Pinaak | Open Source Power

An eloquent example of how integration with the customer can lead to competitive advantage – the company of Riverwood International City of Crosby, Minn., which manufactures cardboard, packing and packaging machines. Riverwood makes packing for big companies, bottled drinks, which use packaging as a key marketing components. The success of products and companies, bottled drinks, often directly related to the appearance of the package, its attractiveness, color, size and other attributes.

The market demands more original, more changeable package. And because the packaging design variable and dynamic, with each new package design should be developed special packaging machines.

“After the buyer has to develop a product, it must determine how the product should be packed” – says Jim Barutt of Riverwood International. Pepsi, for example, makes the box more and more: at 18, 24 and 36 packages in this package are for 12 or 15 bottles each. Typically, buyers know the rate at which they want to pack your goods, say, 150 boxes per minute with 12 banks in each box. Package design is often defined as packaging machine should work. ”

About five years ago, Riverwood strategy focused on the production of basic products – paperboard and packaging used to package beer and other beverages. Packaging machinery supplied by another company.

This strategy has since changed to a vertical strategy, designed to destroy the wall between Riverwood and its customers and provide customers with a complete solution. Riverwood began producing packaging machines.

To use the new strategy Riverwood “acquired capabilities” – said Barutt. “We actually went out and bought one of the factories in Crosby, Minn., with approximately 50 employees, who had a reputation for very high quality and standards.”

Pepsi is working 24 hours a day, 7 days a week “- said Barutt. “If one of their cars stop, they will lose money. We had stocks for one million dollars, in the event of an accident quickly resolve the issue. And even if something was not in stock, there are very few details that we could not do for day. We need to make sure that when the buyer will he really get the detail, which is supposed to be here! ”

Barutt said that partnered with their customers, Riverwood now knows the market inside. Because they know the needs of their customers, they are able to offer them more products with better design, reduce production time and better manage the finished product.

This change in strategy paid off generously for Riverwood, when Pepsi-Cola came in company with the highest order, who ever they were getting. Barutt said: “If we did not have production facilities, we would never be able to meet their demands. Since we do not look back. Our market share has increased significantly – almost 20 times. Prior to the change in strategy, we were invisible in the industry. Now our market share is almost 20%! ”

Barutt showed that although the company’s strategy has changed, its core business remained the same. The main income of Riverwood continues to come from the sale of paperboard. The company now leases a gorgeous packaging machines for each customer, along with required him to cardboard.