Jan/Feb 2015 AICC BoxScore by AICC, The Independent Packaging Association

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TESTIMONIAL VIDEOS

ONE OF THE TOP TEN REASONS TO JOIN AICC

GROWTH 10. DEFINE YOUR GOALS

AND WE’LL HELP YOU GET THERE AICC represents a majority of the independent corrugated and paperboard manufacturers and their suppliers. Learn how to manage your future growth, develop your strategic plans and improve efficiency with best practices learned over our forty years of service to the independent.

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NETWORKING

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You build a bet box, we’ll help 4. r you build a bette COMMUNICATIO N company. Be part of a cultu re that allows you to ask questions an d share ideas.

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

Connect with other members to grow your business.

Man liers sha d supp mation an infor wledge. kno

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Gain the practical know-how to grow and prosper.

KNOWLEDGE Stay competitive with industry information and benchmarking surveys.

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

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

January/February 2015 Volume 19, No. 1

A PUBLICATION OF AICC—THE INDEPENDENT PACKAGING ASSOCIATION

W E N 5 1 0 2 R U O Y HECKLIST C R A E Y

S E L A S Y R T I L I B A N I A T S R SU CES N A N I F P I H R S R E B M E M C C I A R ALSO INSIDE New Columns: Tackling Tech, Inspirational Insights, The Hidden Factory

Special Section: 40 Years of AICC — The Formative Years

Congressional Performance

TABLE OF CONTENTS January/February 2015

•

Volume 19, Issue 1

COLUMNS

W E N 5 1 0 YOUR 2CHECKLIST YEAR

ES R SAL TAINABILITY R SUS ANCES R FIN C MEMBERSHIP R AIC

FEATURES

YOUR 2015 NEW YEAR CHECKLIST How to track and measure sales performance effectively; how to survive a sustainability audit; how to prepare for a financial audit; and making the most of your AICC membership in 2015

CHAIRMAN’S MESSAGE

8 10 16 18

SCORING BOXES

21 22 24

ASK RALPH

NEW COLUMN: INSPIRATIONAL INSIGHTS

28 30 52 66 68 74

SUSTAINABILITY

SPECIAL: 40 YEARS OF AICC— THE FORMATIVE YEARS 1974–1980

LEGISLATIVE CORNER YOUR ASSOCIATION AT WORK NEW COLUMN: THE HIDDEN FACTORY

SELLING TODAY NEW COLUMN: TACKLING TECH

LEADERSHIP SPEAKER PROFILE THE ASSOCIATE ADVANTAGE FINANCIAL CORNER THE FINAL SCORE

DEPARTMENTS

SPECIAL SECTION: FOLDING CARTON AND RIGID BOX Creating and selling sustainable packaging is a forefront issue for folding carton and rigid box manufacturers.

3 4

12 14 33 38 70

MEMBERS IN THE NEWS NEW MEMBERS GOOD FOR BUSINESS MEMBER PROFILE ICPF UPDATE

BoxScore is published bimonthly by AICC—The Independent Packaging Association, PO Box 25708, Alexandria, VA 22313, USA. Rates for reprints and permissions of articles printed are available upon request. AICC is an international trade association representing a majority of independent North American manufacturers of packaging products and the suppliers to the industry. AICC members are represented by 538 boxmaking locations and 482 supplier locations, both segments of which are offered a full array of membership services, programs, and benefits. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of AICC. The publisher reserves the right to accept or reject any editorial or advertising matter at its discretion. The publisher is not responsible for claims made by advertisers. POSTMASTER: Send change of address to BoxScore, AICC, PO Box 25708, Alexandria, VA 22313, USA. ©2015 AICC. All rights reserved.

BOXSCORE www.aiccbox.org

DUST COLLECTION TECHNOLOGY

OFFICERS Chairman: Greg Tucker, Bay Cities Container Corp. First Vice Chairman: Tyler Howland, Sound Packaging LLC Vice Chairman: Mark Williams, Richmond Corrugated Vice Chairman: Tony Schleich, American Packaging Corp. DIRECTORS-AT-LARGE Brad Albright, Touchpoint Packaging Jay Carman, Stand Fast Packaging Products Joseph Palmeri, Jamestown Container Companies Marco Ferrara, Cajas de Cartón Sultana Al Hoodwin, Michigan City Paper Box Jana Harris, Harris Packaging Corp./American Carton

It’s NEW! Radically Different. Industry Proven. The MIST-Clone® Wet Dust Filtration System, with integrated Slurry-Tech® Water Clarification and Dust Briquetting Technology. Setting new industry standards for dust collection and fiber recovery.

REGIONAL DIRECTORS Region 1: Don Simmons, Empire Container & Display Region 2: Matt Davis, Packaging Express Region 3: Kevin Ausburn, SMC Packaging Group Region 4: Eric Elgin, Oklahoma Interpak Region 5: Jeff Ramsey, Central Florida Box Region 6: Clay Shaw, Batavia Container Inc. Region 7: Finn MacDonald, Independent II Region 8: John Forrey, Specialty Industries Inc. Region 9: Vacant Region 10: Peter Hamilton, Rand-Whitney Corporation Region 11-12: John Franciosa, Coyle Packaging Group Region 14: Yair Caballero, CorrEmpaques Overseas: Kim Nelson, Royal Containers Ltd. President: A. Steven Young, AICC Headquarters Immediate Past Chairman: Mark Mathes, Vanguard Companies Chairman, Past Chairmen’s Council: Chuck Fienning, Sumter Packaging Corp. Secretary/General Counsel: David P. Goch, Webster, Chamberlain, and Bean Counsel Emeritus: Paul H. Vishny, Esq. ASSOCIATE MEMBER DIRECTORS Chairman: Brian Kentopp, Bobst Vice Chairman: Keith Umlauf, Haire Group Secretary: Jeff Pallini, Fosber America Director: Ed Gargiulo, Equipment Finance Corp. Immediate Past Chairman: Kevin Widder, Automatan ADVISERS TO THE CHAIRMAN Kim Nelson, Royal Containers Ltd. Jerry Frisch, Wasatch Container PUBLICATION STAFF Publisher: A. Steven Young, syoung@aiccbox.org Editor: Taryn Pyle, tpyle@aiccbox.org EDITORIAL/DESIGN SERVICES The YGS Group • www.theYGSgroup.com Executive Editor: Kelly Crane Winkler Managing Editor: Lori B. Racey Copy Editor: Steve Kennedy Assistant Managing Editors: Ashley Reid, Melanie Bracey VP, Marketing Services: Jack Davidson Graphic Designer: Deborah Sharpe Account Manager: Kali Eskew

Typical dust puck produced

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SUBMIT EDITORIAL IDEAS, NEWS, AND LETTERS TO: BoxScore@theYGSgroup.com CONTRIBUTORS Director, Meetings: Cindy Guarino, cguarino@aiccbox.org Director, Latin America: Maria Frustaci, mfrustaci@aiccbox.org Director, Membership: Virginia Humphrey, vhumphrey@aiccbox.org Administrative Assistant: Chelsea May, cmay@aiccbox.org President, ICPF: Richard M. Flaherty, rflaherty@icpfbox.org ADVERTISING Information: Taryn Pyle, tpyle@aiccbox.org Opportunities: Howard Neft, InTheKnow Inc. 847-899-7104 • thneft@aol.com Norman Summers, The Advertising Sales Department 301-652-8862 • norman@salesdept.net Folding Carton and Rigid Box Advertising: Taryn Pyle 703-535-1391 • tpyle@aiccbox.org AICC PO Box 25708 • Alexandria, VA 22313 BOXSCORE Phone 703-836-2422 • Toll-free 877-836-2422 • Fax 703-836-2795 January/February 2015 www.aiccbox.org

Integrated water clarification dewatering and dust briquetting technology. Slurry-Tech® is a self-contained, water filtration system that separates and concentrates saturated corrugated dust from the water used in the MIST-Clone® system. It continuously cleans and recirculates the water going to the Mist-Clone spray nozzles, dewaters the slurry and produces dust pucks for recycle or disposal. Water usage is minimized due to the advanced water filtration and circulation capabilities.

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Chairman’s Message

GOING PROFESSIONAL IN 2015

elcome to the New Year! This year AICC celebrates its 40th year of service, and many things have changed since its inception. Many association leaders have moved on, and the Emerging Leaders are now engaged in learning about the industry, on their way to becoming our new leadership. The industry landscape has changed significantly. Fewer independents and integrated companies make up our industry. We are also witnessing the buyout sequence of the independent. Moving from a lifestyle company to a professional company is now more relevant than ever. If you are thinking of selling, the two components of value are your EBIDA (earnings before interest, depreciation, and amortization) and your management team. There exists a way to transition your company, keep control of it if you wish, and remain independent tax-free. This is the theme of my chairmanship—moving from a lifestyle company to a professional company. The icing on the cake will be the utilization of an ESOP (employee stock ownership plan) to get out tax-free. In last issue’s letter, I shared Bay Cities’ transition from a lifestyle company to a professional company. We are not there yet, but we work on it every day. On June 30, we became a 100 percent ESOP; and utilizing what is called a 1042 rollover, the shares transitioned tax-free. Not bad for an owner. In return, Bay Cities pays no federal taxes. Not bad for a company! In the last issue, I shared how our founder had established a lifestyle. Soon after his passing, we basically crashed the company and began to crawl out of the hole that was dug many years prior. We reinvigorated the company with cash, revitalized the sales team, and began to breathe. We had to measure and manage

every aspect of the operation, down to expenses on even nuts and bolts. This led us to processes that propelled the company forward and got it out of impulse power. The employees who were conditioned by our lifestyle were either transformed into producers or transferred out. We made our leadership group into a high-performing team. This group wanted more than just a legacy; they wanted performance and improvement in their share value. We instilled ownership thinking into the whole organization. We set up a weekly leadership meeting at 6:30 a.m. to work “on” the business instead of “in” the business. We developed a way to bring the work all the way through our company by the use of destination models, the utilization of oneto-one meetings, and the maximization of the State of the Bay company meetings, in which we shared financials with the employee owners of Bay Cities. The beginnings of strategic planning were not as fruitful as we had anticipated, but they were stimulating. We learned we needed more frequency, and a way to keep this body of work in front of everyone. Then we found Holly Green. She worked our tails off and drove into us a process of destination modeling. We all learned how the other thinks, how our downslope owners think, and how to come together to enable a future state. Instead of figuring out how to get where we are going, we think like winners and reflect on how we got there. It does interfere with the thought process, but if you think like a winner—you get results. Our planning became easy with this method; we began to win. Certainly, as any company would, we tried many tactics prior to strategic planning. We learned to utilize the destination model that cascades

throughout the organization. We continue to meet quarterly with Holly. We meet with every employee, and we focus only on the model. This process has driven top-line and bottom-line performance to heights we had never seen before. We continue to weather the recession very smoothly. It is hard work, but we had fun with the process with Holly. (Read more about Holly Green on page 52.) The Association will be offering a value-packed program with Holly as we celebrate our 40th anniversary in Naples, Florida, this spring. I look forward to the conference, where we will learn about winning and the importance of moving from a lifestyle to a professional company. Have fun!

Greg Tucker Chairman/CEO, Bay Cities Chairman, AICC

BOXSCORE www.aiccbox.org

1974 –1979: THE FORMATIVE YEARS — A RESPONSE TO CRISIS; AN IDENTITY CREATED BY STEVE YOUNG

AICC marks its 40th year in 2015. Journey with us this year in the pages of BoxScore as we take you back to the early days when our founders, facing an industry crisis, launched an association that would help independent boxmakers and their suppliers for years to come. What emerged and what has endured is an association whose mission is to help independent entrepreneurs in the corrugated, folding carton, and rigid box industries grow and prosper their businesses.

BOXSCORE January/February 2015

Joseph R. Palmeri, president and COO of Jamestown Container Cos., Falconer, New York, remembers the time well. He writes, “In the summer of 1974, Jamestown Container was having a tough time getting sheets. Our major supplier had told us they could only run 50 percent of our loads, and for us that was a loss of 120,000 square feet each day.” According to Palmeri, suppliers were telling him the reason was a shortage of containerboard, but he and his partner didn’t really buy it, so they and another independent in the Buffalo area began investigating the installation of their own corrugator.

Credit

Here’s how it all started. Before AICC as we know it today, there was the “Executive Society of Corrugated Sheet Convertors [sic]” (ESCSC). Jim Kowall, AICC’s first president and thenowner of Great Northern Packaging Corp. in Grand Rapids, Michigan, wrote on the occasion of AICC’s 20th anniversary in 1994 that efforts to start an association for sheet plants actually preceded AICC by at least three years. “I sold corrugated sheets to various companies in Michigan, Indiana, and Ohio, and some knew little relative to marketing and manufacturing costs,” Kowall recalled. “I contacted them by phone relative to the idea of starting a Michigan-Indiana trade association.” He said some of the members suggested there should be a national association, and so a meeting was held in Battle Creek, Michigan, in September 1971. At that meeting the “Executive Society of Corrugated Sheet Converters” was established. The group held meetings nine times per year and, in Kowall’s words, “the Association became a valuable business tool.” Kowall recalls that he, George Arvanigian of Arvco Container Corp., Robert Cravens of Container Service Corp., and others spent many hours and traveled many miles recruiting others to their common cause. In 1974, conditions in the industry would make their work easier.

“We brought in a consultant named Jim Levine, who happened to tell us about a new association that was trying to get started that would just represent independent boxmakers. The more he told us, the more we were interested,” says Palmeri. Levine had formerly worked for the Fibre Box Association in Chicago and was consulting to companies in the industry. He was also a good friend of Kowall, and so he acted as an ambassador for the new national association that Kowall, Cravens, Arvanigian, and others were trying to form. The exploratory meeting for this national organization was held September 21, 1974, at the Hyatt Regency O’Hare in Chicago. The 60 representatives there coined the name “National Association of Independent Convertors,” a name later changed to “Association of Independent Corrugated Converters” to accommodate members

Caption

“Always foster intuition; take a guess, compare it to what happens, and continually hone your abilities.” —Paul Centenari Caption

from Canada. At that meeting, 30 members were added. The newly formed Association of Independent Corrugated Converters (AICC) held its first national meeting shortly after that, in November 1974, at Stouffer’s Riverfront Towers in St. Louis. The 90 attendees represented 54 companies. They were united by a need to survive and to set the mission of serving independent box plant owners and operators. Hugh Cameron, then-president of Cameron Packaging and one of the founders from Canada, says he became a member because he “wanted to have communications with other independents who had the same problems I was having.” Cameron remembers that he called others in Ontario and Québec. “Only Keith Munt, owner of ProPak, and Danny McKeon, who had two sheet plants in Toronto, agreed to come with me to the first meeting in St. Louis,” he recalls. “One of our main concerns was the supply of sheets plus linerboard and medium.”

For many of the potential members who were there in St. Louis and questioning the need for the formation of a new association, the defining moment came when Gene Macchi, president of Independent Corrugated Container Corporation, took a single branch and broke it. Joe Palmeri remembers, “He then tried to break a whole handful of branches, making the point how much harder it was to break.” Macchi’s message to the group was that if all independents joined together in the new association, they would be much stronger together than alone. Palmeri says, “We knew then we had made the right decision in joining the new AICC.” Ultimately, a purpose emerged, and AICC’s influence grew within the industry. In these early years AICC focused primarily on the supply of paper to independents, the issue of competitiveness, and the development of a level playing field for independent owners. But more practical reasons for joining forces also became apparent, such as providing

BOXSCORE www.aiccbox.org

Caption

affordable employee benefits and industry training, things previously unavailable to independent companies. Among AICC’s notable accomplishments in those first five years were: The creation of the Corrugated Insurers Association, an offshore insurance company devised to provide affordable health, life, and workers’ compensation insurance for members. A successful opposition run in regard to Conrail freight surcharges, which would have added substantially to freight costs for containerboard. In 1978, AICC developed the first corrugated industry sales training program for its members, called “AID: Applied Interaction Development.” In 1979, AICC negotiated a 10-year supply agreement with International Paper Co. after it acquired the Pineville

BOXSCORE January/February 2015

AICC PAST PRESIDENTS AND PAST CHAIRMEN 1974–1980 JAMES L. KOWALL, 1974–1975 EUGENE MACCHI, 1975–1976 HUGH CAMERON, 1976–1977 J. RICHARD TROLL, 1977–1978 ROBERT D. CRAVENS, 1978–1979 JOSEPH ARMSTRONG, 1979–1980

Kraft Paper Mill, a key supplier to many independent converters. This became the model for “set-aside” agreements, which helped to ensure supply. These and other initiatives proved to be the spur for membership growth, and by 1980 AICC had more than 300 members.

Joe Palmeri, summarizing his view of AICC’s founding, says, “The conditions that existed in the 1970s are gone, thanks to Jack Schwarz, Hans Koch, and others who started so many sheet feeders.” Palmeri believes that the introduction of the sheet feeder has insulated the independent sheet plant from concerns about supply. “I doubt if there are many members still in the industry who will ever go through the situation I’ve described,” he says. “But I think it’s important that our membership knows how this association started.” In the next issue of BoxScore’s 40th anniversary series: 1980–2000: AICC Grows Up. Steve Young is president of AICC, based in Alexandria, Virginia. He can be reached at 703-535-1381 or at syoung@aiccbox.org.

FOUNDING MEMBER COMPANIES The following companies were present at the first meeting of AICC in November 1974 at the Stouffer’s Riverfront Towers in St. Louis: Advance Packaging Corp. American Packaging Corp. Arvco Container Corp. Bates Containers Inc. Blossomland Container Corp. Borders Container Corp. Cameron Packaging Inc. Central Container Corp. Centralia Container Corp. Coast Packaging Materials Co. Commander Packaging Corp. Condura Box Co. Container Service Corp. Cor-Box Inc. Decatur Container Corp. Delta Container Corp.

