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Team approach helps Kraft maximize value of Pack Expo shows

Kraft Foods has come a long way since its founder, J.L. Kraft, began selling cheese from a horse-drawn wagon in 1903. Innovation and commitment to quality have allowed Kraft to grow into a company that serves more than one billion people in 151 countries.

Offering more than 60 new products in 2002 alone, Kraft's brands continually evolve to adapt to the changing needs of consumers. An essential part of delivering these products is packaging that not only ensures food freshness and integrity, but also allows Kraft to creatively market its products. For example, the introduction of the company's Uneeda biscuit featured the first inner-seal package, a system of inter-folded layers of waxed paper and paperboard, and contributed to the food industry's shift to self-serve convenience, PD is told.

To keep its snacks, beverages, cheese, grocery and convenient meals ahead of the competition, Kraft specifies packaging machinery and materials that can help improve shelf appeal, convenience and portability of its brands. One way Kraft says it stays in touch with its key suppliers and learns more about the latest packaging trends is through PACK EXPO tradeshows, held each year and sponsored by the Packaging Machinery Manufacturers Institute (PMMI).

A world of technology under one roof
Since debuting in 1956, PACK EXPO shows have become synonymous with innovative packaging technology that can help consumer products companies like Kraft increase manufacturing productivity, enhance quality and launch new products. Senior vp, R&D and quality for Kraft North America, John Ruff says, "PACK EXPO is the North American show for packaging and related technologies. It provides a 'one-stop shopping' atmosphere that is extremely valuable, as we get to meet with a large number of our key suppliers in one location over a short period of time." Depending on the show's location, either Chicago or Las Vegas, the number of exhibitors at PACK EXPO can range from 800 to more than 1,600. With so much ground to cover, Kraft has developed a highly innovative approach to maximize the value of PACK EXPO shows.

A true team effort
Between 100 and 200 Kraft personnel are sent to PACK EXPO each year, including plant and design engineers, package material and equipment engineers and procurement representatives. Kraft divides the personnel into teams based on business group (i.e. snacks, beverage) or an assigned technology (i.e. aseptic technology, labeling systems), depending on objectives for that year's show. "Taking this approach gives teams clear goals and assignments, ensuring they can be more productive and cover more territory," Ruff adds.

Once at PACK EXPO, the teams walk the show floor to accomplish their mission. Part of each day is spent keeping previously scheduled appointments with key suppliers, who also send their top company personnel. With this combination, PACK EXPO provides a forum to discuss the status of current projects and promote dialogue about other trends and collaboration opportunities.

The teams also seek out new technologies from smaller and international suppliers that Kraft may not be aware of. Ruff says, "PACK EXPO provides a chance to begin discussions with vendors we have never worked with before. Part of each team's responsibility is to seek out new or interesting machinery and material developments as they cover the show floor."

If teams discover developments that do not apply to their particular business group or assigned technology, they share the news with other Kraft colleagues by cell phone or during group debriefings scheduled each day of the show. These important briefings take place in a reserved meeting room at the convention center and allow the groups to discuss the day's events and discoveries in depth. "While our teams are in constant communication during the show, these briefings allow a more structured review of developments with existing and potential new suppliers," says Ruff.

Immediately following PACK EXPO, Kraft organizes a meeting of its global core packaging team that consists of senior level executives representing various aspects of the packaging process. A major item on the agenda during this meeting is a debriefing of the event, which incorporates the findings of all of the teams that covered the show floor.

Educational experience
In addition to serving as a forum for meeting with existing and potential new suppliers, PACK EXPO provides a valuable employee development opportunity for Kraft. This is particularly true at the Chicago show, as the company has several manufacturing plants and offices in the area, PD is told. Ruff adds, "We use the proximity of the Chicago show as a cost-effective way for our junior engineers to develop expertise." Senior and junior level engineers walk the show floor together, and this provides an up-close view of machinery in operation and offers a great learning experience."

