Milton, N.H. – Unlike most pallet companies, Index Packaging Inc. got its start in custom packaging and added pallets as a secondary business although it has become through the years one of the largest pallet companies in New England.
Bruce Lander, president of Index Packaging, said, “Having custom packaging as the base gives us a significant amount of experience that a lot of pallet companies do not have. Not only are we versed in pallets and crating, we know the full spectrum of how best to package anything that customers would want to ship.”
The company has four packaging engineers on staff and keeps up-to-date on the most widely used solid modeling and CAD applications to be able to design and manufacture a wide variety of custom packaging solutions. Index Packaging has equipment not found in most pallet operations including CNC foam profilers, routers, panel saws and cutting tables. These machine are used to produce precise custom packaging utilizing foam corrugated, wood and plywood.
Throughout the years, Index Packaging has developed unique custom packaging to suit the needs of all manufacturing industries. From printed circuit boards to printing presses, Index Packaging uses its expertise in foam, wood and corrugated to meet customer packaging requirements while delivering low-cost results.
One of the specialties at Index Packaging is working with foam packaging material. The company has 20,000 square feet of polyethylene and polyurethane foam manufacturing area. Index Packaging’s capabilities in foam fabrication are vast. With a DataTech M3000 cutting table, several Atom die presses, several Edge Sweet foam cutting saws and many assembly stations, Index is able to provide any pack conceivable. Index Packaging supplies national shipping catalog houses, such as Uline, with shipping indicators, compression packs and foam sheets.
Key Strategy Includes Managed Growth and Self Funding
Index Packaging currently employs about 150 people and has about 130,000 sq. feet of warehouse and manufacturing space. A key to its cost control measures has been steady, managed growth over the years.
Lander commented that from 1993 to 2002, the company built an 8,800 sq. foot building each year and since 2002 has added three buildings. Lander said, “One of the big reasons for our success and ability to grow is that we run our company with no debt. We use our profits to fund any expansion that we need to do. That has been our company philosophy since day one.”
“The first thing some companies have to do is service debt – 5-8% — whatever it is. We don’t have to do that, which allows us to pay cash for the equipment and companies that we buy. This allows us to provide better service at a lower price,” he added.
The history of Index Packaging shows major changes every 10 years or so as the company has slowly evolved and expanded. The company started in 1968 by Bill and Connie Lander with the invention of the TIP (N) TELL shipping indicator, which tells someone if a box has been tipped over in transport or handling. About 10 years later, patent rights to the DROP (N) TELL shipping indicator were purchased. These were the company’s two main products until it moved to its current location in 1981 and opened custom wood, foam, and corrugated operations.
In 2002, new and recycled pallet operations were added with the purchase of Timber Tech Corp. In 2009, Index Packaging started a commercial millwork division by purchasing an existing company that was on the verge of going out of business. This division manufactures and installs custom cabinetry and countertops in all kinds of commercial buildings including hospitals, large apartment complexes and restaurants. This division’s largest customers are comprised of Fortune 500 companies such as Starbucks and Au Bon Pain.
Index Packaging jumped into both the pallet and custom cabinetry sectors by acquiring transitioning or troubled businesses that needed a new owner. Index Packaging reinvigorated life into these ventures and provided a strong management team to ensure success. Lander said that having a good management structure and good managers in place has allowed the company to oversee such a wide variety of businesses. The company’s production manager makes the rounds twice per day to get the latest information from division foremen. This person also helps keep tabs on the progress of various orders so that customer service can alert customers when orders will be ready to ship.
The company has grown significantly under the leadership of Bruce Lander who took over managing the company in 1996 from his father, Bill Lander. The company has grown from $1.7 million in 1991 to $20 million in 2013.
Index Packaging first started in the pallet business by making softwood pallets and crates for customers. It expanded this focus by acquiring Timber Tech in 2002, which had hardwood, new pallet, and pallet recycling operations. Bruce Lander said, “We bought Timber Tech because it complemented our existing pallet business.”
