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A partnership that drives both participants forward

General Mills’ Gregg Stedronsky and Aagard’s Steve Mulder share their thoughts on partnering, controls technology, and how to manage risk in a mutually beneficial way.

Editor’s note: At either PMMI’s Executive Leadership Conference last April or at the PMMI Annual Meeting this fall, I found myself in a number of separate conversations with Gregg Stedronsky and Steve Mulder. Stedronsky oversees Engineering, Global Safety, and Environment at General Mills, while Mulder is the president of packaging machinery OEM Aagard. Both men talked passionately about how valuable a true partnership can be between buyers and builders of packaging equipment. So when both agreed to the idea of being interviewed for a story about the unique partnership that has been forged between Aagard and General Mills, I was, to quote a current ad campaign for a certain insurance company, as happy as a slinky on an escalator. Here then, edited for clarity and mindful of space constraints, is what Stedronsky and Mulder had to say about partnering and about recent changes in the controls landscape.


Packaging World:
Assuming there is a status quo when it comes to machinery builder/buyer relationships, what are someof the shortcomings in that status quo?


Stedronsky: I think one problem is that the word “partnership” is a poorly understood and overused term. So often “partnership” is used during the time when purchasing occurs, as if the act of exchanging dollars constitutes a partnership. While it is true that companies must work together seamlessly during projects, I think partnership is better defined as two companies with a shared vision of the future, a common definition of success, and a real understanding of how their business models can work together over the long term. Another shortcoming in the status quo is that too often companies must buy the same equipment from the same suppliers as their competitors. That makes it difficult to build competitive advantage.


Are there packaging machinery OEMs that are bucking the trend where the status quo is concerned?


Stedronsky: Certainly. Across industry I’m aware of several. For us, a good example is Aagard, one of our packaging OEMs. They understand how to help us build competitive advantage by designing packaging machinery specifically for us. There is a sense of partnership at work. As our relationship unfolded they approached us with a philosophy shaped not by the question “What can we sell General Mills” but rather by the question “How do we help General Mills create competitive advantage?” I think when the relationship is shaped by this it brings together resources from both parties in a stronger fashion.


What does an OEM get out of such a partnership?


Stedronsky: Well, in addition to the obvious answer of being able to sell General Mills a sizeable amount of equipment, I would argue that it enables the OEM to extend and expand their resources. Why? Because if a company like General Mills is simply buying a piece of equipment from a machine builder, then all of the development work and all of the technical detail has to be worked out on that machine builder’s shop floor. But when General Mills is partnering with an OEM, our factory floor, operations people, and engineering teams become available as the OEM’s test ground. They’re able to learn, fail, and propose new methods faster than they otherwise would have. It’s a failing forward model, where you try a machine concept and fix it faster than the competition can come up with the concept in the first place.


Mulder: The partnership helped us drive innovation in a less risky environment. Typically the R&D situation for a machine builder is to look at a market segment that they think they can provide a solution for and then try to design a machine that will fit a wide number of customers. They don’t usually build with one company’s needs in mind as we’ve been able to in this partnership. We’ve certainly taken on some risk on our side, but it was clear that the risk was fairly evenly divided between General Mills and Aagard. The partnership allowed us to push technology much further with less risk than if we were trying to develop a product that we were aiming at a broad part of the market.


Did the partnership emerge rather accidentally and inevitably from your regular dealings with each other, or was it a case of no partnership one day and a partnership the next?


Stedronsky: It didn’t come from traditional engineering relationships. It grew out of key business needs that we had and from some visionary people that resided within that business. The business needed to reduce the capital cost of packaging equipment, reduce changeover time dramatically, remove inefficiencies between packaging unit operations in order to drive reliability and reduce the floor space required by packaging lines. Our business needed something that was not off the shelf, and key operations people inside the business translated that need to some key technical people who were able to work with a new machinery builder that was defining itself as an innovator and wasn’t about mass producing off-the-shelf equipment. That led to prototype equipment, which led to a proliferation of the use of that equipment over the next several years, which led to a partnership.


Mulder: Before the partnership addressed technology or technological solutions, it was addressing business needs, so people from General Mills’s business side were talking with Aagard’s top people about business needs. Once such broader targets were understood, that’s when we started putting smart people on it with execution in mind. They then used the tools that were available at the time and came up with solutions that fit. I’ve spent a number of years at other packaging machinery OEMs where I thought there was a pretty good relationship with General Mills. But with Aagard we seem to talk to a whole different group of people than the project engineering or packaging engineering folks I’d been accustomed to in the past. It’s people in operations or long-term planning. We talk about General Mills’s business needs three to five years down the road. And it’s never a matter of General Mills saying, here’s the packaging material we plan to run on the machine, so give us a machine that will run it. Material specs and package designs are done jointly, in many cases at a point where the machine in questions is still very much in the design phase. The partnership has also been good in terms of being able to plan and make sure our business accommodates their needs because they’re sharing with us a good look at what those needs are, what their capital expenditure is likely to be and so on. There’s an open dialog around such issues.

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