Crystal packing business plays key supply chain role during pandemic

At the onset of the coronavirus pandemic, leaders at Independent Packing Services Inc. had little time to debate whether the company would proceed with in-person operations during initial stay-at-home orders. Demand from clients pushed an immediate answer.

Those clients wrote letters deeming Crystal-based IPSI an essential business — and the business moved forward, said Andrea Burns, the firm's general manager, whose family has owned the company since 1987.

"Some industries were able to work remotely," Burns said. "We didn't have an option."

IPSI uses 3-D modeling technology to design and manufacture custom wood and corrugated crates for the packing and shipping of large equipment. Its client base includes electronic device manufacturers, heavy industrial companies, supercomputer and semiconductor makers and food-processing equipment makers.

In the early stages of the pandemic, many of IPSI's clients transitioned to making machines to manufacture personal protective equipment like masks. Meanwhile, medical equipment clients upped production of their machines that make ventilator parts and other equipment used in hospitals.

A reliance on IPSI's services resulted in double-digit increases in work orders, said Joseph Wallace, Burns' older brother and president and principal owner of IPSI.

The company experienced as much as a 25% increase in demand for custom packing of machines that produce PPE and other medical equipment. The company saw similar increases for crating supercomputers, given the need for greater network capacities for large companies that suddenly had a majority of employees working remotely, Wallace said.

The increase in grocery shopping under lockdown also resulted in a 15% increase in business for crating food manufacturing and food processing equipment at IPSI, Wallace said.

To Burns and Wallace, IPSI played a critical role in the global supply chain in 2020. Any delay by the company could result in food not being produced or equipment not being made on time, Burns said.

"Our role isn't glorified or noted," Burns said. "But it's cool to know we played a part."

Roughly 60% of the crates made by IPSI are shipped overseas, Wallace said.

Though IPSI saw a slight increase in market share in 2020, the company also parted ways with a few clients that year, either because of pricing issues or a client company shutting down, Wallace said.

In addition to funding from the Small Business Administration's Paycheck Protection Program, the increase in orders helped IPSI maintain a steady revenue base in 2020 against rising costs of lumber eating into the company's bottom line, he said.

"Some [lumber] items quadrupled in costs," Wallace said.

IPSI was founded in 1976. Burns and Wallace's parents, Prince and Sandy Wallace, acquired the business in 1987. Prince Wallace is from the Bahamas, and Sandy, who is of mostly German descent, was born in St. Cloud.

At the time of the acquisition, IPSI had two employees and operated from 4,000 square feet of rented space.

Today, IPSI occupies more than 150,000 square feet between its Crystal and New Hope facilities, has about 55 employees and generates around $10 million in annual revenue.

Joseph Wallace, who has been with the company since 1994, became principal owner in 2018. Burns joined in 2003. Last year, the Metropolitan Economic Development Association, or Meda, a Minneapolis nonprofit that helps minority entrepreneurs, named Wallace and Burns Entrepreneurs of the Year.

Last year wasn't the first time IPSI played a role in responding to a global event. A few years ago, it crated robotic cranes made by Twin Cities company PaR Systems that were shipped to Ukraine for demolition work inside a movable tomb built around the Chernobyl nuclear power plant.

"How world events trickle down to a small company like ours is very interesting," Wallace said.

Before the pandemic, Wallace had plans to expand out of state, where IPSI would establish warehousing operations near clients to "grow along side them," he said.

That plan, he said, is slowly coming back to the forefront.