The former owner of Timber Tech was looking to sell and Index Packaging was a good fit. Pallet recycling proved to be more difficult than Lander first thought it would be. Lander said, “The first two to three years of working in the recycled pallet business was really tough. The profitability was not very good. We certainly changed the way we approached it.”
Lander explained that there are two schools of thought when it comes to pallet recycling. You can save everything and try to find a home for it. Or you can only salvage GMAs and grind odd sized stuff. The second strategy has proven to be a better option for Index Packaging. This became especially true when the company bought its first grinders in 2004 to process wood material. The company obtained West Salem and Cresswood grinders, which proved to be very successful.
Index Packaging has developed a strong relationship with a paper mill in Maine. By converting wood waste to chips for the paper company, it has found a valuable buyer for its wood waste. Lander said, “Now we only salvage GMAs, and we grind everything else.”
This program became even more successful when it bought a Rotochopper grinder in 2007, which was much larger than any of its previous units. Lander commented, “The Rotochopper makes a very high quality chip. In developing this relationship with the paper mill, we have to take extra care to make sure that all foreign debris (metals, plastics, etc.) is removed before we grind. This grinding process about doubles the value of the chip relative to biomass fuel, and that has been a very successful program.”
Cutting Costs Starts with Selecting the Right Vendor and Equipment
The company has made smart decisions when it comes to finding supplier partners. One relatively new supplier is Metropolitan Staple, which supplies all the pallet nails and hand nailers to Index Packaging for both its new pallet and recycled pallet operations.
Lander explained, “Our relationship with Metropolitan Staple started three years ago. When we decided to bid out our nails and were looking to reduce costs, Metropolitan pleasantly surprised us by offering us significant savings over our previous supplier.”
Lander stated, “Metropolitan supplied us with Tech 670S coil nail guns. First our concern was about reliability since they are lighter weight, but we found the Tech nail guns to be equally as reliable as our previous nail guns and are a pound or two lighter.”
Lander added, “Our workers are handling these guns eight hours a day. So a pound or two lighter is significant over the course of eight hours.”
In addition to being lighter, the Tech nail guns are quieter by about 5-10 decibels per shot than conventional guns according to Lander. Index Packaging has done some testing and found a noticeable difference in terms of decreasing plant noise. Lander also said that the service with Metropolitan has been outstanding and hasn’t lost a step compared to its previous supplier.
Adding the right equipment to reduce bottlenecks or improve efficiency has also helped make the company more profitable. The company recently acquired and plans to install a Vista Angle Boss with the Tiger stop setup so that operators can defect lumber on the fly. Lander said, “One big challenge we face today is getting quality lumber. Typically for pallets we buy grade three or four lumber. Removing defects to make that lumber suitable for producing a quality pallet is certainly a challenge.”
Lander saw an ad for the Vista Angle Boss in the Pallet Enterprise and decided to add one to improve its defect cutting operations. He said, “Previously we used manual setup and cutting and it just took way too much time. Defecting lumber was difficult, and as a result, the margins in that division were decreasing.”
Expecting the new saw to pay for itself in less than a year, the decision to purchase it to cut dimensional lumber for both hardwood and softwood was a no-brainer decision. Index Packaging will use the Angle Boss for primarily cutting SPF dimensional lumber.
Lander added, “The Vista saw is such a heavy duty saw; that is why I decided to go with that one. Certainly the ability to cut angles is beneficial too.”
In its recycling division, Index Packaging uses AMS conveyor systems and stackers. It also has one AMS dismantler and one Smart dismantler. The company uses a Converta Kiln heat treatment chamber to treat about 10—20% of the pallets it produces. When it comes to being ISPM-15 certified for export pallets, Index Packaging works with Package Research Laboratory (PRL) out of New Jersey for certifying its heat treatment operations. Lander said, “PRL has been very good to work with when we switched from NELMA about five years ago. PRL has been consistent and fair in how it treats us.”
