Friday, October 17, 2008

Interstate Reading Provides Sustainable Solutions

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Source: September 8, 2008 Board Converting News, Vol.24 No.36, by Jim Curley

Jeff Coleman practices boxmanship. Oh sure, there more than a bit of the salesman in him, but what really excites Coleman, the General Manager of Interstate Container Reading, is matching his company’s offerings up with customer needs. That’s boxmanship.

Coleman provided two examples. For a major CPG customer with a wide variety of products, Interstate broke down its box orders into three types: large scale, the item the boxmaker runs a lot of; kanban items, inventories at both plants managed by Interstate; and true specials, items for which Interstate runs small exact quantities. By setting up this tiered system to improve its yield, reduce obsolescent packaging, shrinkage and carrying costs,” we saved our customer almost $120,000 annually on a $1.5 million purchase,” Coleman says. He gives credit for this strategy to Ken Rohleder of The Rohleder Group, which gives advice and training for companies with large, complex packaging spends.

“It may seem counterintuitive that a per unit cost of 5,000 boxes may be less than 25,000 boxes, but it may be more cost effective in a managed system,” Coleman says. When you factor in the fully burdened cost of the packaging (including the cost of obsolescence, shrinkage and “reverse distribution,” many times the smaller quantity, even at a higher purchase price, is lower cost, he explains.

Another customer makes a small sporting goods item that he packages using a homemade partition assembler. By having the customer move from heavyweight C-flute partition pads to lightweight A flute, Interstate was able to impact the bottom line “We told him it will stack as well and will save him money because less fiber will be used,” Coleman remembers. “Six months later. We found out that the assembler he uses had a kicker feed that worked more efficiently with our A-flute alternative. Not only did he save money on the purchase price, but he improved his yield off the assembler by five percent.”

These, Coleman contends, are also sustainability success stories. Rather than looking at sustainability as yet another retailer demand, he sees it as an opportunity for an innovative boxmaker. The glass is more than half full.

“If you can match the package to the product, you can help customers reduce fiber, improve their package to product weight ratio, improve their score in a scorecard like Wal-Mart’s, and save them money,” he noted. “That’s why sustainability has legs. It can improve the financial position of the CPGs we sell to and ‘de-commoditize’ what we do and how we do it.”

A ‘Calling Card’

Innovation requires not only initiative and boxmanship, but also machinery that will enable the converter to stretch its innovative horizons. In late 2007, Interstate Reading installed a Pacific 3.0 folder gluer with a Polyjoiner module. The Polyjoiner is made up of a feeder and an assembling section and enables the simultaneous feeding of up to three blanks. The module offers a number of unique design opportunities.

Less than a year after the machine’s installation, Coleman calls the Pacific “our calling card.” He explains, “We send out videos of what the machine creates as a introduction to our plant’s capabilities.” The response from existing and potential customers? “We have some major customers who seem eager to fill up the new machine and only ask us, ‘What is your daily capacity?’ ”

Coleman is certain that he’ll soon need additional machine power for this display business. “I’m convinced that we’ll need a second specialty gluer with multi-channel feeding by early next year,” he says. (The plant has two J&L specialty folder gluers, but each has single feeds.)

What he tells present and potential customers about the Pacific with the Polyjoiner module is simple and direct: “This will help you get your product to market cheaper, faster, and it’ll look better when it gets there.”

The Pacific will be an integral part of a new production line planned for Interstate Reading. The printer in this line will be a four-color Hycorr flexo folder-gluer that Interstate will soon ship from its Cambridge, Maryland plant and operate at Reading solely as a printing machine. Printed blanks will move from the Hycorr to a new Bobst Mastercut platen die cutter, which will be operational at Reading in the last quarter of 2008.

“I saw the large-format Mastercut in operation in Europe, and I was amazed at what I learned,” Coleman says. “In North America, rotary die cutters are considered the machine of choice for high production die cutting, but with the proper blank sizes, the Mastercut will outproduce any rotary die cutter in the industry.

“In Europe, I discovered that you can run small- to mid-size blanks multiple-up and die cut about 125,000 square feet an hour,” Coleman says. “A rotary die cutter would be hard pressed to do 40,000 square feet an hour for blanks of that size.”

