Not Going Quietly

Joe Elphick, president and CEO of Clayton, N.C.-based 3C Packaging, may assume a calm, matter-of-fact manner when discussing his folding carton company's latest achievements, but make no mistake, 3C has logged a performance record worthy of the exclamation point that graces the company's logo. Specifically, the converting company, which also produces printed literature inserts and unit dose compliant packages, recently reported 20 percent growth during the 2010-2011 fiscal year and has been averaging double-digit annual growth during the last five years. What's more, in a stubborn climate of continual cost cutting for companies across all industries, 3C's "healthy balance sheet," as Elphick describes it, has allowed the company to buck the belt-tightening trend and actively invest in packaging equipment to more effectively serve customer needs. Its new installations in the past year have included a Heidelberg 102ZP 2c Perfecting 28 x 40 press, a Vijuk MV2011 outsert system, two Vijuk folders, and a Longford piggyback system.

As Elphick relates the history of 3C Packaging (formerly known as Colonial Carton Company), it's clear that for him, creating a successful converting company was not a question of "if," but rather of "when." Back in 1978 3C was formed when Elphick, who is originally from New Jersey, pooled his mechanical ability with a local partner's folding carton expertise to pursue the American dream of company ownership. The two entrepreneurs started with $600 and a 1940s hand diecutter, and expanded the company one capability at a time. "There was a lot of hand gluing in the beginning," concedes Elphick.

Operations were relocated to North Carolina's Research Triangle Park (RTP) area after Elphick and his partner saw an opportunity to provide a more nimble response to customer needs than the larger converting firms that then served the RTP marketplace. 3C's first customer was a North Carolina-based pharmaceutical company, and though the going was difficult, the fledgling company gradually gained a strong local foothold by delivering on immediate or emergency turnaround needs (particularly for short-run work) and continually leveraging customer recommendations.

Today, 3C's Clayton, N.C., facility employs nearly 200 people, uses six presses, and offers 7-color web flexo, web offset, and sheetfed offset printing. 3C's folding carton operation primarily serves pharmaceutical firms (pharma makes up 75 percent of its customer base), as well as the food and software industries, while its printed literature insert capabilities solely serve the needs of pharmaceutical firms.

In late 2010, Elphick decided the time was right to expand operations back in the Northeast. He opened a Philadelphia-based Concept Design Center—essentially a duplication of the front-end design and prototype capabilities in-house at the Clayton facility that is intended to more efficiently serve 3C's concentration of Northeast-area clients. "Now it is possible to give our clients in the [Northeast region] one- to two-day turnaround," Elphick explains, adding, "The Center also works hand-in-hand with our Creative Services department in Clayton by mutually helping each other with any peak workload that might occur."

Uncommon success story

Growth, new installations, operational expansion—how has 3C managed to create such an overwhelmingly positive performance trajectory during a more somber time of struggle for many other companies? To Elphick, the foundation that makes ongoing investments and growth possible is 3C's tenacious focus on lean initiatives. Specifically, he touts 3C's plan to continue a two-path system of manufacturing in order to maintain the company's double-digit growth rate. "One path is to continue to make investments that lead us to be the most technically advanced—but that is not enough to succeed," he notes. "The second path is to continue to improve our processes in terms of being the leanest manufacturer in the packaging arena."

From a management team perspective, 3C accomplishes leanness through flatness in its executive hierarchy. Without what Elphick terms an "ivory tower," innovative answers to customer challenges "come simply." It's this organizational approach, Elphick says, that enables 3C's entrepreneurial approach to business—specifically flexibility and speed—to thrive.

Another aspect of that organizational flatness is accomplished through limited employee turnover. Elphick says that "team player" is a top qualification he seeks during 3C's talent recruitment process; candidates must not only demonstrate strong collaboration skills, but also a hold a track record of team commitment. "If we get an application that illustrates the candidate has a different employer every other year, we know that person will not fit our team," Elphick explains. Those who demonstrate staying power are often rewarded. "It is a primary goal of mine to provide upward mobility to employees," Elphick states. "Some of our finest managers started as hourly associates in the company."

On the production front, 3C's lean manufacturing philosophy gained particular momentum after a major fire at the company in 2005 destroyed all of its equipment. "We invested in new technologies that reduced prior makeready times, we automated our scrap system, and we purchased high-speed equipment," recalls Elphick. The company's latest lean assessment was completed in August, and another "lean launch" was initiated in September, he reports.

For 3C, the lean approach to solving customer challenges means removing costs, rather than reducing costs. "We don't reduce cost by sacrificing margins," Elphick clarifies. As one example, he points to the company's recent successful development of bulk packs that have cut down on customers' corrugated case cost. Innovations like these, he says, begin when a 3C team visits the client's production line and evaluates cost removal opportunities. Following these visits, the team coordinates a series of meetings with clients and key stakeholders to gather feedback and develop an implementation plan.

On another occasion, Elphick reports, this approach enabled 3C to help a customer lengthen a paperboard tray containing printed literature inserts—a change that not only reduced the cost of the trays, but also reduced the number of trays the packaging machine operator had to load each day. In still another case, 3C is delivering folding cartons with the printed literature insert already glued inside—an innovation that has increased clients' equipment efficiencies and reduced their inventory management requirements from two SKUs to one SKU.

From lean to machines

With every installation of new technology, 3C Packaging further reinforces its underlying culture of lean manufacturing—by more efficiently accomplishing the cost removal innovations it develops for customers. For instance, its new Vijuk MV 2011 folding machine is the industry's first miniature folder that is capable of folding up to 210 panels. In addition, 3C's new Heidelberg 1-2ZP 2c Perfecting 28˝ x 40˝ press was purchased to produce wide-format printed literature inserts (as large as 20˝ x 40˝) on fine paper (27 lbs.), allowing the company to offer more options to its pharmaceutical customers including new product launches.

However, increased innovation and efficiency can give rise to heightened technical challenges. As an example, Elphick points out that when producing folding cartons with a glued insert attached inside, "the challenge is to guarantee all cartons actually have one insert, and it is the correct insert, and it is in the precise place specified. This can only be accomplished by having a very robust vision/ejection system on one's gluing equipment." At 3C, up to nine vision scanners are used when inserts are adhered to folding cartons; any defaults are ejected directly into the waste bin.

While wider-format printing is an emerging need for 3C's printed insert work, Elphick doesn't expect to take the company's folding carton printing to wider horizons. "The pharmaceutical markets we serve are best served on high-speed 40˝ format presses, mainly because the blanks are usually smaller and the quantities are relatively small," he maintains. Future investments in the folding carton arena, he notes, will likely be centered on technologies that can reduce set-up time and increase speed. In other words, a larger exclamation point on the company logo might soon be needed to more accurately convey 3C's evolving capabilities. pP