Bottom line
In addition to the direct benefits of meeting with key suppliers and employee development, Kraft has seen an overall impact on its business as a result of PACK EXPO. "We involve a varied group of people at PACK EXPO because of the value it brings to Kraft operations," says Ruff. The show provides excellent networking and educational opportunities that helps us to accelerate the introduction of new products and processes. Also, it drives productivity gains and improves the base quality of our products and packages."

Kraft will once again send a team to this October's PACK EXPO Las Vegas, continuing Kraft's push to develop innovative new products and to ensure customers get maximum enjoyment from traditional favorites.

For more information:

Tradeshow: Packaging Machinery Manufacturers Institute (PMMI), 703/243-8555. Circle No. 401.

 

PACKAGING DIGEST
July, 2003
Website Exclusive
The team approach to buying machinery
A new study from the Packaging Machinery Manufacturers Institute proves that many companies, like Kraft Foods in the above article, consider machinery purchasing decisions a team project.
Mary Ann Falkman, Editor
 
Nearly three-fourths of companies work with purchasing teams in the decision-making process when buying new packaging machinery, but the same team is not necessarily used for all projects. This is one of the findings to come out of a study commissioned by the Packaging Machinery Manufacturers Institute, organizers of the Pack Expo shows. The results of the survey of 194 machinery purchasers, done in April, were revealed in mid-May at a MarketTrends Roundtable meeting for PMMI members. The presenter of Packaging Buying Process: It's a New World, was Philip G. Kuehl, Ph.D., senior staff consultant at Westat.
Four to five persons work on a typical machinery purchasing team, a fact that does not vary by industry segment or by company size. By job function, 82 percent of the team members work in plant/process/production engineering, 63 percent in plant management, and 63 percent in maintenance. Other titles found on the purchasing teams include process or production management, purchasing, corporate management and packaging designers.

More than half of the survey respondents indicate that the purchasing decision moves from the plant level up to the division or corporate level at a threshold price point, typically $50,000 for the division and $250,000 for the corporate. The price point is higher, however, for companies in the pharmaceutical market, and higher also at larger companies.

Respondents say that they frequently use OEMs as systems integrators. Overall, 35 percent use consultants or engineering firms for engineering and product management without assembly or manufacturing services, and 40 percent use integrators that provide engineering and assembly services. More than 60 percent use OEMs that accept the responsibility to integrate other equipment. The latter arrangement appears to bring the greatest customer satisfaction, with 78 percent of respondents stating their satisfaction with this role.

Changes in the purchasing process
The study uncovered five changes that have occurred in the purchasing process, as well as six additional changes that are currently on-going.

The changes in place include: Using manufacturers who know the business, its needs and metrics; purchasing simplification by using fewer suppliers; buying more customized machinery; compressing the purchasing process time to save time and money; and using contract packagers as an outsourcing strategy.

Changes underway include: Limited machine customization and low costs are producing a commodity mentality; purchasing decisions are increasingly being affected by governmental policies and regulations; an engineering focus is moving to a marketing and purchasing orientation; the "right-sizing" of company technical and engineering staffs is shifting more responsibility back to the OEM; loyalty to a specific manufacturer diminishes as price becomes more important; and purchasers are more often seeking OEM vendors to engineer, manage and integrate all components on the packaging line.

Two factors that the survey participants do not see changing: leasing strategies to replace financing of the machinery purchases, and use of reverse auctions.

In the decision-making process of choosing one machine over another, buyers rank machine reliability, throughput and safety very highly. Also factoring into the decision are machine design, quick changeovers, ergonomics, cost of operation, flexibility and price. Not important are delivery times, simplicity, self-diagnostics and footprint size.

Different factors affect the selection of one OEM over another, however. Here, participants ranked highly an OEM's problem-solving and engineering expertise; spare parts availability; training and documentation; after-market sales support; and overall reputation. Of less importance, but still deciding factors, are an OEM's knowledge of the customer's business; local access to technical and engineering services; knowledgeable sales personnel; integration expertise; and installation capability.
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