Flexible packaging maker Bemis Co. Inc., expressing concern about its process to commercialize products, is bringing in outside help.
The Neenah, Wis.-based company, on a recent conference call to discuss third quarter earnings, said the time needed to push a new product through the development pipeline is too long.
“I get the fact that customers sometimes are slow in ramping up new business, but when we have inefficiency in our system, that's just not OK,” CEO William Austen said.
“We have brought in an outside firm to review this process end-to-end during the fourth quarter. The commercialization delays in our U.S. business this quarter that were caused due to our internal processes being slow and cumbersome are unacceptable,” he said.
Austen said the review will hit on “all the touch points, all the weak links in the process, all the ways we can remove obstacles.”
The CEO said the company has “way to many handoffs and way too many touches in the process of taking the customer order, getting it through graphics, getting it scheduled, getting it into a plant, running a truck.
“That's what we're understanding, and now we're bringing in the consultant to help us streamline that,” he said about the bottlenecks.
Chief Financial Officer Michael Clauer said Bemis is going to “surgically evaluate our process and look for all the ways we can improve this process and take time out of it.”
Unit volumes were flat in the quarter vs. last year, the CFO said. “Clearly a miss as we had planned for volumes to be stronger in the second half of the year.”
Despite the internal production issues, the CFO said the company delivered “several positives” in the quarter and sees work at the company in a long-term view.
“We are changing the culture of Bemis to think and act differently. That takes time. I will continue to be impatient with our progress, but I have no doubt we will get there. Frankly, it's why I came to Bemis. To win,” Clauer said.
During the second quarter, Bemis had profit of $68.6 million, or 72 cents per diluted share, on sales of $1.027 billion. That compares with profit of $62.5 million, or 64 cents per diluted share, on sales of $1.018 billion during last year's third quarter.
Sales in the company's U.S. packaging segment were $657.6 million, a 4.7-percent decrease from a year before. Volumes were similar to last year, but the decrease was due to what products were sold and a pass-through of lower raw material costs.
Global packaging sales were $369.6 million, a 12.6-percent increase from last year's third quarter.