A. Goodenough Box Corp. Great Northern Packaging Corp. Independent Corrugated Container Corp. of North America Jamestown Container Co. Krafcor Corp. Lawless Container Corp. Mall City Containers Inc. Michiana Container Corp. Michigan Packaging Co. Mid-Michigan Container Corp. Monarch Box & Paper Corp. Nor East Packaging Corp. Northern Package Corp. O’Grady Containers Inc. Omaha Box Co.

Orchard Consolidated Industries Inc. Paragon Packaging Products Powderly Container Corp. President Container Group, Inc. Queen City Container Corp. R and D Incorporated Select Carton Service Ltd. Sentinel Container Corp. Shillington Box Co. Specialty Container Corp. Stand Fast Packaging Products Tate Containers Inc. Taylor Paper Corp. of St. Louis Triangle Container Corp. Tri-Pack Corp. Western Reserve Container Corp.

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BOXSCORE www.aiccbox.org

Scoring Boxes

SURVEYING THE LANDSCAPE OF U.S. RETAIL SALES BY DICK STORAT

ave you ever wondered where the boxes you ship to your customers end up before they are recovered for recycling? The answer is almost always at a retail establishment. While independent corrugated converters may ship empty boxes to a wide range of growers, manufacturers, or wholesalers, after they are filled, they wend their way through the supply chain to retail establishments. The Freedonia Group, a publisher of studies on various industries, estimates that as many as 90 percent of the goods consumed in the U.S. are transported, protected, and displayed in corrugated containers at some point along the supply chain. Through a complex and statistically sound sampling process, the U.S. Census Bureau gathers monthly data on retail and food service sales. In 2013, the total of all retail and food service sales was $5.1 trillion. Last year, based on data for the first three quarters, it was growing at a rate of 3.4 percent and was on track to reach $5.2 trillion by the end of 2014. Sales at food and drinking establishments amount to some 11 percent of that total. Monthly sales average $62.6 billion and are currently growing at 4.4 percent per year, almost a third faster than the overall sector. While the great majority of the boxes that end up in this sector inputs for retail sales, some empty corrugated boxes—like pizza boxes—are filled in the sector. The largest and fastest-growing retail sector, as grouped by the Census Bureau, is motor vehicle and parts stores. In 2014 it was growing at a 7 percent rate, the fastest of any sector, and was aiming to top $1 trillion in sales for the first time ever. Unfortunately, except for the parts portion

BOXSCORE January/February 2015

of the category, relatively little corrugated packaging is used. It is estimated that some 40 percent of corrugated shipments in the U.S. end up in food, beverage, or grocery stores, the next-largest retail sector. Retail grocery store sales amounted to $649 billion in 2013 but grew only at a 3 percent rate. Last year, sales were expected to surpass $650 billion but at a slower estimated growth rate of 2.4 percent. Over the past four years, the average annual growth rate of grocery store sales has clocked in at 3.4 percent, which, after adjustment for inflation, is around 1.5 percent per year. With so much of U.S. corrugated production going into such a slow-growing outlet, one can understand the lackluster growth of corrugated packaging volume over the past several years. General merchandise stores are just a shade behind grocery stores in share of

retail, about 12.9 percent of total 2014 sales. According to the Census Bureau report, general merchandise shows the slowest positive growth for 2014—only 1.5 percent. Since this category includes a diverse group of store formats—from elite department stores to volume-driven “large box” stores— subcategory growth rates can vary widely. Since 2010, the average annual growth rate for these stores, taken as a whole, has been slightly less than 2.2 percent per year. Perhaps the most exciting retail sector is e-commerce. It is included along with catalog sales in the nonstore retail sector. This sector has grown to account for 9.2 percent of total retail and food service sales, positioning it currently as the sixth-largest sector, accounting for more sales than the building material and garden center and the health and personal care store sectors. According to the National Retail Federation, a record 44 percent

Sector Shares of 2014 Annualized Retail Trade & Food Service Sales Motor Vehicles & Parts Food & Beverage Stores General Merchandise Stores Food & Drinking Establishments Gasoline Stations Nonstore Retailers Bldg. Material & Garden Equip. Health & Personal Care Clothing Stores Electronics & Appliances Furniture & Home Furnishings Sporting Goods Stores Source: U.S. Census Bureau

10%

12%

14%

16%

18%

20%

22%

of holiday shoppers were expected to go online during the 2014 holiday season, 10 percent more than in 2013. The nonstore retail sector is growing at a 5.7 percent rate, exceeded only by booming auto sales. The charts associated with this article show the full range of retail sector sizes and current growth rates. They can help you understand better where the boxes that you ship end up before their recycling journey begins.

2014 Annualized Growth of Retail Sales by Sector Motor Vehicle & Parts Nonstore Retailers Health & Personal Care Food & Drinking Establishment Bldg. Material & Garden Equip. Retail Sales & Food Service Food & Beverage Stores Furniture & Home Furnishings Electronics & Appliances

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

Clothing Stores General Merchandise Stores Gasoline Stations Sporting Goods Stores Source: U.S. Census Bureau

-4%

-2%

BOXSCORE www.aiccbox.org

Legislative Corner

CONGRESSIONAL PERFORMANCE BY MARK WILLIAMS

For a list of representatives by state from the House and Senate who earned the NAM Award for Manufacturing Legislative Excellence, go to BoxScore online at www. aiccboxscore.org/ repsbystate.

BOXSCORE January/February 2015

n November’s midterm elections, U.S. voters sent a clear message to our policy-makers that they are frustrated with political gridlock and want change. The Republican Party took control of the Senate and widened their majority in the House of Representatives. In the aftermath of the elections, President Barack Obama told the nation that he got the message and pledged to respond to voter frustrations by using his final two years to forge compromises with the newly empowered congressional Republicans. The 113th Congress, which some commentators have ranked among the worst in history, officially wrapped up on January 3. According to a recent Rasmussen Reports national telephone survey, only 8 percent of U.S. voters think this Congress has done a good or excellent job. Sixty-two percent think it has done a poor job. The gridlock on Capitol Hill has been thick as Democrats have tried to expand government while Republicans have done their best to curtail these efforts. Our elected representatives have been at a political impasse for a prolonged period of time, and it has been frustrating for voters. But this is somewhat typical of democracies, which are designed to be a little messier than other forms of government—dictatorships, for example. We are fortunate to live in such a great country and free to be as active as we want in our political process. Before we look ahead to the 114th Congress, let’s take a moment to recognize the representatives of the 113th Congress

whose voting records earned them the National Assocation of Manufacturers’ (NAM) Award for Manufacturing Legislative Excellence. This award is open to all members of the House of Representatives and the Senate. Members of Congress whose voting records are in support of the NAM’s preferred position on 70 percent or more of key manufacturing votes receive the award. Key votes reflect the pro-manufacturing agenda and are determined by executives representing manufacturers who serve on NAM’s Key Vote Advisory Committee. These records can be found on NAM’s website at www. nam.org/keyvotes. For a list of representatives by state from the House and Senate who earned this award, go to BoxScore online at www.aiccboxscore.org/repsbystate. AICC and FBA are planning to co-sponsor another Corrugated Industry Fly-in in 2015. The dates are tentatively scheduled for June 2–3 in Washington, D.C., in conjunction with the NAM Manufacturing Summit. The past few years we have had approximately 25 participants, and it would be nice to increase this number to 35–40. Please consider coming to Washington and getting involved. Mark Williams is president and CEO of Richmond Corrugated, Richmond, Virginia, and is past chairman of AICC’s Government Affairs Committee. He can be reached at 804-222-1300 or mark@richbox.com.

“Craftsmanship is what we are proud to give our customers.”

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BUILT IN AMERICA www.alliancellc.net

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Apex Group

Members in the News

Apex Adds to Global Leadership Team Apex Group of Companies, a firm that deals in anilox and metering technologies, has added two executives to the company’s growing leadership team. Jeff Dietz has been appointed vice president of sales with responsibility for North and Central America. Doug Jones has been appointed vice president of global marketing with responsibility for marketing, advertising, and brand management internationally.

Jeff Dietz, sales director North America, and Doug Jones, vice president Global Marketing

Harris & Bruno International

B-WI Changes Identity; Awarded Major Contract Vasant Bennett, managing partner of Barry-Wehmiller International Resources (BWIR), announced a new identity for the organization, which will now be called BarryWehmiller International (B-WI). Along with the new name, the organization also unveiled a new logo, color palette, and redesigned website. These changes emphasize the organization’s global reach and people-centric values without losing the strong association with the Barry-Wehmiller family of companies. In addition, B-WI has signed a five-year support agreement valued at $3.2 million with Detroit hosting company Secure-24 to support a multibillion-dollar global automotive supplier in PTC Windchill product lifecycle management services and application lifecycle management services.

York Container

Scott Michels, Sunny Moon, and Ya-Ping Zhou

Wasatch Container

From left to right: Evelyn Carrera, Guinness World Records adjudicator; and with York Container Co., Steve Tansey, president and COO; Troy Little, director of design; and Libby Lehr, director of marketing

From left to right: Charlee Normann (Columbus), Kevin Allan (Wasatch Container), Ryan Frisch (Wasatch Container), Thurl Bailey, and Susan Johnson (American Express, sponsor)

BOXSCORE January/February 2015

Harris & Bruno Attends Grand Opening of HP’s Singapore Centre of Excellence Harris & Bruno International was invited to the grand opening of the new HP Graphics Solutions Business (GSB) Centre of Excellence in Singapore last September. The event included a tour of the new facility and featured live demonstrations of HP Indigo digital presses, HP sign and display presses, and HP Designjet printers. “We were proud to participate in the event,” said Scott Michels, vice president of sales and marketing at Harris & Bruno International. “We see the Asia-Pacific region as an emerging market and look forward to future growth there. We congratulate HP on their new facility and are excited to be an Approved Solutions Partner.”

York Container Sets Record for World’s Largest Box York, Pennsylvania–based company York Container built the world’s largest cardboard box Saturday, November 8. The box measured 80 feet long, 30 feet wide, and 13 feet high, shattering the previous world record, set in 2009 by employees of Chegg. An official from Guinness World Records was on hand to certify the feat. The record-setting attempt was part of a yearlong celebration of York Container’s 60th anniversary.

Wasatch Container Named Business Partner of the Year Wasatch Container, a Salt Lake City–based manufacturer of corrugated packaging, foam fabrication, and custom wood crates, has been named Business Partner of the Year by the Columbus Foundation, an organization that supports the growth, development, and independence of persons with disabilities. The award was presented by Charlee Normann, Columbus, and Susan Johnson, American Express, at the ninth annual Dignity Through Work Recognition Event, held November 7.

Recyclable, Repulpable High-performance Medium

Finally, a wax alternative medium that meets your market’s demands for product protection AND for environmental protection. Disposing of corrugated containers made with a wax-impregnated medium and liners have been causing issues for end users for many years. The new FluteSHIELD™ high-performance corrugated medium helps retain box strength (ECT, BCT, stiffness) in moist and wet environments. And it’s 100% repulpable and recyclable.

Runs like a champ FluteSHIELD medium employs innovative, heat-activated chemistry during the corrugating process to render the medium water repellent. FluteSHIELD is a real medium— either semi-chem or recycled—that will run at desired corrugator speeds. And it works on all basis weights. • Runs at desired corrugator speeds with no wax buildup or cleanup • FDA and CFIA compliant for direct food contact Untreated medium

FluteSHIELD medium

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New Members

WELCOME AICC’S NEW MEMBERS CENTURY SUNSHINE PAPER (USA) INC. ZOE JIAO Representative 1000 Lakes Drive #430 West Covina, CA 91790 Phone: 626-502-1360 Fax: 626-502-1362 zoe.jiao@sunshinepaper.com.cn www.sunshinepaper.com.cn

COASTAL CORRUGATED INC. SAM GILNER CFO Post Office Box 41249 Charleston, SC 29423-1249 Phone: 843-552-2697 Fax: 843-522-9654 sgilner@coastalcorr.com www.coastalcorr.com

At C&M Conveyor, we’ve enhanced our ability to meet the demands of today’s corrugated marketplace by adding products and manufacturing capability. The benefit to you: maximum throughput with the flexibility to meet your customers’ ever-changing needs. Our project management approach means we’ll identify your requirements, manufacture to your specs and install on time. Contact us today; let us solve your toughest problem. Leading supplier to the corrugated box industry 4598 State Rd. 37 • Mitchell, IN 47446 812-558-7960 • 800-551-3195 www.cmconveyor.com

BOXSCORE January/February 2015

SUSTAINABLE CORRUGATED SCOTT PRICE VP Sales 1090 Savannah Drive Sylva, NC 28779 Phone: 828-586-5534 Fax: 828-631-5062 sprice@jacksonpaper.net www.sustainablecorrugated.com

What does the country’s largest sheet feeder use to keep its customers happy ? THE SCHWARZ GROUP’S PRiORiTy iS CONTiNUAl iMPROVEMENT TO MEET ANd ExCEEd THE NEEdS OF iTS HUNdREdS OF CUSTOMERS. THE

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Your Association at Work

NOT ‘EITHER OR,’ BUT ‘AND’ BY VIRGINIA HUMPHREY

here are many associations out there. AICC is the only group focused on the independent marketplace, but we aren’t the only one serving the paper packaging industry. Several editions ago you may remember Steve Young, AICC president, writing about the Association Summit, at which representatives from 14 North American associations in the paper and packaging industries met in Chicago to explore increased cooperation to improve the

value they provide to their members. One of the outcomes of this meeting was the development of a joint calendar on which all the associations can post their upcoming educational and networking opportunities. We appreciate your support of AICC and encourage you to also check out the offerings of our colleague organizations, while remaining active with AICC, to make sure you are getting everything you need. You can be active in multiple

Member Benefits • Electricity Procurement • Natural Gas Management • Energy Efficiency Measures • Green Energy

associations and learn from the various perspectives. Find all the educational and networking opportunities in the industry by visiting www.packagingassociationscalendar.org. Virginia Humphrey is director of membership of AICC. She may be reached at 703-535-1383 or vhumphrey@aiccbox.org.

“Since 2004, AICC and APPI Energy have worked together to provide valuable energy solutions for AICC members. As independent companies, AICC members rely on expert advice so they can focus on running their own businesses. APPI Energy provides consistent and useful education, resources, and solutions to AICC and our members.” Steve Young President Association of Independent Corrugated Converters (AICC)

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BOXSCORE January/February 2015

M i t s u b i s h i

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The Hidden Factory

NEW

EFFICIENCY MATTERS BY LES PICKERING

elcome to my first column, not only for this magazine but for any periodical. Having written several articles before, I face a somewhat unknown task in taking on a column in such a prestigious publication as BoxScore. I would welcome any feedback you have on this and subsequent columns, and also any thoughts on what you would like them to cover. It may take me one or two columns to find the appropriate voice or weight for you—the audience—so your help with that will be appreciated. “The hidden factory” means activities within manufacturing that may not be seen by most, generally because of familiarity with the processes. In highlighting and discussing these activities based on best practices, maybe we can think about them differently in order to improve operations.

Requirements Are Important The first week of November brought about our final AICC training of 2014. Our AICC exclusive Machine Mastery series has been a great success; AICC’s promotion and logistics helped us take this throughout the U.S. and Canada. During the latest training, I was told an interesting story about a paint company—let’s call them Rusty Paint Co. After a delivery, the box plant was notified that one pallet did not meet requirements. The box plant organized freight to pick up the single pallet, and scheduling was informed that a possible makeup may be needed. When the pallet was received, it was inspected and sorted for defects, but none could be found. The only anomaly was that the pallet count of 350 was excessive by

BOXSCORE January/February 2015

approximately 40 blanks. The excessive blanks were removed, and the pallet was redressed and shipped back to Rusty Paint Co. with the correct count. The customer could have removed the blanks but chose to take the opportunity to educate the supplier that requirements are important for them. The box plant did a great job using the incident as a learning opportunity—it was, in fact, a great “eye opener” for the plant. Clearly, Rusty Paint Co. is a sophisticated customer that gives clear requirements and doesn’t want any variation to them, even though at times custom and practice can lead us away from meeting the requirements. Speaking of requirements, are you finding an increasing trend of customers moving from the historical ±10 percent to +5/-0 percent? How many customers are now specifying ±0, for which the box plant charges a premium? I have known of a particular box plant upcharging

the customer 7 percent for ±0 orders. For some, this is an opportunity to deliver the correct number as required by the customer; for others, it’s going to be a problem. The more customers who request ±0 orders as the norm, the sooner it will make us a better industry. To comply, we will need line clearance procedures at the end of an order, and we will need to deal with blanks before and after the finishing process in a different way than we do now. It would be better to move in that direction now, before a large customer forces you to go that way. Working Overtime Most facilities work overtime for service or capacity reasons. So let’s think about which type of customers are being processed during these premium times. Imagine three types of customers—A, B, and C.

Customer A: These are the customers that the business is built upon—maybe one of your vertically integrated customers or a customer in your top 15 percent of revenue. Customer B: These are repeat orders that run regularly, maybe 20–70 percent of your customers. Then there is customer C: The bottom 15 percent—once-a-year customers, customers who shop on price with little chance you’ll see repeat work from them. This category can also include

work managed by a broker who is price-sensitive, low-margin, and quick to point out any problem in the hope of a concession on the price. Every plant has them—you may be able to recall one or two of them right now. Let’s make sure that when we schedule Saturday/Sunday production, we are processing predominantly customer A and customer B orders and nothing in the C category. Let’s not run customer C orders because it helps trim the corrugator or cube of the delivery truck.

If it’s low-margin work that struggles to contribute to margin during the normal week, let’s not be running these orders at premium times in the plant. Les Pickering is co-founder of Quadrant 5 Consulting based in San Francisco. Les can be reached at 415-988-0000 or leslie.pickering@ quadrant5c.com. Follow him and Quadrant 5 on Twitter at @Q5cLP.

