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All in the (Folding Carton) Family
August 1, 2009 By: Mark Arzoumanian Paperboard PackagingA third generation is now involved in running Indiana Carton. It's a new animal that has evolved from old school commodity thinking.
It's a moment that members of the family-run Indiana Carton (IC), Bremen, Ind., will never forget. Nine years ago, the independent folding carton converter was confronted with a harsh reality: It hadn't kept up with technological developments. Every department was operating with equipment that was at least 20 years old. No capital investment had been made since the early 1980s.
 Ken H. Petty, Indiana Carton's chairman of the board, is pleased that his grandson, Ken D. Petty, is now working at the plant as vice president of operations. |
Simultaneously, a veteran management team was receiving offers to buy the business, which was always profitable. But the team hadn't been reinvesting those profits. The effects of this were beginning to show in the rising frequency of equipment repairs. IC had to start taking out loans. Tough decisions had to be made about its future and they had to be made quickly.
At a management meeting held in 2000 to discuss the company's future, Ken H. Petty, chairman of the board, became tired of all the talk and debate about IC's future. He slammed his fist down on the table and said, "If anyone can go to the third generation, we can."
It was a turning point. Ken's sons Dave, president, and Jim, vice president, realized that a new generation of Petty carton makers had to be groomed and a commitment to upgrading equipment had to occur.
At the time, Dave's son, Ken D. Petty, today the general manager, was working as a computer consultant. Dave's other son, Matt, was in college working on a business degree. Dave had been running machinery at IC since 1974. His brother, Jim, graduated college in 1978 and also ran machinery at the 164,000-sq-ft plant. They both were "weaned" on machinery, James says with a smile.
Close Call
After serving in World War II, Ken H. Petty started working at IC in 1949. He was glad to be working with the owner at the time, Nate Rubinson, who treated him like a son. But, even more importantly, he was happy to be working anywhere. After the war ended, he was stationed in Pisa, Italy, for a few years.
 The plant's six-color manroland 900 press replaced a Harris press that dates to 1977. Sheet productivity went from 5,000 per hour on the Harris to 14,000 per hour on the manroland. |
In Nov. 1948 he had his belongings packed and was ready to head home with the rest of his fighting comrades. The plane was delayed so he rescheduled his company to take a ship home. That plane crashed into a Swiss mountain because of fog. Everyone died.
As Petty's career progressed at IC, he had opportunities to purchase larger and larger pieces of the carton converter until by 1974 he owned all of it. For decades the company did well, even as the industries it served evolved. But by 2000 the company had to work at bringing in the third generation, which also included Alicia Petty MacDonald (now in sales and marketing) and Justin Petty (a sales account executive).
"It was a good idea for my sons to first go out into the big, bad world," says Dave. In January 2000, his son Ken graduated from Indiana University, Kelley School of Business, and started working as a manufacturing systems consultant. But then Larry Cather, IC's vice president of operations, had a heart attack. So a month later Ken joined the company in that same position.
It's exciting to see the advent of the next generation, states Dave, who has spent 35 years at IC. He has been its president since 1997.
"It has revitalized me," he says. "I want the company to do well for my kids and extended family. I'm still having fun coming into work."
While Ken was in college, IC developed an internship program so that third generation family members and other potential new employees could see what it was like to work in a folding carton plant. But getting a college education was always the first goal for all Petty family members.
Ken says working at IC while attending college helped him decide what he wanted to do in his career, although he never had an explicit conversation with his dad about the family business. However, he does remember his grandfather telling him that a job was there, if he wanted it and was qualified.
Happened Naturally
"I got lucky with the fit," he says. "It happened naturally. I moved around from within. My grandfather knows his family. He gave us the opportunity and we took it. Since 2000 we've retooled and it's a whole new show."
 Indiana Carton produced a six-color, award-winning carton on its manroland 900 press by using only three colors and the color of the boxboard itself. |
But keeping the company an ongoing enterprise solely by taking it to the next generation would by no means guarantee IC's survival in a consolidating and increasingly competitive industry. When Ken H. Petty worked at IC in the 1950s it's bread and butter business was making permanent press shirt cartons. It was a stock box business. That's history now.
Then its business evolved into producing pizza cartons. But the corrugated container industry usurped that niche. Today IC is a national maker of custom folding cartons for in-store and wholesale bakeries, convenience stores, and a small number of commercial retailers. It is distinguishing itself by improving its graphic design capabilities (think custom printing of orders) and constantly working to shorten lead times, which includes not only providing warehousing options for its customers (they pay for it) but also having its boxboard suppliers provide it with rolls on more of an as-needed basis.
Earlier this year, it won an Excellence Award in the Paperboard Packaging Council's National Paperboard Packaging Competition for its Bakers Pride bakery box.
The plant's 75 employees (many with more than 20 years on the job) belong to a union but the Petty family has always operated on a give-and-take basis, which Ken Petty learned from his grandfather. IC's management takes pride in staying out of its employees' way.
"We don't send people home when there isn't enough work to do," Ken D. Petty stresses. "We will have them work on continuous improvement projects in order to give them 40 hours of work a week."
All the Pettys stress the importance of IC's people.
"At Indiana Carton, the people you're dealing with today will be the people you will be dealing with 15, 20 years from now," says Jim Petty. "You have a comfort zone with us. You're going to be dealing with one or another Petty."
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