Companies confronted by the challenges that the box business has faced might be tempted to bury their heads in the ground. Bennett Packaging buried its entire operation in the ground — not to escape reality but to rise to its challenges.
Bennett's packaging plant is part of Kansas City, Missouri's rich geology. It occupies 400,000 sq ft of space in the limestone mines leased to businesses by Space Center Kansas City Inc. What has sprouted since the company planted itself here in 2000 was recognized this year by the Greater Kansas City Chamber of Commerce as one of the region's "Top 10 Small Businesses." Mark Martin, president of Space Center, uses Bennett as a barometer for measuring the success of the rest of his tenants who lease plant and warehouse space from him.
Bennett Packaging's management team, from left: Ramon Reynolds, manufacturing service manager; Doug Hay, plant manager; Doug Bennett, owner and executive vice president; Kathy Bennett, owner and ceo; Craig Bradley, vice president of manufacturing; Garrett Bradley, corporate sales manager; Don Daly, sales manager.
"If they're busy, usually my other customers will do very well," he says. "They've taken a strategy of doing value-added services to leverage their ability to make boxes. That includes displays and labor-intensive, hands-on repackaging. It's a very competitive niche."
What further distinguishes Bennett is the fact that it is a woman-owned business. However, Kathy Bennett, the president and owner, doesn't want that to be the reason customers do business with her company.
"The fact we're woman-owned is important to some of our customers, but at the end of the day it's a lot less important than the fact we're performing," she says. "Everybody in our organization, from top to bottom, makes this company successful. It's also the type of facility we have. We were once constrained by how few dock doors we had. Here, that's not an issue for us. We have 30-plus to help us run the pallet programs we do for the major retailers."
In fact Bennett benefits from the fact that the space they now use was previously a General Mills distribution center, which gives them plenty of room for production flow and the performance of value-added services.
Leveraging the Wal-Mart Connection
Garrett Bradley, Bennett's corporate sales manager, sees these services as Bennett's greatest opportunity for growth.
"The brown box market in the U.S., because of all the manufacturing going offshore, isn't growing," he says. "So to set yourself apart, you have to offer more than the next guy. Any kind of logistical services, fulfillment, warehousing, developing custom programs for customers, and delivering to suit their needs, that's where the most growth potential is."
Bennett is particularly strong on the display side. It offers a one-stop shop. Customers can either come in with an idea of their own for implementation, or they can rely on Bennett to suggest the best way to make an appearance in the marketplace. Bennett's display headquarters is in Bentonville, Ark., only a few blocks from Wal-Mart headquarters. This is another strategic location for Bennett.
"Working with Wal-Mart buyers in Bentonville, we can make suggestions based on how many units they want to merchandise, and their budget," Bradley explains. "They don't have to go to five different places to execute. Something may come in from China through a port, brought directly into our location in Kansas City. It's unpacked, put into a display that's ready for the store, then either held in our warehouse until that time or shipped directly out."
Bentonville is a strategic nexus for Bennett, not only to reach out to Wal-Mart, but also to gain access to Wal-Mart's huge circle of business partners.
"We're in Bentonville primarily to sell to the people that sell to Wal-Mart and Sam's Club," Bennett says. "Wal-Mart makes us better because of the demands they place on us. We need to be successful in adapting and learning their ways to help them grow their business."
Sales and Production Teamwork
When the ceo says "learn," she means everyone at Bennett — sales and production teams alike. These teams go out on sales calls together as fact-finding missions.
"Not only does that help us, but the customer benefits," Bennett says. "Whether that's adding a perf score to something that's been giving them fits on an automatic piece of erecting equipment or changing a design to reduce waste for them or us. We also encourage our customers to come here and get involved with us."
Indeed, Bennett conducts monthly brainstorming meetings with key customer employees. It also has a "stewardship sales" program through which it collects the names of the customer's buyers and shipping and production personnel. These individuals will then be asked to fill out a simple 10-question report card.
"They'll tell you things that can submarine you in account management," says Don Daly, director of sales and marketing. "You may be delivering an hour early and the shipping manager will explain how that affects them. We benchmark ourselves and set goals from that input."
Bennett is staffed by 118 full-time employees spread among its Kansas City headquarters, its Bentonville sales/engineering facility, and its warehouse/distribution center in Wichita, Kan. Its receiving, shipping, and scheduling departments share the same office at its Kansas City site to facilitate communication and perpetuate supply chain flow. It also has its own fleet of eight tractor-trailers, with drivers. The fleet services customers within a 250-mile radius. Anything outside of that is served by outside contractors.
Bennett dedicates approximately 130,000 sq ft of finished goods warehouse to living up to customer commitments and fulfilling blanket orders.
"On 24-hour notice, we'll load the trucks in evening hours and dispatch them in the morning," says Ramon Reynolds, Bennett's manufacturing services manager.
"If a customer needs something special, or they need it delivered on a certain hour on a certain day or they want a mixed truckload on a certain schedule, that's becoming more difficult for the large integrated companies," adds Doug Bennett, executive vice president and co-owner with his wife, Kathy. "As the integrateds become less flexible, we become more flexible in the things we can do. The difficult part is staying competitive with them because they are very good at doing things at very low cost. That's why we look to the value-added side, and whether it be in displays or brown box, we do a lot of mixed truckload deliveries that I know our integrated brethren would have a difficult time doing."
