WS Packaging Group Makes Strides with IMPACT

Rex Lane recalls that when he first joined label and package converter WS Packaging Group as CEO in 2010, he was known in professional circles as "that guy they hired from outside the industry." And Lane, who brought years of lean business management experience from other manufacturing industries to his current position, is emphatic that the fresh eyes of a newcomer can be the key to effecting far-reaching improvements in operational efficiency.

Lane acknowledges that new perspectives can meet opposition. "There is fear that outside execs will mess things up," he observes. "But lean doesn't have to be a bad four-letter word." Case in point: upon coming in to WS Packaging Group, one of converting's larger players with annual sales of nearly $500 million, Lane quickly saw a need to enhance the sophistication of the company's supply chain, and further, that a focal shift from price competitiveness to shorter runs, quicker lead times, and quicker deliveries could unlock fundamental long-term value for customers.

The notion of strategically teaming business management experts and printing experts to accomplish leaner operations firmly took root when WS Packaging Group—originally formed with the merger of Wisconsin Label Corporation and Superior Label Systems in 2000—was acquired by private equity firm J.W. Childs in 2006. Today, this talent mix consistently characterizes WS Packaging's leadership. "As a management team, our whole is greater than the sum of the parts," says Lane. "It's very exciting to have the shared vision that we do."

Lane estimates he spends half of his time conducting business at WS Packaging Group's Green Bay, Wis., corporate headquarters, and attends staff meetings onsite at WS Packaging manufacturing facilities once a month. Though he may participate in a conference call with a customer to put the final touches on a service agreement, he emphasizes that he does not want to get in the way of printing operations. "We focus on time not spent on making labels," he clarifies. "That's where waste comes in."

With Lane's arrival, operational efficiency initiatives began with a formalized funneling of all aspects of the business through WS Packaging Group's Green Bay headquarters—from new business opportunities to the vetting of potential new technology investments—to ensure appropriate deployment of clients or equipment to one or more of its 22 facilities across the U.S. and Mexico. On a larger scale, Lane led the founding of the company's IMPACT™ Business System (IBS), a "business approach" grounded in a lean manufacturing mindset that drives all operational decision-making—from the supply chain to project workflows to new product development. One notable effect has been improved financial forecasting and modeling through the incorporation of Kanban pull replenishment (a Japanese just-in-time inventory control concept) for raw materials.

Earl Jewett, WS Packaging Group's chief operating officer, notes that IMPACT focuses the company's attention on how to enhance both its products and its processes. "Our packaging experts collaborate with brand owners, brand managers, packaging designers, packaging engineers, and purchasing decision makers," he explains. "Each audience has its own challenges that need to be solved. Project success depends on our ability to understand those challenges."

Expanding diverse capabilities

Lane envisions that WS Packaging Group will become a billion-dollar, global company in the next three to five years. But how does one formulate a cohesive path to this threshold—in light of 2,000 employees working at 22 facilities; producing labels, flexible packaging, and folding cartons; and using more than 175 printing presses encompassing flexo, offset, and digital printing capabilities? According to Lane, the company's competitive advantage lies precisely in the diverse capabilities mix it has pursued. WS Packaging's spectrum of printing and finishing capabilities and materials expertise extends broadly and deeply enough to hold 30 patents and 11 trademarks for primary and promotional labeling. Ultimately, he contends this diversity enables delivery of "one-of-a-kind constructions" that identify and set apart customers' product brands. "We can go in any direction customers want or need," Lane maintains.

Bill Smith, WS Packaging Group's chief sales officer, highlights brand owners' ongoing challenge of finding consistently effective ways to differentiate their products. "Maybe there's a need to rebrand a product due to a new positioning, or a brand refresh for a product that's been a category leader but has been losing share to new competitors," Smith observes. "It could also be a line extension that's part of an SKU expansion strategy. Whatever the situation, it all comes down to enhancing shelf appeal with labels and packaging that helps promote new ways of thinking about the product and the category."

Lane points to success stories that can be told from multiple print process vantage points. On the digital printing front, WS Packaging Group met the short-run, high-end label output needs of Carmella's Italian Bistro when the company moved to launch a prestigious brand image for its house marinara sauce. The sauce labels were produced on an HP Indigo ws4500 press, using four-color process printing with a protective matte UV varnish, on a natural white, ribbed facestock typically used for wine labels.

In another instance that demonstrates WS Packaging Group's expertise in both flexo and offset processes, tree nut producer Blue Diamond® Growers sought the converter's help with the trial launch of eight new SKUs of almond butter. Review of the label artwork revealed that trapping colors using flexo could prove difficult, even with a four-color process/one-spot color approach that would require tight registration on a reverse-out in process. WS Packaging proactively moved the pressure-sensitive job to a Nilpeter offset press, and saved the customer more than $10,000 in prepress costs while achieving the desired label quality.

In short, a customer working with WS Packaging Group can access numerous printing and finishing technology solutions, and Lane aims to provide even more. "WS Packaging Group has and will continue to be an acquisition-focused company," Lane states. "Our ability to manage cash, find and invest in good companies, and leverage those companies into the WS Packaging portfolio is an attractive growth model."

Prior to its ownership by J.W. Childs, WS Packaging had already amassed a solid roster of converter company acquisitions. Following the management shift, four more investments were completed since 2007, resulting in the additions of SenecaSalem (Franklin, Pa., and Salem, Ohio), Quality Label (Elk River, Minn.), Consolidated Products (Knoxville, Tenn.), Boelter Industries (Winona, Minn.), and Label World (Rochester, N.Y.). "Sometimes we buy companies for their technology," says Lane, adding that company acquisitions are a vital strategy for technology acquisition.

Print technology mix

Across the country, WS Packaging has presses on the production floor from equipment providers including Gallus and Mark Andy (flexo); Sanki, Rotopress, and Nilpeter (offset); and HP Indigo and EFI Jetrion (digital). Looking ahead on the company's technology footprint, Lane expects flexo printing to remain "part of the larger mix," and calls digital printing and digitally optimized facestocks "exciting advancements" that must wait for end-user comfort levels to fully "catch up" with their potential.

Overall, Lane is confident in the ongoing availability of attractive converting company acquisition opportunities. "Anybody that survived 2009 is in a good position," he notes. To achieve the desired billion-dollar benchmark, Lane also believes WS Packaging "will need to grow outside of our well-established North American footprint." He adds, "Our customers are ready for us to make the move. And we are eager to branch out into other growing regions of the world."

A strong example

With such a steady investment trend in motion, is the writing on the wall for smaller converting companies? Does long-term survival necessitate alignment with a bigger entity? Lane believes because "the industry is so big, and customer diversity is so huge," there is ample room in the marketplace for both larger and smaller operations. One dynamic in favor of smaller firms, he notes, is that some customers "like to be number one" in a firm where that customer's business represents fifty percent of the converter's total business.

At the same time, Lane foresees that smaller converting companies will recognize the opportunities that private equity backing can enable. "Some might see the ease of growing their top line this way versus growing it organically," he states. As a result, he projects smaller converters will have more desire to be acquired and hold higher expectations to benefit from the transaction.

Whether smaller shops opt to join forces with larger firms or continue competing individually, Lane believes that awareness of WS Packaging Group's lean manufacturing successes stands to benefit every player in the market. "I think the story's good," he remarks. "We're going to make competition stronger." pP