Website: www.aiccbox.org/store

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Ask Ralph

RALPH TALKS RING CRUSH BY RALPH YOUNG

ccasionally members and associates ask us about the additions contribution to ECT from white litho and SBS grades laminated in single-face and single-wall applications. We know a lot about the many physical properties of “brown” and white-top containerboards, but not about the strength of C1S litho offset (C1S—coated one side), solid bleached sulfate (SBS), and chemical thermo mechanical pulp paperboard from Canada and Europe. (See chart below. Anything you can add will be greatly appreciated.) These questions led us to browse new Internet resources, make new network contacts, and dust off some old hard copy files. Below is a chart with the cross direction (CD) ring crush values for coated white-top linerboards, C1S

offset label, SBS, and information about CTMP grades. We patiently await some fill-in-the-blank values from our top sheet associates. The CD ring crush values for the latter two grades were difficult to find, since the “white” products are measured for Taber stiffness and not with the methods we use in our industry. We reached out to our contact at the Renewable Bioproducts Institute at Georgia Tech for a comparison. (Interesting that this was formally the Institute of Paper Science, and before that, Institute of Paper Chemistry. “Paper” is no longer present. Research of this type in our industry is seldom sponsored or shared anymore.) In an example we developed for one member, to engineer a minimum 40 ECT, it was pointed out that a corrugator needs

White Graphic Grades Ring Crush Typical Values Common Grade Name

Basis Weight #/MSF

Calipers in thous.

CD Ring Crush

60# C1S Litho Offset

2.9

22 est.

70# C1S Litho Offset

3.1

21 est.

80# C1S Litho Offset

4 to 6

100# C1S Litho Offset

5 to 7

Coated White Top Linerboard

5.4

58 *

Coated White Top Linerboard

6.5

64 *

7 point SBS

8 Point SBS

9 Point SBS

10 point SBS

12 point SBS

102

10 point CTMP Litho

78-95

12 point CTMP Litho

76-102

* Converted From STFI Litho made to a basis weight target. Usually physical property tests are caliper, stiffness, tear, and tensile, as well as the optical ones.

to combine a minimum of 216# of CD ring crush in the three or five components. This includes the fluted ring crush contributions by the one or two mediums. Remember that corrugators vary in their individual abilities to maximize the inherent strengths in the linerboards and medium from +15 percent to –25 percent. Do you know your sheet feeders’ profiles? To achieve a minimum 44# ECT, the combiners need a minimum of 235# of CD ring crush. After the corrugators’ treatment of the raw containerboards, converters vary in their ability to maintain the incoming ECT by +0 percent to –35 percent. Have you benchmarked your presses, people, and process? The Chalmers DST is an excellent instrument to measure your degradation factors. Under ideal circumstances, corrugators and converters can obtain a minimum 40 ECT B flute with 36/30/36 and a minimum 44# ECT B flute with a 36/36/36 or a 42/26/42 combination. I prefer to put more substance strength into letting the more cost-effective medium provide a larger contribution to combined board strength. The 30/23/26/23/30 formula will give you more than enough strength for 44# ECT. Is this a cost-effective alternative? Let me know what additional technical information I can send along your way. If you have knowledge of the more comprehensive properties of CTMPs, I would like to hear from you. Ralph Young is principal of Alternative Paper Solutions and AICC’s technical adviser. Contact Ralph directly at any time about any technical issues that impact our industry at ASKRalph@aiccbox.org.

BOXSCORE www.aiccbox.org

Selling Today

LEVEL UP BY KIM BROWN

t is during this time of year that the results of 2014 are evaluated against established goals, budgets, and forecasts. It is also during this time that most businesses are considering what the new year will bring. Based on the current strategy, where is your company poised to be 12 months from today? As you look ahead to 2015, be careful in duplicating a strategy, an infrastructure, or a process just because “we’ve always done it this way”—an approach geared toward supporting historical or existing beliefs in place of challenging those thought processes and testing new ones for better potential alignment. What are the Big, Audacious Goals? The development of the business strategy is an important aspect of solidifying your company’s future position. This framework defines the what, when, where, how, and why behind the business. It outlines how the big picture and individual roles will be communicated to the people responsible for executing them. It ensures alignment among departments, keeping everyone on the same page and moving forward with the same agenda. A timeline should be established and include smaller, more easily attainable building blocks to ensure consistent forward progress and accountability along the path to the end goal. Who is Your Fighter Pilot? We tend to surround ourselves with people we relate to, who understand our situation and empathize with our pain. We spend a lot of time focused on learning industry best practices and new thresholds to meet. I recently read a story about the quarterbacks coach for the Indianapolis Colts, Clyde Christensen. It

BOXSCORE January/February 2015

told of his choice to spend the offseason in a much different environment than others holding this same position throughout the league. Most opt to attend camps or clinics led by those considered to be experts on the game or position. Christensen chose to spend his time at an Air Force base that conducts elite fighter pilot training. He recognized the need by these pilots to continually enhance their split-second decision-making skills and realized that, although not a life-or-death scenario, the outcome of a football game hinges upon the quarterback’s ability to excel at this same skill set. What, then, could he learn from the members of the faculty who are teaching, refining, and improving this key trait? What new tactics might he discover? What other similarities might he find if he opened himself up to these new insights and applied this knowledge in his coaching strategies? As we build our plans for 2015, who might we find to engage with who could provide new insights into our business or our industry? Initiate contact with

someone not wearing the same blinders as you—someone who could become a trusted adviser who asks different questions or frames conversations a bit differently. Manage by History or Manage by Science? In addition to formulating the strategy for the upcoming year, when was the last time you explored the internal structure of your organization? What if you did this with fresh eyes? Think of the customer service group—those individuals you employ who currently enter orders, answer customer inquiries, work with your salespeople, etc. A study conducted by the American Psychological Association found that interruptions as short as 4.4 seconds tripled the number of errors in post-interruption tasks. Who is entering orders, building new specs, and estimating production costs? How could you realign these responsibilities if you listened to the science instead of “that’s the way we’ve always done it”? Evaluate your group to

identify individual strengths and areas of interest. Perhaps one excels at math, while another has a desire to grow into an outside sales role and another thrives on product knowledge and machine capabilities. Could their roles be more tailored to their unique attributes? What does that do for you? For your company? For your staff? For your customers? Rather than taking an individual perspective, analyze the current focus areas of the department. The philosophy of “you can’t manage what you can’t measure” is practiced extensively. The focus becomes speed and efficiency. There

is also the conflicting belief that the most important things cannot be measured. In this concept, the focus might be on building trust, human interaction, or friendliness. After all, customer service shouldn’t be just a department; it should be a business philosophy. In running a business, there will always be competitors, or limited resources, or personnel challenges. There will also always be new possibilities, new relationships, and new ideas. We can choose to focus on the first and keep fighting the same battle we fought yesterday and the day before and the day before that, or we

can design tomorrow by thinking about it differently today. It should not all be about the numbers and measurement, budgets, and forecasts. Stimulate dialogue and open debate to reveal new insights from varying perspectives. Instead of simply following the same old path, go where there is no path and leave a trail. Kim Brown is the founder of Corrugated Strategies. She may be reached at 317-506-4465 or kbrown@ corrugatedstrategies.com.

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BOXSCORE www.aiccbox.org

Tackling Tech

MOVING TO THE CLOUD BY GREG HEINZ

s the director of marketing at Amtech Software, I use cloud-based services on a daily basis. Whether it’s for file storage (Dropbox), creative design (Adobe Creative Suite), or website development and content distribution (HubSpot), cloud-based software provides the resources necessary to communicate and collaborate with my team. So what is the cloud, exactly? More than a fancy tech-industry buzzword, the cloud allows users to communicate with a network of remote servers that provides anything from data storage to software applications and online access. The term “cloud” dates back to the 1960s, stemming from the original use of a cloud-shaped symbol on flow charts and diagrams to symbolize the Internet. It may have taken 50 years, but the concept has come to fruition, and it is delivering significant advantages for business leaders who are willing to take the leap. Consider these three immediate benefits of moving your servers to the cloud: • Eliminates the need for internal servers and software. This avoids any on-site storage, maintenance, and management of network equipment, and use of valuable office space, along with the expenses for power and cooling necessary to house the equipment. • Enables IT departments to quickly increase or add new capabilities without having to upgrade or purchase new equipment. • Includes built-in redundancy and disaster recovery so your critical customer and production data is protected. While hardware and storage is the service most commonly associated with moving to the cloud, it is certainly not the only one. Software applications that are accessed

BOXSCORE January/February 2015

over the Internet or a network connection are cloud-based. Some of the products I described here, despite their specialized uses, certainly fit the bill; however, chances are you use other cloud-based technologies in your everyday life and don’t even realize it. If you access Gmail or Yahoo, that’s the cloud at work. Other specialized business applications include Salesforce or Amtech’s Customer Care Portal. Even the way we communicate has been moved to the cloud, including common Web-based conferencing services such as

“Chances are you use other cloudbased technologies in your everyday life and don’t even realize it.” GoToMeeting and business phone systems. Voice over IP, or VoIP, is a popular cloudbased phone system designed to ensure communications stay intact in the event of a power failure—or worse. Because cloud computing provides resources over the Internet, and often on a subscription basis, you may see the delivery model referred to as “as a service.” The most common one would be software as a service, or “SaaS,” but the term also applies to infrastructure (IaaS) and communications (CaaS). This means that a company will provide you with the particular service for a monthly fee. Think of it the same way you would of leasing a car.

The difference with servers or software, for example, is that you pay only for what you use, you receive instant updates and accessibility from any location or device, you often have improved performance and reliability, and you will have a lower total cost of ownership. Once people see how simple the cloud really is, they often wonder how to show a business ROI. While ROI in the traditional sense is a hard measure of monetary return, the concept of cloud computing brings with it numerous “soft” costs as well. In the software business, a key hurdle to a new software implementation is often the expense of the hardware required to support new applications. With cloud computing, customers can quickly and affordably spin up new servers, providing greater business agility and lower project costs. Another key benefit relating to those costs is the creation of a fixed monthly budget for technology, allowing business owners the ability to transfer costs from capital expenditures to operating. If you have been thinking about the moving to the cloud, it’s time to take the leap. Make sure you have a trusted partner who can walk you through your options and support you through the transition. If that company knows your software system and your business, it’s even better. You may not have to look as far as you think. Greg Heinz is director of marketing at Amtech Software and Futura Services, technology companies specializing in corrugated box and folding carton products. Greg can be reached at 215-639-9540 or at gheinz@ amtechsoftware.com.

Inspirational Insights

NEW

SCOPE — KEEPING THE TEAM FOCUSED BY MIKE NUNN

ave you ever been in a meeting or worked on a project when all of a sudden it’s apparent that you’re completely off track and not discussing the reason you gathered in the first place? What’s worse is when the meeting comes to an end and you feel like you haven’t accomplished anything. Worse yet, the project is taking way too much time and resources. If you’ve experienced these challenges, then you’ve had an opportunity to be better-focused on scope, which is defined as the extent of the subject matter that is relevant. Said differently, the scope is the information pertaining to the topic, meeting, or project at hand, and nothing outside of it. Anything outside of that requires a new project or meeting. Think of looking through a telescope—all you can see is what’s in the lens. That’s how your meeting or project needs to be run. It’s easy to get distracted when working on a project that has outside influences or issues. Teamwork itself can create many reasons for losing focus on scope; these reasons could be differences of opinion, certain team members who have common interests, hobbies, or history—and chat about these things in the meeting—or sometimes there are people on the team who are louder than others and dominate conversations. Cell phones and other devices can lead to distraction from the scope. Staying on scope for the entire meeting—or project—will ensure results. Here are a few ideas on how to stay focused on the scope. Have a plan. Why are you here? What are you trying to achieve? You shouldn’t be doing anything else until you can answer these two questions. Moreover, if you’re in a team, then everyone needs

BOXSCORE January/February 2015

to agree on the answers and keep the agreed-upon scope in front of the group. To take the planning even further, you and everyone on the team should also agree on what everyone’s roles and responsibilities are, how and when you’re meeting, and any metrics or goals for the meeting or project. Stephen Covey said it best: Begin with the end in mind.

“Sometimes everyone is just waiting for someone to herd the cats.” Agree on beginning and ending points. If it’s a project you’re working on, then agreeing on the start and end points of the process is essential. Said differently from a lean point of view, you have to know the value stream. Everything is part of a value stream, and therefore value stream mapping is a great tool to help you by visually displaying all the steps in a process. Find an empty wall and grab a bunch of sticky notes. All of the discussion, after the process has been mapped, should relate to the first and last step of the process, or something in between. Strong facilitation is a must. One of the best bets for staying on scope is to have a strong facilitator—someone who is knowledgeable about the process, sticks to the plan, is unbiased, is respected by all team members, and can keep the team focused on the scope at hand. The facilitator needs to keep everyone on track, balance the conversation among all team members, and engage and ensure that the quiet

people have a voice while loud people give everyone a chance to be heard. If you’re not a facilitator or have not been in that role before, don’t let that stop you—everyone has to start somewhere, so start now and keep practicing. Sometimes everyone is just waiting for someone to herd the cats, but no one steps up. Propose simple questions to refocus the meeting or project. When you realize that you’re on a tangent from the topic at hand and are deviating down a new path, try saying, “Does this discussion get us closer to the end we have in mind?” or “How does this relate to our scope?” or simply, “What is our scope?” In answering these questions, the group will usually refocus themselves back to the proper scope. My favorite question for getting people focused is, “How much is this meeting costing us?” When you add up the salary time of the people in the room, it’s usually an overwhelming number. These steps are going to help you keep focused on the scope, but remember that deviations from your scope will never completely go away. The next time you are in a meeting and the topic starts to get off the rails, put your hand up, call a time out, or do whatever is needed to grab everyone’s attention. Then, as a reminder, reiterate with everyone what the scope is. And don’t be discouraged if this happens multiple times. Mike Nunn is operations team leader at Ideon Packaging and is Lean Blackbelt certified. He can be reached at 604-5240524 or miken@ ideonpackaging.com. Follow him on Twitter at @mikednunn.

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Sustainability

THE WANING OF WAXING BY DENNIS COLLEY

new study shows that the corrugated industry continues to dramatically decrease its use of wax coatings. In 2013, the industry used 39 percent less wax than in 2002, when wax usage first was measured. The reduction brings the total waxed corrugated volume to just below 3 percent of total corrugated volume produced in 2013. The dramatic decrease, from 5 percent of total volume in 2002, is attributed to the development of recyclable alternatives. By developing

“Today, more corrugated packaging is recovered for recycling than any other packaging material.” and using wax alternatives, the industry continues to increase the amount of recyclable corrugated packaging. • In 2013, the corrugated industry shipped 9.9 billion square feet of boxes using recyclable wax alternative coatings. That’s more than 653 percent of the 1.3 billion square feet shipped when first measured in 2002. • Progress has been made in replacing all types of wax-treated boxes (cascaded, impregnated, and curtain-coated) with recyclable treated boxes. • 47 recyclable wax alternatives have passed certification testing for repulpability and recyclability and have

BOXSCORE January/February 2015

been registered with the Fibre Box Association as of October 2014. • Certified registrations have been completed by seven coating suppliers commercially offering solutions in the marketplace and 12 converting companies offering proprietary products to their customers. Commercialized alternative coatings have aided the decline of wax. Corrugated recovery is a true success story. During the past decade, the recovery rate for old corrugated containers continued to climb, reaching a remarkable 91 percent in 2012. Today, more corrugated packaging is recovered for recycling than any other packaging material. Corrugated is the most reliable, cost-effective, and sustainable package available for transporting most products, including those requiring moisture protection, such as fresh produce packaging. Even those boxes can be made with recyclable materials. The continuous decrease in wax coatings to below 3 percent of total industry volume means that renewable, recyclable corrugated can be used for even the most demanding applications. For more information about recyclable wax alternatives, including a fact sheet, visit www.corrugated.org. The fact sheet is available as a downloadable PDF at corrugated.org/upload/wax%20 facts%202014.pdf. The Corrugated Packaging Alliance (CPA) is a corrugated industry initiative, jointly sponsored by the American Forest & Paper Association (AF&PA), AICC—The Independent Packaging Association, the Fibre Box Association (FBA), and the Technical Association of the Pulp and Paper Industry (TAPPI). Its mission is to foster growth and profitability of

CORRUGATED RECYCLES SYMBOLS INDICATE RECYCLABILITY There are several symbols that indicate recyclability of a corrugated container. Corrugated boxes marked with any of the following symbols can be recycled.

Dennis Colley is the executive director of the Corrugated Packaging Alliance and president of the Fibre Box Association. He can be reached at 847-3649600 or dcolley@fibrebox.org.

B O X

M A K E R S

•

Corragated Wax Usage 18,000 17,000 16,000 15,000 MMSF

corrugated in applications where it can be demonstrated that corrugated should be the packaging material of choice; and to provide a coordinated industry focus that effectively acts on industry matters that cannot be accomplished by individual members. CPA members include corrugated manufacturers and converters throughout North America.

