- April 01, 1996, Mykytiuk, Andrew
Independent Packaging arose from the ashes, but it wasn't easy. Now, after only 18 months, IP is on track to produce 1 billion bakery bags this year.
Perhaps the saddest event for a business person to witness is the demise of a once proud company. For a long time Princeton Packaging, Bloomington, IN, was one of the premier suppliers of packaging, and then, seemingly overnight, it was gone. With more than 68 combined years of converting industry experience Chuck Romanski and Jack Culver, senior Princeton managers, did not relish the idea of starting at the bottom of the corporate ladder again.
"We talked to a few people, and, after looking around at the job prospects offered by other companies, we decided to start our own," Romanski explains.
This new company would encompass the sum total of their manufacturing experience. They figured it would take six months to get off the ground. It took three times as long and consumed every penny they had in their savings and individual retirement accounts.
The first thing they learned was that banks don't like the phrase "startup," considering them risky to investors. Romanski quickly changed the term to "restart," not just to please potential investors but because he considered it a more accurate description of what they were actually doing.
"We literally restarred Princeton under different management," says Jack Culver, VP of manufacturing. "Everybody in the new company had worked for us before, from the press operators to the secretaries. It was not difficult to pull this team together and get moving in the right direction, because we had worked together before."
Choosing a Niche
Romanski believed that it would be a mistake to spread themselves too thin by trying to service too many markets. The new company, he decided, would be dedicated to producing one product for one market: flexible packaging for wholesale bakeries.
Another goal related to corporate hierarchy. The new company would be competing against Fortune 200 companies, so it would have to be lean and mean. When a potential investor suggested placing one of his people in the plant and another in the office to keep tabs on things, his request was quickly shot down. Romanski planned to create an organization structured for efficiency. "You could hold a meeting of our top officers in a phone booth," he boasts. "There is no bureaucracy here, and it shows clearly in our performance."
Years of experience with printing presses gave them an idea of what kind of equipment they had to purchase. In October 1993 Romanski and Culver went to Germany to conduct a series of test runs on Windmoeller & Hoelscher Olympia Stellaflex flexographic presses. They were very impressed with the quality of the Stellaflex and decided that this was the press they wanted.
Upon returning to the US, Romanski and Culver contacted Jim Bast, plant manger and one of the three founding members of IP, and told him it was time to put the word out to former Princeton employees that they were going to try to restart the company. They reserved a conference room at a hotel, hanged the W&H test runs on the bulletin board, and waited to see if anyone would show up. They did.
"We had an hour scheduled for the meeting, and it went two and a half hours," says Culver. "It was terrific. There were so many experienced ex-Princeton people at that meeting that they could have started printing bakery bags right then and there!"
To further please potential investors, Romanski and Culver contacted former Princeton customers and informed them of their progress in restarting the company. They received signed contracts for product from many previous customers, including two of the largest companies in this marketplace.
"The restart progressed even farther, as FMC made bagmaking machines for us on a handshake, and the mayor and the city of Bloomington pitched in as well with tax abatement help," says Romanski.
A New Name, a New Beginning
Now there was nothing standing in their way. Investors saw that this new company had the equipment, the people, and the know-how to get the job done. The company would be called Independent Packaging, because they were reportedly the only independently owned manufacturer of bakery bags in the business, says Romaski.
On June 29, 1994, Independent Packaging officially became funded. On July 1, 1994, work crews started demolition on a vacant building, gutting the entire structure and removing everything but the walls and the roof with the goal of putting together a state-of-the-art, 40,000-sq-ft manufacturing facility.
"We moved the two W&H presses in on August 10th," says Culver. "The German engineers couldn't believe it, concrete dust was everywhere and bulldozers were still running around. There was no water, no compressed air, no gas hookup, nothing the technicians from Germany were accustomed to, but they rolled up their sleeves and pitched in."
Everyone involved knew up front that the new company absolutely had to begin making product on September 19th. Independent Packaging had contractually committed to its customers to ship bags on that date. "The contractors told me I was crazy when I first told them what our schedule was," says Culver. "But when they saw for themselves how serious we were and how hard we were all working, they caught the fever, too."
Pushing on while the building literally went up around them, the combined W&H/Independent Packaging engineering team overcame every difficulty with long hours of work, ingenuity, and a bit of luck. Permanent electricity was not installed until September 1st. Compressed air became available five days later when the chiller arrived. Natural gas was hooked up to the first press on September 16, and, on the 18th, the chiller became operational.
On the morning of September 19, the exhausted crews gathered for one final push. By 4:40 that afternoon, the press was inked up. The first color match was achieved at 10:55 P.M. At 11:21, just 40 days after the press was delivered and a little more than a half-hour before deadline, the first roll came off the press. Within an hour the pressmen had the Stellaflex press running at a speed of 1,000 fpm. Independent Packaging was in business!
And it wasn't just the press that was running at top speed; the entire company hit the ground running. There were no teething pains. Unlike typical startups where employees have varied levels of experience, the Independent Packaging team's production employee averages ten years of experience-specifically in bakery packaging. The management and sales staff are also very experienced, most having been involved in packaging or wholesale bakeries for 25 or more years.
The company has its own in-house packaging designer and utilizes both photopolymer and rubber plates. A staff of ink specialists from Sun Chemical Corp. is on hand at all times to blend as many as eight different solvent-based ink colors to match customer specifications. Because the inks are solvent-based, a Demtrol Systems oxidizer is used to destroy all volatile organic compounds emitted by the presses. Another W&H press started up in early March 1995 giving the company three presses with eight-color capability.
