Monday, July 8, 2013

Hanko Kiessner named "Rainmaker" by DC Velocity

Hanko Kiessner
Hanko Kiessner is chief executive officer of Packsize International, a privately held "on-demand" packaging company he founded in the United States just over a decade ago. Packaging is in Kiessner's blood — his family's business in Germany has been providing corrugated materials since the 1960s. In a bid to expand the marketing opportunities for corrugated material, Kiessner started to experiment with corrugated converting machines in Europe in the 1990s. In 2002, he introduced the machines, which produce cartons tailored to the exact dimensions of their contents, to the U.S. market.

Kiessner is a member of the Council of Supply Chain Management Professionals, Warehousing Education and Research Council, and the Salt Lake Chamber of Commerce. Ernst & Young recognized Kiessner with its 2008 Entrepreneur of the Year Award in the Manufacturing and Distribution category for the Utah region. He holds undergraduate and graduate business degrees from the University of Utah.

Q: Packsize is your family's business. Can you tell us how it came to be?
A: My father started in Germany as a supplier of corrugated material, the same basic product that now feeds our machines. We developed the machines in the 1990s and introduced them to the United States in 2002 with a new business model that provides day-one savings. The corrugate and the equipment are a complete solution.

Q: Your company's business model is rather unique, in that you supply customers with the corrugated converting machines at no cost, as long as the customer buys its corrugate from Packsize. How did that model come about?
A: Well, it was born out of several years of no success. While I was in Europe trying to sell the packaging machines, it was not working. It was just too much for companies to make the initial investment. As I was driving on the autobahn one day, I had an epiphany, and this model was born. I concluded the machines were not yet saleable, but I believed in the product. So, we would have to give away the machines. I called the office and told them this, and they laughed at me. Then, when we opened the office in the United States, we tried this model and it worked.

Q: What are the advantages of this model?
A: The benefit of this model is that it makes it easy to become a customer of on-demand packaging.
Customers get the benefit of the machines without having to justify the upfront capital investment. It also provides ongoing savings on corrugated and fill materials, since less volume is used. Other benefits are reduced product damage and some labor savings. It also reduces shipping volumes by up to 40 percent, which translates into transportation savings. And the end customer's experience improves significantly since that customer receives a right-sized package.

Q: What are the biggest challenges you and the supply chain profession face today?
A: For us, the biggest challenge is that not everyone adopts the same technology at the same time. Usually, to get mass adoption, you need 15 percent or so of early adopters. We need to be patient to work through the early adoption phase.
On a grander scale, energy is the biggest challenge. Moving products will always require energy, but we need to be able to switch to new forms of energy.

Q: What has been the most satisfying part of your career?
A: The single most satisfying piece is that we have a product that meets sustainability objectives. Staples, for instance, is saving some 122,000 trees a year with on-demand packaging. That is less pollution, less bio-mass—basically, we are able to keep a small forest intact. We have also helped companies cut costs, such as in manufacturing, which has helped to save jobs here in the U.S. And lastly, we have a team at Packsize that is passionate about what we do and the impact we can make. It is exciting to build a business that can make money while doing the right thing.

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