GALESBURG — After more than 50 years operating in the same building, Impact Label Corp. has relocated its headquarters from Kalamazoo to Galesburg.
Throughout its history at the Kalamazoo building, the manufacturer of custom labels for the health care, recreation, agricultural and consumer markets had expanded several times, creating a patchwork of walls and doors that hampered workflow and restricted future expansions.
“Our old building was a dark, old, somewhat dysfunctional building in many ways,” said President Susan Fogleson. “We wanted to invest in more equipment, but we had no more space or parking.”
Impact Label invested approximately $2 million in the new building and bought an additional $1 million in new equipment, including new digital screen processing equipment and an expanded arts department, she said.
The company’s new location represents a capstone of sorts for a lean manufacturing initiative the company launched following a family tragedy and the Great Recession.
Fogleson began her career at Impact Label after her father, who started the business in 1964, passed away unexpectedly at age 77. As the executor of her father’s estate, Fogleson was left with the decision of what to do with the business. She had only worked at the company as a child over the summers, choosing instead to pursue a career in the travel industry. Stepping into a leadership role at Impact Label seemed daunting, but Fogleson said she also wanted to preserve her father’s legacy at the company.
After considerable research into the business, Fogleson opted to take over as the head of the company and its board of directors.
“I just threw myself into learning as much as I could and surrounding myself with people who could help me put my head around the company, what we were going to do and how we were going to it,” she said.
That was in 2006, two years before the Great Recession caused many in the printing industry to permanently shutter their facilities. For Impact Label, the economic downturn resulted in the company closing its locations in Chicago, Florida and Tennessee and consolidating those businesses into its headquarters in Kalamazoo.
“By 2008, I knew we had to take a new direction if we were going to sustain the business,” Fogleson said.
The company launched a new initiative that put a premium on lean manufacturing and instilled a mission of continuous improvement within the organization. To help it along the way, Impact Label hired a lean manufacturing consultant and implemented a lean strategy that borrows from Toyota’s famed production system model.
As a result of its strategy, Impact Label has improved turnaround times for quoting from up to three days to less than 24 hours, Fogleson said. It’s also cut the company’s lead times from 21 days or more to 10 days or less.
“It was a huge culture change,” Fogleson said. “We’re still on this journey, and will continue to be, but it’s taken five years for employees to understand that we can’t go back. If we were to survive, we had to take on this culture of continuous improvement or we wouldn’t make it as a business.”
The company implemented those same lean practices when it set about designing its new space.
At first, Impact Label intended to build a 50,000-square-foot building, but through the planning process with architectural firm Byce & Associates Inc. of Kalamazoo, executives realized they only needed 32,000 square feet of space, Fogleson said.
Portage-based AVB Inc. served as the general contractor on the building project.
PREPARING FOR FUTURE GROWTH
The global market for label printing was valued at $32.7 billion in 2014 and analysts expect that to grow roughly 4.9 percent annually to $41.5 billion by 2019, according to a report from Smithers Pira, a market research and consulting firm specializing in the packaging, print and paper industries based in the United Kingdom.
“The label industry has been very strong for a long time … and the packaging sector is a growing part of the industry,” said Nick Wagner, president of Printing Industries of Michigan Inc., a subsidiary of Printing Industries of America.
Impact Label currently generates more than $6 million in annual sales and is in the process of developing a strategy to double revenue in the next five to 10 years, Fogleson said.
To make that vision a reality, Impact Label plans to launch a sales and marketing strategy that focuses on “untouched” areas of the market. While the company maintains a sales force outside of Michigan, it doesn’t have sales presence along the West Coast.
Fogleson also noted the company intends to target craft breweries as one high-growth industry.
Packaging and printing analysts predict the labeling market for food and beverages will grow nearly 2.5 percent annually in the coming years, making it one of the top growth sectors for the labeling industry, according to data in the Printing Industry ChartBook, published by Printing Industries of America.
“There’s so much potential business out there that we know we can get into,” Fogleson said. “It used to be when we were in all the other states in the ’70s and ’80s, you needed a local presence, but now with the transactions over the internet, you don’t even talk on the phone with customers.”
Made in Michigan: Galesburg-based Impact Label Corp. recently invested approximately $3 million in constructing a new headquarters facility and equipment improvements. The investment comes as the manufacturer of labels and other printed material outgrew its first building, where it had operated for more than 50 years. The company currently generates more than $6 million in annual sales but plans to double in the next five to 10 years as it explores new markets and grows its sales staff.