Alan O'Neill: Change for success: LC Packaging
In days gone by, plain ordinary hessian sacks would have been the normal packaging for potatoes and other produce. But packaging has now become a sophisticated industry in its own right and a key ingredient in most supply chains. Even hessian has become a premium product mostly seen as 'shopping bags for life'.
Located 20km from Letterkenny is one such company playing a leading role in the sector. Formed in 2009 and employing 14 people, LC Packaging is a Dutch-Irish company with the Irish operation headed up by local man Donach Gartlan.
Initially their main focus was on the fresh produce market with onion nets, potato bags etc and on the solid fuel market with bags for coal and logs.
Over the years they leveraged the strong relationships in their international supply base and now make their own FIBC bags. (That's reinforced jumbo bags which are used for dry industrial powders, animal feed, milk powder and pharmaceuticals).
Their international clients include Nestle, Frieslandcampina and Sanofi.
However, being so close to the Border they have obvious challenges with Brexit and the risk of a hard Border. Tariffs and other charges will be a margin hit for them selling into a key Northern Ireland marketplace.
But that will also be an opportunity. After all, if that happens, UK-based competitors will also find it difficult to sell into the Republic. So if handled well, that could be a big win for LC Packaging.
The bigger challenges are the ongoing changes in legislation and what that means for categories such as food safety and solid fuel.
However legislative changes often go hand in hand with extra cost. In a price-sensitive commoditised business like packaging that is a risk. Cost therefore needs a lot of attention and has to be managed carefully.
In almost every sector that I work in, I see compliance becoming more of an issue. The GDPR (data protection) for example effects every industry.
This change is a reality that is not going to reverse. I believe organisations need to embrace all change with a positive mindset rather than resist or moan about it. I do appreciate that change is not easy, especially when there are cost implications and resistance from people.
We need to have a proactive attitude and not feel defeated. If we allow ourselves to feel 'done to' our morale will suffer and customers will sense that. They will react by defecting to competitors who smile more and who serve their needs more fully.
2. Increase Sales through Innovation
The growing food industry is facing massive change regarding food safety.
There are a multitude of standards, certificates and programmes that due to their complexity, can appear onerous and off-putting at first glance - for everyone in the sector.
From my work with Glanbia Consumer Foods over the years, I've seen the people there cope with changes in food safety.
Glanbia has a dynamic Global Innovation Centre in Kilkenny where it is constantly testing and piloting new products and initiatives. In other words, it is proactive.
The food industry is a big growth area for LC, with the packaging market quite fragmented and lots of competitors.
They too need to be innovative. They should explore how they can leverage their expertise and add value to big multinationals and smaller customers alike.
Here are two things they have done: With total focus on the customer, they engage and really listen to them. They now offer a new consultancy service which helps customers navigate the complexity of compliance.
They have taken a leadership position and developed their own six-pillar LC Food Safe Assurance Programme. On occasion, they have advised on spec resulting in actual savings to their customer.
Another example unrelated to food safety is their new BOPP bag. Biaxially Oriented Polypropylene bags have a photo quality layer added to them.
That means that they can work with their customers to produce a retail-friendly product such as coal - to be sold inside the store.
Merchandise sold in the retail sector has to be high quality and appealing to the consumer to inspire them to buy. LC were one of the first in Ireland to source this new concept and have facilitated a whole new category.
Every organisation regardless of its size, is facing change at some level.
Your respective trade association might well be lobbying on your behalf to resist some measures but in the meantime, you have sales targets to achieve.
Coping with them is entirely up to you and I would say to any organisation - to just get on with it. Take a leaf from LC Packaging's book, develop a can-do attitude and look on adversity as opportunity. It will lift your morale which in itself can be infectious.
As for innovation, change often prompts the need for new products or services.
But it's not just about technology. It might also be about new processes, structures, systems and so on. In LC Packaging's case, they innovated by genuinely engaging with their customers.
They listened to establish their pain points and collaborated with them to find cost-effective solutions.
That enabled them to add value and be more relevant.
Alan O'Neill is a Change Consultant and Non-exec Director. For 25+ years he has been supporting global and iconic brands through change. Alan-oneill.com
In association with RGON, specialists in Employee Engagement Surveys www.rgon.ie
Sunday Indo Business