Nov/ Dec BoxScore 2023: Welcome AICC Chair, Matt Davis by AICC, The Independent Packaging Association

A PUBLICATION OF AICC, THE INDEPENDENT PACKAGING ASSOCIATION

November/December 2023 Volume 27, No. 6

WELCOME , AICC 2023–2024 CHAIRMAN, MATT DAVIS

Carrying an impressive packaging pedigree, the Association’s new board leader emphasizes the ‘Independent Advantage’ ALSO INSIDE Essential Differences in Maintenance Approaches Special Section: AICC Annual Report Members Meeting: AICC Takes Bourbon Country

TABLE OF CONTENTS November/December 2023 • Volume 27, No. 6

COLUMNS

40 FEATURES

WELCOME, AICC 2023–2024 CHAIRMAN, MATT DAVIS Carrying an impressive packaging pedigree, the Association’s new board leader emphasizes the ‘Independent Advantage’ MAINTAINING YOUR MAINTENANCE EDGE Understanding essential differences among preventive, predictive, and prescriptive approaches for boxmakers SPECIAL SECTION: AICC 2023 ANNUAL REPORT Your Association ends fiscal year on solid footing after productive year

CHAIRMAN’S MESSAGE

LEGISLATIVE REPORT

MEMBERS MEETING

ASK RALPH

ASK TOM

SELLING TODAY

ANDRAGOGY

LEADERSHIP

DESIGN SPACE

MEMBER PROFILE

THE ASSOCIATE ADVANTAGE

STRENGTH IN NUMBERS

THE FINAL SCORE

DEPARTMENTS

NEW AND RETURNING MEMBERS

AICC INNOVATION

FOUNDATION FOR PACKAGING EDUCATION

INTERNATIONAL CORRUGATED PACKAGING FOUNDATION

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. ©2023 AICC. All rights reserved.

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

BOXSCORE www.AICCbox.org

OFFICERS Chairman: Matt Davis, Packaging Express, Colorado Springs, Colorado First Vice Chairman: Gary Brewer, Package Crafters, High Point, North Carolina Vice Chairs: Finn MacDonald, Independent II, Louisville, Kentucky Terri-Lynn Levesque, Royal Containers Ltd., Brampton, Ontario, Canada Joseph Morelli, Huston Patterson Printers/Lewisburg Printing Co., Decatur, Illinois Immediate Past Chairwoman: Jana Harris, Harris Packaging/American Carton, Haltom City, Texas Chairman, Past Chairmen’s Council: Gene Marino, Akers Packaging Service Group, Chicago, Illinois President: Michael D’Angelo, AICC Headquarters, Alexandria, Virginia Secretary/General Counsel: David Goch, Webster, Chamberlain & Bean, Washington, D.C. Administrator, AICC Canada: Lee Gould Administrator, AICC México: Veronica Reyes DIRECTORS West: Sahar Mehrabzadeh-Garcia, Bay Cities, Pico Rivera, Califormia Southwest: Jenise Cox, Harris Packaging/American Carton, Haltom City, Texas Southeast: Michael Drummond, Packrite, High Point, North Carolina Midwest: Casey Shaw, Batavia Container Inc., Batavia, Illinois Great Lakes: Josh Sobel, Jamestown Container Cos., Macedonia, Ohio Northeast: Stuart Fenkel, McLean Packaging, Pennsauken, New Jersey AICC México: Sergio Menchaca, EKO Empaques de Cartón S.A. de C.V., Cortazar, Mexico

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

PUBLICATION STAFF Publisher: Michael D’Angelo, mdangelo@AICCbox.org Editor: Virginia Humphrey, vhumphrey@AICCbox.org

DIRECTORS AT LARGE Kevin Ausburn, SMC Packaging Group, Springfield, Missouri Eric Elgin, Oklahoma Interpack, Muscogee, Oklahoma Guy Ockerlund, Ox Box, Addison, Illinois Mike Schaefer, Tavens Packaging & Display Solutions, Bedford Heights, Ohio Ben DeSollar, Sumter Packaging, Sumter, South Carolina Jack Fiterman, Liberty Diversified International, Minneapolis, Minnesota

EDITORIAL/DESIGN SERVICES The YGS Group • www.theYGSgroup.com Vice President, Association Solutions: Craig Lauer Creative Director: Mike Vucic Managing Editor: Therese Umerlik Senior Editor: Sam Hoffmeister Copy Editor: Steve Kennedy Art Director: Alex Straughan Account Manager: Frankie Singleton

EMERGING LEADER DELEGATES John McQueary, CST Systems, Atlanta, Georgia Jordan Dawson, Harris Packaging, Haltom City, Texas Evan Clary, National Corrugated Machinery, Hunt Valley, Maryland

SUBMIT EDITORIAL IDEAS, NEWS, AND LETTERS TO: BoxScore@theYGSgroup.com

ASSOCIATE MEMBER DIRECTORS Chairman: Tim Connell, A.G. Stacker Inc., Weyers Cave, Virginia Vice Chairman: John Burgess, Pamarco/Absolute, Roselle Park, New Jersey Secretary: Jeff Dietz, Kolbus America Inc., Cleveland, Ohio Director: Mike Butler, Domtar Packaging, Fort Mill, South Carolina Immediate Past Chairman, Associate Members: Greg Jones, SUN Automation Group, Glen Arm, Maryland ADVISORS TO THE CHAIRMAN Al Hoodwin, Michigan City Paper Box, Michigan City, Indiana Gene Marino, Akers Packaging Service Group, Chicago, Illinois Tim Connell, A.G. Stacker Inc., Weyers Cave, Virginia

CONTRIBUTORS Cindy Huber, Director of Conventions and Meetings Chelsea May, Education and Training Manager Laura Mihalick, Senior Meeting Manager Patrick Moore, Membership Services Manager Taryn Pyle, Director of Training, Education and Professional Development Alyce Ryan, Marketing Manager Steve Young, Ambassador-at-Large ADVERTISING Taryn Pyle 703-535-1391 • tpyle@AICCbox.org Patrick Moore 703-535-1394 • pmoore@AICCbox.org AICC PO Box 25708 Alexandria, VA 22313 Phone 703-836-2422 Toll-free 877-836-2422 Fax 703-836-2795 www.AICCbox.org

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

WHEN YOU INVEST AND ENGAGE, AICC DELIVERS SUCCESS.

Chairman’s Message

The ‘Independent Advantage’

’m so proud and honored to be your AICC chairman. I have been attending AICC events for as long as I can remember; in fact, many of our family vacations growing up were tied to AICC events. I would not be the leader I am, and we would not be the company we are, without participating in AICC. We learn something at every AICC meeting. AICC has been there to help guide Packaging Express at each stage of our growth. I love this industry, and I am excited to be an ambassador for AICC. I am third generation in the box business. My grandfather, T.J. McLaughlin, was in the business from the 1930s through the 1960s. My father, Jim Davis, got into the business and eventually was fortunate enough to partner with the DeLine family. Our families have been intertwined for the past 40-plus years. You cannot say boxes in Colorado and not think of the DeLine and Davis families. The DeLine family has been great to us, and my older brother, Pete, is the general manager at DeLine Box. We could not do what we are doing without that strategic partnership. The box business is in my blood. My uncles, Jack McLaughlin (CCI and Greif) and Ray Ryden (Boise Cascade); cousin, Jim McLaughin (WSA-USA); and my younger brother, Tom Davis (Bahmueller and BCM Inks and now partner at Brown Brothers Harriman), all work or have worked in the industry. I have also hired my cousin’s son, Andrew Bell (fourth generation for our family), into the business. Part of what we are going to do in the next year is embrace and honor the past. There are no overnight success stories in the box business. It takes years of hard work to build something really special. We have a rich history as an Association, and we are going to have a big celebration in the spring in Palm Desert, California, to honor 50 years of AICC. We will recognize and celebrate all of those individuals who have been a part of forming this wonderful organization. During their term, the chairman or chairwoman designates a theme for the year. My theme is what I call the “Independent Advantage.” The Independent Advantage is how we survive and strive. It’s our edge. It’s part of what makes up our competitive advantage, but it is deeper than that. It is doing what other companies cannot do or are not willing to do. It starts with the right people. It’s how we treat people, internally and externally. It’s how we operate our business. It’s the personal connections we must have with our employees and our customers. The Independent Advantage is how we communicate. It is consistent communication and, more importantly, the ease of communication with our employees, customers, vendors, and peers. It’s entrusting and empowering our employees and coworkers with the tools to say yes. It’s giving your team the responsibility and power to influence your business. It is the process of trusting your employees to do the right thing when no one is watching. It’s an ease of doing business for your customers and vendors. As independents, we are creative, flexible, and scrappy. We can pivot on a dime. But the advantage is realized by the companies that can do it and do it well. It’s speed! It’s our sense of urgency that other companies may not have. It’s training your employees and showing them how they impact your business. It’s how we gain, train, retain, and, most importantly, reward. It’s operating with an entrepreneurial spirit. It is leaning on and learning from other companies in our industry. AICC is the network, but the Independent Advantage is how we use the network. I am looking forward to a great year, and it truly is a privilege to represent all of you.

Matthew M. Davis President, Packaging Express AICC Chairman

BOXSCORE www.AICCbox.org

Legislative Report

Finally … a Good Idea From Congress? BY ERIC ELGIN

ll the talk I hear at local chamber of commerce events and national meetings such as AICC’s is the difficulty in finding and keeping workers. In our corrugated and paperboard industries, it’s been the front-burner issue for the past five years, even before the start of the COVID-19 pandemic, outranking other challenges such as sluggish supply chains and rising costs. Until now, there’s been little help from our legislators on this, but a new idea has been percolating in the U.S. Congress, and it certainly has my attention: It’s the expansion of statesponsored 529 education savings plans beyond the university level to include professional certification, licensing, and ongoing industry-specific training. AICC, as part of the Tomorrow’s Workforce Coalition, has joined with 648 other industry and professional

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organizations to urge the passage of the proposed Freedom to Invest in Tomorrow’s Workforce Act (S. 722 and H.R. 1477). The federal legislation would expand qualified expenses under 529 plans to include postsecondary skills training and credentialing programs such as licenses and nongovernmental certifications. It would also provide valuable tax-advantaged resources for students and workers—with or without college degrees—who pursue career growth, midcareer changes, or career pathways that diverge from a typical academic degree. We business owners have often maintained that once you get people in our doors and train them in increasingly responsible roles, they will stay with us for their entire careers. The Freedom to Invest legislation would provide our workers with the financial incentive to save and

invest in their careers, and our companies would be the beneficiaries of their newly acquired skills. As our letter to Congress states, the bills would transform 529 plans from “college savings plans” to “career savings plans.” You, too, can join in supporting this legislation. Contact your elected officials in the U.S. Senate (www.senate.gov) and U.S. House of Representatives (www.house.gov) and urge their support of the Freedom to Invest in Tomorrow’s Workforce Act (S. 722 and H.R. 1477). Eric Elgin is owner of Oklahoma Interpak and chairman of AICC’s Government Affairs subcommittee. He can be reached at 918-687-1681 or eric@okinterpak.com.

New and Returning Members

Welcome, AICC’s New and Returning Members! CUSTOM STEAM SOLUTIONS USA INC. DON BOGARDUS Business Development Manager 555 Plate Dr., Units 1 and 2 East Dundee, IL 60118 331-286-8363 www.customsteam.com

ATLANTIC BOX COMPANY MICHAEL VALOV President 8343 Loch Lomond Dr. Pico Rivera, CA 90631 562-948-3000 www.atlanticboxncarton.com

LLUMIN INC. ED GARIBIAN CEO PO Box 15328 Springfield, MA 01115 413-233-5400 www.llumin.com

ACTION SPECIALTY PACKAGING BRETT SCHULMAN Vice President, Business Operations 5110 W. Idlewild Ave. Tampa, FL 33634 954-873-5085 www.actionspecialtypackaging.com

ENGICO SRL VALENTINA BENZONI Sales and Marketing Via Adamello 3 20851 Lissone MB Italy +39-039-245-7847 www.engico.com

BOX EXPRESS MFG. ERICA ROBLES Director, Operations 8320 Canford St. Pico Rivera, CA 90660 562-942-9923 www.boxexpressmfg.com

STERNER GLOBAL LLC TOM ANDERSON CEO 14136 216th Way NE Woodinville, WA 98077 206-310-6706 GREAT AMERICAN PAPER INC. KEITH GARCIA Vice President, Sales 304 John Martin Rd. Spartanburg, SC 29303 864-472-8022 www.greatamericanpaper.com JCB PACKAGING & LOGISTICS LLC BRIAN KEEVY President 14621 N. Bybee Lake Ct. Portland, OR 97203 888-206-3628 www.jcbpackaging.com

RIGOROUS TECHNOLOGY DIANE RIGGS COO and Co-Founder 50 Chad Ln., Unit A Williston, VT 05495 802-870-3700 www.rigorous.co

BOXSCORE www.AICCbox.org

Members Meeting

500 Industry Leaders Gather to Sip, Socialize, and Strategize at the 2023 AICC Annual Meeting

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Photos by Ryan Armbrust.

ICC celebrated another successful Annual Meeting, as more than 500 professionals from the paper and packaging industry convened in Louisville, Kentucky, for three days of networking, knowledge-sharing, and innovation. The event, held September 18–20 at the Marriott Louisville Downtown, featured a wide range of workshops, networking opportunities, and plant tours to advance the industry and foster leadership. AICC members began learning before the first session even started, with the opportunity to explore the box plants of Premier Packaging, Independent II, and Greif CorrChoice, gaining firsthand experience at cutting-edge packaging facilities. The tours were followed by a lunch and bourbon tasting at Farmington Historic Plantation. The AICC Annual Meeting kicked off with a focus session that included the State of the Industry address delivered by Timothy Bergwall, group president of paper packaging and services at Greif Inc., where attendees gained invaluable insights into the current sector landscape. George Staphos, a managing director at Bank of America Merrill Lynch, followed with a comprehensive Paper & Packaging Economic Update, equipping participants with the latest market trends and financial perspectives. A highlight of the session was Gene Marks, CPA, author, columnist, and small business owner, who shared top tactics and strategies that leaders should employ to navigate and thrive in 2024 and beyond. Keynote speaker Stephanie Stuckey, CEO of Stuckey’s Corp., presented

Comedian and filmmaker Tripp Crosby entertains attendees during a networking lunch.

Looking Back to Move Forward, inspiring attendees to reflect on the past and draw valuable lessons for the future during a general session. She went on to discuss Keeping the Family in Family Business and It Takes Creativity: DIY Marketing during subsequent workshop presentations. In another packed workshop session, Tim Connell, director of sales at A.G.