14,000 13,000 12,000 11,000 10,000 2002

2008

2009

2010

2011

2012

2013

YEAR

P R I N T E R S

•

G L U E R S

A day in the life... RSC 950 Box style OPF Qty 250 Box style HSC Qty 500 Box style FPF Qty 800 Box style TRAY Box style Qty

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BOXSCORE www.aiccbox.org

Leadership

TEAM OF RIVALS? BY SCOTT ELLIS, ED.D.

oris Kearns Goodwin’s book Team of Rivals explores the rare ability Abraham Lincoln used to assemble a highly functional cabinet of political adversaries. Chief among his talents was the capacity to see a problem from another person’s perspective. By doing so, he gained more than an understanding of their motivations; he gained insight for problem-solving and guiding a nation through its most harrowing season. He chose the dynamic tension and creativity of opposing perspectives to lead when the stakes were high. Every team is connected by a common purpose—and potentially derailed by factions’ competing goals. It may be the most energizing aspect of teamwork. Under the protection of a team’s rules of engagement, conflict can foster innovation for direction and decisions. The ability to tolerate respectful disagreement is essential. As a culture, we prize speed in decision-making and often learn that we have moved forward without consideration for the implications of the changes we introduce. Think of each decision as a stone tossed into the pond that is your organization. A brief discussion of those ripples across the organization will circumvent the need for costly decision-making rework. By

inviting different perspectives, our decisions are scrutinized and strengthened. Unless we intentionally bring together divergent thinkers and require questions and concerns be voiced, the quality of our vision and leadership will suffer. Many strong leaders inadvertently weaken the team through blindness to their own influence. The most natural course is for the leader’s style to become the team’s style as they adapt to the alpha team member’s methods and pace. Again, this leads to a congenial group in which we value agreement and where divergent views are ignored or overridden without due consideration. The more conflict-friendly group will invite disagreement in the spirit of Stephen Covey’s statement, “Where two agree, one is unnecessary.” An intentional leader of rivals will understand that some members process information by talking it out, while others want to think it through more privately. That leader will use breaks judiciously to give the more introverted members uninterrupted time to process and return to the table ready to discuss and choose. A Lincoln-influenced leader will also draw out dissenting opinions and rival hypotheses. That leader will require that implementation

of decisions be supported by all in public, and so alternatives must first be voiced with the group in private. This style requires an aware and engaged leader who is at once able to track personal thoughts and emotions as well as those of other team members. Mediating the time parameters for discussion, determining when all quarters have been heard, and intervening when discussion takes the turn toward egotism are vital leadership behaviors. We sometimes need help from others to see when we are arguing with the sole purpose of winning. I call this the seesaw effect, as each time my opponent makes a point I take a step away from the middle to a more extreme position. My fellow conversant balances me with a corresponding step back, until we are at opposite ends of the seesaw arguing from extremes. At this point I usually forget what the disagreement is about, but I am certain I am winning. By purposing to forgo any decision until it has been tested by an opposing view and consideration of the ripples the change will cause, we ensure better results of our team efforts. Individual decision-making will also improve as independent members use the lessons learned in open debate to question and improve their own perspective. The heat of conflict in an environment of respect will produce much greater results from the team. Gather talented, dedicated, and passionate individuals, and require civility while drawing on their differences to create better outcomes. Scott Ellis, Ed.D., is a partner in P-Squared (P 2). He can be reached at 425-985-8508 or scottellis@psquaredusa.com.

BOXSCORE January/February 2015

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BOXSCORE www.aiccbox.org

BOXSCORE January/February 2015

GOOD FOR BUSINESS

DIE RECYCLING ENERGY PRICE CHECK START LISTENING

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BOXSCORE TIPS, TRICKS, AND SOLUTIONS TO BETTER BUSINESS

DIE RECYCLING Central Package & Display’s Impact on Recycling By Ed Polin Central Package & Display’s production and lean teams have been instrumental in bringing cutting die recycling to Minnesota. CP&D was the first Minnesota company to fully participate in a sustainability program and successfully establish a billable process. As a leading partner with Triangle Dies of Brooklyn Park, Minnesota, and the Great River Energy Resource Recovery Plant in Elk River, Minnesota, Central Package & Display began its die recycling efforts in June 2012. As CP&D’s “lean enterprise manager,” I was on-site for this trail-blazing effort—to see firsthand how the process worked. This initial effort was also captured on film by Triangle Die for the purpose of marketing this program throughout Minnesota. The photo shoot of the recycling process at Great River Energy detailed the dismantling and repurposing of the dies. To date, CP&D has recycled more than 2,000 dies—more than 33 tons’

worth. With the successful marketing of the program by Triangle, 191 tons, or a total of 11,938 cutting dies, were 100 percent recycled statewide to date and not added to landfills. In the recycling process, equipment is used to grind the wood, rubber, plastic, and steel. The steel is magnetically separated out of the load, and 100 percent of it is recycled in smelters. The wood, rubber, and plastic are processed differently, depending on current markets. The wood is either used for mulch or by waste energy plants for fuel. The rubber and plastic are either used to manufacture recycled products or provide fuel for producing energy. Ed Polin is the lean enterprise manager and safety director at Central Package & Display in Brooklyn Park, Minnesota, where he specializes in supply chain process improvement. Ed can be reached at 763-493-0674 or epolin@ centralpackage.com.

BOXSCORE www.aiccbox.org

Good for Business

ENERGY PRICE CHECK Energy Outlook 2015 By Jennifer Samuels Last winter’s extremely cold temperatures caused high energy costs for unprepared customers, some of whom are still feeling repercussions today. AICC members are asking whether energy prices will continue to rise, and how they should prepare and budget. The volatile energy markets are dependent on many factors, including legislation, weather events, consumer demand, and environmental concerns. It appears that electricity and natural gas prices reached historic lows in April 2012. Prices are likely to steadily increase through 2017. Several influencers come into play when forecasting 2015 energy price trends. Extreme weather, Environmental Protection Agency (EPA) regulations, and domestic natural gas resources are three of many important considerations that impact today’s energy price trends. Weather Weather forecasters are predicting another cold winter in the U.S. Below-normal temperatures are expected to encompass two-thirds of the country, particularly the East Coast and Gulf Coast. Above-average precipitation and heavy snowfall are expected in these regions. The jet stream over the northern region of the U.S. is expected to be erratic, which could force cold air from the polar and Arctic regions into the U.S., particularly into the East Coast and Deep South. The West Coast will experience above-normal temperatures, which means severe drought conditions could worsen. In California, where 60 percent of the state is suffering the worst category of drought, snowfall in the mountains is crucial for recovery. Snowfall amounts, which depend on the strength of winter storms, are difficult to

BOXSCORE January/February 2015

forecast more than seven days in advance. If extreme cold weather forecasts are accurate, electricity consumers should prepare for the risk of more price volatility. Natural Gas An abundance of natural gas resources in the U.S., coupled with enhanced drilling techniques, has led to historic increases in natural gas production and delivery. This has reduced dependence on foreign natural gas imports. Summer 2014 produced the largest natural gas storage injections ever recorded by the U.S. Energy Information Administration (EIA). Weekly storage injections, which typically occur in May through October each year, were historically high in 2014. Injections were greater than 100 billion cubic feet for eight consecutive weeks during the 2014 summer months. Belownormal temperatures across the U.S. during summer 2014 contributed to large storage injections, as the power sector’s demand for natural gas–fired generation weakened. As of November 2014, replenished natural gas inventories were 6.8 percent below the five-year average. Industry experts are confident that storage levels are sufficient to meet winter heating demand. As another cold winter season approaches, gas demand for heating and power generation is projected to increase steadily. Consumer demand for gas and electricity are typically synchronized. Electricity price trends are closely linked to the natural gas market. Winter weather across the U.S. in 2013–2014 produced the most volatile natural gas daily price swings in several years, and electricity prices climbed, as well. Electricity Generation New federal regulations on power plant emissions have prompted electric utilities

and generators to schedule two dozen coal-burning generators in the U.S. for decommissioning, beginning in 2015. On April 29, 2014, the U.S. Supreme Court upheld the U.S. Environmental Protection Agency’s Cross-State Air Pollution Rule (CSAPR), which is expected to cost power plant operators $800 million per year, starting in 2015. The EIA forecasts 16 percent of coal-fired capacity available at the end of 2012 will be retired by 2020. The increasing use of natural gas for power generation will put upward pressure on prices for both natural gas and electricity. In PJM, the regional transmission organization responsible for reliable delivery of electricity in 13 Midwest and Mid-Atlantic states, the current fuel mix used to generate electricity is 40 percent coal, 30 percent natural gas, 19 percent nuclear, and 11 percent renewable and other. At the current rate, natural gas will surpass coal as PJM’s primary source for generation by May 2015. Natural gas is attractively priced compared to coal, and natural gas–fired generators are easier to install and operate. The U.S. Nuclear Regulatory Commission has granted license renewals providing a 20-year extension to 74 of 100 total operating reactors in the U.S., according to the EIA. Thirty states have renewable energy mandates in place for wind and solar generation sources. Implementation of renewable generation in the U.S. has been slow. Solar power provided 42 percent of installed generating capacity in the U.S. during the first half of 2014, while wind accounted for 14 percent. Biomass provided less than 3 percent, and geothermal and hydropower each comprised less than 1 percent of installed generation capacity in the U.S. during this time frame. The cost of electricity from green systems

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remains high relative to the cost of electricity created by gas or coal generators. Fossil fuel consumption and emissions increase substantially during extreme temperatures. Cold weather increases the cost of power generation from gas, coal, and nuclear power plants. When the polar vortex triggered very cold temperatures in the U.S. in early 2014, energy use and carbon dioxide emissions increased notably. Electricity Delivery Power outages cost the U.S. economy $18 billion to $33 billion per year. The average U.S. power plant is 30 years old, while 70 percent of the grid’s transmission lines and transformers are at least 25 years old. Modernizing the U.S. grid system will cost $673 billion by 2020, according to the American Society of Civil Engineers. Crude Oil During the last few years, oil production in the U.S. has increased to record-breaking levels. U.S. crude oil production reached 8 million barrels per day (bbl/d) in February 2014. In April 2014, Texas crude oil

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production reached 3 million bbl/d for the first time since the late 1970s, more than doubling production in the past three years. Crude oil production from the Bakken and Three Forks formations in North Dakota surpassed 1 million bbl/d in April and May 2014, according to the EIA. The U.S. exported 268,000 barrels of crude oil per day in April 2014, which is the highest level of exports in 15 years. The EIA’s Short-Term Energy Outlook forecasts U.S. total crude oil production will increase to 9.3 million bbl/d in 2015, which would represent the highest annual average level of oil production since 1972. Stabilize Energy Costs Customers who used variable or index prices for gas or electricity supply in January 2014 experienced problematic cost increases. Some electricity suppliers quadrupled the variable price billed to customers from December 2013 through March 2014. Weather-related events in January and February 2014 are examples of how unforeseen and uncontrollable circumstances can greatly affect gas and electricity

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prices that impact RTOs, suppliers, and customers. Energy consumers are encouraged to mitigate risk exposure to volatile energy prices by using a fixed-price supply contract as soon as possible, to cover supply through at least March 2015. Customers unwilling to commit to a one- to three-year supply contract should consider at least locking in a short-term, four- to five-month supply solution. Some industry experts now consider extreme weather, and resulting gas and electricity price volatility, as the new norm. Achieving budget certainty now for this winter’s gas and electricity costs is a prudent business decision. For more information, contact AICC-endorsed consulting firm APPI Energy at 800-5206685 or info@appienergy.com. Jennifer Samuels is communication manager for APPI Energy, an AICC-endorsed member service. She may be reached at 800-520-6685 or jsamuels@appienergy.com.

BOXSCORE www.aiccbox.org

Good for Business

START LISTENING Are You a Good Listener? By Taryn Pyle I come from a family of talkers. And I was born a creative person with so many ideas coming at me full storm. My boss, Steve Young, sometimes says it’s like being hit by a fire hose full blast at times. These two things make me a big talker, and yes, I will admit, I interrupt, talk over people, and sometimes don’t really listen to what others are saying. Over the years, I have struggled with the art of listening, doing my best to find ways to engage myself completely in what the other person has to say. I don’t get

“Most people do not listen with the intent to understand; they listen with the intent to reply.”

—Stephen R. Covey

it right, but I have learned a few key strategies that I employ to make sure I am listening and the person talking is being heard. 1. Clear your mind and focus solely on the person talking and what they are saying. 2. Don’t go thinking in advance about how you are going to respond or what

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BOXSCORE January/February 2015

you are going to say next. You miss out on key information, tone, and feeling. 3. Before responding, breathe, pause, and think again about what was said. 4. If you can, repeat the key points to make sure you heard everything. … 5. Then respond. 6. And at those times when you realize you aren’t really listening, apologize and ask the person to begin again. It builds character. Most people are thinking so much about what they are going to say or what they have to share, they miss the conversation. I am guilty as charged, but I am also a work in progress. Focusing on your listening skills will improve employee, customer, prospect, and yes, even personal relationships. It’s a skill that few people have, and it’s one that can be learned. The art of listening is a skill that works no matter where you fall on the career ladder. Often we feel we have to justify, explain, or admit something—and sometimes we do, but you may just find that waiting to reply puts you in a better position because it tells the speaker they have been heard. Learning to listen will open doors: 1. People will begin listening to you. 2. A person will open up and sometimes give you more information about a problem or challenge. 3. The act of listening shows wisdom and understanding and develops a level of trust between people. Practice listening differently for a month, and see how doors open and relationships shift, and send a letter to the editor with your results.

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Member Profile

ATLAS CONTAINER: PRACTICING EMPLOYEE HAPPINESS BY TARYN PYLE

COMPANY: Atlas Container ESTABLISHED: 1968 JOINED AICC: 1994

Courtesy of Atlas Container

PHONE: 410-551-6300 WEBSITE: www.atlascontainer.com LOCATION: Severn, Maryland

Scott Bauer gives employer Atlas Container a thumbs up.

he words agility, intuition, dedication, and business savvy could all be applied to the people and philosophy of Atlas Container. Although each of these is accurate, the most apt description would have to be employee-driven. Many books, articles, and speeches are centered on investing in the happiness and well-being of employees. Paul and Peter Centenari not only accept and understand this concept, but they also practice it as a daily way of life. It has been, and continues to be, the cornerstone and solid structure behind this successful organization. In order to fully appreciate what makes Atlas Container such a success story, you must return to its roots. It is important to understand how these gentlemen moved from the world of investment banking into manufacturing—a world that was both foreign and enticing to them. This desire to build something, to make something, and to bring new concepts into a very old industry is where the path of these brothers—and Atlas—begins.

BOXSCORE January/February 2015

As young men, Paul and Peter entered the investment banking industry after securing master’s degrees in business from Harvard. Both seemed to have great careers ahead, yet there remained a nagging feeling that this just wasn’t the right fit. Paul describes an overwhelming desire to build something, but the specific product or industry remained a mystery. He sought an item that possessed the basic key elements of being disposable and fairly low-tech. These would be critically important in the Centenaris’ ability to sustain and grow a profitable business while learning and adapting to a completely new environment. However, to Paul, the most important aspect of the desired industry was that it must be one with repeat customers—one that would allow the brothers to form longterm relationships beneficial to both sides. Although they considered several industries, they had had brief exposure to the world of corrugated packaging. Deciding to explore this box business in closer detail, Paul contacted his friend Steve Young of AICC.

Paul shared with Steve his desire to learn more and to consider entering the packaging arena through acquisition. Young was able to provide a list of potential companies, and the difficult work of entrepreneurs began. Paul and Peter wrote letters to 450 different companies. The letters were followed by phone calls to all 450 potential candidates. Their list was reduced to two dozen. After personally visiting every one of these facilities, they narrowed the list to five, then two, and finally to the one plant they determined to be the best fit and most closely aligned with their vision. This would require a move from their location in Denver back to the East Coast, where they had spent their childhood. The next step in this life-altering decision would be to write a business plan. But it wasn’t just any business plan. This document held the keys to the brothers’ future, and the plan had to convince a bank to fund two guys with no manufacturing background and no firsthand knowledge of running a business. Not ones to be deterred, they did

Member Profile

their homework, and after much research and 100-plus hours, they crafted a plan they would present to 12 banks. Although in most stories one may be astonished to learn that 10 were interested in moving forward, the drive of these two brothers was now evident. And so their initiation into the box business was solidified, and at 4 a.m. the day before Thanksgiving 1988, they became the proud owners of Atlas Container. Reflecting on their 26-year history, Paul attributes a large part of their success to the stability they realized by retaining two of the previous owners. The industry veterans’ presence, vision, and the solid foundation they had already established turned out to be key to the company’s future success. Paul recognized the vast knowledge they possessed, along with an almost uncanny ability to predict the future. He describes the methodology in learning this valuable skill as “always foster intuition; take a guess, compare it to what happens, and continually hone your abilities.” Mutual respect and admiration allowed the existing culture of the company to be maintained. That culture, simply stated as “do anything for the customer, and value your employees,” supported with a core value of honesty and integrity, remains the driving force of Atlas Container today. The Centenaris have witnessed many changes to the industry over the past couple of decades. The massive decline of manufacturing within U.S. borders can still be felt today. The reality of the box business is there are still too many plants competing for a smaller customer base. The result of this marketplace dichotomy is tighter margins and a need to reduce costs. The supply-and-demand curve of our manufacturing world requires an ability to pivot based on these outside situations. This ability is present in the various growth methods used throughout the company’s history. Although the employee focus is constant, the strategy the owners employ to sustain and grow pivots with market conditions. At times, this has resulted in the

BOXSCORE January/February 2015

“Always foster intuition; take a guess, compare it to what happens, and continually hone your abilities.” —Paul Centenari opportunity to acquire other box plants in the area. The Centenaris have chosen this path and method to expand the company footprint on about 10 occasions. The past five years have seen an evolution in strategy from this acquisition mode to a greater focus on organic growth. The message the Centenaris continually send to their market is one of exceptional service. This is captured in Paul’s sentiment, “We are the FedEx of the box business.” The concept of “on time, every time” allows Atlas to stand above their competition. The ability to meet the demand of significantly reduced lead times does come with certain challenges. The lack of time creates more opportunity for mistakes to be made and quality to decline. Recognizing this potential concern, the Centenari brothers have invested heavily in a variety of areas that all impact the quality standards they are able to achieve. This investment includes millions on corrugator improvements and upgrades. The management team understands the importance of both regular maintenance and cleanliness at all machine centers. This allows for continuous improvement in both quality and efficiency. The desire of these two brothers to build something and to bring to life their belief system of investing in employees generated the successful organization they continue to lead today. Their focus on creating the right environment with the right people fosters an atmosphere of teamwork and camaraderie. Paul and Peter believe deeply that happy employees make happy customers, who in turn make a profitable business; but even more, they simply believe it’s just the right thing to do. The list of activities, areas of focus, and priorities is long; the choice, dedication,

and commitment to never stray from the mindset of employees first is admirable. Paul describes their company as a learning organization—one that empowers its people and allows them the opportunity to explore their own potential with confidence, dignity, and unwavering support. The people of Atlas, their customer base, and even their suppliers all share in the positive result of such a dynamic business philosophy. The benefits stemming from this philosophy exceed those typically found in an employee handbook. Their belief system extends to the families of their team members. These benefits vary based on need, such as tutoring for their children, or time of year, such as special visits from Santa Claus. This dedication to helping people moves outside the company walls, as Paul and his wife, Elizabeth McDavittCentenari, are active members of and a driving force behind Hope for Children, a charitable organization created to assist orphans in Ethiopia. The generosity of staff, suppliers, and even customers in support of this worthy cause speaks volumes about these relationships. The dominant characteristic Paul described when identifying an industry to which he wanted to dedicate his life’s work was one that had “long-term relationships beneficial to both sides.” It is evident he has achieved his goal. Taryn Pyle is the director of marketing and communications for AICC—The Independent Packaging Association. Please send company news and press releases to boxscore@theYGSgroup.com. Taryn can be reached at 703-535-1391 or tpyle@aiccbox.org.