Service Makes the Difference
Romanski knew that great equipment in the hands of skilled, motivated employees would result in quality product, but he also knew that all of that may not be enough. From its inception, Independent Packaging was determined to separate itself from the competition by being the service leader in the bakery packaging industry. Customer service is without question the new company's distinctive competency.
Company headquarters is in Dallas, TX, where Princeton made its home. According to Romanski, there were two main reasons for the decision to remain there. "First, Princeton's excellent customer service network and MIS management information systems people were located in Dallas. Second, we didn't want to be perceived as a regional company," says Romanski. "We have a national market, supplying bakery packaging product to 49 states, and the only reason we're not in Hawaii is because they don't have a large-scale wholesale bakery there."
From the Dallas headquarters the ten-person IP management team, sales staff, and customer service team clearly focus on the customer. The hallmark of the company is a highly experienced sales and management team, supported by a computer network that's tied into the manufacturing plant in Bloomington and provides on-line, real-time tracking of order status and other key data. Up-to-the-minute reports can be produced instantaneously, giving the customer an accurate assessment of inventory levels, stock in transit, work in progress, and pending orders. To help customers manage inventory, customer service representatives talk with bakers daily. They regularly monitor customer inventory levels and historical data to stay on top of market conditions, production issues, and seasonal fluctuations in demand that affect inventory needs at bakery locations across the country.
Through the computer network, the service representatives immediately notify the plant to adjust production schedules or dispatch a shipment from finished inventory to meet bakers' changing needs. The result is a seamless customer service and inventory management system that allows customers to know with certainty that they will have the inventory they need when they need it.
Teaming Up for a Positive Approach
Culver believes that undervaluing the contribution of its employees can ruin a company, and he was determined not to let that happen. The employee relationship strategy at Independent Packaging is simple: Everyone is part of the team, and, like a true team, the success of the organization is dependent on everyone working together. (The workforce, including the Dallas headquarters, totals 75 people.)
He says, "We want everyone to know that this is their company. One of the reasons it took three times as long to get the financing was that we insisted everyone be part of a company-wide profit sharing plan. If Independent Packaging makes a profit in any given quarter, all employees get a quarterly profit sharing check."
Culver also explains that they don't want new people coming in and changing their culture with negative work attitudes they acquired from previous job experiences. As a result, the company is selective about the people it brings aboard and has a policy not to hire more than one person per shift per week. "We want the new hire to come in, get exposed to our productive, motivated people, get a dose of Independent Packaging's team spirit, and quickly begin to contribute their own special skills to the organization. If someone likes their job and enjoys their work, it's reflected in the quality of their work."
There is another reason for the company's unique attitude toward employee hiring and empowerment. Both Romanski and Culver have been involved in downsizing a company, and they didn't want to have to go through that here. "When we were thinking of starting this business, I told Jack that I don't ever want to cut or eliminate jobs again," says Romanski. "I want to dedicate the rest of my business life to creating jobs. That's why we are very careful and deliberate with the number of people we bring into our team."
Everyone's Responsible for Quality
An example of the team attitude is the company's commitment to quality. Independent Packaging does not have a quality control inspector; every employee is responsible for producing quality product at all times. "We cannot inspect quality into the product," says Romanski. "We challenge our people to be the best, and they take this challenge very seriously, both from a quality and a production standpoint."
Culver says there is one additional secret ingredient to the mix that makes Independent Packaging a success: Hoosier pride, meaning a set of values and a work ethic that just won't tolerate being second best.
"Because we're a small independent, we try to be more innovative, offering more in the way of new products, and we welcome challenges," says plant manager Jim Bast. "Customers approached us and asked if we could make a square-bottom bag or the zip lock bag. Our reply was, 'Why not?' Because of the lack of bureaucracy, our decision-making chain is pretty short-one phone call."
Today, just 18 months after a miraculous restart, Independent Packaging is running three shifts and producing nearly 1 billion pieces of flexible packaging. They process low-density, high-pressure polyethelene film in thicknesses from .75 to 2 mils. Soon the company will be acquiring a fourth eight-color Stella flex press. Bagmaking features 12 production lanes utilizing the latest high-speed FMC 175 bag machines that form, seal, cut, perforate, and wicket bags. A 30,000-sq-ft warehouse holds goods until shipping.
"We are trying to envision what the bakery packaging industry will be like in five years and get ourselves ready to thrive in that environment," says Romanski. "As competitive as this business is, we try not to focus on the competition, we focus on our customers. That's who pays the bills, and we try to direct all of our energy in a positive way toward the customer."
"Everything is right on track," Culver adds. "Every month our production rates improve, every month our opportunity for business improves, and all signs point to continued growth from both established and new customers."
The young company has also expanded beyond the industry's traditional definition of bakery products, selling to several tortilla producers.
"When their livelihood suddenly disappeared," Romanski recalls, "many skilled, motivated people started to look around for jobs that paid a comparable wage with good benefits, and they found out that there weren't many around. I think we all gained a new respect and appreciation for our jobs. When we came back, every one of us realized that it would take more than eight hours a day - we had to do whatever was necessary to make the entire organization a success."
Out back, within sight of the new plant, sits the abandoned Princeton Packaging building. It's a grim yet effective reminder to everyone of what can happen to a company. Independent Packaging has assembled an experienced, highly motivated team and brought in brand new, top-line equipment to ensure continued success for the company that literally rose from the ashes.
Windmoeller & Hoelscher Corp., Lincoln, RI; ph: 401/333-2770; fax: 401/333-6491.
FMC Corp., Green Bay, WI; ph: 414/494-4571; fax: 474/496-1322.
Sun Chemical Corp., Fort Lee, NJ; ph: 207/224-4600; fax: 201/224-4392.
Demtrol System, Hartland, WI; ph: 414/367-7548; fax: 414/367-0831.