Box buyers are reducing their supplier base, a trend that is by no means new. The question that passes through the mind of every box making executive nowadays is: What if yet another one of my major customers tells me he has to reduce his supplier base? The issues that the buyer will focus on include past service and, more importantly, the ability to maintain or even increase service demands.
From left, Norampac's President and Chief Executive Officer Alain Lemaire, Vaughan General Manager Maria Procopi, and Divisional Engineer Pan Giammarco, celebrate the plant's opening last October.
Montreal-based Norampac had to tackle this issue directly when a few years ago it closely examined its customer base for its Toronto/Leaside corrugated box plant. The 250,000-square-foot facility had been successfully serving more than 150 customers in the food, beverage and sheet plant industries for decades. But the building itself had some disadvantages. It is long, slender, and not wide where you would want it to be, says Maria Procopi, general manager. In addition, it's landlocked. But the concerns of Norampac executives went beyond its physical attributes. The key issue was keeping up with customer growth.
"If we couldn't meet customers' demands at Leaside, our (single source) clients would go to dual source," says Stu Fremlin, regional general manager, Central Canada. "Our customer base was growing and we didn't want to hurt that."
So in December 1999 the decision was made to relocate this plant to Vaughan, north of Toronto. The Leaside facility was eventually sold to a hardwood flooring company. But before that occurred, a major transplant was needed: smoothly moving machinery and business from Leaside to Vaughan.
Norampac's new box plant in Vaughan, Ontario, runs a triple knife on its BHS 110-inch corrugator so it can run out three orders simultaneously.
"Our customer base is west of Toronto, so now we're more centrally located to them," says Procopi. "There's less traffic congestion and easier highway access. Also, here at Vaughan we have CN rail access right at the plant."
Indeed, the plant can fit up to 10 60-foot cars in its building, a big advantage when receiving containerboard rolls from its own mills.
The Vaughan plant, the largest in Canada and ISO 9002 registered, cost Norampac $38 million (U.S.) to build and equip. Some of the box making equipment came from the Leaside plant, while other pieces were bought new. The 400,000-square-foot facility includes a 100,000-square-foot roll distribution center for Norampac's 400,000 metric tons per year virgin linerboard mill in Red Rock, Ontario.
Fremlin admits that Norampac was a little too optimistic about when the Vaughan box plant would be completed. While the decision was made in late 1999 for a spring 2001 opening, the actual plant opening didn't occur until August 2001. What caused the delay?
The BHS corrugator's stacker has been built so that it can send sheets in two directions: to the left for sheet plant orders and to the right for box plant orders.
"The main problem was the land itself," he says. "We had to first prepare it to build on. We had to remove topsoil and replace it with construction-based soil. The delay in preparing the site resulted in winter construction, which was much slower than anticipated."
Addressing environmental concerns also was critical to the plant's successful opening, stresses Pan Giammarco, divisional engineer. To eliminate emission issues, Norampac invested in the latest boiler combustion systems and repeatedly tested the air to make certain the plant was obeying the local air emissions laws.
An impressive 98 percent of the Leaside box plant's 190 employees are now working at the Vaughan facility. The rest are new hires, mostly in production. This makes sense because the new plant's production capabilities are 60 percent higher than the old plant's (145 million square feet a month at Vaughan versus 90 million square feet a month at Leaside).
Setting The Goal
Moving employees to the Vaughan facility was easy compared to moving all the converting equipment, especially when you consider that after much debate, Norampac set a goal of doing it in 10 days.
Moving the converting equipment at Norampac's Toronto/Leaside box plant to the new Toronto/Vaughan facility took months of careful planning with employees and customers.
"The two camps on the move were doing it one piece at a time or doing it all at once," states Fremlin. "Once it was decided to do it all at once, our other plants helped us serve our customers. The move was well thought out and involved a lot of supervision."
Norampac's other five box plants (and two sheet plants) had to commit to produce a specific volume of the Vaughan plant's production. Planning such detailed logistics took Norampac 10 months. Customers were notified about this plan through letters and verbally. All were asked if Leaside could pre-run their orders; whenever possible, this was done. Most importantly, every customer was told where his or her business was being moved to within Norampac.
Norampac executives met every week during the very hot summer of 2002, making certain that every customer's needs were met while also factoring in employee vacation days. In less than three weeks the Vaughan plant took back all the volume it had parceled out.
Putting The Package Together
"We're committed to some accounts with less than five-day delivery needs," Procopi says. "With sheet plant orders, an afternoon order is at the customer's door the next morning."
The majority of the Vaughan plant's boxes and sheets serve customers in the greater Toronto area. Sheet plant orders will run from 5,000 to 75,000 square feet. Fremlin notes that Toronto's sheet plant community is just as demanding as end users. Today's demands include:
Everything has a designated place at Norampac's new Vaughan box plant. All of the employees know that if a tool isn't put in its right spot, it's missing.
- 1. Shorter and shorter lead times with a healthy mix of rush orders;
- 2. Boxes must work on case erectors and be 99 percent defect-free; and
- 3. More colorful boxes with easy-open features for in-store displays.
"Today's customers have low inventories," Fremlin says. "As a nonunion shop we have a lot of flexibility. We run the converting operation six days a week, 24 hours a day. Our sheet plant customers tell us we're making the best corrugated sheet in the Ontario market."
The compliments extend beyond sheet buyers. After the Vaughan plant's open house, Paul Tremblay, a box buyer from Campbell Soup Co., Toronto, e-mailed plant executives.
"The people, the quality of board . . . and the total team commitment have made your plant a model for success," he wrote.
But don't think such praise has gone to the heads of Vaughan plant executives. Instead, their minds are filled daily with the five S's:
- 1. Sort;
- 2. Set in order;
- 3. Shine-Keep it clean;
- 4. Standardize-Maintain equipment and tools in proper working order; and
- 5. Sustain-Do regular audits.
And they wouldn't have it any other way. They know firsthand what it takes to keep customers like Campbell Soup from searching for other suppliers. And they know that once they have such loyalty it should never be taken for granted.