Stacker, moderated a panel discussion with Jeremy Cohen, vice president and general manager at Acme Corrugated Box Co. Inc.; Keith Thomas, director of strategic initiatives and business development at Michigan City Paper Box Co.; and Dennis Wood, director of manufacturing at Premier Packaging on Automation vs. Semi-Automation in the Plant.

THANK YOU, SPONSORS! AICC is grateful for the support of our many meeting sponsors: • Domtar Packaging

• Quantum Ink

• eProductivity Software

• Kao Collins

• SUN Automation Group

• Kolbus America

• Haire Group

• Premier Packaging

• WestRock

• Stafford Corrugated Products

• Emba

• Global Boxmachine

• Pacificolor

• Huston Patterson

• A.G. Stacker

• Lewisburg Printing Co.

• Oklahoma Interpak

• ARCO Murray

Members Meeting

R. Andrew Hurley, Ph.D., associate professor at Clemson University, presented a four-phase program for sustainable packaging development during a workshop and discussed carbon neutrality during a general session, while Abigail Sztein, senior director of government affairs at the American Forest & Paper Association, provided insights into legislative developments affecting the industry. During the meeting, Evelio Mattos, host of the Package Design Unboxd podcast, also explored the implementation of AI in manufacturing. AICC Emerging Leaders (ELs) participated in a dynamic discussion on leadership development and authenticity in leadership with moderator John McQueary, vice president of sales at CST Systems Inc. Panelists included Cassi Malone, director of customer experience at Corrugated Supplies Co.; Josh Sobel, account manager at Jamestown Container Cos.; Danny Lopez, director of business development at Haire Group; and Simona Georgescu, president and founder of Adduco Communications Inc. A networking lunch featured keynote speaker Tripp Crosby, a comedy filmmaker, live host, and entrepreneur, who added a dose of humor and inspiration to the event. Unique networking opportunities included a reception at the Kentucky Derby Museum at Churchill Downs, where attendees toured the racetrack and

After three plant tours, attendees are treated to a lunch at Farmington Plantation.

decorated fedoras and fascinators. Many also participated in the bourbon distillery tours at Maker’s Mark and Stitzel-Weller. The ELs enjoyed a lively evening at the Howl at the Moon Dueling Piano Bar. During the meeting, AICC recognized Greg Jones, executive vice president at SUN Automation Group, and Greg Tucker, chairman and CEO of Bay Cities, as recipients of the AICC Champion Award. Cascades took home the AICC/BCN Innovator of the Year Award for its 100% recycled SBS alternative used for color applications on packaging. Student Design Competition winners and Troll Scholarship recipients were also recognized during the meeting and given a priceless opportunity to network with attendees. Additionally, AICC members elected a new slate of officers and directors, with Matt Davis, president of Packaging Express, succeeding Jana Harris, CEO

of Harris Packaging and American Carton Co. as the Association’s board chair. The event concluded with a powerful closing keynote from Dakota Meyer, a U.S. Marine and Medal of Honor recipient, who shared insights on mastering life’s toughest battles and discovering one’s purpose. Additional photos from the meeting can be found on AICC’s Facebook page (www.facebook.com/AICCbox). Meeting presentations will be sent out to attendees. Questions about the Annual Meeting and the value a well-connected workforce brings to a company can be answered by Cindy Huber, AICC director of conventions and meetings, at chuber@ AICCbox.org, or Laura Mihalick, AICC senior meeting manager, at lmihalick@ aiccbox.org.

MARK YOUR CALENDARS! Upcoming AICC national meetings include: AICC 2024 Spring Meeting & 50th Anniversary Celebration April 8–10 | Palm Desert, California

Jana Harris (far left), CEO of Harris Packaging and American Carton Co. and AICC immediate past chairwoman, presents Student Design Competition awards and Troll Scholarships to winners and recipients.

AICC/TAPPI 2024 SuperCorrExpo September 9–12 | Orlando, Florida For more information about upcoming events, visit www.AICCbox.org/calendar.

BOXSCORE www.AICCbox.org

Ask Ralph

Some Corrugated and Containerboard History: Part Two BY RALPH YOUNG

n the September/October issue of BoxScore, I delivered a brief summary of some of our industry’s key players and how they’ve evolved to where they are today. In this issue, I’m continuing that approach with part two, as follows.

Owens-Illinois Great Northern Nekoosa Corp. acquired forest products group Owens-Illinois for $1.15 billion in 1987. The unit had been expected to be sold ever since New York investment firm Kohlberg Kravis Roberts & Co. acquired Owens-Illinois in a $3.64 billion leveraged buyout in February that year. Toledo, Ohio-based Owens-Illinois was one of the world’s largest packaging concerns. The forest products group had revenue of $730 million in 1986. The unit also operated 21 corrugated box plants. Hinde and Dauch Hinde and Dauch is the original hay/ straw medium jute operation that started in the late 19th century as a threshing and baling operation, which later expanded to corrugated box plants. From its very humble beginnings in Sandusky, Ohio, it expanded east to New Jersey, west to Indiana, and north to Toronto. It grew to 28 manufacturing plants in 18 cities, and at the pinnacle of its creative, independent, and entrepreneurial efforts, it was the largest corrugated box producer in the world. Over the years, it became part of what at various times were Westvaco, Displayco Midwest, Chesapeake Display and Packaging, Temple-Inland, and now International Paper.

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Great Northern Nekoosa Corp. In June 1990, Great Northern Nekoosa Corp. shareholders gave formal approval to a $5 billion takeover by Georgia-Pacific Corp., creating the nation’s largest paper and forest products company at that time. Crown Zellerbach Crown Zellerbach was a large paper manufacturing firm formed 1928 by the union of Zellerbach Corp. (founded in 1924 in San Francisco by Isadore Zellerbach) and Crown Willamette. Gaylord Container was a byproduct of the hostile takeover of Crown Zellerbach by Sir James Goldsmith in July 1985, which resulted in the breakup of the San Francisco-based forest products corporation in May 1986. The more profitable manufacturing assets (fine paper mills) were sold to James River Corp. of Richmond, Virginia (which became Fort James in 1997 and was acquired by Georgia-Pacific in 2000).

Southern Container Corp. In March 2008, Rock-Tenn Co. completed the deal to acquire privately held containerboard manufacturing and corrugated packaging business Southern Container Corp. for $851 million. Norcross, Georgia-based Rock-Tenn then became the eighth-largest manufacturer of containerboard in North America. Southern Container operated the Syracuse, New York, Solvay mill, one of the lowest-cost recycled containerboard mills in North America. It also ran eight integrated corrugated box plants, two sheet plants, and four high-impact graphics facilities. Longview Fibre Longview Fibre’s operations, east of the Mississippi River, were purchased by U.S. Corrugated Inc. and then by KapStone. On October 31, 2011, KapStone acquired U.S. Corrugated Inc., which owned a recycled paper mill in Cowpens, South Carolina, and 14 box and corrugated sheet plants.

Ask Ralph

Boise Cascade Corp. In November 2004, Boise Cascade Corp. completed its sale of its paper, building products, and timberland assets to Madison Dearborn, a private-equity investment firm. Boise Cascade then renamed itself OfficeMax, which it had acquired in 2003. In February 2008, the company spun off its paper and packaging operations to a new company, Boise Inc., with Boise Cascade resuming the use of its old name. Inland Container In January 1984, Temple-Inland was spun off from Time Inc. In October 1985, Inland sold its Eastex Packaging Inc. unit to Manville Forest Products Corp., a subsidiary of Manville Corp. That same year, Georgia Kraft Co. was dissolved, with Inland becoming the sole owner of the Rome, Georgia, linerboard mill. In 1986, Inland acquired a linerboard mill in Orange, Texas, along with three box plants from Owens-Illinois. In 1990, the company purchased Indianapolis-based Pakway Container Corp., operating three box plants, and California-based Crockett Container Corp., operating four box plants; this brought Inland’s box plant total to 40. On September 6, 2011, Temple-Inland Inc. agreed to be bought by International Paper Co. for $4.3 billion, or $32 per share, plus $600 in assumed debt. U.S. Corrugated On November 1, 2011, U.S. Corrugated consummated a transaction with KapStone Paper and Packaging Corp. with the sale of 14 of its manufacturing facilities and its Cowpens, South Carolina, paper mill. The latter mill was originally built in 1992 as a greenfield operation by Lin Pac, a U.K.-based company. This was one of the mini mill concept operations to use 100% recovered fiber. The remaining company assets consist of two full-line corrugated

plants, three sheet plants, and two display houses. CeCorr Inc. In March 1998, Georgia-Pacific Corp. agreed to acquire CeCorr Inc., a corrugated sheets producer, for about $190 million in cash and stock. CeCorr, a closely held company based in Indianapolis, operated 11 sheet feeder plants, a corrugating medium paper mill, and several specialty operations and support service groups. Jefferson Smurfit Corp. Jefferson Smurfit Corp.’s U.S. operations merged with Stone Container in 1998, and the new company became Smurfit Stone Container Corp. Jefferson Smurfit had established a major presence in the U.S. with the 1981 and 1982 acquisitions of Alton Box and Diamond International. In 1986, it bought a major interest in Container Corp. of America. Smurfit Stone Container Corp. In May 2000, Smurfit Stone Container Corp. acquired St. Laurent Paperboard Inc. The new company then bought the Stevenson, Alabama, medium mill in 2002 from MeadWestvaco. Smurfit Stone went into Chapter 11 bankruptcy protection in January 2009. Rock-Tenn bought those assets in a $3.5 billion deal that closed in May 2011. Stone Container Corp. Stone Container Corp. bought Consolidated-Bathhurst of Canada, a newsprint maker, in 1989. In 1998, Stone merged with Jefferson Smurfit Corp. The resulting entity was named Smurfit Stone Container Corp., which at the end of the 20th century grossed more than $7 billion in annual sales. Westvaco Corp. In September 1995, Westvaco Corp., a major manufacturer of paper, packaging,

and chemicals, announced it had signed a letter of intent covering the sale of its container division to Weyerhaeuser, headquartered in Tacoma, Washington. The sale included Westvaco’s 10 U.S. corrugated box plants in Baltimore; Buffalo, New York; Chicago; and Cleveland. In September 2002, it completed the sale of its Stevenson, Alabama, corrugating medium mill and related assets, including seven container plants and 82,000 acres of timberland, to Smurfit Stone Container for $375 million that it had acquired when it merged with Mead in August 2001. Hoerner Waldorf Corp. In 1977, Hoerner Waldorf Corp., a paperboard and corrugated box manufacturer, merged into Champion International. Hoerner had acquired Waldorf Paper Products through a series of purchases between 1959 and 1966. Chesapeake Corp. The most dramatic event in the transformation of Chesapeake Corp. came in May 1997, when the company sold its West Point kraft products mill, four corrugated container plants, and other related assets to St. Laurent Paperboard Inc. for about $500 million. Ralph Young is the principal of Alternative Paper Solutions and is AICC’s technical advisor. Contact Ralph directly about technical issues that impact our industry at askralph@AICCbox.org. Sources: Personal knowledge from employment, media articles over 40 years, Corrugated Shipping Containers: An Engineering Approach, annual reports, 10Ks, industry technical committees, interviews, personal relationships, and Wikipedia.

BOXSCORE www.AICCbox.org

Ask Tom

The Value of Leveraging Supply Chain Data BY TOM WEBER

he need to address supply chain challenges such as inflation, evolving sustainability and U.S. Environmental Protection Agency regulations, and worker shortages continues to be top of mind for many companies heading into 2024. Although each of these challenges is massive individually, companies are facing all of these, and more, at once. While seemingly overwhelming, business leaders can tackle these challenges by implementing a digital strategy based on a strong data foundation. During challenging times, companies often look to their packaging suppliers to reduce costs. That may seem like a “quick win” for them but may not be a long-term winning strategy. In order to reduce costs while increasing efficiency and innovation, companies must rely on the DNA-level data—specification data—of their products and packaging for optimizations and reporting. Companies that are still managing this detailed data in spreadsheets, PDFs, and email cannot fully trust the data to be accurate or reliable. Cost-Saving Opportunities Once you have a strong data foundation that you know is accurate and reliable, you can look for ways to better optimize costs. For example, with digitized data in one central system, companies can quickly identify if packaging supplies are being underutilized or if materials can be swapped for more cost-effective alternatives—or even transition to more cost-effective suppliers. A digitized data strategy can also lead to cost-savings when it comes to productivity and collaboration. If your teams have a single source of truth to find and leverage data, they’ll spend less time searching for those data points and more time focusing on innovation and optimization.

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Reporting can also be significantly improved. Time-savings is similar to the productivity example as well as the data accuracy aspect. You can trust that the data you are reporting is the most accurate and up to date because it lives in one place, instead of in multiple systems, updated or duplicated by multiple people. The questions around data accuracy will be significantly reduced if everyone is working off of the same data “playbook.” Tackling Sustainability Challenges With a Data Foundation You cannot achieve your sustainability goals without data. Many companies are missing corporate commitments made on sustainability because they cannot easily access or report on how sustainable their products and packaging are. And with regulatory pressures growing by the day, companies need to act on their sustainability ambitions. Data is the only way to do this. While sustainability as a whole is a very complex challenge, the process of tackling it doesn’t have to be. It starts with simply knowing the DNA-level data—again, specification data—of your products and packaging. When companies have this deep understanding of the data at their fingertips, it makes sustainability reporting and optimization that much easier. Additionally, you can connect that data to your life cycle analysis tools so purchasing agents can make sure they are selecting quality products that meet industry standards while still minimizing costs when possible. It is possible to drive sustainability and cost-savings at the same time. Everything Starts With the Spec When you boil it down, companies are responsible for their products and

packaging. It’s critical with today’s challenges and pressures to get control of your data. Everything starts with a spec, so having specification data readily available is how companies can help meet sustainability goals, drive efficiencies, and optimize costs—all while growing innovation. We all need to do our part in building supply chain resiliency, and it starts with data. How to Get Started Specification data crosses company departments, functions, and priorities. From product and quality to sales and marketing to sourcing and leadership, accurate specification data is the foundation to delivering on your goals. Part of any good enterprise resource planning software system is to simplify the complex, so I advise my client companies to engage with their software supplier’s digital transformation team in a discovery session, which includes these top three items: • Defining and prioritizing challenges in information-gathering and dissemination. • Mapping supply chain major issues and opportunities to metrics that reflect your business needs. • Developing success criteria specific to your packaging business and specific client benefits. Afterward, you and your team will have a much clearer road map to undertake your supply chain management and cost takeout journey. Tom Weber is president of WeberSource LLC and is AICC’s folding carton and rigid box technical advisor. Contact Tom directly at asktom@AICCbox.org.

