Focus on Process Capability
The effects of the overall slowing U.S. economy continue to create sweeping changes within the corrugated industry, for both machinery suppliers and their customers. As a result, many suppliers are pushing equipment limited in flexibility and application.
Alliance takes a whole machine approach to the specialty folder-gluer market to serve the boxmakers' specific market requirements with a broad expandable capability.
A specialty folder-gluer is inherently not a flexo folder-gluer. The specialty in its name indicates that it produces containers different from the rest. In today's tight, competitive, fast moving market, boxmakers never know where their next order will originate. Having the flexibility to accommodate virtually everything the market can throw at them is key to a successful livelihood.
Since the Corrugated '98 show in Paris, Alliance, then known as J&L Industries, has focused on a series of continuous product improvements and offerings. For Alliance, the feedback from their customers has indicated that the top reasons for buying or upgrading a specialty folder-gluer is to increase production throughput, while decreasing maintenance costs and downtime, and enhancing value-added offerings. In many instances, Alliance's specialty folder-gluers are purchased to run boxes that cannot be run on other folding and gluing technologies. This capability opens a unique market niche to the customer that can be leveraged for higher profitability.
The company realizes that cost pressures are at the top of everyone's list in a down turned market, but Alliance still adheres to the philosophy that the entire machine should be based on how to increase its value-added capabilities. With initial purchase price representing only one component of the total cost of the ownership equation, a thorough examination of the total cost of ownership more than offsets any initial purchase price differences. Alliance believes the combination of total cost of ownership, along with the flexibility to run boxes that no other machine can run, makes the specialty folder-gluer stand alone as the value added leader in the market.
To that end, Alliance has also chosen not to cannibalize or de-content their products' capabilities for the sake of a competitive situation. They are not in the parts and pieces business and do not believe that type of thinking is in their customers' best interests.
Its three pronged strategy focuses on continuous product improvement, the addition of value-added enhancements and a refusal to sacrifice core product strategies that make its machine the leader in specialty folding and gluing.
As John Ruskin put it circa 1900 — “The common law of business prohibits paying a little and obtaining a lot. There is little in this world that someone cannot make a little bit worse and sell a bit cheaper…And those who consider price alone are the natural victims of this condition.”
Differentiation in the Market
Helping boxmakers acquire and maintain business is the key to success in the machinery business. Service and product management at Alliance work daily with customers all over the globe, developing specific options and tooling to ensure that their customers not only get the box order the first time but that they keep it. They understand that those who accept a box order on price alone are apt to lose it the next time the order goes out to bid.
Another key to success in the new container manufacturing market is realizing that there are established specialists in many areas of the boxmaking profession whose products are excellent. Working with these established, and best of class vendors within the corrugated industry is another reason Alliance's specialty folder-gluer continues to keep abreast of the innovation cycle.
Alliance has partnered with key OEM's to provide in-line stitching, taping, windowing, spot labels, RFID tags and numerous other applications. In most cases, these are processed in one pass through their specialty folder-gluers. This allows its customers to provide, in an efficient and cost-effective manner, the capabilities of several machines in one, thereby removing the need for greater space in the plant and increased maintenance demands on plant personnel.
Machine Design Philosophy
In addition to designing a machine equipped with the capabilities needed to produce a product that serves a customer, there are macro design issues that come into play. One recent trend has been the pressure to design smaller machines, or machines that are designed to a specific footprint. (For other comments on this topic, see the June BCI article, Flexo Folder-Gluers' Great Leap Forward.)
Alliance, with its whole business — whole machine viewpoint, noted that the biggest single limitation engineered in the construction of any machine is to design it for a specific footprint. The product the machine will produce should dictate the design criteria of the machine, and not the other way around.
Some specific issues that come up when folder-gluers are shortened are the decrease in fold accuracy. The fold crease needs to be gently inserted into the container substrate and a shortened machine may require that too much fold be put in too quickly, causing cracking at the fold or a fold that is inaccurately positioned. Other limitations include glue placement and speed limitations, as well as access to various parts of the machine for maintenance.
Two Sides to the Market
The nature of the specialty market is all about options — engineering the most flexible and wide ranging specialty folder-gluers on the market today. Wherever possible, developing, or partnering to develop new folding and gluing technologies is one way to keep customer loyalty and drive the technology curve.
Alliance sees the specialty folder-gluer market as split along price issues. However, purchasing a specialty folder-gluer based on price and immediate needs often results in a company walking away from a large or lucrative order that their inexpensive machine is not capable of processing. This short term, start-up can leave a boxmaker without access to the full market potential.
The other side of the price market is the business that is already established in one niche that wants to grow or expand into another market. These are the true entrepreneurs who are focused on value-added and high margin box orders. Their choice of a machine is usually different. When an established business adds a folder-gluer, they usually want one that can do everything that their existing machine can do, plus some additional capabilities. Often, these operations are looking for the flexibility of two machines running parallel to help ease production bottlenecks as well as having specialty characteristics that can open the new target markets.
As Hodges sees it, the successful entrepreneurs will be those that position themselves early with the flexibility to address the widest range of opportunities.
