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Let's take a walk down nostalgia and fantasy lanes this week. I am so frustrated with energy issues; I see no other choice.
It is energy month again, and, quite frankly, I am getting tired of talking about energy matters. As I have stated before, the first energy crisis occurred about four months after I received my undergraduate degree. We have been talking about energy ever since, not only in our mills, but in life in general. At first, the issue was, do we have enough? At the time, known petroleum reserves were about eight years, which would have gotten us to 1981. Obviously that was incorrect. Later in my career, climate change became the issue when the powers that be decided we face global warming instead of global cooling.
When I was young, binge drinking seemed to be the personally destructive behavior of choice. In one mill where I worked, the staff was in the habit of having a beer blowout after every shutdown day. I don't know if that is still a widespread activity or not. Of course, drugs, especial fentanyl, are widespread today and kill many people. We have had this tragedy hit close to us. Today, however, I want to talk about overeating and weight. We all, including me, struggle with this.
What I am about to describe can happen anywhere...work or home. Most of us would say our life is more important than material goods. However, here in our neighborhood, two people have lost their lives in the last six months because, in a rapidly developing situation, they thought saving material goods was paramount. They didn't have time to think it through.
In recent years, companies have started emphasizing safety off their premises as well as at work, for anything that causes an employee to be missing from work is a cost. It is just a matter of how big that cost is.
As we start safety month, we could almost repeat the issues discussed last month in maintenance month. We'll spend some time this month talking about attitudes as well. Attitudes have a lot to do with safety.
We started off this month talking about obsolete equipment and processes left in place. This is not what I am talking about now. Here, I am talking largely about installed spares.
There has been a vast improvement in the selection of materials for new capital projects during my 53-year career. There are new materials, upgrades to old materials and a general view of specifying materials more suitable for the application now than in prior decades. If you have read me for any length of time, you know I like galvanized steel for all structural components (indoors and out) and stainless for nearly everything else where appropriate in pulp and paper mills. Granted, there a bleach plants constructed of titanium, but those are more the exception than the rule. I like plastic, too. CPVC pipe, FRP tanks are your friend.
Last week, we talked about the first step to better maintenance. That was cleanliness, as in wholesale cleanliness by removing dead and obsolete equipment. To me, the next thing after cleanliness is oil and grease--lubrication.
If you have taken an automobile to a dealer's repair shop lately, you have no doubt noticed how clean and neat the facility is. I have been wheeled into operating rooms in prestigious hospitals with more clutter and cobwebs than one will find in the typical auto dealer repair shop. Automobile dealers work at a high charge out rate, out of a rate book. They have a constant struggle between the profitability demanded by their owners and the resistance of the customers to high prices. The repair shop is a profit center. The repair services provided by the maintenance department in your pulp or paper mill are treated as a cost center, a cost center the mill does not want to own. Big difference from the automobile dealership repair shop. Perhaps this is at least one reason why pulp and paper mill maintenance centers are so unkempt and trashy.
Your mill has all sorts of motive equipment, from skid steer loaders to clamp trucks to over-the-road transportation providers. The outside suppliers who maintain this equipment have a tremendous amount of valuable information that can save you hundreds of thousands of dollars, sometimes on a monthly basis. The key is how you approach accessing this information.
At this point the decision to go electric in your motive equipment or trucks is an easy one. If the vehicles are used for short range and there is charging time, go electric if it makes economic sense. For everything else, don't even bother doing the calculation.
A lot of money leaks out of a company through the travel budget. It does not need to be this way.
It is transportation month and I will be the first to admit that this column will likely not make you any money. But occasionally, we should have a little education and fun without worrying about ROI, eh? Over the years, when I have brought up these matters with individuals, I get, "Well I didn't know that." So perhaps I can give you a little education, too.
If you are building statues or monuments, when the construction is done, you are done. We don't build statues and monuments in the pulp and paper industry.
If you have spent your career in the shelter of large, rated companies, you likely have not experienced this problem. Some explanation. By "rated" I mean a company that carries a rating by a Dun & Bradstreet, Fitch, or some other recognized rating agency. Most such companies fund their capital projects through their corporate treasury.
Very long time reader Dene Taylor wrote me a note after last week's column (Week of 9 January 2023 "First Number Uttered") suggesting the second number uttered is the time to complete a project. Mike Higgins offered a similar comment. This is so true and in line with the items I covered the first week of this series, the week of 2 January 2023. I have seen so many schedules blown over the years that they are uncountable. The worst are the rebuild schedules, for they are the ones that take an operating machine out of production for a period of time, endangering the customer base. There is a lot of pressure to make these as short as possible.
Capital project budgets suffer from "first number uttered" syndrome. Whatever project cost number gets to the executive suite first is the one that every decision hangs on. That number may arrive from a back of the envelope exercise, an article read in a trade publication, or some other unresearched source. The corollary to "first number uttered" is, "surely we can beat competitor x's reported costs." More projects have been doomed by these kinds of thinking than any other I have ever known, and remember, we're talking about my fifty-three-year career here.
What continues to amaze me are the stories of projects gone bad. Large, small, makes no difference, there are still for me, after nearly 53 years of watching projects from all sides, reports of disastrous projects. In this time period, experienced and learned people have brought forth courses, books and institutes to tackle the subject of project management, yet my side gig of being an expert witness in construction lawsuits continues to thrive. These are the top five reasons I think capital construction projects fail...
The 10,000-pound elephant in the room is that old digester that you abandoned in place. Or maybe it is an old paper machine, or an old bleach plant. Managers have gotten really cute about abandoning old equipment in place rather than take a write-down. The error in this is that one has no idea what kind of energy consumption or fluids consumption (water, lubricants and so forth) are taking place in that abandoned unit operations.
The first energy crisis started within four months of my graduating from college. You might say I, and anyone younger than me, has spent their entire career energy centric. Yes, at times energy became relatively less expensive than at others, but it was always there.
I think my long-term proclamation that all energy is political (which is proven true every day in the popular press), licenses me to wander a bit from our normal management and technical topics here as we attempt to figure out how to get the pulp and paper industry through this coming Northern Hemisphere winter.
In May of each year, we talk about Energy Trends, and we wrap up in December with Power & Energy. Energy is an important topic in the industrial and post-industrial world. As I have said many times, modern energy is all politics. It doesn't help that most politicians and journalists did not go to STEM schools for their secondary education.
So, what have we learned from this series of columns?
Discerning when to be innovative or not is just as important as the art of innovation itself.
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