Managing the Complexities of the Pallet World
Staying on top of things is an everyday job in the pallet and packaging industries. Lander pointed to his managers as a major reason for his company’s success. For example, the supervisor in the recycled pallet department has been with the company since 2005.
Highlighting people critical to the company’s growth, Lander singled out Mike Wiles who is being groomed to take over the company in the future. Wiles was promoted from sales manager to the company’s vice president last March. Lander said, “Wiles has been key to our success both as a sales manager and as a vice president.”
Location has also benefitted Index Packaging. Situated in a rural area about 70 miles outside of Boston, the company has lower labor and overhead costs and certainly lower taxes than competitors located closer to urban areas. While the company does face longer shipping distances, the company has minimized the impact by ensuring that trucks are full both legs of any trip. A trucking manager works to improve the efficiency of its trucking fleet.
Lander explained, “One of the things that the recycled pallet business brought to the forefront was our trucking fleet. Before the recycled pallet business, we probably had two or three tractors and ten trailers. Now we have 120 trailers and fifteen tractors. It is a challenge to manage the logistics of that. We do have a trucking manager. What it did help us do is make our fleet more efficient. We can ship custom packaging going out and pick up recycled pallet cores coming back so that our trucks are loaded both ways.”
Location has also benefitted the company when it comes to the level of competition for cores. Lander said, “We have been fairly lucky when it comes to core supply.” He added that his company has strong relationship with national retailers, such as Lowes, Home Depots and Walmart. He further explained that there aren’t a lot of good sized recyclers in northern New England who can handle those larger accounts.
Being a big fish in a small community has its advantages. Lander said, “We are a valued member of our community. We are the largest employer in the town.” That also brings with it some challenges. Lander said, “In this area of New Hampshire, it has been a real challenge to find good lead workers who can work up the ranks to become supervisors or foremen. It isn’t difficult to fine basis labors.”
Government Regulations Concern Entrepreneur
One of the hardest parts of being in business are new government regulations and mounting costs associated with them. Lander said, “The new federal motor carrier regulations that went into effect July 1st are a major thorn in my side. Especially the rule requiring a half hour break after eight hours of on duty time. It caused us to shift our policies, which is not good for anyone.”
Index Packaging offers health insurance coverage to all workers and their families. The company covers 70% of the cost of the worker while the employee must pay the remainder. Employees must cover 100% of the cost of families. Lander said that Obamacare was supposed to reduce costs but they keep on spiraling out of control. He said, “It is reaching the point where neither me nor my employees can afford our portion of it.”
The company hopes to keep on growing by adding incrementally onto each division of the business instead of launching into any new ventures over the next few years. This will require the company to expand its operations a bit in every area. Lander explained, “Probably the biggest challenge we face right now is how to acquire space and give each department a little bit more room to grow. It would be easier if there was just one department that we needed to double.”
Metropolitan Staple Offers Quality Nailers and Competitive Prices
Since 1962, Metropolitan Staple Corp. has provided nailing and stapling equipment and accessories. Metropolitan offers a full service program to pallet companies throughout the Mid-Atlantic and New England regions.
With a highly experienced sales and service fleet, Metropolitan can help you tackle any pallet nailing job and offers extensive inventory, excellent service and highly knowledgeable support personnel.
Metropolitan Staple features the Tech brand line of nailers. The Tech 670S coil nailer is a unique state-of-the-art tool specifically designed for pallet work. At 6.7 lbs., it weighs more than a pound less, yet has more power than comparable nailers for driving nails 1-3/4” to 2-1/2” x 099” into the hardest woods.
Offering low recoil and a strong power to weight ratio, along with solid durability, this nailer is designed to reduce the strain on your workers in the highest production operations. The 670S also features quieter operation than competitive nailers, according to Metropolitan Staple.
For more information on Metropolitan Staple, call 800/255-7209 or visit www.metrostaple.com.
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