Statement of the Problem Carded Graphics (CG) is a modest-sized competitor in the $160 billion U.S. folding carton industry and specializes in smaller, highly customized orders. CG, along with other players, grew to dominate the small-order niche very early in its lifespan due to its ability to provide a seamless information infrastructure linking client specifications to final products and differentiate through its quality and speed to market. Despite its early success, CG saw growth stymied from 2007 to 2008, with the tightening of margins that resulted in a reported loss for the year. By 2009 sales had exceeded 2008 sales levels and operating margins had returned to the 2007 level, however, net income had not improved at a pace proportionate to sales. To alleviate this stagnation and to exploit efficiencies, CG is determining whether to augment its current sheeting process with a new sheeter that has higher capacity. Until the 19th century, product packages were made primarily by hand, held together by tacks and strings. With technological innovations, this changed dramatically to what is known today, the modern packaging industry. Today, demand for cartons is driven by commercial activity and population growth and because prices are highly competitive, operational efficiencies are the primary factor that fosters growth within the industry. Folding carton companies primarily focus R&D on greater production efficiencies, such as devising information management
DG has a current competitive advantage within its industry that is maintains through a unique cost-efficient approach. This low-cost structure is apparent through low inventories, low advertising costs, and location of stores in rural areas. Though profitable in the short-run, DG's current advantage is not
In turn, manufacturers are able to avoid this labor- intensive activity of breaking down larger packaging and delivering in smaller batches. O&M also tracks and monitors the prices and contractual agreements between customers and suppliers, including verifying agreed-upon pricing arrangements for a variety of different customers. This is a time-consuming and labor-intensive activity, which sometimes involves facilitating rebates and debits.
Construction – Boxes, all sizes and shapes – cereal boxes, tissue boxes, appliance boxes, packaging,
In the essay, “What’s in a Package”, written by Thomas Hine, the author describes how we live in a world unaware of what’s right under our noses when it comes to consumers and buying items in packages. He explains the many ways packaging is relevant in our lives and how much of an impact it has on us without us even knowing. He illustrates packaging as something that has evolved and is still evolving over time and something that plays a huge role in why we buy the things we do. First, the author introduces how everyone has the desire of wanting to buy things, regardless of where it may be or what it is. He mentions that the businesses selling these items are not only getting you buy their product but also believe they they will benefit us in some way, shape or form.
Mensa’s packaging business had three major markets; Food and Beverage, Specialty Packaging, and International. This sector was economically sensitive, as it was difficult to build any competitive
Based on the changing electronic industry and business demands, Custom Molds should correct major issues by adopting the following recommendations. The molding process should focus on small batch sizes and purchase more small and customizable machines. More workers should be hired to oversee the production since there is more labor needed to prepare the machine for each customized mold. The plastic parts process should focus on few but large capacity specialized machines. Fewer workers will be needed to oversee this process because there are few setting changes needed. To control the problem of late deliveries, a better communication system between offices should be implemented so workers do not need to walk back and forth between offices. Orders should also be accepted based on the ability to complete the product in the time that is promised to the customer. More efficient communication between all departments would result in a more accurate estimated delivery time. To control errors resulting in defective parts, Custom Molds should invest in moving the testing center to a more centrally located area. More frequent testing and less walking will increase efficiency and decrease defective products. An alternative option to the recommendations listed, is for Custom Molds Inc. to evaluate the market for the products they produce and to decide to make either molds or plastic parts. The key factors that should be considered while
Case Analysis Success in the folding carton industry Pitts has been extremely aggressive in positioning Carded Graphics within the folding carton industry. This industry prints and cuts paper and glues it in a way that allows subsequent unfolding and filling by the customer. The industry is facing ever shorter lead times and must satisfy even more complex customer requests, particularly regarding printing capabilities. The large printers have secured the ultra-high-volume noncustomized business (printing boxes for commodity products), and Carded Graphics must be able to fill the customized small-run business. Pitts took a major step in purchasing a state-of-the-art printer. It is the main feature of Carded Graphics’ operations, putting the company ahead of
The Forest Hill Paper Company (FHPC) is a small, closely held paperboard manufacturer that produces “parent rolls” which are then distributed to converters for further processing. Due to their small size in comparison to many of their competitors in the industry, FHPC would be classified as a niche company as stated in the case. Part of FHPCs strategy, which will be looked at further below, is to create a niche based on service and rapid customer response that the larger manufacturing companies are too large to be able to do successfully.
Investment in the Detroit plant has lagged significantly from other plants in the corporation. As a result, the infrastructure and machinery is outdated, haphazard, and inefficient.
The proliferation of packaging products and poor product education has caused confusion among end users. US consumers have traditionally viewed packaging supplies as a cost-saving resource. Consequently, packaging engineers are accorded high status and influence roughly 40% of material purchase decisions. The US market is experiencing strong growth, driven in part by the growth of the coated and uncoated bubbles segment. However, AirCap's market share remains stagnant (Appendix A).
Bayonne Packaging, Inc is in the paper packaging industry. In the 1980s and early 1990s companies in the consumer goods industry start to look for a greater impact with their promotional materials and star to implement their promotional budget to the package itself instead of print media and broadcast forms. This led to a rapidly growth on the paper packaging industry.
Changes witnessed over the last few years on mode of packaging and its economic impact.
Carded Graphics, a business that is driven by being lean, agile and efficient in all aspects of their daily operations so that it can survive, thrive, and prosper in the $160 billion paper products industry. Carded Graphics is part of the $10 billion sub-industry in the paper product industry. Murry Pitts is the owner and president of Carded Graphics; he was driven to make his company be the best it could be. Carded Graphics operations are handled by 90 individuals who work out a 125,000-square-foot facility that is located off U.S. Route 81. Murry’s business operations are focused around the concept of made-to-order – in order to keep costs low, the organization would make large production runs and keep their finished good inventory high and distribute the customers order based off their previous request of smaller orders. The entire folding carton industry was being flipped upside down by the implications of technological advances. Especially the niche market that Carded Graphics business was directed towards. Organizations that can provide customers with a seamless information infrastructure that allowed clients to specify their needs and see the final result and are able to adjust their needs based off the final product were succeeding.
Buyer Power: The major consumers in this industry are basically anyone who intends on sending a package or letter to someone urgently or with the most convenience. It seems as if businesses use this industry the most, considering the importance of delivering and receiving products and other necessities to keep a company stable and on top of their game. Because there is barely any differentiation in this industry, it allows customers to easily shop around for the best prices. This raises price sensitivity and gives the consumer more customer power.
Carded Graphics (CG) is a medium-sized competitor in the $160 billion U.S. folding carton industry and specializes in smaller, highly customized orders. CG, along with other players, grew to dominate the small-order niche very early in its lifespan due to its ability to provide a seamless information infrastructure linking client specifications to final products and its speed to market and quality. Despite its early success, CG saw growth stymied from 2007 to 2008, with the tightening of margins that resulted in a reported loss for the year. By 2009 sales had exceeded 2008 sales levels and operating margins had returned to the 2007 level, however, net income had not improved at a pace proportionate to sales. Now, in 2009, to alleviate this stagnation and to exploit efficiencies, CG is determining whether to augment its current sheeting process with a new sheeter that has higher capacity.