Packaging-products company grew through out-of-the-box thinking
The common knock against salesmen is that once they book an order, apart from tracking their commissions, they wash their hands of it, leaving problems to the production people. But Paul Gaulin is not just any salesman.
"I've always liked being on the road. But you can't be a good rep unless you know what's going on inside," said Gaulin, president of Induspac Packaging Group, a specialty packaging-products manufacturer. "So I always took the trouble to learn everything that I could, about businesses I worked for."
Unlike most sales reps, when Gaulin started working in the packaging business, he took a personal interest in each of the orders he booked. Often he followed them through the plant as they went through production stages and sometimes even onto the back of the truck to make sure important shipments went out.
The more Gaulin learned about how things worked, the more he sensed opportunities. During the mid-1970s the electronics industry was beginning a period of rapid growth. Sensitive components needed special packaging to protect them during the shipping process, which few suppliers were offering.
In 1977 Gaulin took the plunge and opened his own business, mortgaging his house to buy his first press. During the next three decades, he built Induspac, into a $150 million powerhouse with close to 1,000 employees during seasonal peak production.
The company's 18 plants, spread across North America, provide protective packaging solutions for a variety of industries such as aerospace, telecom, adhesives and medical systems.
Induspac is divided into four divisions: corrugated sheets and finished products, protective packaging material, film and thermoformed packaging and specialty services.
"We don't do any consumer packaging, except indirectly through distributors," Gaulin said. "But it's a highly diversified strategy. If one industry goes down, we make up sales somewhere else."
Large commodity producers such as International Paper and Georgia-Pacific dominate the North American packaging market. But Gaulin has managed to build his business by concentrating on niche areas that are too small for the big players to notice.
One example is Chateauguay based CMP Advanced Mechanical Solutions, an Induspac client that manufactures components for the telecom and medical systems industries and ships them across North America.
"Some products we make, like computer chassis, are worth as much as $10,000 and can be highly sensitive," said Steve Zimmermann, the company's president. "If we don't do the packing right, they could get damaged and it would cost us a lot of money."
Induspac sales reps proposed an integrated solution including a shipping carton, foam inserts that protect against vibration and shock, combined with special film which guards against electrostatic discharge. The company even provided custom-made skids that cushion the pounding when forklifts move products around the warehouse.
According to Zimmerman, Induspac made life a lot easier. "They provided everything everything we needed," said Zimmerman, who gives Induspac close to $1 million a year in business. "If we didn't have them, we would have had to deal with several suppliers."
According René Dor, vice-president in charge of finance at Induspac, the key to Gaulin's success has been his strong attention to detail.
"He tries hard to delegate, but he is by nature a hands-on manager," said Dor, who has worked with Gaulin for more than 15 years. "He gives managers a lot of leeway. But if there is a problem, he'll roll up his sleeves to find out what it is."
During the past few years, Gaulin has been trying to balance his life a bit vowing to take one week of vacation each month. Despite this, he continues to run a tight ship.
In fact, Induspac's operation is so lean that Gaulin, who didn't even have a personal secretary until last year, long booked vacation flights himself.
"We used to work out his cancellation ratio, which was very high," Dor joked. "Because whenever an important customer called he would stop everything. Business came first."
Despite his success, Gaulin is not finished yet. Induspac has no debt and a strong cash position, which Gaulin is hoping to use to make a major acquisition, possibly in the U.S.
"What's that saying? Either grow or die?" Gaulin said. "That's us. We have made a lot of progress, but we are still a peanut compared to the giants."
Sidebar: Flexible management
Running an integrated packing company with 18 plants, grouped in four divisions, that produce a wide variety of products, each requiring specialized equipment, personnel and management systems, is a logistical nightmare.
To cope, Gaulin has adopted a flexible management style that consists of decentralizing decision-making down to the plant level. Induspac Packaging Group acts as a holding company with only a few employees that handle administrative and overview functions.
"The key is to have the right people in place, people you can trust," Gaulin said. "Once you've got that, you let them run."
Plant managers participate actively in the budget-making process with goals set based on past performance. Division managers get access to comprehensive sales and cost projections, and analyses of budget variances several days before month-end. They use this information to identify problems and pick out opportunities.
But managers are given leeway only as long as they produce. If the numbers fall too far out of whack, either Gaulin or Dor will contact the manager to see what actions need to be taken.
"We trust them," Gaulin said. "But they have to perform."
Photo caption: According to Paul Gaulin, much of Induspac's success is due to its focus on specialized areas of the packaging trade such as container board products for aircraft parts.
|© 2004 Peter Diekmeyer Communications Inc.|