A passion for success: Lee Shillito leads Triad Packaging from three employees and no orders to more than 140 employees and 250 regular customers

Paperboard Packaging, Nov, 2004 by Esther Durkalski

Lee Shillito, president and chief executive officer of Bristol, Tenn.-based Triad Packaging, has developed a motto that he lives by--you must have a passion for the business to be successful. He has pioneered Triad Packaging from three employees and no orders to more than 140 employees and 250 regular customers.

After struggling but getting by for years, Shillito's determination, hard work and talented management team led Triad from small beginnings to a flourishing, profitable business. That is, until fall of 2000 when the effects of the incoming recession hit close to home. Shillito, who has been in the corrugated business for more than 35 years, was interviewed for a 2001 Wall Street Journal article that previewed the tough times ahead for the U.S. manufacturing base, especially for corrugated converters.

"We started our new year in September 2000, and lost money five months in a row. That will get your attention. After being very successful for a long time, you had to start asking yourself why," he said in the front-page article.

After that steady decline in growth, Shillito's passion for the business could have been tested but he didn't waver. He went into action mode to save his company. He led a bottoms-up process that involved everyone in the company developing a strategic plan to deal with the downward spiral Triad had just entered.

Now the entire organization is aligned on the same goals. Shillito's passion for the business guided Triad out of crisis mode, into continued evolution and therefore success.

Shillito, the incoming chairman of the Association of Independent Corrugated Converters (AICC), started in the industry at Boise Cascade, in an Alabama plant. After a successful 15-year run there, he left the company to venture out on his own. He has always loved the Tri-Cities Mountain Empire Region (the region around Bristol) and knew he could develop a flourishing business there without competing with Boise, a company has was still loyal to.

So in 1984, Shillito, his mentor and industry veteran Harold Craddock and another industry veteran Lou Wetmore started Triad Packaging Inc. of Tennessee. Craddock and Wetmore had started another corrugated company, also known as Triad Packaging, in North Carolina 10 years earlier. After a few years, Craddock sold his interest in the North Carolina Triad to Wetmore and Wetmore sold his interest in Tennessee Triad to Shillito and Craddock.

The Ideal Market

Bristol is split down the middle with one half of the city in Tennessee and the other half in Virginia. Shillito loves the area, which is a great market for Triad, and knew that he always wanted to build his company there.

The Bristol facility, the company headquarters, is a 100,000-square-foot building built on eight acres. The facility has recently undergone a $2.5 million expansion as part of its 20th anniversary celebration. Not only does the expansion include the physical building but the investment of new machinery, including a J&L specialty folder-gluer from Alliance Machine Systems International.

Each of the company's four locations (Bristol; Gastonia, N.C.; Athens, Ala.; and Wilkesboro, N.C.) is customer focused and Shillito says each was acquired as a strategically focused growth initiative.

Shillito's first acquisition was 14 years ago when the company bought the Athens facility. Triad's most recent acquisition is Gastonia-based Chambers Containers in 2003. The plant is still run by Chambers president Randy Chambers, and Triad's 20-year veteran Roger Powers as general manager. Chambers Containers still operates under its own name but as a division of Triad.

The Wilkes Packaging division, based in Wilkesboro, was set up for one of Triad's major customers. The plant makes boxes and related products to supply this customer on a daily basis, says Customer Service Manager Sherry Lee, a 19-year veteran of Triad. The building was bought in 2003 as a warehouse but since January, it has been the home of the company's Wood Products Division.

The company has approximately 250 customers, including Bristol Compressors, Rockwell Dodge, Gardner Glass and Mirror, Pelton and Crane, and Philips. The end use markets Triad serves include the home decor, industrial parts, heating and air, medical furniture, and consumer electronics.

The company's growth has been modest but it has been very deliberate. Its existing customer base fuels the growth. "We are very selective with who our potential customers are," Shillito says, adding that Triad is very conscientious about finding additional packaging services that its customers value.

"What value do we bring to them?" is something Shillito constantly asks. "How do we distinguish ourselves so we don't become a commodity?"

Shillito believes the term "value-added" is often overused in this industry. "We do what our customers want and need in any way, shape or form," he says. "We do that with every customer, potential customer and even supplier."

That commitment and loyalty travels to its suppliers, in and out of the industry. For its most recent expansion, Triad stayed with its banker even as he moved to a different bank. "He really became part of our team," Shillito says. "He really took the time to understand our business. That brings a lot of value to the relationship.