Mannkraft makeover: this independent corrugated box plant reinvigorates itself with Arrow's displays

Paperboard Packaging, Nov, 2004 by Mark Arzoumanian

When Dennis D. Mehiel became president of Newark, N.J.-based Mannkraft, an independent box maker, in March 1999, he was confronted with an operation that, while profitable, was going nowhere fast in an extremely competitive market.

For many years the 200,000-square-foot plant was part of Box USA. But in June 2000, when a portion of Box USA was sold to Roger Stone, former president of Stone Container Corp., Chicago, and his son-in-law, Matt Kaplan, the operation returned to its independent roots. (Earlier this year International Paper bought Box USA.)

About 60 percent of Mannkraft's box production goes to brokers and distributors, who then resell them to end users. The rest is sold to companies in the paper, publishing, food and beverage, and cosmetics industries, among others. RSCs make up 60 percent of its business, diecuts (including displays and other value-added packaging) 25 percent, and sheets 15 percent. The sheets are sold to secondary converters on the open market. The plant produces more than a billion square feet a year.

For the past four years, Mehiel has made it his mission to reinvigorate the operation with a few new employees and many new projects.

Among the current users of its products are Internet shippers Amazon.com and BarnesandNoble.com, which are now buying Mannkraft's easy-open book boxes.

Give Me Details

Like other people in his position, Mehiel is eager to talk about reacting quickly to customer needs and meeting any and all corrugated box requirements. But he can support industry cliches with specific performance improvements, including:

* Ninety-eight percent on-time deliveries, an 18 percent improvement from a few years ago;

* A safety record that's significantly better than the industry average. The plant's OSHA recordable incident rate is 2.6 to 3 per year;

* A 50 percent reduction in quality complaints and rejects. Today rejects are less than 11/44 of 1 percent of sales;

* Last year Mannkraft spent more than $100,000 on a quality lab and on equipment improvements; and

* Increasing the corrugator's speed more than 15 percent while simultaneously reducing waste, even as the machine ages.

And what if a potential customer says he has seen similar improvements at other nearby box plants?

"I'll tell him to come back [in a couple of months] and we will show him the next wave of improvements," Mehiel says.

Up until four years ago Mannkraft's scheduling practice was to run only one flute on any given day of the week, General Manager Bob O'Connell says. He's a 26-year industry veteran who came from an integrated company four years ago, anxious to learn more about a medium-sized box making business. Many box plants did business like this in the 1980s and even the 1990s; it was taboo to break into the schedule. Today flutes are being changed on Mannkraft's MHI/Marquip corrugator up to five times a day.

Such operating changes, while admittedly long overdue, have been critical to Mannkraft's survival in a world of shrinking lead times. Whether sheets or RSCs, today's customers want delivery in one to three days. Even complex display programs continue to see reduced cycle times as retailers continue to demand supply chain improvements from their suppliers.

"Quoting timelines are shortening," O'Connell says. "Display timelines used to be 30 to 45 days, now they're 15 days and sometimes less. Full service and total quality are the basic benchmark expectations of all customers, no matter what they buy. If you can't meet them, you can't play."

Mannkraft's RSC turnaround times are usually three to five business days. However, every day eight to 10 of the 100 jobs the plant processes daily leave the company's docks within 24 hours (or less) of initial order placement.

But quick, timely deliveries alone won't keep customers forever. So Mannkraft also stresses its design strengths. The plant employs five designers and two project managers to meet the structural and graphic demands of its 330 customers. As a consequence, revenue from diecut products of all kinds has grown 50 percent over the last three years.

"Our customers are constantly wanting us to come up with something new," Mehiel says. "They say, 'Show me something I haven't seen before.'"

Display with Pop

Many of these customers are now learning about what Mannkraft's latest acquisition, display maker Arrow Art (now known as Arrow Display), can do for them. In February 2003 Mannkraft acquired the assets of Arrow Art from Princeton Investment Partners (PIP), an investment group, for an undisclosed amount. PIP sold because it saw that there was more to running this type of a business than it initially anticipated. It also recognized Arrow Art's real value was in growing within Mannkraft, which is now aggressively marketing the pop-up displays to consumer products companies.

Mannkraft had a 16-year selling relationship with the temporary display company, best known for its pop-up displays. Today Arrow has more than 25 display patents. In the 1980s Mannkraft was heavily into the display business. But that was no longer the case by the time Mehiel arrived in spring 1999.