Such services not only make Bennett competitive, but they've become the company's secret to survival amidst the current spate of price increases from mills.
"The last time we've seen these kinds of price increases was 10 years ago," Doug Bennett says. "Customers want to know what will happen in six months and I can't tell them. The largest cost we have is the paper we buy. When that moves in a few months by 30 percent, trying to recover that on the other end is tough."
To appreciate Bennett's strategy for the future, it helps to look at its past. In 1987, the Bennetts bought the assets of a very small sheet plant that was owned by Consolidated Packaging. The Bennetts then moved those operations from an old downtown industrial site to an 85,000-sq-ft section of Space Center.
Bennett's fulfillment and co-packing area has access to 30 dock doors, enabling this converter to quickly process and ship large pallet programs and other contract packaging services.
"When we got together with the folks at Space Center, they told us we could have a building in 90 days," Doug Bennett recalls. "From the signing of the lease, in the first 60 days they had the warehouse area completed and 30 days later they had the offices completed. Of course they didn't have to build structural steel. They poured a concrete floor and put up partition walls."
The first piece of converting equipment installed there was a Thompson diecutter. That was easy compared to installing the scrap-handling system. In an above-ground facility, a scrap system installs on the ceiling with a cyclone on the roof. Not only is there no roof at Bennett's Space Center site, but its operations are about 85 feet underground. That meant building an elevator to lift the bales out.
Operators load sheet onto Bennett's new Martin Transline four-color flexo folder-gluer, which features inline diecutting.
Bennett also had to be more careful about its conveyor layout. They had to be positioned around the site's 40-ft-diameter pillars, which translated into more conveyor than originally planned.
As Bennett's business grew, it outgrew its original underground space, and in 2000, the Bennetts transferred operations to its current 400,000 sq ft, formerly occupied by General Mills.
Make Room for Converting
This move came at a good time because Bennett planned to invest in bigger, more sophisticated converting equipment. Since moving in, the company has added:
- 1. A jumbo, 86- by 196-inch, two-color flexo folder-gluer with full inline diecutting (the largest size installation of its kind in the Midwest);
- 2. An Allegra B-130 specialty folder-gluer; and a
- 3. A Martin 1228 Transline four-color flexo folder-gluer with full inline diecutting.
The Jumbo presented the greatest material-handling challenge during installation.
"There were only two pieces of equipment in the country that could actually lift a machine that heavy in the low head space we have," Doug Bennett says. "Normally you'd use a crane. With a Twin Lift, they were able to unload and lift that jumbo press inside our 17-ft ceiling-height building. The slotter section was probably the heaviest part."
During the initial transition, Bennett ran both operations for six months, without missing an order. The move also gave Bennett the opportunity to improve on the success it already had.
The Allegra B-130 specialty folder-gluer helps Bennett produce a variety of displays for several Wal-Mart and Sam's Club suppliers.
"Moving here gave us the opportunity to reengineer our plant layout from a production efficiency standpoint," Reynolds explains. "At the other facility, we just added on when new equipment was brought in. Here we were able to regroup and look at the sequential flow of orders as they went through the system and engineered our plant to be more efficient."
The 430,000-sq-ft space is divided in half from a functional standpoint. Today, 70 percent of the product manufactured at this site is done in one pass in the half equipped with Bennett's latest converting equipment. Secondary operations are performed here, too. The remaining space is dedicated to co-packing and fulfillment.
Knowledge Give and Take
While much of what this company has accomplished has been the result of responding to external forces, the Bennetts say their biggest risk and their greatest opportunity come from within.
"We're a well run, profitable company with a great management team, but the big risk comes when we stop trying to figure out additional services we can provide," Kathy Bennett says. "We can't ever be complacent."
Especially in a market that has excess converting capacity.
"Within 100 miles of here there are 17 box plants," Garrett Bradley says. "That's many more than what's needed. We're all willing to do whatever it takes to get a return on our equipment investment. That leads to price erosion as material costs go up."
That's why Bennett's operators are given incentives to invent new tools and operations, even if they take only a quarter second off a setup.
"The incentive program has been a big help," says Craig Bradley, vice president of manufacturing. "People are understanding how they affect the company's bottom line. We educate them on how much an anvil cover costs, or how much a bucket of ink costs. We do this during monthly meetings with the whole crew, first and second shifts."
Doing What Integrateds Can't or Won't
Bennett Packaging's success as an efficiently run small company has made it an attractive target amidst the industry's continuous mergers and acquisitions. However, Doug Bennett sees value in remaining independent.
Bennett's display headquarters is in Bentonville, Ark., only a few blocks from Wal-Mart headquarters.
"We get letters and phone calls on a fairly regular basis, but we don't take them too seriously," he says. "We feel very good about the future. The consolidations in the industry will create more opportunities for us. I see more and more opportunities for us just from what's falling off the table at the major integrateds — stuff they don't want to do. In some cases, we might partner with them on an account. It all comes down to paying attention to customer needs."