than 100 in the past seven years—from 1,257 in 2010 to 1,155 in 2016— the annual production of corrugated board has increased from 357 billion square feet to 376 billion square feet. This is a testament to increased productivity and higher output per man-hour. Acquisitions are not a new development, but the rate at which they are happening is certainly unprecedented. There are many reasons. First, larger companies have a lot of cash, and improved mill productivity is an incentive to up the ante to acquire companies that can use that tonnage. Second, generational transition is at its highest level, as current baby boomers (themselves second, third, or beyond owners) seek their own exit plans. Third—and this is the most important—independent companies seeking to grow are looking to acquisition, and this is why the future is the most promising. Those companies that continue to invest, to grow, to expand their footprints will be the most successful. So, what I see in another 10, 20 years is not an industry devoid of independents, but an industry whose independent sector is as alive and thriving as it is today. And we’ll leave the light on for you.

Steve Young President, AICC

BOXSCORE September/October 2017

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3 Color 400 bpm FFG 34" x 84"