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Week of 15 May 2017: The problem of scattered assets--some new, some old

Email Jim at jthompson@taii.com

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One of the joys of my career has been opportunities to wander through many different pulp and paper mills and see the many alternative approaches people have taken to solving essentially the same problems. As a matter of integrity and reputation, however, I have to be careful about discussing what I have seen, for I have seldom found anyone anxious to have their good or bad problem solutions broadcast to the world. So, being mindful not to betray any trusts, I want to discuss carefully something I have seen and found disturbing while being discreet about it.

Over the years, I have had the privilege in the course of my daily business to visit a number of major mill sites which were once part of one large pulp and paper company. These sites are widely scattered geographically and none of the sites of which I speak has remained with the company that acquired the former, now defunct, company.

With all that lengthy preamble, let me get to the point. Each of these sites has a remarkable and identical set of characteristics: most of the plant and equipment is in fairly poor condition, with the exception of one unit operations area which is bright, shiny, new, and these days, often shut down. Let me be clear: the bright shiny new areas at each of these sites are not the same--on one site it may be a boiler, on another a bleach plant--but the pattern is the same. It is just weird to see this pattern across so many mills.

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Now, in general, it is not my purpose here to criticize the management of operations--financial and technical--that made such an unusual set of decisions. After all, it is one thing to make decisions on the run versus having the advantage of hindsight and I want to credit them with that handicap. There is an observation and learning here beyond the obviously easy criticism, though. The observation is this: if all these new unit ops had been built on one carefully selected site, they would today compose one nearly brand new (in paper mill years) fully integrated pulp and paper mill. As it stands they are scattered among a myriad of sites that are barely competitive. One invoice printer could be spinning quite efficiently instead of a number of invoice printers barely sputtering.

Something in the culture and decision-making process of the defunct company prevented this from being seen at the time of these capital expenditures. From a wealth-destruction point of view, the fine components are worth but a tiny fraction of what they would have been worth if they been agglomerated on one attractive site. The whole situation, taken from the perspective of today, is obviously such a waste. There is a lesson here for us all--an opportunity for a critical self-examination of how large decisions are made.

For safety this week, I would urge you to review the safety records of your department for the past three or four years. Do you see any patterns that have not been addressed? Fix them now, please.

Be safe and we will talk next week.

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Nip Impressions has been honored for Editorial Excellence by winning a 2016 Tabbie Award!

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