The Mastercut 2.1 platen die cutter, which can cut sheet sizes as large as 82 inches by 51 inches, can handle larger formats sheets and higher speeds with high quality registration than other Bobst platens, it was reported. Interstate will enhance its productivity off the die cutter with Bobst add-ons, such as a Dynaload automatic loader, a Dynabreak blank separator and an automatic Palletizer.

C + A =

In a self-deprecating way, Coleman, a veteran of several decades of selling corrugated, says, “You know, a lot of box salesman might have been C students, but they got A+ in street smarts. It is the street smarts and boxmanship that make the difference.”

After touring the Reading plant, Coleman takes me to Interstate’s design lab. “Here are the real A students,” he says.

The creativity of Interstate’s four-man design team, enhanced by the design possibilities offered by the Polyjoiner, have resulted already in the development of dozens of new display designs. The key is the quick, simple set-ups, Coleman says.

“Consumer product companies have spent millions of dollars in point-of-purchase displays, and 50 percent of them never get set up in the store,” he adds. Why? Often the set-up is too complicated, particularly for a workforce that is pressed for time and often transient, Coleman says.

“The assembly needs to be simple and fast,” explains Josh Kalwat, Lead Graphic and Structural Designer at the plant. As if to prove his point, Kalwat and his team time his set-up on a variety of power wings, “weekenders,” PDQs, and box-in-boxes, all developed after less than a year with the Polyjoiner. All take five seconds or less to pop into place.

“Design discoveries don’t come daily, but they do come often,” Kalwat says of his group’s offerings. “We’re getting a better understanding of how the Polyjoiner works. The gluing makes it all possible.”

As the design team increases its knowledge of the folder gluer’s capabilities, it’s gaining recognition as the “go-to” source for design possibilities by both Interstate’s sales staff and the plant’s customers. “Sometimes customers aren’t sure what design will get them what they need. It’s great to hear them turn to us and say, ‘Take it and run with it,’ ” Kalwat adds.

Take the Interstate team’s box in box design. For one manufacturer, Interstate was able to provide a display that could be packed right at the end of the customer’s production line, instead of off-line. As a result, Coleman says, the customer was able to eliminate one worker on each of its three shifts.

Thanks to the Polyjoiner, another customer was able to discontinue its use of a middleman to pack out its displays. “This led to a big cost savings,” Coleman says.

“And it also had implications for the product’s sustainability scorecard,” he quickly adds. “By eliminating the middleman, our customer was able to reduce the product’s carbon footprint.”

Sustainability of products, packaging, and manufacturing processes has gained enormous exposure in recent years. Interest in the issue on the part of retailers and their vendors is not likely to wane any time soon, Coleman believes. Interstate Reading is ready to help. “Sustainability isn’t a fad. it makes too much sense,” Coleman says.

Off The Fossil Fuel ‘Treadmill’

The box plant is only part of a remarkably closed loop recycling system that enhances the sustainability of Interstate Reading’s manufacturing process. The plant gets most of its medium from Interstate Resources Inc.’s United Corrstack mill only a mile away.

By year’s end, the loop will be tightened even more when the 435 tons-per-day mill starts up its cogeneration facility, which will produce steam and electricity from wood construction debris, old railroad ties and telephone poles, and other wood debris to power not only the mill and the box plant, but also to the area electric grid of PJM. As much as half of the 25 megawatts of elecricity the new plant will generate will go back into the regional grid.

“When this project is completed, we won’t be on the fossil fuel treadmill any longer,” said United Corrstak’s General Manager Dave Stauffer. He added that the boiler, which produces 300,000 lbs. of steam an hour, will be able to power a second containerboard machine on the site, a project which is on the initial stage of consideration by Interstate Resources. A second machine would force United Corrstak to dip into the regional electrical grid once again, but also still provide a competitive advantage through very low cost steam.

United Corrstak’s $115 million power house construction project was started in June of 2007, will be completed at the end of this year, and fully operational in the first quarter of 2009. A circulating fluidized bed boiler from Austrian Energy and Environmental and a Siemens steam turbine-generator will replace the package boiler that currently powers United Corrstack’s 15-year-old machine.

The mill uses about 92% OCC for its furnish, with the remainder mixed paper. It collects the 500 tons of OCC it uses daily from brokers, manufacturers and municipal recycling programs, as well as DLK from brokers and its own box plants. When they deliver finished boxes or displays to area customers, Interstate Reading’s trucks backhaul OCC to the mill.

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