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Selling Today

Are You Ready for 2024? BY TODD M. ZIELINSKI AND LISA BENSON

n May 2020, the inflation rate was at 0.12%. By July 2022, it had reached a historic high of 8.5%, a number the United States hadn’t seen in more than four decades. To fight inflation, the feds have incrementally raised interest rates. Its hike of 0.25% in June meant interest rates had gone up 5.25 percentage points over the previous 18 months, reaching its highest level in 22 years. Although inflation has come down and the feds are hoping for a soft landing, financial giant JPMorgan Chase & Co. predicts a recession at the end of this year or in early 2024. Other experts have noted that while consumer sentiment has been positive, companies are noticing consumers pulling back. It is expected that the lagging effects of interest rate hikes

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impacting credit, depleting COVID-19 pandemic savings, and restarting student loan payments will significantly impact spending. A reduction in consumer spending will lead to a decrease in packaging needs in some industries. As we approach 2024, many have begun planning for the coming year. The uncertainty of the upcoming year makes planning more critical than ever. A strong annual business plan can set the tone for a successful year ahead by outlining clear goals, metrics, resources, implementation strategies, and timelines. It should build upon your broader strategic plan and allow flexibility to adapt to unpredictable market shifts. Business development is critical to this plan and should be purposefully considered. With careful business development planning

and execution, you can pave the way for a prosperous year. Overall Sales Goals Defining overall sales goals is the foundation for creating a business development plan. This includes not only having a revenue goal but also understanding where the revenue is expected to come from. This involves identifying specific markets, products, or customer segments that will contribute to achieving the revenue goal. Some questions to consider are as follows: • What is my annual sales goal? • How does it break down between new and existing customers? • What is my expected customer retention rate?

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• How does this break down by product/service and market/industry? • How do I define the steps in my sales cycle (specific actions taken to convert a prospect to a customer) and the conversion rate at each step? It also includes setting realistic timelines, allocating resources efficiently, and establishing performance metrics to track progress. By focusing on these areas, a company can create a solid plan that aligns with its strategic vision and ensures growth and success in the market. Defining and Prioritizing Your Targets To achieve sustainable growth, a business must carefully identify potential customers and industries that fit its products or services well. This means identifying not only those that need your product or service but also those for whom your value proposition will be most compelling. It is also essential to prioritize these prospects to allocate your resources efficiently and focus on the most promising opportunities. Specific steps to be taken and questions to ask include: • Identify potential customers. Ask, “Who is my ideal customer (industry, sales potential, geography, etc.)? Who is not my ideal customer?” Remember, not all customers are created equal. Some will be more sustainable than others. Identify those for whom you can have the most significant impact. Prepare to eliminate those that are wasting your resources. • Categorize and prioritize customers. Once you have identified the most promising customer types, categorize them in a way that makes sense for your business (e.g., e-commerce, large industrial, etc.). It doesn’t matter what they are called as long as it is clear what it means to your company. For example, “large industrial” may mean companies

14 BOXSCORE November/December 2023

west of the Mississippi that sell products larger than washing machines and require at least 1,000 boxes per month. Just be specific. Then, prioritize the categories so you know which to focus on first and allocate resources to. • Identify the needs of the category. What are the challenges it is facing? What are the unmet needs of the customers? • Assess your proposition. What makes our products or services unique and valuable? How can our business solve the problems this group is facing? • Determine prospecting goals. How many prospects are needed to achieve the desired revenue from a new business based on our sales cycle conversion rates? Creating Awareness and Educating the Market In today’s competitive business world, making people aware of your company, product, or service is vital. This involves helping them understand why your offering is valuable and how it benefits them. Some important aspects to consider and questions to ask include the following: • Define your value proposition. What does my company/product/ service bring to the table that competitors don’t? Does my value proposition address the real needs of my target market? • Communicate consistently. As a company, are we consistent with what we communicate to the market? • Relay your message. What marketing channels will we use to relay our message (e.g., emails, case studies, cold calling, pay-per-click, blogs, search engine optimization [SEO] strategies, advertising, and trade shows)? • Anticipate objections. What objections do we anticipate? Which can

we overcome? How will we address those objections? • Track performance and adjust. What metrics will we use to track performance? How will we determine success? When will we change if our message isn’t resonating? Secure Opportunities and Develop Relationships The ultimate objective is converting a marketing lead to a sales lead, one that aligns with your ideal customer profile and expresses genuine interest in your offerings, and moving it through the sales pipeline until it results in a sale. Achieving this goal demands consistent engagement at regular intervals as follows: • Define your process. Do we have a precise sequence of steps to follow when engaging with potential clients? • Prepare your team. Do we have the right people in the positions that are a fit for their skills? Is our team well-trained, and do they understand the nuances of relationship-building and lead conversion? • Define your outreach. Do we have a marketing communication plan with an outreach frequency for each channel that will help us reach our goals? Do we have a plan for regular opt-in nurture emails or follow-up calls for those who aren’t ready to commit but express interest? • Track performance and adjust. What metrics will we use to track performance? How will we determine success? When will we adjust if our process isn’t delivering? Sales Process Management Regularly reviewing the sales pipeline and managing the opportunities as they move through it are critical. Your business development plan should have a mechanism for ensuring opportunities do not age and become forgotten as follows:

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• Define responsibilities. Who will be involved in reviewing pipeline lead flow and follow-up steps? Who will schedule next-step appointments, obtain requests for quotes/drawings, quote follow-up, and capture win/ loss feedback? • Track opportunities. How will we track and record active sales activities through win or loss, including subsequent step disposition and date, estimated revenue, and probability of closing? • Review pipeline activities. How often will we review activities to ensure we are on track to meet our sales goals? Resources The resources you need to execute your business development plan are pivotal to your budget. Specific steps to be taken and questions to ask include:

16 BOXSCORE November/December 2023

• Put the right people in place. What staff will we need? Do we have hunters and farmers in the correct position for their skills? Do we have a content creator and graphic designer? Do we have the administrative help required to free the outside sales team to focus on selling? • Create processes. Do we have processes in place with defined tasks, intervals of execution, and roles and responsibilities? Do we need multiple processes (e.g., inside sales versus outside sales and inbound leads versus outbound leads)? • Determine and acquire technology. What technology is required (e.g., customer relationship management, marketing automation tool, graphic design software, sales intelligence software, website chatbot, website visitor tracking, analytics, and SEO tools)?

Business development is a critical component of any company’s annual business plan. By following the steps outlined in this article, you can create a business development plan tailored to your specific needs and goals, and it will help you grow your business in 2024 and beyond. Todd M. Zielinski is managing director and CEO at Athena SWC LLC. He can be reached at 716-250-5547 or tzielinski@athenaswc.com. Lisa Benson is senior marketing content consultant at Athena SWC LLC. She can be reached at lbenson@athenaswc.com.

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Andragogy

Exploring the Trade-Offs of Sustainable Packaging BY JULIE RICE SUGGS, PH.D., AND ALLI KEIGLEY

nnovative, sustainable packaging solutions seem to hit the market daily and are popular among large corporations, fast-moving consumer goods manufacturers, and packaging suppliers. These entities are proactively making bold commitments to improve the sustainability of their packaging while fundamentally rethinking their packaging systems. But we all know that saying is much easier than doing. Making shifts toward sustainable packaging will require significant changes in the way an organization conducts business. So, it is best that you involve the right people to evaluate a prospective process or technology. Since we’re talking about sustainable packaging at its core, it’s important to first understand how it’s defined. We at the Packaging School have a three-step definition for sustainability: 1) The ideal package is made completely from post-consumer recycled materials; if that’s not possible, then 2) the package is made completely from materials that are easily recycled by the consumer; and if that’s not possible, then 3) the packaging reduces food/product waste. But how do you arrive at one or all of these packaging implementations? You need to start with the people, processes, and technologies that come into play when working sustainable packaging solutions into your current packaging system. People Creating sustainable packaging that aims to increase environmental efficiency without compromising functionality (e.g., preservation, protection, communication)

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is by no means a solo endeavor—it is a collaborative process that involves multiple stakeholders. Clear communication needs to exist among product development, quality, your clients, suppliers, manufacturers, distributors, retailers, and ultimately, your end users. Keep in mind that most people are reluctant to embrace change. So, instead of stating and defending your idea, ask as many questions as possible to fully uncover liabilities, issues, and reluctance. Try to embrace resistance to fully tease out where issues exist. Once you have a better understanding of the speed bumps ahead, you can begin to optimize your path to deployment. By leveraging collective expertise, creativity, and insights from your stakeholders, solutions can be crafted that are not only environmentally friendly but also commercially viable and technically feasible.

Processes We could talk for hours about the processes required to make the change to sustainable packaging materials. At a high level, it’s important to think about material usage (reduce, reuse, recycle), energy, and waste, all while aiming to maximize the performance, functionality, and appeal of the updated packaged system. As far as materials are concerned, let’s walk through an example highlighting common material trade-offs for corrugated board. When comparing virgin with recycled containers, it’s important to note that corrugated containers containing zero recycled content are very rare. When corrugated containers are said to be 100% virgin fiber, this typically refers to the facings of the board. The corrugated medium most often has some recycled content. Regardless, you should know what differentiates these two types of material.

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Virgin fibers are longer than recycled fibers, and the longest of these fibers are produced by chemical pulping. In chemical pulping, chemicals are used to “cook” the fibers out of the wood (in contrast to mechanical pulping, which grinds the wood). Longer fibers interweave better, allowing for higher strength. Recycled fibers cannot completely duplicate the functional and aesthetic properties of virgin fibers because their fibers are shorter; however, numerous applications lend themselves to corrugated containers made from recycled content. Virgin material can be repulped after it has been disposed of—up to seven times before the fibers can no longer be reused. However, as you might imagine, repulping produces fibers that are shorter and weaker than those in the original material. Naturally, using either type of corrugated presents its own set of benefits and limitations. So, let’s first take a look at a few of the benefits of recycled corrugated, then virgin corrugated. Benefits of recycled corrugated: • Environmentally friendly— reduces deforestation. • Recycled—reused versus going to a landfill. • Fills the consumer desire for sustainable materials. Benefits of virgin corrugated: • Fibers are longer and stronger than recycled counterparts. • Holds up better against heat and moisture compared with recycled corrugated. • Can be recycled by the end user after its first use. As noted, both recycled and virgin corrugated also have limitations. Let’s take a look. Limitations of recycled corrugated: • Weaker than virgin material, which means it’s more susceptible to warping or crushing.

20 BOXSCORE November/December 2023

• Tape selection is more difficult—not all tapes adhere as well (and you can’t interweave as easily with shorter fibers). • Inks may bleed or fail to penetrate when printed on. Limitations of virgin corrugated: • Not as eco-friendly as recycled— requires more deforestation. When laid out in this fashion, it’s easier to see the trade-offs when choosing one material over another. Overall, it is the responsibility of the end user to decide whether virgin or recycled works best for their business. Any new material should be tested for product protection. The International Safe Transit Association developed a sustainable packaging process guideline, which provides rationale for sustainable packaging, recommended sustainable packaging metrics, and a standardized process guidance (including recommended templates) for organizing and documenting a complete sustainable packaging development program. When it comes to processes, sustainable packaging optimization is not linear but dynamic and iterative. When investigating new processes within your organization, it’s important to stay ahead of regulations, prototype and test your ideas, collect as much data as possible, and communicate changes internally and externally. Technologies Technology plays a key role in helping us achieve a more sustainable future. We believe it is reasonable to assume that new materials will have lower supply and higher cost compared with traditional packaging materials. So when considering a new packaging technology, anticipate who might also benefit from the investment. Seek out internal and external stakeholders who have sustainability goals. For example, it’s possible

someone in the marketing department has a budget to offset the difference in price if the environmental benefit has a marketable impact. Technologies such as artificial intelligence are being used to reduce energy consumption, helping businesses make more informed decisions about their energy use. Many companies are also looking into modular machine concepts, which allow for flexible systems that can be tailored to the desired customer specifications. Packaging is ubiquitous— we interact with it constantly. As new technologies and tools become available for seemingly unrelated topics, take a moment to connect the dots between your project and emerging tech to find inspiration and resources. And remember, it’s always best practice to collaborate. Because packaging touches everything and everyone, it’s wise to be proactive and lead the conversation versus reacting as your project evolves. Align with material and supply chain experts, quality control, and even line operators to develop solutions that are both machine-compatible and environmentally friendly. Moreover, it is important to take into account the full view of the packaging supply chain to be able to quantify your footprint—recognizing direct and indirect carbon impacts and weighing the pros and cons associated with each material choice or change. Julie Rice Suggs, Ph.D., is academic director at the Packaging School. She can be reached at 330-774-8542 or julie@packagingschool.com. Alli Keigley is production coordinator at the Packaging School. She can be reached at alli@packagingschool.com.

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Leadership

Stop Shooting Yourself in the Foot! BY SCOTT ELLIS, ED.D.

o many frustrating economic and societal conditions are working against manufacturers. Yet, the most infuriating losses are self-inflicted. A CEO recently put it this way: “We have procedures in place with good training and clear goals, so why do we keep shooting ourselves in the foot?” This is not a new annoyance, and we have tried many solutions: • We have issued mandates and directed supervisors to remind people every day. This follows the belief that with sufficient nagging, compliance is the path of least resistance. • We have invested in training and measurement reporting and then allowed ourselves to get distracted by seasonal or situational changes. This has resulted in cynicism and resistance in our team. • We have incented people for productivity and suffered remorse when people felt entitled to bonuses when not achieved through performance.