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les ur sa or yo roject f s l a go al p plan, on? speci tegic nance a to questi . a r t s fi a d 15 o e h l t 0 t l ca wi ing ul 2 ready you look adiness be a successf u o y re re or l re lan? A ere. A ancia ready—f r is h nability p l your fin d a n e a y — w il ai he ne nd a sust ar, and w you sharp e a y , p e s i m e tea n th ems to k ditio or ad re a few it a Here

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BOXSCORE www.aiccbox.org

R SALES PERFORMANCE TRACKING

MEASURING SALES PERFORMANCE EFFECTIVELY BY GEORGE A. MORETTI

here are many different methods for evaluating sales performance, and the actual metrics used can take many different forms. It really depends on what is important to you and your company today and going forward. As a start, look at performance on a companywide basis and compare it to the previous year. Also look at sales performance individually or by segment or territory, and compare it to your plan going forward. If you are looking at overall performance, look at the sales team numbers, and then drill down to the individual level to measure how individuals are doing compared to the plan. First, review your current metrics and methods. Keep in mind some of these metrics might be outdated or not significant any longer to your business success. Be wary of measuring them because “that is what you have always done” and devise a new set of metrics that align with your company plan and specific sales goals. This checklist will focus on measuring the sales team—as a whole and as individuals. Resulting calculations from previous years will give you a baseline for determining their progress—or lack of progress—so be sure to include them in your charts and reports. The metrics and methods of evaluating are critical, and there is no shortage of the type of metrics to use. Here are a few of them, along with some of the expectations for the metric: • $/MSF: This could be a useful metric to measure segments or territories, or

BOXSCORE January/February 2015

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specialty-type business. You could look at markets, salespeople, and design styles of $/MSF to give you a good look at the comparisons. Sales dollars TY (this year) versus LY (last year): This metric can be deceiving because of a variety of factors such as transferred accounts, price increases in linerboard, or mix change by the customer. So look for any significant changes when comparing these numbers. Contribution dollars/MSF or contribution percent against sales dollars: Good metric to ensure pricing intelligence and connectivity to the profitability of your organization. Profit/MSF: A little tougher to measure effectively, but if you have the ability to get good data, then use it. New accounts sold: Every company must sell new business all of the time. No matter what your circumstances are, this is one of the main measurements to ensure long-term success. Every sales person needs to be selling new accounts. Growth of existing accounts: What percentage of the business do we have? What else is available to us? Is this account growing or in an attrition mode? Many long-term accounts are in attrition, and that is why we need to always be selling new business. Attrition of all accounts: Very few companies measure attrition outside of TY versus LY. This is a good monthly or quarterly measurement. Sometimes the erosion is very slow. That is why it needs to be monitored on a regular basis.

• Selling price/MSF: Always a good measurement, but it looks at only one view. Many factors can come into play when looking only at this metric. I would suggest that this is only one of the base metrics you use. • Sales against budget or plan: This one is the most-measured. But it shows only a part of the story. Was the plan too easy? Were accounts transferred to the sales rep? Was there a price increase, and if yes, were the numbers recalculated to reflect the increase? • Sales against forecast: Some companies measure this to ensure a good supply chain and good data to order roll stock and staff machines. • Cost of a salesperson: One of my favorites. This is a good exercise to have you and your salesperson complete. What does it really cost to put a salesperson on the road for your company? This can be measured as a selling, general, and administrative (SGA) percentage to include your design, project management team, and customer service group if your organization offers more value-added or specialty sales in your business. • Time in front of the customer: A great measurement that will open your eyes as to what little time we are “face to face” with our customers and prospects in today’s selling environment. • Time each week calling on new opportunity at new accounts: How many minutes or hours a week are your salespeople actually calling on new opportunities?

• Designs/samples made versus sold: A good analysis of where your design team is spending their time. What account uses most of the design support, and are we getting the orders? Are you deploying your resources where you will get the maximum return? • Quotes/orders: Be careful how you measure this metric. This is one of my least favorites because we tend to measure it the wrong way. New salespeople often get caught up in this, being told that the more they quote, the more business they will get. By the numbers, this may be statistically correct, but is this the main feature of your selling process and how you want your salespeople to be measured? • Presentations/proposals made: This is a very good measurement, since it takes you further down the line in the selling process to get to this stage. It would lend itself to knowing that you have understood the prospect’s needs and have spent the time to prepare a proposal to meet those needs, bringing you closer to closing the opportunity. • Plant tours given: I have heard many times that “once we get a prospect into our plant, then we close the deal 90 percent of the time.” Those are great results! And I’m surprised to report that when I then ask if they track plant tours, most of the time the answer is no. As Spock would say, “This is not logical.” • Entertainment—lunches, breakfasts, dinners, sporting events, etc.: Although this is getting tougher in today’s selling environment, people still do business with people they like. • Sales pipeline metrics (dollars, accounts): How many dollars are in your sales pipeline, and when do you expect it to close? How many new accounts or opportunities in existing accounts are in your salesperson’s funnel? Where are you in the selling

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cycle? All of these can be answered with an effectively managed sales pipeline system. BGA (base, growth, and attrition) analysis: This is one of the best metrics, as it analyzes your accounts over a two-year-plus time period. • Are your base accounts (two years plus) growing, or are they in an attrition mode? • How many new accounts have you sold? • Second-year accounts: Are you growing accounts that you have sold for more than one year but less than two years? Or are they in an attrition mode? This metric will give you a net total performance against your budgets, plans, and the market, and all three combined. I would suggest you use this metric for all your salespeople and roll it up for a complete sales plan review. Strategic account plan effectiveness: Review the top five strategic accounts that are most important to your company. Losing one of these accounts would hurt your business. Have a plan to keep it in tact, and review it quarterly. Margin improvement: Measure the growth in margin as a percentage or as total dollars. This metric keeps the focus on improvement of profitability and allows you and your teams to see progress on margin improvement initiatives. Receivables percentage in term and DSO (days sales outstanding): Cash drives the business, and the faster you collect the money, the healthier your business becomes. Key performance objectives or KPIs (indicators): A good tool to keep the focus where it needs to be. Miles driving: How much time are your salespeople spending in front of the windshield? Review this with the cost of a salesperson, and you may uncover a need for improvement in time and territory management, whether you

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provide a vehicle or not. Compare this with the measurement of how much time you are spending face to face with your customers and prospects. Number of accounts being serviced: Is one salesperson spread too thin? Sometimes reallocating your accounts will grow the overall sales in your company. This is also a good time to review the match between your clients and your salespeople as well as your geographic territories if you use them. Lost accounts: Analyze all lost accounts to determine the reason you lost the opportunity or account. Is there a pattern, or are the results pointing toward one or two salespeople or customer service representatives? Closed sales and opportunities: Who is best at closing the sales? Can one of your sales reps help train the others who may not be closing at the same rate? Time to close a sale: What is the time in days to close a brown box account? A graphic or specialty account? Knowing these numbers will help you plan better, forecast better, and focus on improving the selling process to reduce the closing time. Percent of market share and performance against the market: If market demand is up 5 percent and so are your sales, you really have not grown your sales, have you? The main focus should be on improving market share of the business you want. Sales dollars per FTE (full-time equivalent): This is a good metric by which to review additions or deletions from your workforce. Did you add a few more people in the sales department? Did you add a designer or project manager? Have your sales increased because of the additions? Wins/losses from competition: Track the wins and losses against each competitor and look for a pattern. Who is the weakest competitor? Can we take more business from them? Who is the

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strongest? What makes them stronger than you? • Capability of our manufacturing: Where do we have excess capacity? Where can we add more throughputs without adding any more fixed cost? These are a few of the metrics you can use as you look toward improvement in the upcoming year. If you can track all of them, great! But if you are just looking

for a few, these will help you. Be sure to create a dashboard and update the numbers each month to review with your team. Determine which ones are more important to you, and begin the new year with more focus! Plan to make the time to manage the expectations, results, and performance of those you choose. Your team will see that it is important to you, so it will become important to them.

George Moretti is president and general manager of training and consulting at Innovative Integrated Solutions LLC. He can be reached at 716-909-1177 or gmoretti@iispkg.com. For more on tracking sales performance, check out BoxScore online this month at www.aiccboxscore.org.

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BOXSCORE January/February 2015

R HOW TO SURVIVE A SUSTAINABILITY AUDIT BY BRETT KIRKPATRICK

SETTING THE STAGE The AICC Sustainability Audit is a great way to identify where you currently stand in your efforts to create sustainable solutions. It helps raise awareness of opportunities to conserve resources and can be used as a guide to show what can be done and where you may want to start. Completing the audit and reviewing your processes is a commitment that will take time and resources, though it is extremely well worth it.

GOING GREEN AT BAY CITIES The journey at Bay Cities began a couple of years ago, when we completed our first AICC Sustainability Audit. Our results were eye-opening. We realized there were many opportunities for improvement within our organization. As an employee-owned (ESOP) corporation, we made it our mission to be an example for everyone at Bay Cities to practice

Toyota 8-Series forklifts are California Air Research Board compliant and boast near zero emissions.

sustainable habits. We wanted to be true to the meaning of our company values: creativity, passion, integrity, responsibility, safety, and fun. After analyzing each one, we noted that the value “integrity” states, “We honor our business and our planet with sustainable practices.” What better way to show our commitment to sustainable solutions than actually practicing our company value of integrity? So we went to work. We started by reviewing the “7 R’s of Packaging” in the Wal-Mart sustainability scorecard—remove, reduce, reuse, recycle, renew, revenue, and read—and began our journey by creating companywide sustainability goals, which led us to small successes. Instead of throwing paper away, we decided to manufacture new notepads by reusing our waste paper, calling them Bay Notepads. We replaced the lighting controls in our plant and warehouse, upgrading to photosensitive switches. In the office areas, we have motion detection lights and pre-programmed thermostats

Photos courtesy of Bay Cities

ustainability, or going “green,” is one of the biggest topics in the world today. It is all around us, from signage, to recycling bins in public parks, to mobile apps that measure our individual carbon footprint. Sustainability is an important initiative, and we are constantly informed about our environment and what needs to improve. In a manufacturing facility, it is always a good idea to minimize your environmental impact by reducing waste within your organization, improving efficiencies, and creating steps to become a sustainable business. Engaging in the AICC Sustainability Audit is a huge step in the right direction. It is a tool that helps companies identify overall areas for improvement within the organization.

on all air conditioning and heating units, saving energy during nonproduction hours. As we progressed, we became more aggressive with our improvements by installing power conditioners. We increased voltage stability with significant reduction in kilowatt consumption, and we realized a power factor improvement to 98 percent from the pre-installation rate of 77 percent. In our warehouse, we continue to use electric carts, and we changed our forklifts to the latest Toyota 8-Series lift trucks. The Toyota forklifts carry the highest California Air Research Board compliancy, with near-zero emissions. We installed speed limiters and set the maximum at 8 mph, reducing fuel consumption and tire wear by 30 percent. The forklift seats have an ergonomically safe design, providing comfort for our drivers and increasing performance and productivity. During the summer months, we participate in the Summer Advantage Program with our energy provider. The program encourages a rescheduling of shifts away from peak demand hours, reducing our energy expenses by 16 percent during the four summer months. Our delivery trucks are equipped with timer controls that shut the motors off when they idle longer than two minutes. We offer flexible delivery and receiving hours that enable night and early morning deliveries when the roads are clear, avoiding excessive idling and reducing diesel emissions. And we didn’t stop there. Our new skylights were designed to increase foot-candles in our manufacturing plant. Our graphics team designed custom recycling bins that have been placed

throughout our facilities, including individual offices, encouraging everyone at Bay Cities to recycle paper, plastic, metal, and glass. We continue to make it a point to purchase supplies manufactured from recycled materials. Results from the audit and company improvements were significant. Our overall energy expenses were decreased by 14 percent, fuel consumption was reduced by 14 percent, and transportation costs were lowered by 13 percent. Our next energy challenge is to reduce the energy consumed when producing compressed air. We are resolving this issue by ordering an updated air compressor that utilizes variable-frequency drive (VFD) technology.

STEPS TO SUCCESS When you decide to conduct an audit to benchmark your sustainability efforts, we suggest you start by reviewing the six key audit areas that are stated on the introduction page of the AICC Sustainability Audit template. Though there are many overwhelming questions, answer each one as honestly as possible. Be sure everyone involved is engaged and excited to learn how the organization can improve. Here are a few key thoughts to keep in mind when you are conducting the audit: • Review the sustainability audit and six key audit areas, so you know what to expect as you work through the checklists. • Be honest. The audit will help you only if you do not sugarcoat your answers. • Select a champion who can dedicate time and resources to completing the audit. Consider selecting volunteers with a “green” passion to ensure a successful audit. • Communicate with department leads about the upcoming audit, and encourage them to participate honestly and openly. • Tackle the process, not the person, to avoid blaming. • Research each department; go beyond your present knowledge of the area, and

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This employee-owner created and designed the Bay Notepads.

Custom-designed recycling containers were created by the Bay Cities design department.

explore new possibilities to enhance each department of your organization. • Review your key suppliers—how sustainable are they? • Upon completion of the audit, establish goals to make improvements. • We recommend you complete the audit yearly to benchmark your success; just because an improvement was made does not mean you moved the needle. It’s important to check back and see how far you have really come.

within your organization has a direct impact on those around you. You may not realize it, but your actions also indirectly affect others on a global scale, today and in years to come. It is important that we all do our part and work to reduce waste within our organizations, improve efficiencies, and create a more sustainable business. Be honest with yourself, communicate with department leads, research your individual departments beyond what you know, and be sure to create goals for next year. Make sustainability a core value, create incentives for employees, and remember, any change, large or small, is a positive start. Be an example to other organizations and to your own employees. Start by completing the AICC Sustainability Audit, and use it as a tool to guide you. Visit AICC’s online store at www.aiccbox. org to order the AICC Sustainability Audit— Benchmarking and Improving Internal Plant Efficiencies workbook.

USING THE AUDIT AS A GUIDE FOR YOUR ISO 14001 CERTIFICATION The AICC Sustainability Audit is not just a tool for you to see where you stand and how you can improve; it is also a guide for obtaining the ISO 14001: Environmental Management Systems certification. This is an international certification that signifies your organization’s commitment to reducing negative impacts on our environment. More than 150,000 certifications have been issued globally—why not be next? We have made it our goal to become ISO 14001 certified. Becoming certified shows a commitment to environmental stability, which continues to be a big initiative within Bay Cities. What you do

Brett Kirkpatrick is chief operating officer at Bay Cities. He can be reached at brettk@bay-cities.com.

