Many of us recognize quality and we love to acquire it. Few of us love to create it. We'll explore the love of quality and how to create it this month.
It has been widely reported recently that companies are "quietly cutting" employees. If you are not familiar with this term, it means your job has been eliminated, but you haven't. You'll be put on the sidelines until a place can be found for you. Likely your department has been eliminated, but to avoid paying you a severance package, you are "being placed in inventory" until a position can be found that matches your perceived skill set.
Extremely touchy subject, but I have never let that stop me before. DEI (Diversity, Equity, and Inclusion) is at least on the lips of every human resource professional today. What should be your posture and response?
It is being reported that Smurfit, of Dublin, Ireland, and WestRock, of Atlanta, Georgia, are in merger talks. These are interesting times indeed. I recall in 1986 when Smurfit bought Container Corporation of America (CCA) with the help of Morgan Stanley. In fact, the combined company name included Morgan Stanley. Long term, that merger did not end well.
There is a new norm for work attendance. It was caused by the Covid lockdown, and if you are not aware of it, you must have been under a rock for the last three years. In the hourly ranks in our mills, it seems to be working itself out. Mills are adopting the twelve-hour day and hourly workers in many cases are working fourteen twelve-hour days out of each twenty-eight days, on various schedules of day and night shift. Maybe this will work and be widely adopted. That is a few hours more than a straight forty hour per week job, but who works forty hours per week. Salaried staff schedules have been more of a problem.
Fos the Rat says, "Every August, I look forward to taking over Mr. Jim's column and providing the insights of the Pulp Rats. This year we've done things a little differently, but here we are, already, at the end of the month. I hope you have enjoyed these interviews as much as I have enjoyed doing them. Let's see what Mr. Jim has to tell us today."
Fos the Rat says, "We've been talking to Mr. Jim this month and he has told us some amazing stories. Let's see what he has for us this week."
As we discussed last week, this year we are using a different format. Fos the Rat is interviewing Mr. Jim in a side room at the Pulp Rat Convention. Last week's story relayed matters that can happen within one's company. This week, we'll move outside the walls and see what can go wrong when an outside company has an evil intent.
Fos, the Rat, says, "I am going to use a slightly different format this year. Yes, the rat convention is going on as usual, but I have reserved a private room off the main convention floor and Mr. Jim has agreed to being interviewed concerning some of the situations he has seen over his fifty plus year career in this industry."
How clean is clean? What are we willing to pay for things to be incrementally cleaner?
Let's not forget what business we are in. Simply, that is to manufacture, convert, and/or print paper. There are many other activities in which mills must engage but these must be our focus--this is how we spin our invoice printer. I have lived through nearly the entire environmental era to date. Perhaps it is time for a new third party to rise up and help us with the entire environmental equation.
By and large, we all want the same thing for ourselves, our families and our friends. Clean air, clean water, and a pleasant view of nature. In most places governments have disincentivized (read: one can go to jail) managers from disobeying when it come to environmental regulations, so regular and repeated excursions from what is expected are matters of reasonably respecting compliance requirements. So why do your mill's neighbors have an adversarial relationship with your mill? There can be several reasons for this.
Conditions should not be us and them, but that is what they have become. My solution? At this point, you have no choice but to be absolutely transparent to your local neighbors and be cautious of the traveling rabble-rousers. This situation is no fault but our own.
This is environmental/regulations month here at Nip Impressions. I must ask, what has changed in the past year? It appears the rhetoric has become shriller, the regulations more onerous and the government has become more invasive.
Last week we talked about the missing doctor blades and how the solution cost the mill serious money through their own inability to manage their needs. I have a story from the other side of this issue as well.
If I am being a bit hard on purchasing this month, it is because I often see purchasing as a silo in our mills and corporate structures. Purchasing is often thought of as price, terms and conditions. There is a lot more that purchasing can do for the mill. It is not all about pricing, terms and conditions.
Today's purchasing professionals are much better than the ones I ran into early in my career, but there is still room for improvement. A great purchasing executive must be a strategic and tactical thinker, also keeping their company's ESG goals in mind.
We can't start talking about purchasing without talking about corruption. This is my 54th June in industry, and I wish I could tell you that corruption in purchasing has diminished over this period, but I can't. One bright spot I know is a mill in Texas where a new purchasing agent eliminated all hats, pens, calendars, meals...any freebies provided by the vendors and suppliers. Sounds harsh? Once the camel gets its nose under the tent, there is no stopping.