And the list goes on. It is no secret that the habits of highly effective manufacturers include consistency, awareness, communication, accountability, and recognition. These factors are always present in a culture where best practices are common practices. Consistency Consistency of follow-through is the major difference between resolutions and lasting change. If it is worth doing well, we must begin by assigning responsibility to all and oversight to a few. For example, quality is everyone’s job, but measurement and reporting

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are assigned to a person. Followthrough is completely dependent on discipline in leadership to apply the agreed-upon consequences and recognition without exception. Practices that are adopted by the team apply equally to the baler operator and the person with their name on the door. The first question to answer about consistency is, “What can we do to ensure we stay invested in this practice, regardless of backlog, labor constraint, or market volatility?” If we won’t take this first step, then we might as well invest in armored shoes. Awareness If best practices are to be adopted as our way, they must first be understood and visible. Take ink management as an example. In most plants, the ink supplier has trained crews multiple times in the measurement of pH and viscosity. There may even be convenient measurement logs at each print station. However, on a trip press side, one is likely to find a coating of dust on the bottom of the measurement cup. While education and measurement are essential, compliance won’t happen until crew members are aware of how this practice will improve their experience. Once they see the data that shows that rework, jam-ups, and extended cleanups will be significantly reduced, they get motivated to “do it our way.” Communication Broken resolutions don’t happen because we change our minds about their value. They are broken by distraction, old habits, and avoidance of the discomfort that comes with forming

new habits. Communication on the topic can be visual, on the screen, or a machine-side measure. No matter how sophisticated the company’s data management may be, it is most effective to involve the team in keeping score. In most companies, a measure such as overall equipment effectiveness is gathered and reported monthly. Ownership of the scores is made difficult by these mysterious numbers. Even those who have received classroom or online training (see AICC’s Packaging University at AICCbox.org/ page/PackagingSchool ) in measurement will benefit and comply more quickly if they participate in the data gathering and reporting. A line-side production-reporting dry-erase board has been helpful to many. It is redundant to the production coding at the machine terminal but involves more thought and visibility of data. Even if the numbers are provided by a supervisor, the act of discussion and writing in the uptime, the run speeds, and the number of saleable units produced will connect theory to practicality. Soon, the team is keeping score, diagnosing issues, and competing with other shifts. Communication may also be verbal in a crew meeting or one on one. A conversation starter for many of these best-practice discussions is found in AICC’s Get to the Point videos. These two-minute explanations help the team focus and follow up with a discussion of the application’s benefits. Accountability A resource on this topic titled Holding People Accountable is available on AICC’s Packaging University. Most people do

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Leadership

not enjoy holding others accountable any more than they relish being held accountable themselves. But we can agree it is necessary for improvement. The distasteful feeling about accountability related to punishment and reward is likely incurred due to lopsided or late deployment. If we all agree upon a policy, then the supervisor’s job is to raise awareness of noncompliance evenly and in a timely manner. As a supervisor once said to me, “This is the employee manual. If you break the rules in here, you will have fired yourself. I will be the one to tell you about it.” Recognition We all enjoy being recognized for doing things well. The art of management is to know when and whom to recognize in view of their peers and who will appreciate a quiet thank-you. Incentives tied to gainsharing can be effective. Private and timely awareness and consequences for noncompliance are also motivational. As stated above, this will be nullified if the policy is applied inequitably. Recognition of exemplary behavior or noncompliance is most effective when it occurs quickly. This allows the positive or negative motivation to be perceived as proportional and fair. So, it is more like coaching and less like discipline. Feel free to contact me with these or other culture challenges that are common to those who aspire to become highly effective manufacturers.

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Scott Ellis, Ed.D., is facilitating a new AICC Continuous Improvement Group that is accepting new members. His books, articles, and other resources referenced above are available at WorkingWell.bz. Ellis can be reached at 425-985-8508 or scott@workingwell.bz.

BOXSCORE www.AICCbox.org

Design Space

Connecting With Winners of AICC’s Student Design Competition BY M. DIANE McCORMICK

A Competition Is Born In 1985, AICC founded the International Corrugated Packaging Foundation (ICPF) to help colleges and universities intensify corrugated packaging studies in their packaging engineering programs. By the mid-1990s, as the programs took hold, someone had an idea: Why not hold a student design competition? It would be similar to AICC’s design competition, held since 1981. In those first years, a gap appeared between the goal of challenging students to produce work worthy of the real world and the actual entries submitted, says Steve Young, AICC ambassador-at-large and former president. “We mostly got

26 BOXSCORE November/December 2023

Photos courtesy of AICC.

dwin Barrera has loved graphic design since his freshman year in high school. Now, as a University of Texas at Arlington (UTA) student, he sees packaging design in his future, especially now that he is a national award winner. “Everything is going to be delivered now, so it’s an upcoming industry,” he says. “The shipping industry has been exponentially growing. I expect there is a future for us and for each individual colleague of mine who will continue on as a designer.” For nearly three decades, AICC’s Student Design Packaging Competition has created a forum for the brightest ideas emerging from the next generation of packaging designers. Offered to colleges and universities, the competition challenges student teams to problem-solve packaging dilemmas, hone their collaborative and communication skills, and build ties to the industry that could soon welcome them to their workplaces.

The winning entries from AICC’s Student Design Competition combine strategic structural design with artful innovation.

back corrugated cutouts of flowers and artsy things,” he says. “We weren’t presenting guidance on a packaging problem to be solved.” By the early 2000s, each competition presented students with such challenges as creating a six-pack holder for jars of taco sauce. As the competition evolved, the winners were required to “sell” their designs at ICPF’s live teleconference, held annually at Michigan State University. “If you’re going to be in the corrugated industry, you can’t just come up with a good idea,” Young says. “You have to get in front of the customer and convince them why this design is better for their product and why my company should produce it.”

Winners are also invited to attend AICC’s annual meeting. “Imagine being 19 or 20 years old, and you are in an industry conference with 600 other professionals,” Young says. “It’s a great

AU TO M AT I O N

Design Space

opportunity. They can collect a lot of business cards.” Under Jim Nelson, of Great Lakes Packaging Co., former chair of the AICC Packaging Design Committee, the competition flourished. At many of the schools, faculty champions have shepherded students through the annual competitions. “Their students can get really good jobs either in our industry or for end users,” Young says. “Packaging engineering is a very in-demand field.” The 2023 competition attracted 20 entries from six schools, which is typical for most years. As it continues, Young is encouraged by the enthusiasm of the students. He believes the competition sets an example of giving back to the industry that young talent will replicate in their careers. “I hope they come into the industry,” he says. “I hope they begin working for one of our members. I hope they remember our involvement and become champions of AICC within their companies.” Winning Teams For 2023, students faced the challenge of safely packaging a hammer, four lightbulbs, and a box of nails. First-place structure went to Dunwoody College of Technology and team members Xinh Beardmore, Cory Richard Williams, and Kristin Benusa. First-place graphics was awarded to UTA and team members Barrera, Kit Corney, and Cassidy Victor. To Barrera, the sight of the Student Packaging Design Competition on a class syllabus seemed like an exciting opportunity. He and his teammates devised an inner structure with a box for each item, creating more space to display the branding. That’s where Barrera deployed his strengths, designing graphics to be “interesting but not overwhelming,” he says. The competition also pushes students to hone their marketing and brand concept skills, not simply designing a workable

28 BOXSCORE November/December 2023

package but creating a target audience. The UTA team invented Tuff Hardware, catering to typical Ikea shoppers seeking form and function in their home goods. Receiving the email that his team had won first place in graphics “was amazing,” Barrera says, especially because he got to celebrate with family visiting from Mexico at the time. “They were all excited,” he says. Benusa is a 2023 graduate of Dunwoody College of Technology, a “pretty cool technical school” in Minneapolis, Minnesota. In her final semester, she formed a team with two classmates who, like her, chose to study graphic design and packaging as a second career path. As they brainstormed their target customer, they wondered, “Who in the world is going to buy all this stuff in one box?” That led to a DIYer who isn’t terribly knowledgeable about home maintenance. “They’re just clicking online and saying, ‘I need a hammer and lightbulbs, and I need it now,’ ” Benusa says. For their inner structure, the Dunwoody College team decided on a Z-fold, less materials-intensive than a tray. For sustainability, they steered away from glue and tape. They chose B flute for its buoyancy and strength. They cut out early iterations at Dunwoody before producing and testing their final designs at The Bernard Group, where Benusa and Williams had been working since graduation. Continuing its practice of supporting Dunwoody College’s packaging studies, The Bernard Group donated the team’s materials. “It’s incredible,” Benusa says. “It’s really great to see that they are so eager to go above and beyond in supporting the very thing they hired us for. That kind of support is exactly what makes me want to work for them.” Throughout the process, the team kept striving toward Dunwoody College’s tradition of excelling in the competition. “We knew we had to keep this streak

going,” Benusa says. “Winning was definitely a welcome surprise.” A Winning Experience Both first-place teams found themselves deploying the soft skills demanded in the real world, including collaboration, critical thinking, and communications. “You can’t do it alone in this industry,” Benusa says. “It’s very invaluable to be able to collaborate on projects like this competition because in our department at The Bernard Group, that’s exactly what you’re doing. You have to know how to communicate well with each other.” Her team’s win justifies the faith her employer showed in hiring her and Williams right out of college, Benusa says. It also represents a happy sendoff for their mentor and professor, the newly semiretired professor Pete Rivard, “who was the only professor who dared to push us to learn ArtiosCAD in order to be multifaceted graduates from a primarily graphic design-oriented degree.” Barrera thanks “every one of the professors who guided us through,” especially Shaban Al-Refai, who “made packaging interesting for me.” He also appreciates the industry support from AICC member Harris Packaging that sustains UTA’s packaging program. The packaging field offers a runway to great careers, the winning designers agree. “If you have a creative mind and a little bit of technical expertise, whether you’re a man or woman, you can succeed in this industry,” Benusa says. “From my experience, I don’t think there’s any limitation to what you can do. As long as you’re ambitious, you’re going to take yourself anywhere.” M. Diane McCormick is a freelance journalist based in Pennsylvania.

Headline BYLINE

Sustainability

Achieving Carbon Neutrality

n an era when environmental concerns have become paramount, consumers and clients increasingly demand transparency and tangible actions when it comes to sustainability. Meeting this demand requires more than just providing renewable and recyclable products; it necessitates a deeper understanding of the carbon footprint and a commitment to reducing it. AICC, in collaboration with the Packaging School, recognizes this pressing need and has responded with a transformative four-phase carbon neutrality program designed to empower its members. Michelle Conca, one of the participants from Abbott-Action Inc., explains the value her company found by participating: “We successfully completed the Carbon Neutrality Program, by AICC, The Independent Packaging Association, and the Packaging School. As we pause to reflect on our journey through this program, we are deeply grateful for the wealth of knowledge we have gained, which will undoubtedly enhance our sustainability endeavors. “In this program, our Abbott-Action team transformed a standard oversized

kraft shipping box, known for excessive dunnage use, into a compact, eco-friendly solution. We utilized 100% recyclable corrugated materials, optimized dimensions to align with Amazon’s SIOC (ships in our container) packaging guidelines, and bolstered protection with corrugated partitions. Notably, we offset the box’s carbon emissions through meaningful investments in carbon offsetting programs, marking a significant step toward sustainability,” she says. “This comprehensive program has not only equipped us with the tools to fluently speak the language of sustainability but has also enabled us to align our sustainability objectives with the United Nations’ global goals. Additionally, it has empowered us to develop and implement new sustainable system designs while providing us with the means to accurately measure our packaging’s carbon footprint.

This newfound insight will be instrumental in guiding our carbon offsetting strategies as we work toward achieving carbon neutrality,” she adds. “We look forward to putting these newly acquired tools to good use, especially in measuring and effectively communicating our carbon footprint and offsetting efforts to our valued customers and prospective partners. By doing so, we aim to empower them to make informed and conscious choices when it comes to packaging solutions.” Learn more and bring your team to the next level at www.AICCbox.org/carbon.

BOXSCORE www.AICCbox.org

AICC Innovation

Professional Development

The Value of the Emerging Leaders Program

AICC Emerging Leader Contribution

BY EVAN CLARY

probably have a similar story to many other AICC Emerging Leaders (ELs). When I started working for the family business, I was encouraged to attend the AICC Southeast Summit as my first event in 2017. I did not know anyone in AICC at the time, and when I walked into the networking event, I immediately realized that at the age of 22, I was much younger than many of the AICC members and suppliers. I was lucky that Dave Burgess sought me out as a newcomer and both welcomed me and introduced me to people he knew at the networking event. This was an experience I will never forget; it embodies one of the core values of AICC. Shortly after the 2017 Southeast Summit, I started to attend EL events at the national meetings. I quickly realized that the EL network was a group I wanted to participate in. Both AICC members and suppliers in the EL group have welcomed and continue to make every effort to welcome newcomers to the industry. These efforts are extremely important for us because the industry has struggled to attract new young talent. I believe the EL group provides value on multiple levels to those who attend and actively participate in its events. The network of peers one can develop via the EL group can range from customers and suppliers to consultants and friends. It acts as a forum to bounce ideas off one another and develop one’s

32 BOXSCORE November/December 2023

own professional styles and strategies. The more formal EL events such as training seminars can offer insight from experts in their fields—depending on the theme of the curriculum. (This year, it has been leadership development.) Jordan Dawson, John McQueary, Lauren Frisch, and Cassi Malone—all recent EL delegates—assisted the group in continuing to make strides in its programming and overall organizational structure. They have done, in my opinion, an excellent job. Now, at age 28, I will have a great opportunity to learn from them over the next year. It is my hope that we can continue to improve on the value the EL group provides each

year so we do not become complacent. I am extremely encouraged by the turnout at events over the past few years that we continue to head in the right direction in providing maximum value to the ELs. If you or anyone at your company has any interest in learning more about the AICC EL program, please feel free to reach out to me directly. Evan Clary is a North American sales associate at National Corrugated Machinery and JS Machine. He can be reached at 443-388-7153 or eclary@ ncm-jsmachine.com.

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Packrite: Newest Investment Offers Precision With Added Punch BY STEVE YOUNG

Company: Packrite LLC Established: 2007 Photos courtesy of Dwayne Shrader of Shrader Studios.*

Joined AICC: 2008 Phone: 336-884-0793 Website: www.packrite.net Headquarters: High Point, North Carolina CEO: Michael Drummond Michael and Mary Drummond, owners of Packrite, in front of their recently installed Bobst Breaker Flat Track nick breaker and palletizer.

ackrite LLC’s latest equipment installation continues the company’s longtime partnership with Bobst, adding a Bobst Breaker Flat Track nick breaker and palletizer to its lineup of the Swiss company’s precision converting machinery and ancillary material-handling equipment. Packrite completed the project in July, and the new investments continue Packrite’s trajectory of upward growth, according to CEO Michael Drummond. “The nick breaker and load former represent an investment of another $1.5 million,” he says. “We keep progressing and growing.” Packrite, located in High Point, North Carolina, was founded in 2007 by Michael and Mary Drummond. Michael’s pedigree is in the folding carton business, having been a part owner with his father of Preferred Packaging, also in High Point.

34 BOXSCORE November/December 2023

As Michael tells it, with the continued evolution of microflute profiles in the early 2000s—E, F, and proprietary profiles such as G and N—Preferred Packaging’s mix of business was changing. “We were doing a lot of microflute packaging for other corrugated companies across the United States,” he explains. “They didn’t know how to handle N flute and some of the real micros, plus very complex folds and foil stamping and things that they did not want to play in and we were doing.” Preferred’s principal suppliers of the microflute at the time were Alliance Packaging (now WestRock) in WinstonSalem, North Carolina, and Flutes LLC (part of the Schwarz Group) in Indianapolis. “That’s where we started— utilizing them to form flute for us,” Michael says.