R HOW TO SURVIVE A FINANCIAL AUDIT BY KEVIN AUSBURN

he holiday decorations have been put away, the credit card statements are arriving, and your attention turns to preparing for the annual financial audit of your business. Let’s get to the issue of preparing for the arrival of the personnel from your accounting firm to begin the annual audit of your financial statements. What is the first thing that you do to get ready? If you are just now asking yourself this question, you need to acknowledge that you are 12 months behind in your planning and preparation. The audit of your financial statements involves much more than analyzing your accounting records at the end of the year. To gain confidence that the information you are reporting in your financials is reasonably accurate and prepared in a consistent, objective manner, the auditors will test and evaluate the systems that feed and support the financial statements. If there are no formal processes in place, the auditors will not be able to place reliance on your accounting system—the basis for your financials. Under these circumstances, if they are able to perform the audit at all, it will require much more time, testing, and ultimately expense to the client. What are the elements of a sound accounting and information system that, if followed consistently, would prepare you to be “audit-ready?” First, it is important to note that all activities of a business eventually flow up to the financial statements. Whether it is the maintenance department ordering parts for equipment repairs and maintenance, sales and customer service entering orders for processing, the purchasing department

buying raw materials to fill customer orders, or the production department scheduling employees on machines to run specific items, all of these ultimately have a financial impact on the business and will be reflected in the financial statements. These transactions need to be subject to a system of approval and recording to ensure their upstream integrity. The following components of a business are necessary to ensure the accurate and consistent reporting of information that has an impact on financial statements: • Internal Controls — A sound system of internal controls helps to ensure transactions are properly authorized before a commitment is made. One example would be the dollar limit of a person’s purchasing authority, over which another individual higher up in the organization would have to approve before the purchase is made. Another example would be dual signatures on checks over a predetermined dollar amount to minimize the chance funds could be disbursed inappropriately. The auditor will review these internal control procedures to see if they are designed properly and are being followed faithfully. If the results of testing and inquiry confirm internal controls are adequate, the auditors’ level of comfort in relying on them as a foundation for the financials is enhanced. • Segregation of Duties — It is desirable to separate, or segregate, the duties of individuals so they are not performing tasks that could result in errors or omissions going undetected. The classic example is to not have the same employee prepare the daily bank deposit and also post the payments

received to customer accounts receivable records. Properly designed job descriptions will take into account the intent to segregate duties and minimize the opportunity for fraud or collusion to occur and the risk of innocent errors not being caught. An employee’s temptation to perform an act of fraud or theft they would not otherwise consider can be eliminated by a segregation of duties that is well-communicated and enforced. For small businesses, segregating duties can present a real challenge. However, most of the time a reasonable compromise can be reached that satisfies the needs of the business to handle daily tasks efficiently, yet makes sure duties are properly segregated. • Process and Procedures — To ensure business transactions are being processed consistently and accurately, it is important procedures be in place to guide employees. Without them, the financials generated from this information would be suspect. The list of processes and procedures within an organization could be quite long, but they would include the following: • Customer order processing • Purchase order approval process • Customer payment posting to accounts receivable records • Inventory valuation process • Customer credit approval process • Payroll authorizations • Capitalization policy During the course of the audit, the accountants will document many of these processes and procedures and confirm their functioning with selected employees. If they are satisfied the

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processes and procedures are operating as described, they will be able to rely on the financial information that flows up from these transactions. • Documentation — It is important to maintain good documentation that supports transactions of the organization and was prepared at the time the transaction occurred. The auditor will look for the supporting documentation that proves the transaction was authorized and recorded properly. For example, a large disbursement for a capital asset should have the following attached to the check copy in the paid bills file: a copy of the purchase order with appropriate approvals; a copy of the shipping and receiving documents evidencing

the date received and by whom; and the vendor invoice that was paid. • Attention to Details — Preparing detailed schedules of balance sheet accounts will assist the auditors in reconciling the balances in these accounts as of your fiscal year end date. Selected expense accounts may also be detailed to show the transactions comprising the total for the year. The organization can save a lot of time and money by preparing these schedules prior to the commencement of the audit, and in some instances these schedules can be maintained throughout the year and updated on an ongoing basis. You will miss an opportunity to improve your business operations if

you view these practices as having value only for an audit. This would be similar to attempting to achieve a supplier certification without fully implementing the elements of the program to take advantage of the improvements that can accrue to the business. By integrating these good business practices, you will not only be ready for an audit, but you will also have a healthier and more efficient business. Kevin Ausburn is chairman and CEO of SMC Packaging Group. He can be reached at kevin. ausburn@smcpackaging. com.

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R MAKE THE MOST OF YOUR AICC MEMBERSHIP IN 2015 BY VIRGINIA HUMPHREY

ICC is here to serve you. Make sure you get the most out of your company’s membership by taking advantage of some new—or updated— member benefits. • Include the new AICC logo on your website. Utilizing the AICC logo on your website and other marketing materials shows your prospects and current customers your company is a strong independent on a path of constant improvement, taking advantage of AICC’s comprehensive suite of education and networking events and other members-only resources. Download the logo and guidelines at www.aiccbox.org/logo. • Grow your employees and grow your profit by taking part in AICC training. Classes, offered online and in person, cover everything from hazmat packaging to increasing your sales. For a full schedule, go to www.aiccbox.org and click on the Education tab. • Sign up for BoxScore and inBox. Make sure you are reading AICC’s bimonthly publication, BoxScore, and AICC’s now weekly e-newsletter, inBox. The information found in these publications showcases trends, challenges, and solutions from peers and co-members. If you know of someone at your company who isn’t getting these publications—and should—ask Virginia Humphrey (vhumphrey@aiccbox.org) to add them to the AICC mailing list. • Read BoxScore online, too. See the print magazine formatted for online reading and find more content— BoxScore Web exclusives—that give you a new perspective on the independent

marketplace. Read BoxScore online at www.aiccboxscore.org. • Make it easier for others to find you. Make sure your company’s information is up to date in AICC’s searchable online membership directory—the iDirectory—at www. directory.aiccbox.org. Increase your visibility by adding your logo to your listing. Contact Maria Frustaci (mfrustaci@aiccbox.org) to learn more. • Meet your peers at regional meetings. As a member in good standing, anyone from your company can register for regional meetings, which take place across the continent. A regional meeting can offer peer learning opportunities, seasoned industry speakers, plant tours, and priceless in-person networking opportunities. For a list of meetings, go to www.aiccbox.org and click on the Meetings tab.

• Visit the AICC online store. For the newest reports and publications written with an independent perspective, go to www.aiccbox.org/store. • Get answers to your most pressing questions from Ralph Young. Ralph Young, AICC technical adviser, has more than 25 years of experience in the paper and packaging industries. He’s available to solve problems and answer questions. Email Ralph at ryoung@aiccbox.org. See what others are asking on the Ask Ralph blog at www.askralph-aiccbox.org. Virginia Humphrey is AICC’s director of membership. For more tips about making the most of your membership, contact her at vhumphrey@aiccbox.org.

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Speaker Profile

A HABIT OF WINNING BY SCOTT ELLIS, ED.D.

he 2015 AICC Chairman Greg Tucker and his team at Bay Cities engaged Holly Green a few years ago to develop competitive advantage through strategic agility. What she says makes uncommon sense when she confronts companies that plan “not to lose” rather than practicing to win. Holly Green will be a keynote speaker at AICC’s Spring Meeting and one of several presenters at the concurrent Strategic Leadership Forum. She is CEO of The Human Factor, Inc. and former president of the Ken Blanchard organization. I asked her what winning companies are focusing on in 2015. Ellis: What do you mean when you say most companies practice not to lose? Green: The problem is that if we practice doing the wrong things, we get better at doing the wrong things. We are,

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in effect, practicing not to win. In order to win, we need to practice the habits that will support our organizations in achieving their destinations. Ellis: How does that show up in the culture? Can you give a few examples of how that may be evidenced in everyday behavior? Green: Certainly, playing to not lose shows up in disorganized meetings where people arrive late, unprepared, and not focused on what’s really important. It can be seen when decisions are based on assumptions rather than hard data. We all see it when we fail to follow up and hold people accountable for their decisions. Ellis: So, I’ve been guilty of those. What can leaders do to form better habits and improve the win column entries in our cultures? Green: I came to this conversation prepared; I have seven winning habits that

I would encourage all leaders to practice every day: 1. Focus on winning every day. Take three minutes each morning to think about the day ahead. Ask yourself, “Of what I plan to do today, what will get me closer to my definition of winning or success?” Then organize your day around those tasks and activities that move you closer to your goals, while eliminating the things that clutter your time and attention. Ellis: Do you have any advice on how to maintain winning focus in the face of distractions and emergencies? Green: Funny you should ask. … 2. Focus others on winning. Between distractions, interruptions, and the struggle to get the product out the door, people can easily lose focus on the

big picture. Constantly talk about the importance of winning with employees. Place visual cues throughout your work environment, and imbed your definition of winning into all your ways of working. Keeping everyone in the organization focused on winning is essential for reaching the destination. 3. Expose your thinking. One of the biggest causes of bad decisions is the tendency to believe that others think and see the world the same way you do. This can be avoided by exposing your thinking processes to others. When presenting an idea or proposal: • State your assumptions and describe the data that led to them. • Provide supporting detail for the reasoning behind your assumptions. • Explain the consequences or outcomes of your thinking. After communicating your thinking process, publicly test your conclusions and assumptions by actively soliciting feedback. Discussing the “why” behind the “what” will help your organization make higher-quality decisions. Ellis: So state your case and show your work. Do you go so far as to ask for “yeahbuts” or dissenting feedback? Green: Yes, that’s habit No. 6, but I find it helpful to focus on timing and good planning to make disagreement more agreeable. So, first try to stay aware of the emotion involved. 4. Recognize when you’re in mental fight or flight. When humans are in mental fight or flight (strong fear of or resistance to an idea), we tend to screen in data that proves us right while screening out data that might prove us wrong—not a good recipe for smart decisions. If you find yourself having a strong emotional reaction to an idea or a statement, practice asking yourself: • Why am I reacting so strongly to this issue?

Register to see Holly Green at the national Spring Meeting April 29–May 1 in Naples, Florida, at Naples Grande Beach Resort. Holly will also be presenting at the concurrent Strategic Leadership Forum, April 28–April 29. To register for the event, visit http://bit.ly/1JK3FJ2.

• What underlying assumption or belief of mine is being challenged? • Is this assumption or belief still true? • What do I stand to lose by having my point of view challenged? • Is it time for me to update my thinking? The fifth habit will reduce frustration and help reduce the fight or flight reaction. 5. Run effective meetings. To turn meetings from time-wasters into effective time-users, practice the following: • Have a written agenda. • Start and end on time. • Define what winning for the meeting looks like during the first two minutes (what will we do, decide, discuss, determine, seek feedback on, etc.). • Get everyone involved in the discussion. • Make decisions based on hard data rather than unspoken assumptions. • Make sure everyone knows who has agreed to do what before leaving the room. Ellis: I’ve been looking forward to No. 6—because a mentor of mine said, “Where two agree, one is unnecessary.” This is about constructive disagreement, isn’t it? Green: Yes, it is, so leaders should invite the opportunity to be proved wrong and change direction. 6. Prove yourself wrong. When evaluating an idea, project, or even your strategic plan, first look for evidence

that suggests things are going right. Then actively seek out evidence that contradicts it. The human brain has a strong tendency to see what it wants to see and to focus on evidence that supports its prevailing view of the world. Purposefully seeking data that “proves you wrong” can help with midcourse corrections—before it’s too late—and can often prevent bad decisions before they get fully implemented. Ellis: That takes humility and self-control to resist reactivity. Green: It takes an agile brain to develop this habit, so I suggest one more: 7. Play with your brain. These days, we’re all overworked, overstressed, and overinterrupted. To keep your most important leadership tool (your brain) in top operating condition, practice building time into your schedule to re-energize and recharge it. For example, schedule time away from your cell phone, email, and other distractions. Go for a barefoot walk in the grass. Do brain teasers or mind puzzlers. Read a magazine or blog that has nothing to do with your business or industry. Take one day a month to think about anything except your business. Use neuroprompts to remind yourself to visit your brain on a regular basis and see what’s going on inside that amazing tool. Ellis: Thank you for sharing these winning habits. How would you challenge readers to get started? Green: We all practice what we do every day. I’d challenge readers to ask themselves, “Will I practice winning habits in 2015 or resign myself to another year of working hard to not lose?” Scott Ellis, Ed.D., is a partner in AICC member company P-Squared (P 2) and an expert in individual and organizational growth. He can be reached at 425-9858508 or scottellis@psquaredusa.com.

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AICC’s Packaging University doesn’t have a Football Team, a Marching Band, a Mascot, Fraternities, Cheerleaders, or Spring Break.

What we do have is CORRUGATED BASICS and SAFETY BASICS, the only two industry-specific, online training courses designed for you and your employees. Enroll in AICC’s new Corrugated Basics Course, and you’ll graduate with a comprehensive knowledge of the Corrugated Industry - its history and its future - from construction to converting, from manufacturing to marketing. Safety Basics should be required curriculum for every worker in the Corrugated Package Manufacturing Industry, providing general safety information and practical training solutions designed to minimize accidents and promote safe productivity in the workplace. To find out how to get your employees to the top of the class at AICC’s Packaging University, log on to the AICC Packaging University site at AICCbox.org, contact Taryn Pyle at tpyle@aiccbox.org or call 703.535.1391.

113 S. West Street • Alexandria, VA 22314 • Phone +1.703.836.2422 • www.aiccbox.org

S T R AT E G I C L E A D E R S H I P

2015 Spring Meeting AND THE 2015

Strategic LEADERSHIP

APRIL 29 - MAY1, 2015 THE NAPLES GRANDE BEACH RESORT NAPLES, FLORIDA

PLUS... AICC 2nd ANNUAL INDEPENDENTSâ&#x20AC;&#x2122; CUP CHARITY GOLF TOURNAMENT

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55 Meeting co-located with the Flexographic Pre-Press Platemakers Association ( FPPA)www.aiccbox.org Annual Meeting

Chairman’s Message HAPPY NEW YEAR! This spring AICC will celebrate its 40th Anniversary in Naples, Florida, at the AICC 2015 Spring Meeting! We will honor the past while we look to the future. The evening of Wednesday, April 29, will feature a special 40th Anniversary celebration that will pay homage to the AICC “founding fathers” and will feature a special tribute to AICC “Through the Years.” The evenings’ events will culminate on a lighter note with entertainment provided by “Four Day Weekend,” a critically acclaimed comedy troupe. Our keynote presenter, Holly Green, an International Business Consultant and Best-Selling Author, joins Mike Carey, Senior NFL & CBS Expert Referee and Business Owner, in an upbeat and interactive presentation on “Elite Leadership.” They will share the “secrets” of what it takes to be elite in everything you do. Holly will also present a two-day workshop track for leaders on “Using Your Brain to Win in Today’s Hyper-Paced World” and “Enabling Strategic Ability.” We also have a two-day track for emerging leaders that will feature a roundtable discussion of former industry leaders as they discuss what they know now that they wish they knew then and looking to the future.

into high-impact, memorable insights on leadership, executing a plan, operating in uncertain environments, and to “never quit.”

Greg Tucker

AICC will also hold its 2nd annual Independents’ Cup charity golf tournament. Following the success of last year, this scramble-style tournament offers more networking and fun for everyone, all while raising money for great causes. We will also be offering a new educational course, the Strategic Leadership Forum, in conjunction with the Spring Meeting. The course will teach innovative approaches to identifying, attracting and retaining well-prepared employees. I’m looking forward to the year as your newly elected chairman and I hope you and your colleagues will join us in Naples. Sincerely,

Greg Tucker, Chairman/CEO, Bay Cities Chairman, AICC 2014-2015

Our closing speaker, former SEAL Team Six operator Robert O’Neill, will translate his unique experience

Scan this code for meeting details and registration.

Meeting Speakers Robert O’Neill Former Seal Team Six Operator, Team Leader, Naval Special Warfare Development Group Rob O’Neill is one of the most highly decorated combat veterans of our time. He was a team leader with the Naval Special Warfare Development Group. He has deployed more than a dozen times, and he held combat leadership roles in more than 400 combat missions in four different theaters of war. A highly trained Navy SEAL, he led the military’s most elite and was involved in our nation’s most important campaigns. With most of his career shrouded in a classified cloak, O’Neill was the man on the ground we have never heard of but know exists. He was one of the quiet professionals performing the most difficult tasks in the most difficult circumstances, serving his remarkable career in the shadows and keeping America safe in the process.

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AICC 2015 SPRING MEETING

In O’Neill’s line of work, instant, critical decision-making is an absolute necessity for success, and he has proven experience in exceptionally high-risk and fluid environments. Having trained more than 800 special operations and tactical operators, O’Neill brings this unique expertise to organizations and translates his elite SEAL team training into high-impact, actionable insights on leadership, decision-making, operating in uncertain environments, and how to become the “best of the best.” His mantra is “never quit,” and O’Neill believes this is the single most important factor in determining success. O’Neill reminds us that the servicemen doing the dirtiest work are often making the hardest sacrifices.

AICC 2nd ANNUAL INDEPENDENTS’ CUP CHARITY GOLF TOURNAMENT The 2nd annual AICC Independents’ Cup Charity Golf Tournament will take place Thursday, April 30 from 12:15 pm – 6:00 pm at the Ritz Carlton Golf Course in Naples, Florida. This will be followed by a 19th Hole Happy Reception from 6:00 pm – 7:00 pm. This scramblestyle tournament presents a new format that offers participants more networking opportunities and generates an atmosphere of greater fun for everyone, all while raising money for great causes.

the AICC

Independents’ Cup

The 2015 Independents’ Cup Charity Golf Tournament will benefit The Wounded Warrior Project & Grace Place for Children & Families. The cost of the golf tournament is $325 per person and $1,500 per foursome. This includes all green and cart fees, driving range balls, tournament fees, box lunches, beverage cart, round-trip transportation, prizes and and all taxes and gratuities.

Holly Green CEO and Managing Director of THE HUMAN FACTOR, Inc. An executive with more than 15 years of helping business leaders and their companies achieve excellence, Holly creates clarity on what winning looks like and determining how to get there. She draws on her neurophysiology background to help align and focus your organization. Her unique approach to strategic agility, alignment and engagement– based on the approach Pause, Think, Focus, Run–provides the tools, techniques, and skills companies need to achieve their goals.

Golf Transportation The golf course is located approximately 10 minutes from the Naples Grande Resort. Transportation will be provided, departing at 11:30 am, and will return following the 19th Hole Awards Happy Hour after 7:00 pm.

Golf Clubs You can bring your own golf clubs on the provided transportation. If you plan on renting clubs, you can reserve and pay for them during the meeting registration process. The cost per set of TaylorMade ® rental clubs is $70 (includes tax).

Proper Attire Appropriate golf attire is required on the course and practice facilities. Shorts are permitted but should be Bermuda length. (T-shirts, tank tops, Major Golf Sponsors

cut-offs, sweat pants, bathing suits, athletic shorts and denim are NOT permitted.)