No, this is not a retirement announcement. I am merely pointing out that we are done with energy for this month. We'll be back with more energy columns in December. If you haven't figured it out yet, Nip Impressions features energy two months per year--May and December. Energy is that important. As I have said before, it has been important for my entire career and will be far into the future.
I have been beating around this energy trends subject all month. It is time for me to get serious and give you some help. Are there any sure-fire energy solutions you can do now and not be required to back track later? Let us think about it for a minute and see what we can develop and what can be set up for continuous improvement.
At this point in time, we have forgotten that using electricity as a widespread energy form is an almost new experience. My own grandparents, for instance, were born (early 1880's) when electric lights were brand new and only in the homes of the rich in concentrated urban places like New York City. It was years before they experienced these in the US Midwest. While electricity brought many advantages and improvements to life, business and industry, it was not without its negative side effects, too.
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.
Be creative, but make sure you are creative from many points of view. Additionally, don't get hung up on your idea, there may be a better one.
I think anyone can train their brain to be creative. It is a matter of recognizing and knocking down the subconscious mental barriers in your thinking. I believe most are not creative because they won't let themselves explore the possibilities. I know this happens to me even though I am aware of this barrier.
I suspect when I started this series four weeks ago and you saw the word quality, you immediately thought about the products or services your company provides. That is normal. However, we first must get our house in order, starting with ourselves, before we talk about the products or services our company provides.
Todd Brooks of NORPAC in Longview, Washington, wins Capital Arguments Project Manager of the Year Award
We had an opportunity to gather on the evening of 6 October 2022 and award the Capital Arguments Project Manager of the Year Award to Todd Brooks of NORPAC in Longview, Washington. Todd came in on budget on a tough project that was done entirely during the Covid Era. Todd learned the meaning of Force Majeure and still pulled it in on budget. Great job, Todd!
I am just from the SAP Conference in Madrid and I have to tell you my head is still spinning. One cannot understand the rapid advancement being made in business and process software unless one listens to the users.
As we talked about attitude last week, you should have picked up some ideas for making sure your customer relations exude quality, but there are a few more items I would like to emphasize.
Generally, I think that a cheerful countenance and an empathetic attitude convey a person of quality, and like I have said in other parts of this series, an aura of quality is contagious throughout your entire sphere of influence.
The modern phone is a miracle device. The downside is that it may expose us in multifaceted ways that are not flattering.
Quality starts at home, and that home is often your home, your car, and your workspace. Organization exudes quality. Ever walked into an automobile dealership? Was it disheveled or spotless? How would you react if you walked into an automobile dealership that was untidy? If we are going to talk about quality, we must start with ourselves in the places we live and work.
Nothing is free
Spinning the Invoice Printer
So, you want to be a consultant
Well, after a few days, the Great Mother came back. She did not mention gorging herself and neither did anyone else. Great Mother, "We have gotten very far behind, and our time is almost up. Til, can you come forward and read the remaining cases? If we have time, we will take them up at next year's conference." Til came forward.
The Rats took a break for a couple of days. We found a pond for swimming and had a good time. On the way back to the meeting area, we went past a place where the Big Things eat food that they heat up very quickly. Out behind, there were bins full of discarded food, so we had quite a feast. The Great Mother got sick from gorging herself and was very embarrassed. The Great Mother always takes her role very seriously and is very conscious of her decorum. Gorging herself was out of character. She must have felt quite ill, for when we reconvened the Junior Mother was presiding. "Attention, please!" she called us to order. "The Great Mother is a bit under the weather and has asked me to preside over this session. Today, we are going to quickly look at cases where Big Things threatened the companies for which they work. Clerk, please read the cases."
After a brief recess, the Great Mother called us together again. "What is on the docket for today?"
After three lights, the Great Mother called us together again. "We have heard a particularly disturbing story," she began. "It seems as though the Big Things want to be known for protecting this whole place where we live, but some of them take what they call shortcuts at times. The RBI, or Rat Bureau of Investigation, has been looking into this. I'll let them explain." Phineas Kirby came to the front of the room...
By Jim Thompson interpreting for Fos the Rat ... Yes, it is August again and its is corruption month at Paperitalo Publications. We rats have observed in the past year that the human engagement in corruption is not limited to pulp and paper mills. This last statement may sound naïve, but one must understand our methods of communications are rather limited (basically just walking around and talking to each other) so we perhaps don't get all the information Big Things do.
As we wrap up Environmental and Regulations Month here at Paperitalo, we would be remiss if we did not mention the minefield that regulations relating to Human Resources have become.
Don't think you can turn regulations into a marketing advantage. Thinking that a customer base must buy a certain good or service and hence this will make an automatic market for you is a potential mistake.