As successful as Preferred Packaging was, time intervened: The company was sold to allow the elder Drummond to retire. “My father and I were in that business together,” Michael explains. “He was the majority stockholder, and he said, ‘Do you want to buy it?’ It was nothing but older equipment, and that wasn’t my philosophy. My father liked buying older equipment and building it up; I like buying new equipment and growing.” So Michael, with his native expertise in the complexities of folding carton converting, decided to start his own business. “I chose to venture out on my own and put my money where my mouth was,” he says. “So, we went out and borrowed $8 million out of the gate.” To Michael, the equipment choices in those startup years were simple: Acquire

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capacity for forming microflute corrugated, the precision die cutting necessary to convert it, and the folding and gluing capability to deliver a flawless box to the customer. “We started with one Asitrade; one die cutter and a folder gluer and went out to the marketplace and said, ‘Hey, we’re here!’ ” The year was 2008—just before the Great Recession—but as Michael remembers it, the timing was fortunate for him and Packrite. “The downturn actually ended up being really good for me because I had gotten all my loans established,” he says. “I had gotten the company up and going, and I didn’t have any competition coming into my marketplace because the chance of borrowing that kind of money again for a startup company or someone seeking an expansion was slim [to] none after that point.” Geography also played to the new company’s advantage, since Packrite’s newly installed Bobst Expertflute 64" x 67" Asitrade Singleface-Laminator was one of the few in that part of the country that sold to the trade. Thus, Packrite’s influx of business in those early years was primarily from other boxmakers, both corrugated and folding carton. “At the time, we were the only other Asitrade in the southeast United States and the only one for the trade,” Michael explains. “The closest one was in Indianapolis.” The Expertflute installation provided Packrite with the in-house capability to produce B, E, F, and N flutes. “We bought one new piece of equipment, and I was just amazed at how much business it brought us very quickly,” says Michael. Recalling the advantages he brought to his converting industry customers, he says, “What we did for them right out of the gate was to allow them to expand their own graphic footprint. We started with F, E, and B, and soon after that, we ended up adding N flute for a number of our customers in Chicago who were in the folding carton industry and had to have N flute.” Michael structured Packrite from the start to cross both segments of the

36 BOXSCORE November/December 2023

paperboard market. “When we started out, the size and print to cut registration were the critical factors,” he says. “So we started with a 57" x 41" die cutter and a 51" gluer. That was big for folding carton, small for corrugated. We glued things that boggled the minds of corrugated companies and also handled the oversized jobs the folding carton people couldn’t handle. We were right in the middle and feeding off both.” Michael’s market instincts validated his early investments. Asked why, with his years of expertise in the folding carton industry, he did not pursue that route, he explains, “There are plenty of print assets out there. There are tons of good printers, but those printers are very specific to, ‘OK, you’ve got eight colors, and it’s 40 inches or six colors and 64 inches, or seven-color 81- or 73-inch, and each one of those assets is millions and millions of dollars. And if you buy one, you’ve got to sell to that one.’ I bought the converting equipment that takes whichever press is the best fit.” Michael describes Packrite’s converting process as “print agnostic.” Since the company possesses no printing capability of its own, it can accommodate any print process commonly used in corrugated and folding carton packaging, from litho offset roll-to-roll preprint and flexo preprint to gravure and digital. With this kind of print diversity, Packrite has become synonymous with quality, precision laminating, die cutting, and gluing. Marketplace demand for this precision continues to grow for consumer brands, e-commerce packaging, and retail and point-of-purchase applications, and the company has responded in kind. Michael points to a specific example of a two-sided print display package, with preprinted litho offset roll on the inside of the box and a preprinted litho sheet laminated to it. Pointing to the accuracy of the print-to-cut registration, he says, “We can hold plus or minus one-thirty-second of an inch on the outside graphics and

one-eighth of an inch on the print to cut registration on the inside.” Packrite’s precision equipment menu has been artfully crafted from the beginning. The initial investments were the Bobst Expertflute Asitrade 67; a Bobst 145 Expertcut 57" x 41"; and a Bobst 130 Masterfold specialty folder-gluer. According to Michael, the Expertcut die cutter was the first one in the world set up as a “crossover,” giving Packrite the flexibility in converting either microflute corrugated or folding carton substrates. “Bobst was going to upgrade it after three years to all the latest and greatest technology based on our experience, but they changed so much that they replaced it with a brand-new machine; so, this is my second 145,” he says. Michael explains that his business grew so fast in the early years that he ran out of gluing capacity. “In 2011, we added a second gluer, the 170 Masterfold,” he recalls. “When I add something, I just don’t add the same thing; I expand our capabilities.” The Masterfold, Michael says, can produce what he called a “double gyro box” in a process that rotates the blank in process to create complex specialty folded items. “The Masterfold,” he says, “can create a double gyro box, which means it can take a blank, fold it in several directions, turning it 90 degrees or even 180 degrees.” Saying this technology is more commonly found in folding carton companies, he adds, “Still today we’re the only corrugated double gyro in the country.” He says the machine also has the capability to apply double-sided tape, tear tape, and reinforcing tape, and to insert literature. Michael notes that Packrite has been on a fairly consistent schedule of adding new equipment every two to three years as its business grew. True to schedule, the addition of the 170 Masterfold soon strained the capacity of the 145 Expertcut, so a second die cutter was acquired in 2013, a Bobst 2.1 Mastercut 83" x 52". “I call it my beast,” he says. “It has automatic infeed, and she just eats and eats and eats.”

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In 2015, Packrite began planning an expansion project that would add 60,000 square feet to its manufacturing footprint, bringing the total to 200,000. The object of the project was the addition, in 2016, of a second Asitrade, the Bobst Asitrade 81, 64" x 81". The new machine has a capacity of 12,000 sheets per hour and adds new C, B, E, and F flute capability. Michael points out that the Asitrade 81 has been outfitted with Copar conditioning units to allow it to pretreat liners with added heat and moisture, giving Packrite added flexibility to run both Mary Drummond and Mark Karow, Packrite sales for Southeast, examine a folding carton project heavy and lighter-weight grades. Packrite at the company’s headquarters in High Point, North Carolina. cut the ribbon on the new addition and Asitrade in an open house in February 2017, “The Bobst Breaker Flat Track does away In a virtual tour of the company, which was attended by more than 400 boxwith manual breaking, but I did not do this produced for AICC’s Southeast Summit makers, suppliers, and end-use customers. at first because we do a lot of nesting like a held in Greensboro, North Carolina, in With more microflute capacity, Packrite folding carton company, and Bobst couldn’t March 2021, Michael called Packrite LLC was again faced with a bottleneck, this handle that,” he says. “Now with [the] new “the premier trade finisher for fluted hightime in its gluing lines. Enter the Bobst design they came out with a couple years ago, graphic packaging.” The company is ISO 230 Expertfold, acquired in 2022. The we can nest cartons without any problem.” 9001-certified, and with Michael and Mary 230 Expertfold adds more capability for Michael’s real fascination with the as the majority stockholders, Packrite qualstraight-line, auto-bottom, and four-corner technology, however, is its ability to autoifies as a woman-owned business as defined and six-corner trays. matically palletize. “The thing that made by the Women’s Business Enterprise The Bobst Breaker Flat Track, the most the Bobst Breaker important for me is that National Council. Michael also credits his recent addition to Packrite’s precision con- I can run an 80-some-inch sheet, eight up, involvement in AICC with helping the verting lines, was installed this summer on break it apart, and then the machine will company’s growth, saying, “I was late to the back of the 2.1 Mastercut die cutter. reshuffle it and put it onto a skid. There’s no the game with AICC, but for me personally, The unit allows a single-pass break in both tow motor or three people on the back,” he it helped me join a corrugated CEO group directions, a conveyor offset for safe and says. “You’ve got a machine that’s running and understand the market better.” easy quality control checks and sample and not restricted by people. The blanks Michael and Mary consider Packrite removal, and a fully automatic palletizer can then go directly to the folder-gluers.” to be a “boutique” boxmaker. “We with automatic squaring, bottom-sheet, The labor-saving feature of the Bobst make what everybody else doesn’t want and pallet insertion. According to Michael, Breaker Flat Track has allowed Michael to to make,” says Michael. And with their the Bobst Breaker will substantially reassign workers otherwise occupied with latest investment, the Drummonds have increase the uptime of the 2.1 Mastercut. breaking and stacking die cuts on skids. ensured the company’s unique market “When jobs come off the back of the 2.1, This, he says, is a real advantage during a position for the years ahead. the operators have to pick it up, break it time when good workers are hard to find apart, and then take it over and stack it on and retain in manufacturing and converting Steve Young is AICC’s a skid,” he says. “Well, when you’re doing plants. “The Breaker has not only given me ambassador-at-large. a lot of short runs, that’s pretty efficient. additional capacity, [but it also] allows me to He can be reached at But when you’re getting into some of the redeploy people into other departments,” he 202-297-0583 or larger runs that we do with the Asitrade, it explains. “To me, this was labor avoidance— syoung@AICCbox.org. slows the die cutter down substantially.” not that I wanted less labor. I wanted more Michael says he didn’t add the unit labor to continue to grow. Labor’s hard to initially when he acquired the 2.1 Mastercut find, and if I could redeploy that labor into *Special thanks to Dwayne Shrader of because Bobst had not perfected the the gluing department and the die cutting Shrader Studios for providing photos and machine’s design to handle nested cartons. department, that was a huge deal for me.” machine technical data used in this article.

38 BOXSCORE November/December 2023

WELCOME, AICC 2023–2024 CHAIRMAN, MATT DAVIS

40 BOXSCORE November/December 2023

Carrying an impressive packaging pedigree, the Association’s new board leader emphasizes the ‘Independent Advantage’ By Robert Bittner

Photos by Scott Wilson.

ncoming AICC Chairman Matt Davis’ family has been succeeding in the boxmaking business for three generations. Yet, perhaps surprisingly, the grandfather, uncle, brothers, and father who built their careers in the industry never actually worked for the same company. Instead, each was encouraged to find their own path and make the most of whatever opportunities caught their imaginations. That approach has served Davis particularly well—professionally and personally. Davis believes that same independent, entrepreneurial mindset is what sets AICC members apart, equipping them well for whatever they will face in 2024 and the years beyond. He is honored and excited to lead the membership on behalf of the industry and the future of AICC. BoxScore sat down with Davis to learn more about his background, his journey through the industry, and his perspective on AICC and its future.

Hear more of Davis’ story on Breaking Down Boxes, wherever you listen to podcasts.

BoxScore: Tell us a little bit about your family background and where you grew up. Matt Davis: My parents met in first grade, but we always joke that they didn’t start dating till second grade. My parents, Jim and Jane, actually started dating after college. My mom came out to Denver, (Colorado,) from Iowa for school, and my dad eventually followed her out after college, and they got married. They were both schoolteachers in Denver, and then they started a family. I have an older brother, Pete, who is the general manager at DeLine Box, and a younger brother, Tom, who is a partner at Brown Brothers Harriman. Even though my brothers and I grew up in Denver, we have always identified as having Midwestern, Iowa roots.

BOXSCORE www.AICCbox.org

From left: Jim Davis, Matt Davis, Mike D’Angelo, and Andrew Bell.

BoxScore: What did you plan on doing for a career after high school? Davis: Back then, I’d probably have said that I wanted to be a ski instructor! But I actually ended up getting a business marketing degree at Creighton University in Omaha, (Nebraska). After graduation, I went to Quito, Ecuador, where I volunteered teaching school for a year in a program sponsored by the Center for Working Families. We were teaching general subjects to innercity street kids—kids who worked on the streets, shining shoes. The thought was that education is the best weapon against poverty; we didn’t want to see these shoeshine kids grow up to be shoeshine men, if you will. The school provided a basic elementary education. Then, when the children were of high school age, Ecuadorian professionals taught things like how to be an auto mechanic, a carpenter, a baker, a plumber, and so on. As an American volunteer, in addition to teaching, our main role was giving these kids love and attention that they may not have been getting at home. The

42 BOXSCORE November/December 2023

“Our independence gives us the freedom to serve customers in ways others can’t, finding ways to say yes rather than no, empowering our employees and coworkers with the tools they need, and building on our natural sense of urgency and flexibility.” model works; many of these families have broken the cycle of poverty, and the Center for Working Families is still flourishing today. BoxScore: What was your first exposure to the industry? Davis: I’m third generation in the box business, so I grew up in the industry. My mother’s father, T.J. McLaughlin, was in the box business in the late 1930s through the 1960s and ended up being a part of three corrugated

box plants. He and John Ewers started Waterloo Corrugated Box Co. in 1938. In 1940, they purchased a corrugator and established a separate company, Waterloo Container Corp. In 1941, they partnered with John Worley and started Fort Dodge Container Corp., 100 miles west of Waterloo. Later, they partnered with Harold White to start White Container, in Monticello, Iowa. My grandfather was truly innovative. Although the birth of the sheet feeder in the corrugated industry is not generally

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recognized until the mid-1960s, the fact is that Waterloo Container Corp. was serving three sheet-plant operations in the early 1940s. That demonstrates how forward-thinking he was. The legacy that he created is part of what still motivates me today. BoxScore: How did your father get involved in the business? Davis: Even though my parents were teachers, my dad wasn’t sure that was the best fit for him. He talked to his fatherin-law, T.J. McLaughlin, about the box business, and my grandfather encouraged him to get in. It’s interesting, though, that my dad really never worked for his father-inlaw, apart from sweeping the shop floor one summer when he was in high school. The story goes that there was a wellknown paper company called Hoerner Waldorf that had a plant in Denver, and my grandfather got my dad a “warm introduction” there. My dad started there and worked his way up to become the sales manager. Eventually, he took over running the Denver plant. After Hoerner Waldorf got sold, my dad had the opportunity to buy into another family-owned company in Denver, the DeLine Box Co. The Davis family and DeLine family have always been close, and DeLine Box is still thriving today under the leadership of

44 BOXSCORE November/December 2023

Dave DeLine, a fourth-generation owner. I cannot say enough good things about the DeLine family and the relationship we have with their business. BoxScore: It sounds like you could have been a ski instructor or a teacher. What led you to join your father in the box business? Davis: My brothers and I were always encouraged to do whatever we wanted to from a work standpoint. In college, I realized how much I admired my dad and what he did. My grandfather had success in the industry, and my mom’s brother, Jack McLaughlin, was in the box business

Matt Davis on the floor at Packaging Express.