Mike Carey Senior NFL & CBS Expert Referee and Business Owner Mike has been an NFL referee for 20 years. He can currently be seen on CBS Thursday Night Football as the referee expert. He is also a successful CEO and owns or shares 8 ski apparel patents. On the field, he is known for his crisp, distinctive signals, clear, well-described stadium communications and swift disciplinary actions – he has ejected the most players of all the active referees in the NFL.

A Compelling Look at Leadership – Being Elite: On the Field & in the Office Elite leadership is hard to define, but we all know it when we see it. Together Holly and Mike will share the “secrets” of what it takes to be elite in everything you do. In an upbeat, interactive format, Mike and Holly will share what it is, specifically, that defines an elite leader–and what makes them stand out from everyone else. Topics include: Together, Mike and Holly use their experience working with elite teams to • How to slow down to go fast on the field and in business shine a light on the lessons learned that can be applied to leading successful • How to continuously “hone your craft” both at work and on the field companies. This is a rare opportunity to explore how elite leaders think and • How to create and maintain elite teams on the field and at the office do and learn more about what makes an elite team. BOXSCORE www.aiccbox.org

AICC 2015 SPRING MEETING

Dynamic Workshops INTENSE LEARNING, SHARING & “PUT IT TO WORK” Thursday, April 30th and Friday, May 1st AICC will offer in-depth workshop track sessions during the AICC 2015 Spring Meeting. The workshop sessions will be held concurrently on both Thursday, April 30th & Friday, May 1st. Plan to attend BOTH DAYS for the optimal learning experience! Take advantage of “box plant” multi-group pricing to allow key company associates to take advantage of these education opportunities! Workshops are for box and carton makers and supplier members too!

CEO and Executive Leadership Track WHO SHOULD ATTEND: Owners, Presidents, CEO's, General Managers and those currently in management or leadership positions

PRESENTER: (Both Days) Holly Green

International Business Consultant and Best-Selling Author

Emerging and Developing Leaders Track WHO SHOULD ATTEND: Emerging Leaders and New Managers

DAY ONE: Thursday, April 30, 2015 • 9:45 am –11:00 am

DAY ONE: Thursday, April 30, 2015 9:45 am –11:00 am

WORKSHOP TOPIC: “USING YOUR BRAIN TO WIN IN TODAY’S HYPER-PACED WORLD”

ROUND TABLE DISCUSSION: “HONORING THE PAST”

Your brain is your most powerful competitive weapon! Yet, many of its built-in thought patterns and ways of working do not serve business leaders well. The brain has a real talent for forming patterns and connections, answering questions and solving problems. It also has a tendency to see what it expects to see. Learn how to avoid getting blinded by your own data; make better, more informed management decisions; and use your brain to win!

DAY TWO: Friday, May 1, 2015 • 8:30 am –10:00 am WORKSHOP TOPIC: “ENABLING STRATEGIC ABILITY” Are you swift? Can you move fast with focus and flexibility in today’s rapidly changing environment? Using ideas, tools, and techniques from her best-selling book, More Than A MinuteTM–How to Be An Effective Leader and Manager in Today’s Changing World, Holly reveals counterintuitive insights that market leaders use. Holly will show you how to win, define what you need to do to get there, and how to pause and focus.

Hear from our former industry leaders as they discuss what they know now that they wish they knew then and discuss best practices from the past.

DAY TWO: Friday, May 1, 2015 8:30 am –10:00 am WORKSHOP TOPIC: “LOOKING TO THE FUTURE” Hear from a millennial entrepreneur on what it takes to succeed in today’s market.

Emerging Leaders Events: Tuesday, April 28, 2015

Tuesday (continued)

Wednesday, April 29, 2015

Emerging Leaders Planning Session 4:00 pm – 6:00 pm

Emerging Leaders Networking Event 7:00 pm – 10:00 pm

Emerging Leaders Educational Session 8:00 am – 12:00 pm More details available on www.aiccbox.org/meeting.

Folding Carton & Rigid Box Events:

58 4

Thursday, April 30, 2015

Friday, May 1, 2015

Folding Carton & Rigid Box Networking Happy Hour & Dinner 7:30 pm – 9:30 pm

Folding Carton & Rigid Box Session 7:15 am – 8:15 am (Breakfast provided)

BOXSCORE January/February 2015

AICC 2015 SPRING MEETING

This session is a special group discussion forum for AICC Folding Carton and Rigid Box makers. Here is your opportunity to hear and discuss issues important to your company and the industry. Come ready to share and learn from your industry colleagues.

THE AICC 2015

Strategic LEADERSHIP FORUM

A MANAGER’S CONFERENCE FOR CREATING WINNING TEAMS. IT STARTS WITH WINNING EMPLOYEES – HOW TO ATTRACT, GROW, KEEP WINNING EMPLOYEES

Tuesday, April 28th & Wednesday, April 29th at the Naples Grande Resort THIS WILL BE A WORKING FORUM TO SHARE BEST PRACTICES AND LEARN INNOVATIVE APPROACHES TO IDENTIFYING, ATTRACTING, AND RETAINING WELL-PREPARED EMPLOYEES. Participants will be interviewed in advance to pinpoint winning strategies and challenges. Adept instructors will customize the workshop content to address these critical topics, and attendees will also share resources toward practical action plans for workforce improvement. Participants will gain tools to: • Locate emerging talent nationally

Holly Green

CEO and Managing Director of THE HUMAN FACTOR, Inc. With over 15 years of helping business leaders and companies achieve excellence, Holly draws on her neurophysiology background to align, focus and provide the techniques and skills organizations need to achieve their goals.

Scott Ellis, Ph.D.

• Develop talent locally

Individual and Organizational Growth Expert

• Select employees with certainty • Onboard effectively • Develop employees intentionally • Retain engaged employees for mutual benefit

WHO SHOULD ATTEND: Culture Influencers, CEO’s, Department Managers,HR Professionals, Hiring Managers Scott Ellis will facilitate and present on workforce development, talent discovery, and selection. George Moretti and Taryn Pyle will provide a practical set of tools for onboarding and training employees. Spring meeting keynote speaker Holly Green will discuss engaging employees and keeping them aligned with the company’s winning strategies.

SCHEDULE AT A GLANCE: Tuesday, April 28, 2015

Wednesday, April 29, 2015

Strategic Leadership Forum 1:00 pm – 5:00 pm (Lunch provided)

Strategic Leadership Forum 8:00 am – 4:00 pm

Strategic Leadership Forum Reception 6:00 pm – 7:00 pm

Course Instructors:

(Continental Breakfast and Lunch provided)

REGISTRATION: To register online, visit aiccbox.org/meeting. Registration includes events associated with the AICC 2015 Spring Meeting. For more information on the AICC Strategic Leadership Forum, please contact Taryn Pyle at tpyle@aiccbox.org or 877-836-2422.

A partner in P2 and a certified professional coach, Scott uses his deep experience in psychology and business leadership to help individuals and teams find direction, and achieve their goals.

George Moretti

Sales Consultant and Trainer, GM Training & Consulting A 40+ year veteran of the corrugated industry, George uses his flexible management experience to build highly effective management and sales teams with a focus on adding profit to the bottom line quickly.

Taryn Pyle

Director, Marketing and Communications, AICC A 20+ year association veteran, Taryn has recruited, trained and developed personnel in companies ranging from 5-200 employees. She creates course content for AICC’s Packaging University, seminars and webinars, is editor of BoxScore magazine, and contributor to AICC’s Employee Onboarding Manual. BOXSCORE www.aiccbox.org

AICC 2015 SPRING MEETING

Schedule of Events Tuesday, April 28, 2015

Thursday, April 30, 2015

Friday, May1, 2015

AICC Strategic Leadership Forum* 1:00 pm – 5:00 pm

AICC Continental Breakfast 7:00 am – 9:00 am

AICC Emerging Leaders Planning Session

AICC General Session I 8:00 am – 9:35 am

AICC Folding Carton/Rigid Box Session

(emerging leaders only)

4:00 pm – 6:00 pm AICC Strategic Leadership Forum Reception* 6:00 pm – 7:00 pm AICC Emerging Leaders Networking Event (emerging leaders only)

7:00 pm – 10:00 pm

Wednesday, April 29, 2015 AICC Emerging Leaders Educational Session (emerging leaders only)

8:00 am – 12:00 pm AICC Strategic Leadership Forum* 8:00 am – 4:00 pm AICC Optional Spouse/Guest Off-Site Event* Naples Gallery Tour, Lunch & Shopping 10:00 am – 4:30 pm Departure from Main Lobby

AICC Board of Directors Luncheon Meeting 1:30 pm – 3:30 pm AICC Associate Member Meeting 4:00 pm – 5:00 pm AICC New Member & First Timer Orientation & Reception (invite only) 5:00 pm – 6:30 pm AICC Opening Night Reception, Dinner, and 40th Anniversary Celebration 6:30 pm – 10:00 pm

Opening Remarks & Housekeeping Greg Tucker, Chairman, AICC

8:00 am – 8:10 am Anti-Trust Statement David Goch, General Counsel, AICC

8:10 am – 8:20 am

(Continental Breakfast available in room)

7:15 am – 8:15 am Workshop Track Sessions–Part 2 (held concurrently)

8:30 am – 10:00 am Coffee Break 10:00 am – 10:10 am

AICC/PBP Hall of Fame Award Presentation 8:20 am – 8:40 am

AICC General Session II 10:10 am – 12:05 pm

Keynote Presentation

Tyler Howland, First Vice Chairman, AICC

Holly Greene, International Business Consultant Mike Carey, Senior NFL & CBS Expert Referee “A Compelling Look at Leadership– Being Elite: On the Field & in the Office”

AICC Golf Tournament Awards Announced for the 2nd Annual Independent’s Cup 10:20 am – 10:30 am

8:40 am – 9:30 am Closing Remarks & Housekeeping Greg Tucker, Chairman, AICC

9:30 am – 9:35 am Coffee Break 9:35 am – 9:45 am Workshop Track Sessions–Part 1 (held concurrently)

9:45 am – 11:00 am AICC 2nd Annual Independent’s Cup Charity Golf Tournament* and 19th Hole Happy Hour* Ritz Carlton – Tiburon Golf Course 12:15 pm – 7:00 pm Golf Shuttle departs at 11:30 am from Main Lobby

AICC Optional Off-Site Event* Kayaking Adventure 12:30 pm – 5:00 pm Departure from Main Lobby

Opening Remarks & Housekeeping 10:10 am – 10:20 am

Paper Check-Off Update Mary Ann Hansan, Executive Director, The Paper Check-Off

10:30 am – 10:50 am ICPF Presentation & Circle of Distinguished Leaders (CDL) Award 10:50 am – 11:10 am Closing Keynote Presentation Robert O’Neill, Former Seal Team Six Operator, Team Leader, Naval Special Warfare Development Group

11:10 am – 12:00 pm Closing Remarks & Housekeeping Greg Tucker, Chairman, AICC

12:00 pm – 12:05 pm AICC Optional Off-Site Event* Deep Sea Fishing Excursion 12:30 pm – 5:30 pm Departure from Main Lobby

AICC Cash Bar Happy Hour Reception 7:30 pm – 8:30 pm *Events requiring separate registration and fee. Times, locations and events are subject to change.

All events are being held at the Naples Grande Beach Resort unless otherwise noted.

AICC 2015 SPRING MEETING

Folding Carton & Rigid Box Networking Dinner* 7:30 pm – 9:30 pm ICPF event is shown in purple. Optional Events shown in red.

Optional Events NAPLES GALLERY, LUNCH AND SHOPPING EXCURSION Wednesday, April 29, 2015 • 10:00 am–4:30 pm Join other AICC attendees for a day of art culture while visiting Naples’ famed Gallery Row or Bayfront Place. Famed local artist JoAnn Lizio will be on hand to discuss the art scene in Naples and to answer any questions about the local galleries. Guests will be given a map and information on the various galleries in the area. Following the gallery tour, attendees will enjoy lunch at Tommy Bahama’s Restaurant. Then spend the afternoon strolling through the tree-lined streets and quaint courtyards, and discovering the finest shopping Southwest Florida has to offer. Nestled in the heart of historic Olde Naples, Third Street South and the Avenues is a cornucopia of fashion, art, antiques, jewelry, one-of-a-kind gifts, exquisite dining and the ultimate in pampered service. With more than 100 unique shops, galleries and restaurants, Olde Naples offers a shopping experience in the intimate tradition of yesterday featuring stylish trendsetters of today. The cost of the event is $180 per person and includes: round-trip transportation, local art guide, lunch and non-alcoholic beverages. All taxes, gratutities and fees included.

KAYAKING ADVENTURE Thursday, April 30, 2015 • 12:30 pm–5:00 pm The Kayaking Adventure was designed for nature loving paddlers of all levels. Embark on a 3½ hour paddling adventure in a one or two person kayak (type of kayak dependent on total number of attendees). This adventure affords the opportunity to see and learn about dolphins, manatees, alligators, herons, osprey and other wildlife indigenous to southwest Florida that inhabit the river and bay. Accompanied by a guide, guests will have the opportunity to see the palmetto uplands, as well as mangrove wetlands and learn about the area ecosystems. The cost of the event is $150 per person and includes: round-trip transportation, box lunches and refreshments, guided kayak tour and equipment. All taxes, gratutities and fees included.

DEEP SEA FISHING EXCURSION Friday, May 1, 2015 • 12:30 pm–5:30 pm The subtropical beauty and bounty of fishing on the Gulf of Mexico provides excellent year-round action for anglers, whether it’s bottom-fishing for grouper and snapper, to a major test of strength with cobia, amberjack, shark and goliath grouper, or trolling for the hard striking king mackerel and barracuda. Deep sea fishing promises an enjoyable day for the seasoned fisherman and the novice alike. All charter boats are 30’ and up sport fishing boats operated by professional licensed captains, who are very knowledgeable of the prime fishing reefs. Catch of the Season: April–June: Tarpon, Mackerel, Cobia, Barracuda, Grouper, Snapper. Please note that caught fish can be filleted and packaged for shipping (at your expense). The cost of the excursion is $265 per person and includes: round-trip transportation, box lunches and refreshments (includes soda, water and beer), four-hour fishing charter, bait, tackle, ice, fishing license, captain and crew.

”PrimeTime” NETWORKING OPPORTUNITIES

AICC Opening Night Reception & 40th Anniversary Celebration Wednesday, April 29, 2015 • 6:30 pm–10:00 pm The AICC 2015 Spring Meeting will officially kick off with the 40th Anniversary Celebration at the Naples Grande Beach Resort. The event will include a cocktail reception and dinner buffet followed by the 40th Anniversary Celebration. The celebration will feature a tribute to AICC “Through the Years” and recognition of the AICC “founding fathers.” The evening will culminate with entertainment featuring Four Day Weekend, a criticallyacclaimed comedy troupe. All registered AICC 2015 Spring Meeting attendees and their spouse/guest are welcome and encouraged to attend this family friendly event.

AICC Cash Bar Happy Hour Reception Thursday, April 30, 2015 • 7:30 pm–8:30 pm All AICC 2015 Spring Meeting attendees and their spouse or guest are welcome and encouraged to attend this evening reception at the Naples Grande Resort. AICC 2015 SPRING MEETING

Hotel Accommodations

Naples Grande Beach Resort • Naples, Florida THE AICC HOST HOTEL: The Naples Grande Beach Resort is a stunning resort, offering the ideal combination of authentic service in a relaxed modern environment. This inviting beach property sets the standard for treating guests and families to endless activities, incredible nearby sights, and an unmatched level of service and attention. The resort is located on 23 manicured acres along the Gulf of Mexico in Naples, Florida and adjacent to miles of natural mangrove estuary waiting to be explored. The resort is conveniently located just seven miles (10 minutes) northwest of Naples Municipal Airport (APF), 32 miles, (35 minutes) to the Fort Myers –Southwest Florida International Airport (RSW).

ROOM RATES: Traditional Single & Double Accommodations: $249 per night

GROUP DISCOUNT CUTOFF DATE: Friday, April 3, 2015

(plus applicable taxes and resort fee - $10.00 per night). To make your hotel reservations online directly into the group block visit or www.aiccbox.org/meeting or you can call reservations at 1-844-210-5931 (reference AICC 2015 Spring Meeting)

Attendees are encouraged to make hotel reservations before the group cut-off date of Friday, April 3, 2015 to be guaranteed availability, and ensure group rate. The AICC hotel block will sell out quickly and most likely prior to the cut-off date. Booking your hotel reservations early is very strongly recommended.

Meeting Registration OPTIONS & FEES

BOX PLANT MULTI-DISCOUNT GROUP PRICING: SEND MORE PEOPLE FOR LESS! AICC is offering box plant group pricing for corrugated, folding carton and rigid box members. Send more of your employees and experience more of the benefits of AICC for one low price! $2,700 – up to 3 Employees from the same location $4,800 – up to 5 Employees from the same location $7,000 – up to 8 Employees from the same location

STANDARD AICC SINGLE MEMBER REGISTRATION AND STRATEGIC LEADERSHIP FORUM REGISTRATION: $1,300/person – Super Early Bird, on or before February 27, 2015 $1,400/person – Early Bird, on or before April 3, 2015 $1,500/person – After April 3, 2015

For more details and registration, visit www.aiccbox.org/meeting Scan this code to register from your mobile device.