The general intent of regulations is to keep order in society and keep the population safe. A dictionary definition of regulations is "a rule or directive made and maintained by an authority." My cynical version is this: "those who have power by fiat telling those who own assets what to do." Over the decades, we have seen many actions that follow my definition here in the pulp and paper industry.
A little regulation is probably good, but a lot of regulation chokes business to death.
Sorry about that, but the energy news is coming thick and fast for all of us these days. I am sure you remember old Jim telling you to carefully preserve your boilers, regardless of what form of energy they consume (I have also said these are the only types of idled assets to save). I hope you have heeded my advice. It appears the rapid transition to "Green Energy" sources appears to have some problems.
A tough subject and one all of us, not matter what side of the negotiating table we sit, should treat with respect, not forgetting our fiduciary duty.
Today, we need to know the delivery status of items way before their expected delivery date. We even need to know what ship they are on and where that ship is at any given moment. As shortages continue, this becomes even more important.
The purchasing department is an area of great opportunities. It is also a place where all the profits of the mill can be dribbled away, and a potential source of grossly unimaginable corruption. The purchasing department must be carefully managed.
As we wrap up this month on energy trends, there is one certainty over which you have complete control. That certainty is this...energy you don't use frees you from others' control. If we think of a pulp and paper mill as a "black box" this means that energy we use inside the mill that we generate ourselves frees us from the vagaries of the markets and external suppliers.
If you have read this column for any length of time, I am about to repeat something you have heard before. I am always in favor of removing obsolete and unused equipment quickly with one glaring exception. That exception is this: power plants.
The answer to dirty energy today seems to be electricity. For mobile transportation, cars and trucks, electricity moves the emissions from many points (tail pipes) to either single points (power stations) or theoretically no points (solar, wind and hydroelectric). The first thing we need to understand is that our choice of energy is cost, ease of use, and emotions. Notice that glaringly absent from this list is science. Energy choices have long since left science out of the equation.
Of course, it is. You ask how I can write a column about this. What we don't realize is how rapidly and how important energy has become to modern societies. The following is a column I wrote for my hometown newspaper about six months ago. While not about energy, it describes a real scenario, that while current, could have easily been widespread conditions about 70 years ago in the United States. The boiler, an important object in this piece, was manufactured only about sixty years ago.
On the Nip Impressions calendar, May is energy trends month. There is hardly a timelier topic, except perhaps food trends, but Nip Impressions does not cover food and my doctor wants me to lose ten pounds, so I try not to think about it. I would guess a good half of the headlines in the popular press today are about energy. These then fall into two categories, security of supply and what to do about, what I will call "dirty" energy.
I was doing some consulting in a mill a number of years ago that had a sign by their entrance that stated they had won some "safety award of the year" some years before the time I visited. I chided them and asked what they had been doing since the time of the award? Obviously, they had not won it again. Unfortunately, about five years after my visit, they had a triple fatality at that mill--contractors on an outage. There are a couple of issues I would like to unpack from my opening paragraph.
Many of us take OTC (Over The Counter) drugs. These can be abused, too. Especially on outages. I'll tell a story on myself...
There was a fatal automobile accident in our neighborhood lately that can serve as an excellent study on how we think when there is little time to sort out the situation. There are lessons here for all of us.
I like to remind people of the following resource any time I get a chance. It is a good way to start off safety month here at Paperitalo Publications. It is simply this. On our website, PaperMoney (www.globalpapermoney.com), we have been keeping track of the industry's safety performance. In its sixth year now, the department, "Reported Risks" is a current chronicle of "Risks: Fires, Fatalities and Catastrophes." It is a good learning resource and a source of endless safety meeting subjects.
It has been over a decade ago that I started talking about manufacturing your own spare parts with additive manufacturing. It is now moving from an interesting idea to a vital necessity. Between logistics problems and world turmoil, the spare parts needed for your machine may not be available. Most, except those of the most critical metallurgy, you can make in your own shop with less skills than a first-class welder or machinist.
Over the years, I have talked about this miserable old mill that I worked at long ago. When I was young, when I had a choice, I always ran towards opportunities that had lots of problems. My philosophy was that situations in trouble were the best way to advance your career. I have never been interested in career safety, it is boring and leads to complacency. So, I end up at this mill, in the prime of my career. It is large, ancient and a mess...
We have more aids for maintenance today than ever before. Detection instruments, storeroom software, built in monitors, training, you name it. Maintenance has never had more help than is available today. So, why do we still have maintenance failures?
