Separate from the Pack
Family-run IPS Packaging serves the Southeast with complete packaging systems and supplies from leading manufacturers. The company provides not only packaging supplies, but packaging solutions through consultative selling.
Growth has been impressive, and the business now has six divisions and four warehouses within its supply chain. Business in Focus spoke with Chief Operating Officer Derrick Murdock and Vice President of Marketing Brad Murdock to find out more.
Privately owned IPS Packaging is a family business, and Brad and Derrick are the second generation to be involved. Since their father started the company in 1976, the focus has always been on packaging and, in particular, industrial packaging. The company has been steadily extending its reach from its beginnings in Greenville, South Carolina. It expanded into North Carolina and southern Virginia. After a few years, this was followed by further growth in Tennessee, the Memphis market and Florida. Currently, it is setting up operations in California.
This is an extremely competitive market, so, to stand out, IPS does things differently. ”We like to provide the customer with all the information they need to make the best decisions. Instead of trying to sell them, we are trying to be more of a partner. It’s called consultative engineering/selling.” Instead of trying to sell its favored product, IPS remains neutral. It listens to the customer’s needs and evaluates their processes before proposing several different solutions.
IPS invests heavily in packaging engineers and software. Engineers are part of the product design team from the conception stage through to when the end user receives the product. This design philosophy, taking production into consideration from the customer’s perspective, is how the company separates itself from the rest of the field.
“We really look at the engineering and listen to the customers. If the customer needs it, we will help augment their current staff by providing engineers on a contract basis to work for specific projects for a specified period of time. This is a unique all-encompassing service in our industry. Only a few other companies do the same.”
Much of the packaging industry is based on individual transactions and oriented toward standardized product offerings. IPS, on the contrary, constantly trains its staff about the features and benefits of different products. This product knowledge is then applied to the customer. Anyone can save on price, but IPS helps its clients with more long-term cost savings.
“If you only sell based on price, that is just short term. We see that perhaps they are taking seven steps to package and reduce it to four. If they are using five SKUs (stock keeping units), we take it down to two and take into consideration their goals as a company.”
IPS breaks down packaging costs into to five fundamental areas: material, labor, space, freight and damage. In this way, it can quantify and justify specific costs for projects and allow customers insight into how the process works and how it will affect the bottom line.
Growth has been a challenge because, when a company grows this fast, infrastructure is needed to support that growth and the growth has been exceptional. The company has quadrupled in size in the last ten years and the plan is to continue to grow. IPS goes to where its customers are, and its strong relationships have given the opportunity for expansion.
Even the crash of 2008 did not halt the progress. IPS’s growth actually exploded towards the end of 2009 due in part to its value-based approach. Competing companies, using a more volume-based sales approach, were downsizing. Eventually, the customers came to IPS for expertise.
IPS is always looking to add highly talented people who are innovative, creative and responsible. “Brad and I say, that if we are the smartest guys in the room, we have a big problem,” Derrick laughs. “So we are always looking for talented people. The reason we are number one is because the good Lord blessed us.” He also credits the company’s employees and key vendors in allowing it to run with tier one suppliers in the marketplace.
It looks at any hire as long-term because it feels a responsibility to the families of the new employees. “We want to provide long term employment and hire more people. So, we take it very personal who we hire and bring aboard. We don’t make rush decisions.”
IPS is very process, performance and demand driven with a lot of structure. Hiring practices dictate that it performs psychological profile tests and personality tests to ensure a good fit within the unique culture of the place. For these reasons, it can be very difficult to find the right people who can excel in the environment. It has to be a good fit for both parties.
The brothers’ experience in the military is used as a model to produce a seamless flow both within and without the company. Derrick believes that the experience of having being in the military is itself not necessarily an advantage, but that applying its processes is. “The military is very structured and regimented but also very clear on what their goals are, and they define them. We do the same thing with our people and our management team. We define our goals very clearly. That is where the military experience is very advantageous.”
IPS is also an ISO-certified company which goes hand in hand with its philosophy. Being process-driven, it values constant improvement. No matter how good it may be in any given week or month, the company is not satisfied until it has improved on that and challenged itself to be better. Customers want the improvements that demand large investments in people and technology.
“It’s not just about providing packaging on the front and design side, but it’s on the back side, to reduce transaction costs, because when you start getting into a larger business, it’s more than just delivering a product; it’s about handling the backside and transactional.”
IPS is integrating with its customers’ enterprise resource planning (ERP) systems. This enables national companies to be consistent, and it alleviates the transactional costs. Clients do not have to exit the enterprise resource planning systems and can still receive products and invoices. It is a system developed to do business around the customer, instead of customers having to do business around a system.
“Integrating into the ERPs or Punch-Out catalogues makes for an efficient supply chain. That way, our account managers and engineers could concentrate on cost-cutting initiatives, taking the transactional and making that a seamless workflow. We are also implementing technologies where customers are able to do inventories and orders based on timestamps, barcoding and port numbers.”
For all its success, where the company is today is not where Brad and Derrick want it to be tomorrow. They are very aggressive in striving for value, and the determination is appreciated by customers. Otherwise, as they say, “what is the point?”
And yet, the brothers remain grateful for the company’s fortune thus far. “We have good employees, vendors and customers. It’s full circle. We feel very blessed for our opportunities and for our success. We recognize that. We are very humbled in the opportunities that we have and feel that some good things are yet to come down the pipe. We are honored to be in this position!”