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Neff Packaging Busts Out
January 31, 2008
Robert Neff, ceo of Neff Packaging Solutions (NPS), Simpsonville, Ky., takes great pride in the quality of the folding cartons his company has been providing customers since 1959.
He has a long track record of reinvesting profits into the latest technology. Yet when his customers would visit the Louisville, Ky., plant where, until recently, the company was headquartered for 35 years, they saw an operation that had outgrown its space.
Neff's customers would ask him how he could do the business he did in such a cramped facility. The question bothered him. He knew that although he served these clients well, the plant's size limitations could influence their perceptions of NPS' ability to serve their future needs.
"How much is a customer's perception worth?" he asks. "Ten percent, 20 percent?"
Neff had been looking to move into a new building since 2004; he knew the company had run out of space. It needed a facility that allowed for the smooth flow of product from one end to another, with about 15 ft of space between printing, diecutting and converting operations.
"I could have stayed with the status quo, but that's not who I am," he states. "I knew that if we were going to grow the business, we needed to keep moving along. When we first moved here [into the old building] in 1973, we were one of two businesses in this industrial park. Now it's full of companies, so there's a space and land lock factor."
Looking and Looking
Of course, deciding to move into a bigger and more flow-friendly building was the right business strategy; finding the right building in the Louisville area was the challenge. After much searching, in late October 2006, Neff found what his company needed: a 122,000-sq-ft facility leased by Cardinal Health, a pharmaceutical and medical products company, in Simpsonville, 15 miles west of Louisville.
"I'm a quick decision maker and go with my gut reaction when it comes to buying equipment and serving my customers," says Neff, who commutes between Simpsonville and the company's structural design operation in Dayton, Ohio, regularly. "I never look back. I've made a few mistakes, but not many. I looked at this building and said, 'This is it. We can make it work.' Perception is enormously important, and this has curb appeal.
"We can add up to four more printing presses in this building and can expand it another 80,000 sq ft. We're here for the long haul."
Not only does the plant provide plenty of space (49,000 more sq ft than the old facility), but it has 32-ft ceilings. Cardinal Health had decided to leave the facility and move to Knoxville, Tenn., even though it still had time left on its six-year lease. NPS moved quickly to take advantage of this opportunity. Initially, NPS was subleasing the building — but now owns it.
Neff's management team had been kept informed of the effort to move since 2004. Neff knew that without them and the many other veterans he employs (some with 35 years of experience) on board, the transition wouldn't go smoothly. Only two employees (out of 110 total) decided not to move to the new facility. One great selling point to operating in Simpsonville is that most of the plant's day shift is driving out of Louisville (and against traffic), making for a much easier commute.
Clock was Ticking
By the last week of January 2007, all the papers had been signed. Between Feb. 1 and May 18, NPS, which had revenues of $23 million in 2006, moved into the new building while endeavoring to keep all its customers supplied with cartons. The clock was ticking and the stress levels were rising because the company's busy season (about 60 percent of its clients sell health and beauty aids and medical products) is between June and December.
"We couldn't have done it if it was during our busy season," Neff admits. "We didn't tell most of our customers we were moving until we had completed the move. In the very last week of the move, we stumbled and had our first late deliveries."
Working closely with Heidelberg, its only printing press provider, NPS didn't have to move any presses from the old building to the new one. It was running two 40-in presses and a 29-in press in its old building. It sold the 29-in press and traded in its two 40-in presses for two new Heidelbergs, each manned by only two operators: a six-color, 18,000 sheets per hour (sph) Speedmaster XL 105 and an eight-color, 15,000 sph Speedmaster CD 102 with extended delivery and UV capability.
One flexible helper rounds out the pressroom staff per shift. Both machines are equipped with the Prinect Image Control color measuring system. These presses, which will soon be upgraded with a full logistics system, give the plant the opportunity to seek the higher-end cosmetics and personal care markets.
Moving the plant's three Bobst Sprintera 106 PER diecutters was the most difficult challenge, Neff states, but Bobst "came to the table" and not only successfully moved NPS' three diecutters but also its two Alpina 110 straightline folder-gluers — all in five weeks.
"It was expensive but impressive," he says. NPS spent about $1 million total making this move.
In the old building, the printing presses, diecutters and folder-gluers were separated by about 15 ft; in the new one there's a 40-ft gap between them. Throughput and balanced production are important to Neff, who points with pride at the four folder-gluers pulling from three diecutters that are pulling from two printing presses. The bottlenecks experienced at the old plant are now history.
Neff remembers from an early age his dad, who started the company, stressing the importance of always having space for the next press. With this building, he now has that space.
Today the oldest piece of equipment in the plant is four years old, which shouldn't surprise anyone who knows Neff. He's a proponent of buying the best and the fastest so that his operation can do more work with the same number of people. Efficiencies are already increasing in the new plant, as both raw materials and finished goods no longer have to move back and forth multiple times.
"Speed to market," Neff states with authority. "We're always asking, 'What can we do to help our customers react to the retail market?' We have to help them get goods out faster and allow them to take advantage of trends and market needs. Looking for these opportunities gives us an advantage."
NPS' goal is to turn around carton samples in 24 hours or less and supply 100 percent of its customers in 10 days or less. Today 68 percent of its orders are delivered in 10 days or less. One of the reasons Neff enjoys getting out of bed and coming to work each morning is to get that order delivery rate to 100 percent.
"The only person that schedules production is the customer," Neff stresses. "Recently I had a customer place an order, only to then call us on a Tuesday to change it. It involved eight different cutting dies, 28 different SKUs, and 800,000 cartons. We delivered it the following Monday, working right through the weekend. We're not running so efficiently that we lose our service capabilities."
NPS is in the business of solving problems, he adds, so it is constantly on the lookout for ways to make current and potential customers happy. If they're happy with NPS' service, price discussions will flow smoothly.
"Changing [carton] suppliers is very difficult and emotional," he states. "That's why we look for people that have some kind of [packaging] pain, whether it be with structure or filling machine problems. If we can help them run 15 percent better, does it matter if the carton costs 3 or 4 cents more?"
While NPS doesn't try to solve every carton problem (it does virtually no food carton business, for example), the sales team is always trying to improve service. Having an impressive building to conduct that service from helps. A lot.
"Our largest customer saw the building before we signed the [final] paperwork and said, 'Now you have a real building,'" Neff says. "We look prettier now, but we're never satisfied with where we are."