in Cincinnati. My uncle, Ray Ryden, was high up in Boise Cascade and also had a lot of success. So, I knew it was a good industry. And once I realized that ski instructors didn’t make a lot of money, I said, “You know, that box business looks pretty good!” Before I went to Ecuador, we all sat around the breakfast table as a family, and my dad announced that he wanted to start a sheet plant in Colorado Springs to help service the southern Colorado market. He asked me and my brothers who was interested. It ended up being the best fit for me at that time. I told him that after my year of teaching, I was all in. In 1998, my father and I started Packaging Express. After I’d been in the business maybe seven or eight years, my dad saw that I was serious and committed for the long term. So with the help of an accountant and a lawyer, they drew up papers for me to buy into the business. I bought 10% a year for five years, which ended up making us equal partners. When my mother passed away unexpectedly in 2009, my dad became less interested in the business. Shortly thereafter, I bought the rest of

the business, and my dad has been able to focus on other things. He’s heavily involved in the Catholic Church, where he volunteers and serves on a number of different boards. He’s no longer involved in the company—other than moral support, which means a lot. Twenty-five years later, I’m still here. Other than my year teaching, it’s the only job I’ve ever had. BoxScore: What is the business focus at Packaging Express? Davis: Our focus is corrugated—boxes, displays, retail packaging, and so on. Early on, we were established as a complementary company to the DeLine Box Co. That’s still largely true today. We are separate companies but complementary in that we do a lot of business back and forth and try not to duplicate anything between the two companies. BoxScore: Tell us a bit about your own family. Davis: I met my wife, Maggie, during my year in Ecuador. Maggie is from Chicago, and she was teaching in the same program. In Ecuador, we were just friends. After the program ended, we went back to our hometowns. I came back to Colorado and started Packaging Express with my father; she was teaching school, first in Chicago and then on the Upper West Side in New York City. We reconnected at a fundraiser for the school we had taught at in Quito and then dated long-distance between Colorado Springs and New York City. Eventually, I convinced her to come out here, and we got married. Today, we have two young girls, Catherine (10 years old) and Mary Elizabeth (7 years old). BoxScore: What led to your involvement in AICC? Davis: Growing up, we’d been traveling as a family to the AICC meetings for

Matt Davis and Mike D’Angelo inspect the die storage system at Packaging Express.

as long as I can remember. Some of our best vacations as children were tied to an AICC event. Even beyond that, though, our family has always had close connections with the Association. My father’s partner at DeLine Box, Jim DeLine, was AICC president, which is what they used to call the chairman, in 1988–1989. And then my father, Jim, was president in 1999–2000. I’ve personally been active in the organization for a good portion of my career. I was a regional director, then I was in charge of convention content for six years. I’ve been on the board for 14 years. We continue to see the value of AICC at Packaging Express. All of us are somewhat limited by our four walls. If we didn’t get out and see what else is

happening, connect with our colleagues in the industry, we wouldn’t be the company we are today. That’s possible because of AICC. BoxScore: What are some of the key challenges facing the industry at this point that AICC may be able to speak to? Davis: The biggest challenges that a lot of businesses are facing right now involve people—hiring, training, retention, and motivation. As an industry, we make great products, and we should be proud of the work we do. But we can also be proud of the fact that we provide good jobs that people need. Our big challenge as an industry is getting the right people in the right positions and then inspiring them to deliver their best. Workforce education naturally follows. It’s hard to invest in education if you

BOXSCORE www.AICCbox.org

Packaging Express graciously hosted the AICC Emerging Leaders field trip in June.

“My biggest hope regarding the future of the industry is that as we reshape, rethink, and reinvent what we are doing in our efforts to continually improve and grow, we never lose the entrepreneurial spirit that brought us to where we are now.” don’t think your new hires are going to stick around. That’s why it’s important to create an atmosphere that encourages them to stay and trains them for growth. The more they know about how you and your business are successful, the better off you’re going to be. In other words, we need to gain, train, retain, and reward. We also need to keep an eye on the economy. A lot of box plants had a lot of success during COVID-19. Although business is not as robust at this point, it is still very good. Of course, we can’t control the economy. But we can work to create our own luck during those times when business may be slowing down. We need to be willing to think creatively and go after the business we want, every day.

46 BOXSCORE November/December 2023

BoxScore: What are you most excited about when it comes to AICC’s future? Davis: There are real advantages to being independent in this industry, and I’m excited about the ways we can accentuate those advantages. The theme for my year is what I call the “Independent Advantage.” Our independence gives us the freedom to serve customers in ways others can’t, finding ways to say yes rather than no, empowering our employees and coworkers with the tools they need, and building on our natural sense of urgency and flexibility. One of the biggest benefits of being involved with AICC is that you get to learn from so many talented and successful people in your own industry. People are willing to share their ideas, open their plants and show you how they do things, and help you be successful. I’m

excited about participating in that to a greater degree and promoting that within the organization. BoxScore: What would be your biggest hope regarding the future of the industry? Davis: My biggest hope regarding the future of the industry is that as we reshape, rethink, and reinvent what we are doing in our efforts to continually improve and grow, we never lose the entrepreneurial spirit that brought us to where we are now. I hope we never forget the importance of the human relationships that are so much a part of the AICC family and the businesses we run. BoxScore: Looking back, do you ever have days when you wish you’ d become a ski instructor? Davis: [Laughter] I love what I do. I just feel incredibly blessed that I’ve been able to work in this industry and build this business with my father. Not everyone gets that opportunity. I’m glad to be right where I am. Bittner is a Michiganbased freelance journalist and a frequent BoxScore contributor.

MAINTAINING YOUR MAINTENANCE EDGE Understanding essential differences among preventive, predictive, and prescriptive approaches for boxmakers BY ED GARIBIAN

48 BOXSCORE November/December 2023

breakdowns. Traditionally, maintenance strategies were either preventive or reactive, by which equipment is maintained on a set schedule or repaired when it fails. However, these strategies are radically changing due to technological advancements in data analytics, artificial intelligence, and machine learning. Preventive, predictive, and prescriptive approaches are all valid ways to streamline plant equipment management and are a major step up from the “don’t fix it until it breaks” approach. This article will explore the differences among these three ways to maintain plant equipment efficiencies and look specifically at the opportunities offered by computerized maintenance management systems (CMMS) software. Preventive Maintenance— Covering the Bases The main goal behind preventive maintenance (PM) is for the equipment to perform from one planned service to the next without any failures. Regular maintenance, when properly matched with a company’s unique maintenance needs in terms of equipment type, criticality, and scale, can help a company avoid expensive repairs, costly replacements, and operational downtime. For all of the intricacies of corrugated board and box manufacturing, maintenance planning can help ensure the required parts are in-house and appropriate staff time is allocated.

There are seven main steps to consider when implementing a new PM program or improving a current one. First, carefully consider the company’s maintenance needs, develop a comprehensive outline that defines all equipment and maintenance tasks, and set maintenance schedules. From setting program benchmarks, goals, and key performance indicators (KPIs) to leveraging the right supportive technology and training, each foundational step of preventive maintenance ensures the overall program’s success. A company must first determine the project’s scope and requirements. These considerations are based on the number of machines or equipment that need to be maintained as well as their age, usage, operating environment, risk to operations, and manufacturer’s recommendations. A program outline can then be created that details the maintenance procedures, maintenance schedules, and required staff. For example, boxmakers using a PM strategy often make use of manufacturer data on a part’s repairs and breakdowns to schedule maintenance before failure occurs. For instance, if a drying machine blower typically fails in four years, the maintenance team may opt to replace it in three years and 11 months, eliminating the potential for unscheduled downtime. Supported by CMMS software, the maintenance program can be tracked and measured over time to determine its

Source: LLumin

orrugated paper and board packaging is steadily growing due to the global expansion of the e-commerce market, which heavily relies on corrugated products for shipping and the demand for sustainable packaging by replacing plastic with paper-based products. An increasing number of businesses are choosing to invest in corrugated packaging as their main packaging material because it can be created easily, is recyclable, and lowers overall shipment costs. As this presents opportunities, corrugated board manufacturers must keep pace and have been looking to software and technology to help them optimize their production processes and maintenance operations. To accommodate the growing adoption of corrugated board by many industries, manufacturers are looking to scale their production in smarter and more efficient ways—while maintaining a competitive edge. According to SkyQuest Global Corrugated Board Market Insights, the global corrugated board market is projected to grow from $134.7 billion in 2022 to $238.1 billion by 2030. Both corrugated board and box manufacturers are investing in digital transformation driven by Internet of Things (IoT) technology advancements. They have become acutely aware that by replacing traditional (often paper-based) methods with these advanced technologies, downtime is lessened, operations are more streamlined, and lost productivity is mitigated. Operational disruptions can cause maintenance staff to divert time from scheduled projects and can have significant negative business implications, including lost revenue, unplanned expenses, missed deadlines, and damage to a company’s reputation. Because corrugated industry companies rely on a variety of specialized equipment and machinery to operate at peak efficiency and performance levels, they require up-to-date maintenance strategies capable of reducing rates of unexpected

BOXSCORE www.AICCbox.org

success and identify areas for continuous improvement. The CMMS solution should be 100% HTML5-compliant, mobile-friendly, and easily adaptable for user acceptance, and it should provide a complete overview of the company’s assets, including maintenance history, warranty details, and current equipment status. The limitation of this preventive approach is that it relies on the law of averages. Assuming all assets of the same type are created equal—and that’s not usually the case—you may be replacing a part that might actually have a lot of life left in it. For example, if specific parts such as roller bearings are at the end of their normal life cycle, replacement is recommended. Alternatively, if a specific part happens to be toward the short-lived end of the normal distribution, it could fail if you waited to replace it based on its average life span. Predictive Maintenance— A Better Approach Also strongly supported by CMMS software, predictive maintenance (PdM) is a proactive maintenance approach known for its ability to optimize maintenance and asset management operations, reduce downtime, improve machine performance, reduce costs, and enable data-driven decision-making. It determines the condition of in-service equipment in order to estimate when maintenance should be performed. This approach promises cost-savings over routine maintenance or PM because tasks are performed only when needed. Before reaping the benefits, you must successfully integrate PdM into your facility’s process structure, which will require an upfront investment in equipment, software, personnel training, and stakeholder buy-in. Nevertheless, PdM will deliver a well-planned implementation project combined with ongoing training, monitoring, and management. It’s best to find a CMMS software that integrates with control systems

50 BOXSCORE November/December 2023

“To maximize the benefits of a PdM program, it’s crucial to take proactive steps such as setting alarms and alert thresholds, regularly reviewing collected data, and training staff to interpret that data.” and IoT-enabled assets to monitor each machine’s specific state in real time. Such information can be used to avert problems— for example, based on past experiences, if a particular brand of motor is likely to fail within a day and then it is noticed that it has started running hotter than normal. This is knowledge worth being armed with because staff could immediately repair or replace the item anytime that brand of motor’s temperature spikes. To maximize the benefits of a PdM program, it’s crucial to take proactive steps such as setting alarms and alert thresholds, regularly reviewing collected

data, and training staff to interpret that data. By doing so, you can identify potential problems early and take corrective action before equipment fails. A checklist (see example below) can help ensure all necessary steps are taken to establish and maintain a successful PdM program, from sensor installation to data collection and analysis to maintenance planning and scheduling. Along with the hardware and software checklists, a fully trained maintenance team will be required to support the PdM strategy and to ensure you the best return on investment on the maintenance strategy.

PREDICTIVE MAINTENANCE EQUIPMENT CHECKLIST Hardware Verify that machine-level sensors are directly integrated with the CMMS. Verify that sensors are properly installed and securely attached. Check that sensor readings are accurate and up to date. Check that sensors are clean and free of debris. Verify that data communication hardware (e.g., gateways, controllers, etc.) is connected and powered on. Check that data communication hardware is operating properly. Software Verify that the CMMS is properly configured to receive data from sensors. Check that the CMMS software is operating properly. Verify that data is being transmitted to the CMMS on schedule. Check that the CMMS is correctly processing and analyzing the data. Verify that the CMMS is creating work orders based on predictive maintenance results. Check that the CMMS is accurately tracking maintenance history and costs. Verify that the CMMS is properly integrated with other software systems (e.g., ERP, SCADA, etc.).

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It will also be necessary to monitor KPIs such as mean time between failure, mean time to repair, and overall equipment effectiveness. Tracking performance KPIs is essential to enable the maintenance team to improve the efficacy of your program. Prescriptive Maintenance— A More Comprehensive Approach Prescriptive maintenance (RxM) is an advanced maintenance strategy that uses machine-level sensors and other monitoring strategies to determine when complex equipment and machinery require maintenance. It is a type of condition-based maintenance supported by CMMS software that uses real-time data from equipment, advanced analytics, and machine-learning algorithms to predict when maintenance is required and recommend the most appropriate and effective maintenance actions. Its data analytics processes are used to calculate the equipment’s remaining useful life, enabling operators to perform maintenance before faults occur, similar to the philosophy of PM. However, unlike PM, this approach doesn’t rely on a predetermined schedule or cycle. Instead, it aims to identify the optimal moment to perform maintenance, whether by postponing or anticipating it, thus minimizing downtime. RxM is generally best suited for enterprise companies that have to maintain equipment with complex failure

52 BOXSCORE November/December 2023

modes with high levels of criticality and where high costs or safety implications are associated with equipment failure. It’s also a recommended choice for difficult-to-access equipment on which maintenance is costly and difficult to perform. Both PdM and RxM strategies are effective and advanced, and they rely on sophisticated CMMS solutions. While both strategies use similar technologies, it’s helpful to understand the differences between the two. The comparison below illustrates differences, goals, the data these approaches use, and the maintenance actions recommended. Understanding these differences can help organizations determine which approach is best suited for equipment and maintenance needs.

Embrace the Advances For the corrugated board and box manufacturing industries, which rely on a variety of specialized equipment to maintain process improvement, successful maintenance strategies are key to operating at optimum performance levels that will ensure a competitive advantage. Whether choosing either a preventive, predictive, or prescriptive approach, the successful manufacturer will embrace the advances made in technology that are embedded in CMMS software solutions to support their maintenance strategies. Companies should do everything possible to ensure their assets are dependable, perform at peak levels, and operate with the least maintenance and downtime. Ed Garibian is CEO of LLumin. He can be reached at 413-233-5404 or ed@llumin.com.

PRODUCT

PREDICTIVE MAINTENANCE (PdM)

PRESCRIPTIVE MAINTENANCE (RxM)

Definition

PdM uses data and analytics to predict when maintenance is required.

RxM uses data, analytics, and machine learning to predict when maintenance is required and prescribes the most effective maintenance actions.

Goal

Prevent unexpected downtime and extend the life of the equipment.

Optimize equipment performance and reduce costs by prescribing the most effective maintenance actions.

Data used

Historical data, real-time data from sensors, and machine-learning algorithms.

Same as PdM but also can include external data sources such as weather and traffic.

Maintenance actions

The most effective maintenance tasks Reactive or preventive maintenance are prescribed based on the predicted failure and other company-specific based on predicted failure. factors such as cost and availability.

Advantages

Helps avoid unexpected downtime, reduces maintenance costs, and extends equipment life.