Probably after August (Pulp Rats Month), Maintenance Month is my favorite month of the year on the Paperitalo editorial calendar. My dad was notorious for avoiding maintenance. It was an expense he loathed in the same manner as many mill managers and operations executives do. I followed his example for a while, saw the fruits of such policies and became a maintenance fanatic. A couple of old family incidents are in order.
I don't think most mills realize how close we are to interacting with robots every day. The box plants are ahead of us on this. The new Super Plants require about two thirds the employment for the same level of productivity. They are all 110" corrugators and they have a heavy component of robotics. I am expecting to see a flurry of box plant upgrades between now and 2030. Super plants won't be super then--they will be the norm. Back in the papermill, a couple of ready for here and now human aids are available.
In today's world, you may want to think long and hard about how the new or replacement piece of equipment (or other vital supplies) reach your mill. If you can afford to wait 12 - 18 weeks for those special refiner plates to arrive, put them on a ship. If you are losing production or quality every day because you do not have them, fly 'em, the most economical overall cost.
Back in the old days, we used the term "FOB." This meant "Freight on Board." There are other terms these days, but they mean nearly the same thing. One could purchase items "FOB seller's dock" or "FOB purchaser's dock." Internal logistics personnel have, for the last couple of decades, thought it smart to handle the logistics and freight themselves and purchase nearly everything "FOB seller's dock." They think they are saving money and justifying their existence. No more. In today's world, I would recommend that you purchase nearly everything, especially capital goods, "FOB purchaser's dock."
If you are like most facilities these days, your transportation system, outside the fence, if not in shambles, is at least limping along. What to do?
Give your operations and maintenance folks the help they need to make the project truly successful.
I've often been asked, "how often should our project team meet once our project is under way?" My answer is based on your average spend over the life of the project and at peak times (especially in rebuilds).
I have written assessments on lots of projects. Every one of them follows the same pattern in the same order. Three questions: 1. What are the markets? 2. What are the raw materials? 3. What are the assets (including tangible assets and human assets) that you place between (1) and (2) to have a successful project? If you don't start here, your chances of success are very low.
Most of the people I talk to today have not prepared or managed capital budgets under the conditions we find ourselves in now. Well, I saw my first capital budget in an industrial setting in March of 1970. Perhaps I can help you a bit--we had similar issues back then as those we are facing today--the administration in the White House in those days thought they could control inflation with price controls which caused me to miss two planned 25 cent raises as a co-op student, from $2.75 per hour, to $3.00 per hour to $3.25/hour, over a period of 18 months. Glad I could do my part to help tame inflation; as a student operating on the pay as you go plan (no loans), one makes too much money anyway.
Have you ever had a conversation like this? "I was going to by a car from Brand X because it is cheaper and has more features than Brand Y." "Well, you obviously bought Brand Y. Why?" "Brand X didn't have any in stock and didn't know when they would get any." So, really, in the end, Brand X didn't mean anything because you could not get Brand X. Their price could have been twice the price or half the price of Brand Y, it just didn't make any difference. You may find yourself in this place with certain pieces of capital equipment now. You may have to become a "satisfier" instead of an "optimizer."
I don't think this is a one size fits all question as you look at your marketing going forward. Some customers will be interested in your energy usage, others will be interested in what your products can do to save them costs in their manufacturing and logistics schemes. Please note that in all scenarios in this column, I will be talking primarily about business-to-business sales, not business to consumers.
I recently read an article in the Wall Street Journal which was discussing the write down coming in some energy assets, such as coal reserves, as the economy switches to "greener" energy sources. Like it or not, agree with it or not, there seems to be a move afoot to completely change our acceptable energy sources. You can interpret this as follows: energy is going to get more expensive, a lot more expensive, in this new world.
What concerns me today is that we seem to be more interested in the form of energy rather than its efficiency or cost. Energy has taken on somewhat of an "identity politics" persona. In earlier days, it was security of supply and efficiency. Today it is products of combustion that seems to garner the attention.
If you have read this column for any length of time, you know that old Jim has told you countless times to carefully mothball energy assets that are out of favor, for sooner or later, they will come back into fashion again. This statement is a corollary to my principle, all energy decisions are political. This calendar year has seen a sudden swing to an overwhelming global opinion that climate change is "settled science" and we can't decarbonize fast enough. Couple this with ESG (Environmental, Social and Corporate Governance) principles and boards of directors worldwide are moving at warp speed towards these extremely popular ideas.
The components and devices to do what I will describe here exists now. Someone just needs to assemble the bits and pieces.
If you think you can't innovate, the problem is purely mental. Creativity can be learned and you can use it in many ways to make your work environment more productive and safer.