2015 Spring Meeting & 40th Anniversary Celebration

AND THE 2015

Strategic LEADERSHIP FORUM

Post Office Box 25708 , Alexandria, VA 22313, USA Toll-Free: 877- 836 -2422, Fax: 703 - 836 -2795 Email: lmihalick@aiccbox.org http://www.aiccbox.org

S I M P LY A C U T A B O V E

Folding Carton/Rigid Box

FOCUS ON SUSTAINABILITY BY ROBERT BITTNER

Folding Carton Educate Customers and Employees Pete Traeger, CEO of Artistic Carton Co. in Elgin, Illinois, says most customers don’t come to him with a deep knowledge of what it means to choose sustainable packaging. “Our customer base isn’t the Kellogg’s of the world. We have more midtier customers. We try to educate them about our commitment to recycling.” That commitment extends to Artistic Carton’s ownership of a recycled paperboard mill—White Pigeon Paper Co. in Michigan. “There are really only about five companies left that have a recycled paperboard mill. That puts us in a unique position compared to a lot of folding carton companies. I’m not certain how much it helps us in the marketplace, but it does help us tell a story.” That story? This company is wholeheartedly invested in recycling. That extends to the company culture as well. “All of our scrap paper is baled and recycled. We recycle all of our stretch wrap and banding, along with all of the aluminum for our printing plates. We try not to have any of it go to the landfill.” Engineer Efficiencies “Sustainability isn’t just about choosing the right material,” says Traeger. It’s also

BOXSCORE January/February 2015

Photos courtesy of Michigan City Paper Box Company

reating and selling sustainable packaging is a forefront issue for folding carton and rigid box manufacturers, who must constantly navigate the push-pull of environmental responsibility, customer requirements, and an increasingly competitive global marketplace. Focusing on the following key points can help.

The most popular line of 100 percent recycled stock jewelry boxes at Michigan City Paper Box

about the box design. “We meet with clients to discuss ways of redesigning the package to make it more efficient, requiring less material. Or instead of shrink-wrapping something, maybe we come up with a different kind of tamper-proof solution. It’s not just about trying to switch the customer from virgin paper to recycled. We look closely at the package itself. And we take these steps because we believe in them.” Get Active As a self-described midtier folding carton company that specializes in retail gift-box packaging, automotive-part packaging,

and some food packaging, Traeger believes there’s only so much clout Artistic Carton can wield on its own. That’s why his company has joined with two lobbying organizations—the 100% Recycled Paperboard Alliance and the Paper Recycling Coalition, a lobbying group created, according to its website, “to protect the U.S. recovered fiber supply from market-distorting government subsidies and costly government regulations.” Or, as Traeger puts it, “to educate senators and congressmen not to mess with the fiber stream.” The result, he believes, is an electorate better educated about the facts regarding recycled paper and

Michigan City Paper Box uses 100 percent recycled chipboard for its jewelry boxes.

Fillers used by Michigan City Paper Box Company, from top to bottom: recycled, virgin, recycled, recycled, virgin, virgin

better equipped to represent the business interests of the folding carton industry.

to point to our products and say, ‘These are using the latest and most sustainable materials out there.’”

Rigid Box Explore Advances Representing one of the leading custom rigid box manufacturers in the country, Nelva Hembree-Walz, vice president of business development at Elegant Packaging in Cicero, Illinois, says, “We have already explored most of the existing materials that are 100 percent biodegradable and compostable. The challenge is to keep seeking out advances. When it comes to finishing, foil is not recyclable. But aqueous coating is. And there are some new cellophane-based laminations that are 100 percent compostable. We don’t think of foam as being biodegradable, but I’ve worked with three vendors already that have found foam that dissolves in water. Now, it’s still kind of ugly. But we can offer it to our customers. “Price is always an issue with domestic customers,” Hembree-Walz continues. “We’re always compared to overseas manufacturers, which puts us at a disadvantage. So I focus on what we can do that sets us apart. It is an advantage

Consider the Little Things “Sustainable” doesn’t have to mean “splashy.” Al Hoodwin, CEO of Michigan City Paper Box Co., a supplier specializing in stock jewelry boxes in Michigan City, Indiana, discovered his company could offer boxes made from 100 percent recycled materials, including the “cotton” lining. “We were able to develop ‘cotton’ made out of 100 percent recycled material. That’s helped differentiate us from our competitors, and a lot of our customers actually prefer it to the unrecycled stuff. It also looks more like the old cotton product from years and years ago.” That discovery has even led to additional business: The company now sells its recycled “cotton” fiber to a variety of other manufacturers. Weigh the Costs At Michigan City Paper Box Co., Hoodwin has found that “most premium retailers are willing to spend about 3 percent more for recyclable products.” If a product exceeds that 3 percent for a higher percentage

of recyclability, customers balk. “We’re fortunate in our sourcing that we can find recycled products that are the same price or less than other products,” he adds, which makes it possible to remain competitive. For most customers, the choice of recycled products is fundamentally about price, not philosophy. “It’s not the first thing customers ask about anymore,” Hoodwin says. “It tends to come up at the end, when we talk about price. But we do try to use our emphasis on sustainability as a sales advantage. As a result, we have some retailers whose whole business is based on sustainable products. Many come to us because we have one of the only stock lines of 100 percent recyclable material jewelry boxes that are ready to ship in 24 hours. Otherwise, I’ll purposely try to design packaging that contains as much recyclable content as possible.” Ultimately, the choice of a sustainable folding carton or rigid box packaging solution is in the hands of customers. Pete Traeger at Artistic Carton has been somewhat disheartened by the growing popularity of standup plastic pouches in the consumer marketplace. “Those aren’t really sustainable, recyclable packages,” he says. “But that’s the push and pull of it: Customers like it, but we lost all of that business in our industry.” Adds Al Hoodwin: “My top-selling stock box is a kraft-covered jewelry box. I had the opportunity to take this line from 77 percent to 100 percent recycled content. But many of my distributors balked at it. They didn’t want it. The current product was selling so well, they were afraid any changes would disrupt sales. So we do get pushback from customers. Even though it wouldn’t affect price at all, they said to keep it at 77 percent.” Robert Bittner is a writer and contributor for BoxScore. He can be reached at 517-541-0950 or rmbittner@gmail.com.

BOXSCORE www.aiccbox.org

The Associate Advantage

SHEPHERD LEADERSHIP BRIAN KENTOPP BOBST NORTH AMERICA INC. CHAIRMAN BRIAN.KENTOPP@BOBST.COM

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

JEFF PALLINI FOSBER AMERICA SECRETARY PALLINIJ@FOSBER.COM

ED GARGIULO EQUIPMENT FINANCE CORP. FIRST ALTERNATE EGARGIULO@EFC-FINANCE.COM

KEVIN WIDDER AUTOMATÄN IMMEDIATE PAST CHAIRMAN KWIDDER@AUTOMATAN.COM

BOXSCORE January/February 2015

ecently, I had the opportunity to participate in a leadership trip in the Jordanian and Israeli mountains that studied the guidance practices of a real shepherd. The shepherding occupation is thousands of years old, and it is rich in deep-rooted leadership principles that are still applicable today. After spending an entire day with a shepherd and his flock, I walked away renewed and challenged to lead well in my own life. The following thoughts seemed to apply directly to my role with people on our team: 1. Purpose — As the flock is guided daily to fresh water and new grazing ground, caring for the needs of the flock while providing safety is always paramount. As leaders, what do we do every day to demonstrate our commitment to helping our employees safely achieve company goals? 2. Patience — Leading a flock of sheep or goats requires genuine tenderness and patience. We would watch as the shepherds tossed small stones behind the flock to direct their path without ever throwing to strike an animal. As with all groups, there are those who need a nudge and those who are self-starters and simply need guidance. The dance is to keep the entire group moving toward its goals without much separation. 3. Rest — With calculated thought the shepherd stops two to three times per day to rest. The flock is rewarded with treats to keep them close while tea is made over an open fire. Although guests are served first, this resting period is planned for all involved to refresh, enjoy fellowship in community, and continue on their course. As leaders, what intentional or unintentional

stops do we make during our day to check on our employees, demonstrating our support and appreciation for their continued efforts? 4. Consistency — The shepherd must be consistent in his approach, his tone, and his treatment of the flock, to achieve the desired results. We need to be intentional about routinely displaying similar key attributes throughout our busy day. 5. Trust — On one occasion, I watched a stranger attempt to guide a herd over steep and hazardous terrain. Try as he might, the flock would not budge. Yet, when the real shepherd appeared and gently spoke to his flock they obediently followed his direction and resumed their trek. Through patience, sincere care, and the experience of the shepherd, the sheep follow the plan. When a confident culture of faith and trust is practiced from the view of servant leadership, nothing is impossible. In some ways, shepherd leadership takes corporate leadership and turns it upside down. As successful leaders our style should always include the goal of serving others and not simply being served. Daily, leaders should strive to be sensitive to others’ needs and put their concerns above our own. We will meet our business goals by learning to lead the same way a real shepherd guides his sheep—through consistent care and concern for the needs of our team. The resulting trust will produce a team ready to follow our leadership goals. After all, keeping everyone on the same path simply reflects an ancient profession that has withstood the test of time. This article was written by Keith Umlauf.

I WISH I COULD FIND A FLAT BED DIE CUTTER THAT: • Runs at 6,000 sheets per hour • Has computerized set up • With format sizes of 185 (72”x 51”) or 210 (82”x 59.5”) • Has compatibility with Swiss dies • Excellent Parts, Service and Support out of Atlanta

THINK

NO MORE!

North American Sales & Service:

(847) 598-3611 1320 Tower Road, Suite 111, Schaumburg, Illinois 60173 Email: PMack@youngshinusa.com www.youngshinusa.com

Financial Corner

ESTIMATING SYSTEM THEORY AND PRACTICE — VOLUME 2 BY MITCHELL KLINGHER

“Those who fail to understand past history are doomed to repeat it.”

n the last issue of BoxScore, I admonished you to become variable profit estimators rather than cost allocators under the theory that the marketplace doesn’t really care what your perceived cost structure looks like. In addition, the total cost of manufacturing an order is not really actionable without understanding the amount of your most valuable resources (machine hours) it utilizes. Finally, at the end of the day, profitability is driven by generating contribution dollars in sufficient quantities to cover fixed costs and generating a return to owners. So if you agree that your most valuable—and finite—resource is the number of machine hours you have to sell and the key driver of profitability is contribution dollars generated by the sale of these hours, then what is the next logical step for you to take? The answer lies in reviewing your plant reporting on each order and developing analytics that show the amount of contribution generated by each order and the number of machine hours it took to fulfill that order. A proper budget is the backbone of any estimating system, and the only changes required to effectuate this type of planning are a change in the cost buckets that are utilized in calculating contribution and the injection of machine hour utilization information. We have spent a lot of time in previous installments

BOXSCORE January/February 2015

discussing various ways in which you might define contribution, so let’s spend a little bit of time on the machine hour issue. Most sophisticated machine floor reporting systems track in great detail the setup times, run times, and the various other categories of downtime relating to each order and each machine center. The key to this type of reporting is to better understand the throughput and the downtime associated with each order and each machine center. The goal is to minimize downtime and maximize throughput. These are noble and important goals that will ultimately give the company more machine hours to sell. However, in the absence of a plan to sell these hours, what can they really accomplish? One of the most important benefits of designing a system to estimate variable profit per hour rather than computing a fully loaded and heavily allocated average cost per hour is that it gives the user better metrics with which to decide to accept or reject new orders. In addition, it makes it fairly easy to model what effect new customers and new major pieces of business will have on the company. In the final analysis, if you are trying to create more machine time to sell, the incremental hours will likely be at lower prices than you are used to, at least initially. Without proper metrics to evaluate the effects of taking on this business, you can really hurt yourself with a few bad decisions. Cost-plus thinking will likely set the price too high to actually get an order, although you probably have all of the resources in place to do a lot more volume without incurring any significant increase in fixed costs. Estimating the variable profitability per hour of potential

new business is a more realistic and objective way of looking at things. First, look at your machine reporting information and your job cost variance reports. Take the most recent closed month, because that will be freshest in everyone’s mind and, unless you are a highly seasonal business, will be representative of your most recent mix. Go order by order and make sure all machine hours, with the exception of downtime that cannot be charged to a job, are fully allocated to each order. At the end of this exercise, you should have a spreadsheet that shows the sales and contributions for each order and the machine hours it took to generate this contribution. If the contribution on this worksheet—which comes directly from the closed jobs in your system—is reasonably close to the contribution shown in your general ledger and you are confident that you have accounted for all of the machine hours, then you can start to make some interesting analyses of your business that will help you make better decisions. In the next issue of BoxScore, we will take a look at this spreadsheet and discuss the next steps in this process. Remember that in order to improve your future business model, you need to understand your past behavior. Spending the time to break down your most recent month using a different analytical lens is your first step toward a more profitable future. Mitchell Klingher is a partner of Klingher Nadler LLP. He can be reached at 201-731-3025 or mitch@klinghernadler. com.

International Corrugated Packaging Foundation

UNIVERSITY OF TEXAS– ARLINGTON AND ICPF DEDICATE NEW PACKAGING LAB BY RICHARD FLAHERTY

O Richard M. Flaherty is president of the International Corrugated Packaging Foundation. He can be reached at 703549-8580 or rflaherty@icpfbox.org. For more information about the International Corrugated Packaging Foundation, visit www.careersincorrugated.org.

I N T E R N AT I O N A L

PACKAGING

CORRUGATED

F O U N D AT I O N

BOXSCORE January/February 2015

n October 28, the International Corrugated Packaging Foundation (ICPF) conducted a ribbon-cutting ceremony and dedication at ICPF’s most recently established packaging design lab in the graphic design program at the University of Texas at Arlington. The UT Arlington program joins 24 other partner campuses across North America that have been initiated or expanded by the work of ICPF. The Arlington campus dedication program included a presentation and interactive lunch among ICPF corporate partners, students, faculty, administrators, and additional AICC Region 4 participants, who conducted their regional meeting on the campus that afternoon. The Corrugated Prototype Design and CAD LAB integrates corrugated and structural curriculum into the visual communication program at UT Arlington. The new lab includes ICPF’s online corrugated curricula, a Data Tech/ Gerber Innovations CAD (computer-aided design) table—earlier donated to ICPF by its corporate partner Vanguard Packaging—and Artios design software donated through ICPF by Esko. Both Gerber Innovations and Esko donated extensive training and support during the startup and have continued their support whenever needed. Robert Hower, professor and chair of the Department of Art and Art History, said the new partnership aligns closely

with the department’s growth and focus on design. The lab curriculum, CAD table system, and design software “already are providing significant packaging experiences and design problem-solving opportunities for realworld design and production,” Hower said. “It is a great example of education and industry teaming up to improve employment opportunities for our students.” Hower’s “real-world” view of the lab and new program was expanded upon by UT Arlington’s new president, Dr. Vistasp Karbhari, who participated throughout the program and addressed the industry crowd during the luncheon. President Karbhari’s vision for the university—with an enrollment of 41,000 students and located in the nation’s fourth-largest metropolitan area—includes additional partnerships with industry that are modeled after the one initiated by ICPF. The lab, which has been in use for a few semesters, has already yielded impressive results. Last February, a UT Arlington student team won first place in ICPF’s International Best of the Best Student Design Presentation Competition during ICPF’s 15th annual Careers in Corrugated Packaging & Display Teleconference. The UT Arlington student design team qualified for the ICPF runoff competition by competing against dozens of teams from universities across the nation in AICC’s 2013 student

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ICPF Update

design competition. AICC and the Fibre Box Association are co-sponsors and longtime supporters of ICPF. Assistant Professor Ben Dolezal said the students’ work was enabled by the new design lab. “The lab provides students with the structural design software, materials, and a computer-aided design table to produce significant packaging solutions for use in the marketplace,” he said. Outgoing AICC Region 4 Director Jana Harris (Harris Packaging), who serves as an ICPF representative on the UT Arlington packaging advisory board, announced with her sister, Jenise Cox, that Harris Packaging would be providing a scholarship for UT Arlington packaging students in honor of their father, Joe Harris, who was present for the ceremony. New AICC Region 4 Director Eric Elgin (Oklahoma Interpak) summed

BOXSCORE January/February 2015

Photo courtesy of ICPF

The packaging lab dedication at ICPF's most recently established packaging design lab in the graphic design program at the University of Texas at Arlington.

A map of ICPF equipment placements and curriculum support for colleges and universities across North America.

up the comments of the corrugated manufacturers in attendance: “It is very exciting to have the packaging design lab at a major school in our region. The new program will not only greatly improve the understanding

and awareness of our industry among students in the region, but also potentially provide an educational resource from which we can recruit future employees who will grow into managers and executives.”

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The Final Score

THE VISION ‘An International Association of Independent Boxmakers’ “I remember those days vividly when we were attempting to form an international association of independent boxmakers. Most of us were being threatened with extinction. We were being shut off by our suppliers. Several members [were] attending the meeting as ambassadors of their suppliers. These were few, but it was clear they were [there] to discourage the forming of a new trade association.” —Jim Kowall First president of AICC, 1974

his quote, taken from a letter written by AICC’s first president, James Kowall, shows both the vision and the roadblocks the founding fathers of AICC encountered in those early days. The vision—forming an “international association”—was embraced by many but not shared by all in the industry, even among independents. It was a turbulent time, made all the more difficult by disagreement about how independents should react and a fear of reprisal by paper suppliers. It was not, one could say, an auspicious beginning. And so it is in this new year that we are all the more happy to celebrate AICC’s 40th anniversary. It’s a belated celebration, actually, since the anniversary of our founding was November 20, the date on which our articles of incorporation were filed in 1974. In the pages of this issue of BoxScore and in subsequent issues through the year, we will look at the people who have formed AICC, the circumstances that motivated them, and the milestones they have accomplished. Reducing the history of this great organization to a few pages is an ambitious undertaking, but it’s one we venture into with fond affection, remembering as we do those events and people—living and deceased—who have led and influenced AICC. In this issue we focus on the first five formative years, when AICC’s founding fathers reacted to a raw materials crisis that was threatening their survival and began to build programs and services to benefit the Association’s growing membership. Today’s AICC is far different in many respects, but the same in one: It is the voice of independent entrepreneurs in the corrugated, folding carton, and rigid box industries. As we relive AICC’s 40-year history, we will realize that this foundational principle is unchanged.

Steve Young President

BOXSCORE January/February 2015

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