Same as PdM but also provides more effective maintenance prescriptions.

Can be expensive to implement and Same as PdM but requires more Disadvantages may require a significant amount of advanced machine-learning algorithms and analytics expertise. data and analytics expertise.

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AICC 2023 ANNUAL REPORT

Your Association ends fiscal year on solid footing after productive year

54 BOXSCORE November/December 2023

National Meetings and Events The first AICC event of each fiscal year is the Midwest Region Golf Outing, always held in July at the Batavia Country Club in Batavia, New York, and hosted by Clay and Casey Shaw of Batavia Container. This always well-attended event serves as a scholarship fundraiser for a worthy aspiring student of a team member at an AICC member event in the region. AICC’s Northeast Summit in Atlantic City, New Jersey, in August was next on deck, a combination of casino glitz, educational speakers, and a golf outing. AICC’s fall meeting was held in September 2022 in San Antonio in conjunction with the Technical Association

of the Pulp & Paper Industry (TAPPI). In September, there was Corrugated Week. By long-standing contract, fall events in even-numbered years are either a SuperCorrExpo or a Corrugated Week. The bustle of exhibitors at the San Antonio convention center was a reminder that our industry enjoys getting together in a big way and loves to learn about technology. As October rolled around, the AICC West Coast Golf Outing was held at Strawberry Hills in Irvine, California. At the end of February and into March, the fun stayed out west with the West Coast Ski Meeting at Snowbird, Utah. The events calendar was capped in April with the Spring Meeting at Trump Doral in Miami, where more than 800 attendees and the Independents Cup Golf

Tournament raised another $30,000 for the Foundation for Packaging Education. AICC is thankful for all members who participate at in-person events and for the many Associate Member companies whose sponsorship makes these events possible. Education and Training As FY 2023 began, AICC’s long-standing partnership with the Packaging School as the learning management system host for AICC’s Packaging School was ending. AICC launched a new platform, AICC NOW (NOW.AICCbox.org), which hosts not only AICC’s Packaging University but the entire archive of AICC’s education-related materials. The new website is much easier to search for and find content as compared with the

Photos by Jason Jackman.

s AICC’s fiscal year came to a close, converting members and supplier members were experiencing slowdowns in their businesses since the latter part of the fall of 2022. AICC’s “business” was going in the opposite direction, an indicator that members rely on each other more than ever when the industry is seeing adversity. AICC is the network members utilize to share best practices, to seek education, and to network with one another. AICC closed the fiscal year 2023 (FY 2023) on June 30 in a strong financial position, with results back to pre-pandemic levels and better. Before we get to the numbers, which will close this article, let’s show you how AICC got there.

The Spring Meeting at Trump National Doral Resort in Miami drew nearly 800 attendees.

BOXSCORE www.AICCbox.org

previously linked locations at the AICC website. Hits and visit lengths at NOW. AICCbox.org have been growing steadily throughout the fiscal year. Packaging University has seen over 18,000 learners complete courses since spring 2017. AICC continues to create approximately 10 new online courses annually and translate existing and new courses into Spanish on a regular basis. The backbone of AICC’s online education programming is the courses provided by AICC Education Investors. These companies have committed financial and intellectual capital to create courses rostered on the site: Fosber, BCM, SUN Automation, JB Machinery, Pamarco, Absolute, Printron, EFI, Krueger, Bobst, HP, and Stafford Corrugated Products. As part of the new courses created during the past year, AICC’s Machine Primer deserves special mention. This

56 BOXSCORE November/December 2023

virtual box plant has an array of equipment on the floor. A visitor to this plant through AICC’s Packaging University can put their cursor on any machine or process shown and find an in-depth review of what the machine does with extremely detailed information. Members have cited it as a tremendous onboarding tool (along with Corrugated 101, 102, and 103, and Safety Basics), and it is also helpful for team members interested in moving over to other tasks and positions within their company. AICC’s Breaking Down Boxes podcast remains an anticipated monthly education tool. Hosted by Gene Marino of Akers Packaging and Joe Morrelli of Huston Patterson/Lewisburg Printing Co., boxmakers and suppliers tell their stories about their successes, stumbles, and lessons learned that got them to where they are today.

AICC continues to host education opportunities for other associations through our relationship with the National Wooden Pallet & Container Association (NWPCA) and Asociación de corrugadores del Caribe, Centro y Sur América (ACCCSA). More discussions are underway with other associations. Finally, AICC is in discussions with the Ben Barber Innovation Academy, a STEM school in the Fort Worth, Texas, area, to include AICC’s education programming in its curriculum. This project is a passion of AICC Past Chairwoman Jana Harris and is being facilitated with the International Corrugated Packaging Foundation (ICPF). ICPF is also partnering with AICC to bring AICC education to ICPF’s partner schools and to find more STEM and trade school opportunities. The fight for talent on the plant floor is going to be won here.

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Foundation for Packaging Education Launched in fall 2020, the Foundation for Packaging Education is a 501(c)(3) education foundation whose mission is to ensure funds to sustain AICC’s and other entities’ education programming for current workers in the paper-based packaging industries. The number of donors has risen to 34 pledging companies and individuals, 10 one-time donor companies, and multiple single donations from individuals. The foundation has received pledges valued at $1.72 million of which $587,000 have been received. Total on-hand funds in investments and the bank are $1.53 million, which includes a one-time donation from AICC of $1 million. The goal is to reach $3 million in on-hand funds to begin funding programming. Please visit www.packaginged.org to make a pledge. You will be investing in your company’s future. The foundation also administers two scholarships, AICC’s long-standing Dick Troll Memorial Scholarship and the new Steve Narva Memorial Scholarship, which is funded by several pledge companies in the foundation. In November 2022, the foundation launched its first dedicated fundraiser at Kiawah Island, South Carolina. Golfers played on two courses, including the famed Ocean Course, while nongolfers enjoyed the sights, sounds, and tastes of nearby Charleston. The next foundation fundraiser will be held in July 2024 in the Napa Valley region of California. Watch for details. The Foundation for Packaging Education thanks and values all companies that have gotten behind independent education through their generous pledges. Publications and Advertising Since all AICC publications are available only in digital format, most of AICC’s publications and media past and present are now found at the previously mentioned AICC NOW site (NOW.AICCbox.org). Included are white

58 BOXSCORE November/December 2023

Balance Sheet Year Ending June 30, 2023

Total Current Assets Total Fixed Assets Total Other Assets TOTAL ASSETS Liabilities Total Other Current Liabilities Total Current Liabilities Total Liabilities Equity 32000–Unrestricted Net Assets 32001–Temporarily Restricted Net Assets Net Income Total Equity TOTAL LIABILITIES & EQUITY

JUNE 30, 2023 JUNE 30, 2022 4,851,172 4,470,467 416,669 425,950 166,926 162,178 5,434,766 5,058,594

$ CHANGE % CHANGE 380,705 9% –9,281 –2% 4,748 3% 376,172 7%

1,646,772 1,694,265 1,694,265

1,511,938 1,645,654 1,645,654

134,834 48,611 48,611

9% 3% 3%

3,412,940 0

3,299,564 0

113,376 0

3% 0%

327,561 3,740,501 5,434,766

113,376 3,412,940 5,058,594

214,185 327,561 376,172

189% 10% 7%

papers, Ask the Expert content, past and current issues of BoxScore, all webinars, and more. AICC NOW will also offer more online advertising opportunities for members wishing to showcase themselves in front of AICC member companies and all of their employees. BoxScore remains the flagship publication of AICC. Produced six times a year, the content is always relevant and generated primarily by members. The January/ February Big Associate Issue is dedicated to AICC’s Associate Member companies in good standing. Each interested company receives one page of editorial copy for them to write about themselves. The issue also serves as a de facto buyers guide because AICC members prefer to purchase from fellow members. For those members who would like to advertise in AICC publications, online, or sponsor AICC events, opportunities abound. You can always stay abreast of these opportunities by looking at the media guide at www.AICCbox.org. Governance, Cooperation, and Advocacy AICC continues to follow its destination model driven activity where the board of directors sets high level, strategic

goals for the year. AICC’s committees—Convention Content, Membership, Education, Government Affairs, Paperboard Regulations & Sheet Supply, Nominating, and Associate Member— translate the strategic goals into effective deliverables and programming. Each committee is chaired by a member of the AICC board of directors, ensuring connectivity and accountability between the committee and the board. AICC staff execute to achieve the deliverables and programming as identified by the committees. It has proven to be a sound model that provides visibility into all aspects of AICC operations. It puts members in the driver’s seat to ensure AICC provides what its members need and evolves as those needs change. Committee membership is open to any AICC member. Please consider participating and shaping the future of your Association. AICC continues its close ties with fellow industry associations such as the Fibre Box Association, TAPPI with which AICC shares co-ownership in SuperCorrExpo and Corrugated Week, and the American Forest & Paper Association (AF&PA). Internationally, AICC is a member of the International Corrugated Case Association

(ICCA) with representation on the ICCA Board of Directors in the person of Kim Nelson of Royal Containers, AICC’s overseas director. AICC maintains relationships with the Sheet Plant Association in the United Kingdom, the European Federation of Corrugated Board Manufacturers, and with the previously mentioned South and Central American entity ACCCSA and the NWPCA. AICC management and staff endeavor to represent member interests at various events throughout the year. AICC also maintains close ties with its constituent organizations, AICC México and AICC Canada. Members in both countries have access to all AICCgenerated programming and also receive unique member benefits, events, and information from closer to home. Both organizations are represented on the AICC board of directors. AICC México is experiencing explosive membership growth, reflective of the revitalization of the Mexican manufacturing economy, likely the result of near-shoring efforts by U.S.-based companies. AICC staff and management participate in many member events both south and north of the border. With an administration in Washington, D.C., that is active on regulatory fronts, with a Congress made up of opposing narrow majorities in the House and Senate, and with several state legislatures actively considering extended producer responsibility (EPR), AICC has had a busy year as it relates to government affairs. AICC partners with several entities that

are active on Capitol Hill and in state legislatures around the country, namely the Small Business Legislative Council and Council of Manufacturing Associations, a division of the National Association of Manufacturers. Issues relating to paper and paper-based packaging are borne by AF&PA, which is also active in Washington, D.C., and in state capitals around the country. AICC is involved in campaigns on behalf of members at the federal level regarding changes in overtime eligibility rules, the introduction of the Corporate Transparency Act, the expansion of 529 plans to cover trade school participation, and the continuity of the 199A deduction for S corporations. At the state level, it is all about EPRrelated legislation, which is driven by the bulk of plastic packaging going to landfills. Unfortunately, legislators tend to think broadly and write laws that roll up all packaging into EPR. Paper-based packaging recycles and reuses at a high rate, and as such, it should be exempt from measures meant to affect lowrecycling-rate packaging media. Membership AICC’s member retention rate continues to be among the highest in the manufacturers association industry at 94%. We believe this rate reflects the relevance of AICC programming for members and the strengths of the Association’s collegial networking atmosphere. AICC’s tagline, “When you invest and

Ordinary Income/Expense Revenue Year Ending June 30, 2023

Total Revenue Total Expense Net Ordinary Income Total Other Income Total Other Expense Net Other Income NET INCOME

ACTUAL 4,167,302 4,001,380 165,923 186,814 25,176 161,638 327,561

ANNUAL BUDGET 3,692,937 3,656,732 36,205 0 47,500 (47,500) (11,295)

engage, AICC delivers success,” proves time and again to be accurate for the member experience. At the close of FY 2023, AICC had 502 members in the U.S., Canada, and Mexico with general (boxmaker) members totaling 292 and Associate (supplier) members totaling 210. Total dues revenue was over $2 million for the three organizations in North America. Financial Results AICC finished the fiscal year in a strong position, beginning with the balance sheet. From an operating income and net income point of view, total revenue was better than budgeted by nearly $500,000 due to strong dues and meeting receipts. On the expense side, most activities ran according to plan. Administrative costs were elevated as AICC’s information technology made a cloud migration to enhance the security of our platform and our members’ information. Meeting expenses were higher due to the turnout at the AICC Spring Meeting in Florida, but this was more than covered by meeting revenue. Operating income was better than budgeted by $130,000. Below the line income and expenses netted to over $210,000, resulting in a total net income of $340,000. The above financial information is not audited. The spreadsheets are derived from AICC’s monthly financial statements. At the time of this writing, AICC’s audit, an annual process we conduct with Mullins, PC, of Bethesda, Maryland, has not been completed. Once audited numbers are received, they are presented to the AICC Budget Committee and board of directors for review and approval. Members that wish to receive AICC’s audited financial statements should contact Mike D’Angelo at mdangelo@ AICCbox.org. Thank you for your membership, your participation, and your support.

BOXSCORE www.AICCbox.org

The Associate Advantage

Is It Just a Box? BY JOHN BURGESS

JOHN BURGESS PAMARCO VICE CHAIRMAN JOHN.BURGESS@PAMARCO.COM

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

JEFF DIETZ KOLBUS AMERICA INC. SECRETARY JEFFREY.DIETZ@KOLBUS.COM

MIKE BUTLER DOMTAR PACKAGING DIRECTOR MIKE.BUTLER@DOMTAR.COM

GREG JONES SUN AUTOMATION GROUP IMMEDIATE PAST CHAIRMAN GREG.JONES@SUNAUTOMATION.COM

60 BOXSCORE November/December 2023

he company I lead is more than just a supplier to the corrugated box industry. By the very nature of our product, we cross over into many different areas of flexo and gravure printing, but when I am in the hotel bar and restaurant on my own or playing a foursome at my golf club, I am always asked, “What do you do?” And I usually respond that I manage a company that is a supplier to the corrugated box industry. Why do I respond like this? I have three main reasons: • It’s a great industry to be involved in. • It has some of the best people you will ever run across in life, not just business. • My company’s reputation and brand identity are deeply rooted in this industry.

But is it just a box? I cringe when I hear someone use the term “cardboard box.” There must be a better way to explain the product to receive more attention from the consumer. It’s the ultimate way to inexpensively ship and protect a vast array of products. From electronics to foodstuffs, corrugated packaging is the go-to for protection and shipping. It’s lightweight, it’s relatively inexpensive, and it’s certainly fit for the purpose. With all of the boxes that end up on my doorstep and on those of millions of other consumers around the globe, how many do you see crushed or damaged? The answer is very few, as it’s a very resilient medium that even the overstuffed parcel service vehicles don’t seem to be able to damage.

With modern high-speed flexo and digital print, a drab sheet can be turned into a work of art that can display a facsimile of the manufacturer’s product and catch the consumer’s eye in the milliseconds required. The trend to inside-and-outside printing is now taking the art to a new level; with bright, eye-catching colors and graphics on the inside of the box, this phenomenon has created the catchphrase “the unboxing experience,” which has taken hold with many YouTubers and TikTokkers. Corrugated packaging is also incredibly recyclable. An average corrugated box can be recycled up to seven times before the fibers are too short to make paper with. Reducing the size of landfills and preventing oceans from becoming full of waste are perhaps the most important results of using the medium. David Attenborough’s Planet Earth did more for the corrugated industry than most understand. The viewer sees oceans full of plastic waste, but do they understand? Given the above, is there a better way to explain the industry we are very proudly a part of? It’s difficult to call it a highly engineered, protective work of art that is totally recyclable, as most people won’t have a clue what you are talking about. Maybe after all these years, all the engineering of sophisticated machinery, and the billions invested to make it lighter and stronger, “box” is the best way to describe it! John Burgess is president of Pamarco’s flexo division and vice chairman of AICC’s Associate board.

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Strength in Numbers

Getting Back to Basics BY MITCH KLINGHER

et’s discuss some of the key financial and operational relationships that are universal to almost all converters, how to measure them in your operation, and what modifications you may wish to make to your accounting, plant performance measurement, and financial reporting systems to properly highlight and analyze them.

Material Margin The key relationship in the financial statement of a converter is material margin, yet most financial statements that I see do not focus on this relationship. Instead, I often see gross profit or contribution margin as the ultimate measure of margin before operating expenses. Although these measurements can certainly be important, it is usually best to look at the overall relationship

62 BOXSCORE November/December 2023

between materials and sales, since this will be anywhere from 40% to 70% of the expenses of the company. When labor, overhead, freight, and other costs are included in the calculation of margin, material margin may be partially obscured by efficiencies or inefficiencies in these other areas. In evaluating this key relationship, it is also important to make sure of the following: 1. Your reported sales and reported materials at the top of the statement relate to manufacturing of converted goods. To whatever extent you mix in the sale of purchased products, packaging supplies, tooling, waste, labor-only sales, and other miscellaneous items, the relationship between paper or board purchased to converted sales becomes distorted.

2. Brokered sales of converted and nonconverted products should be shown separately and matched up with their material costs. 3. Purchased products that are ultimately billed as part of a manufactured sale should be shown as part of manufactured materials, since that is where the billing will be done. If you put a purchased product in the same general ledger account, or the same financial statement grouping that is matched up against purely brokered sales, the resulting margin will be skewed as will the margin on the manufactured sales. 4.The sale of tooling should be matched up with the purchase of tooling, and replacement tooling that is not being billed should be shown separately so

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the markup on tooling can be readily seen in the statement. 5. When labor is the material income producing factor such as in assembly and pack out areas, that labor should be broken out from regular plant labor and matched up against that revenue. 6.Waste measurements should also be made and noted on the financial statements to help evaluate the efficiency of material usage. 7. Finally, some stratification of converted sales by style, machine routings, or graphic content should be included as a sub schedule along with information about the associated margin. Typically, income statements follow these formats: Sales less cost of goods sold = Gross margin or Sales less direct costs = Contribution less indirect costs = Gross margin My recommendation is that you utilize the following: Converted sales less converted materials = Converted material margin plus material margin from brokered and other items = Total material margin less labor, overhead, and delivery = Gross margin This has the effect of segregating the margin generated from manufacturing from the margin generated from other endeavors, which is important because of the capital intensive nature of converting operations. Much of your invested capital is in the manufacturing plant and equipment, and therefore, it is important to segregate manufactured results on the income statement. At the end of the day, the key to profitability in a manufacturing environment is to

64 BOXSCORE November/December 2023

generate enough margin to cover your fixed costs and generate a return on your investment. By treating materials as the one true variable cost in your operation and separating manufactured margin from nonmanufactured margin, it will be easier to understand the profitability—or lack thereof—of your operation. Major Machine Hours and Efficiencies After material margin, the second most important statistics in a converter’s financial statements are machine utilization and efficiencies, yet this data is generally not found on your financial statements. In general, when your machine utilization is high, you make money, and when your utilization is high and your efficiency is high, you make a lot of money. Of course, all of this assumes that your markups on materials are high as well, which is why the first part of this article focuses on material margins. High margins can overcome a lot of inefficiencies but not an overall lack of orders. Almost every piece of converting equipment carries a multimillion-dollar price tag, and that is before stackers, pre-feeders, and the required conveyorization. Filling your machines with profitable orders is the main job of the overall sales effort, and producing them quickly, efficiently, and without defect is the main overall job of the production effort. For those of us in the measurement business, understanding these relationships and measuring them are consistent and objective matters, while making the results understandable is at the core of our mission. But where is any of the machine information that is integral to understanding profitability shown on your financial statements? The answer, of course, is nowhere. Financial statements generally only contain purely financial information that comes from your general ledger and is vetted by detailed reconciliations of

cash, receivables, payables, inventory, and payroll. But without some operational information, can it tell the complete story of the company’s profitability? On the other hand, if you bring too much nonfinancial information into the reporting, will it make the information more cumbersome and difficult to understand? A certain delicate balance must be maintained, but if margin versus fixed costs are the key to measuring profitability and machine utilization and if efficiency is the key to understanding profitability, then they should both be accommodated in the efforts to measure results. The answer is by utilizing sub schedules and possibly bringing some summary information onto the face of the income statement. Just by noting the number of major machine hours run and the percentage of overall capacity this represents, each reporting period next to the margin generated enhances the reporting. Adding a sub schedule that shows the hours run by each major piece of equipment and the percentage of that machine center’s capacity will go a long way toward explaining changes in margin from period to period. So, keep your sales and material buckets clean in your general ledger and create a focus on manufactured versus nonmanufactured sales. Add some sales analysis and machine hour reporting to the mix, and you will have taken the first step toward enhancing your reporting systems. Over the next few BoxScore issues, I will focus on other areas where reporting can be streamlined and improved and other operational data that can and should be incorporated into your financial reporting systems. Mitch Klingher is owner of Klingher Nadler LLP. He can be reached at 201-731-3025 or mitch@klinghernadler.com.

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

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Foundation for Packaging Education

Take Your Pledge and Mark Your Calendars

he Foundation for Packaging Education, created three years ago, was established to ensure that AICC will always have funds available to create and renew education content for its members. Consumption of AICC education programming is now approaching 20,000 completed courses since 2017. AICC education is popular, relevant, and in demand. So, it stands to reason that the Foundation for Packaging Education’s mission is vital. Which means that your pledge is necessary for the foundation to allow its corpus to reach the critical mass of $3 million that will ensure education demands in the future can be met. The foundation is more than halfway to the goal. If you are not a Foundation for Packaging Education donor, please consider joining the 35 companies and 10 individuals that have made such a commitment. Your pledge will bring a return to your operations as the foundation’s commitment is to your employees and their continuing education and

FOLLOW ON SOCIAL! Scan the QR code to donate to the Foundation for Packaging Education today!

66 BOXSCORE November/December 2023

improvement. Visit www.packaginged. org or scan the QR code on this page to donate. Mark your calendars for the Foundation for Packaging Education’s next fundraising event. From July 16 through July 19, we will be in Napa Valley, California! Accommodations at the Silverado Resort include: • Day One: Golfer breakfast and golf outing at the Silverado South Course; a nongolfer brunch, followed by an excursion to the Culinary Institute of America for a cooking class, lunch,

and wine tasting; then, a dinner aboard the Napa Wine Train. • Day Two: Winery tours and lunch. Once details are completely finalized, the event will be posted in the AICC calendar, and registration will open in December 2023. Space will be limited. The Foundation for Packaging Education is a 501(c)(3) education charity administered by AICC. Your pledge is tax-deductible and ensures the future of the independent in this industry. Yours is a generational business—pay it forward!

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

PACKAGING

CORRUGATED

F O U N D AT I O N

Photo courtesy of ICPF.

ICPF Funds New Kongsberg Table at Appalachian State University

Appalachian State University graphic communications management students celebrate their new Kongsberg X Edge 24 prototyping table.

tudents in the graphic communications management (GCM) program at Appalachian State University (App State) will be using new equipment this fall, provided by the International Corrugated Packaging Foundation (ICPF). The new Kongsberg X Edge 24 prototyping table replaces equipment previously awarded to App State’s GCM by ICPF in 2009, when the GCM first developed packaging curricula. “ICPF was thrilled to provide placement of this machine at Appalachian State University,” says ICPF President Caitlin Salaverria. “This donation will allow GCM to support and grow their corrugated packaging curricula and expand hands-on learning opportunities for students to prepare them for future careers in the packaging industry.” Salaverria acknowledged the partnership between GCM program faculty

68 BOXSCORE November/December 2023

George Glisan, Ph.D., professor and program coordinator; Yu-Ju (Mandy) Wu, associate professor; and advisory board member Bettylyn Krafft of the Phoenix Challenge Foundation, who all helped make the donation happen.

“As an industry-sponsored foundation, ICPF has worked for the last 30 years to advance student and faculty knowledge of the industry and to promote development of a highly trained workforce,” Salaverria says. “We’ve provided over $13 million

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

PACKAGING

in donations of equipment and grants to universities and look forward to expanding our efforts over the coming years.” Get Connected With ICPF The International Corrugated Packaging Foundation (ICPF) has worked over the past year to rebrand and redefine our mission to better serve the needs of the industry. We encourage you to join us on our rebranding and expansion journey. Reconnect with ICPF to stay informed about the work we are doing and to collaborate on career and hiring initiatives. Be there with us as we work to grow the labor force of the corrugated packaging industry—now and into the future. Find ways to get connected with ICPF below: • Stay In the Know with ICPF. Sign up for our distribution list to receive ICPF’s monthly newsletter and stay informed on all things corrugated. Email csalaverria@icpfbox.org or alemoine@icpfbox.org to be added in time for our next edition! • Connect on social media with #CareersinCorrugated. Follow us on a variety of social media channels (scan the QR codes on this page) to stay up to date on career and hiring opportunities in corrugated packaging, industry news, and more. • Post jobs on our Career Portal. Corporate partners can post openings for free on the portal and be directly connected to interested upcoming and new graduates who post their resumés. Visit careers.icpfbox.org. Together, we can make a difference. Caitlin Salaverria is president of ICPF.

70 BOXSCORE November/December 2023

CORRUGATED

F O U N D AT I O N

4 trends are reshaping the future of the corrugated industry.

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The Final Score

Box Plants, Bourbon, and Business—and a Little Berra

e’ve just closed the AICC Annual Meeting. Thank you to all who attended and made the event the networking and educational success it was. With more than 500 of you in Louisville, there was a lot going on. The session speakers were well received. The breakout sessions were engaging and informative. AICC visited three outstanding box plants: Independent II, Premier Packaging, and Greif/Corr-Choice. Many thanks to the teams at each. There were also off-site trips to the Kentucky Derby Museum and bourbon distilleries. The meeting’s theme was “Box Plants, Bourbon, and Business,” and all three were in abundance. Let’s talk about the third “B”—business. (Although, I am always up for a box plant conversation, and I learned enough about bourbon in Louisville to be dangerous.) Overall, our industry’s volumes are down from the highs of pandemic-induced demand. Two of the Louisville meeting’s opening focus session speakers disagreed on whether the fall back is to 2017 or 2019 levels. But both agreed that the near-term outlook for converters is one of improvement. Tim Bergwall, group president of paper packaging and services at Greif, spoke of the three opportunities for growth he sees in the industry today: the reshoring/nearshoring of manufacturing; the continued demand for e-commerce; and plastic replacement. U.S. manufacturing construction rates are at their highest level in years, and capital is flowing to the U.S. Orders for e-commerce goods continue to grow year on year. States around the country are banning single-use plastics and enacting other restrictions that open the door for paper-based replacement. George Staphos, managing director of equity research at Bank of America (BoA), shared BoA’s outlook that the U.S. economy is not going to see a recession in the coming months or year. He also reported that demand for containerboard will be flat or rise “modestly” between now and 2025, while capacity “keeps pace.” Staphos mentioned the industry’s role as a leading economic indicator. Things slowed in containerboard-related activities ahead of the general economy, and the industry is positioned to lead the way up. Those of you who know me know I like to quote “The Bard of the Bronx,” Yogi Berra, whenever I can. It seems appropriate here. Berra once famously said, “It’s tough to make predictions, especially about the future.” Being in the room, hearing directly from industry experts helps. That’s why meetings such as the one just held in Louisville and AICC programming in general are important to AICC members. It is all peer-driven from real-life experiences. AICC’s chairs generally close the meetings with the advice to take what you’ve heard and learned at a meeting back to your plant and share it. Make sure the lessons don’t just sit in a notepad on a desk or in the depths of your mind. Because if you don’t put what you’ve learned from boxmakers, suppliers, and AICC into action, you may make another Yogi-ism become fact: “You’ve got to be very careful if you don’t know where you are going, because you might not get there.”

Michael D’Angelo AICC President

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Preliminary Schedule of Events TUESDAY, JULY 16, 2024 Arrivals 6:00 PM – 7:00 PM Welcome Reception

WEDNESDAY, JULY 17, 2024

The Foundation for Packaging Education’s 2nd Fundraiser Event July 16-18, 2024

Silverado Resort & Spa, Napa, CA

8:30 AM

Shotgun start on South Golf Course

8:30AM

Spouse & Guest (and non-golfer) Brunch

10:00 AM – 1:30 PM Experience, Lunch & Wine Tasting at the Culinary Institute of America (CIA)

Join your peers and friends for the Foundation for Packaging Education’s 2nd Fundraiser Event. This premier networking event will feature the following events: •

Dinner on the Napa Valley Wine Train; restored historic train offering a scenic wine country tour, 4-course dinner and wine-tasting.

•

Golf at the Silverado South Course; enjoy a morning round of golf at one of their two 18-hole championship golf courses.

•

Hands on cooking, experience , lunch and wine tasting at the renowned Culinary Institute of America (CIA)

•

Napa Valley winery tours, tastings and lunch.

5:15 PM – 9:00 PM Dinner Wine Train

THURSDAY, JULY 18, 2024 9:00 AM

Registration will open in the late fall of 2023.

Brunch (all attendees)

10:00 AM – 3:00 PM & Tastings (includes lunch)

FRIDAY, JULY 19, 2024 Departures

Hotel Information: The Silverado Resort & Spa 1600 Atlas Peak Rd Napa, CA 94558

AICC Room Rate: $399* per night – One-Bedroom Suite *Taxes are currently 15% + $1.50 CA tourism fee. Resort Fee: $35 per night

Questions? Contact Laura Mihalick (Lmihalick@ aiccbox.org) or Cindy Huber (Chuber@ aiccbox.org) or call 703-836-2422.

The AICC rate is available for Tuesday, July 16-Thursday, July 18. Other dates will be based on availability. One room per registered couple.

Registration is $3,995 per couple.

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