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Management Side
Week of 7 December 2015: A modest start

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This month's emphasis at Paperitalo Publications is on Power and Energy. This got me to thinking about a short term assignment I accepted a couple of years ago with the R & D department of a major company.

This company wanted to build a plant in a developing country to make their products. I'll not reveal their product, but there is a good chance you are sitting beneath it right now as you read this.

First-world countries have highly automated facilities that have been very successful for a long time. In this third-world country, however, my client had determined that a first-world facility would not be competitive. So, they brought me in to "dumb down" the operation. How appropriate!

We spent several days bouncing around ideas. We were meeting in a part of the United States where there are a lot of old "bank barns," as they were called. Bank barns were built with a lower level at ground level and an upper level reached by an earthen ramp. Essentially, the barn had access on two levels for animals, wagons and so forth.

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I brought this observation into the ideas we were tossing about. My thought was this: In the new design, there would be a number of manual steps involving physically carrying small quantities of Work-In-Process (WIP) from one station to another. To the extent possible, if we could design the facility so that WIP was essentially always moving downhill, we could make life easier for the workers and actually eliminate some electrically powered mechanical equipment.

We did this in our conceptual design. The end of the facility which accepted raw materials was two stories above the end of the facility that discharged finished goods. We would use the horsepower and fuel of the trucking companies to create a working advantage. For them it was so small an incremental effort that it was merely a rounding error.

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What happened? It's been an interesting month ... Check out the latest edition of Strategic & Financial Arguments.

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I have seen only one paper mill do a similar thing, and I think it was done by accident. Interestingly enough, that mill is only about twenty years old.

The bigger question, though, is how do we expand on this idea? Where can we use the force of gravity to eliminate energy costs? When it comes to pumping, there are many places we can do this in a new design or renovation. Has anyone done a study on the cost of building elevated tankage as compared to the cost of pumping from one tank to another on the same level? It takes a lot of energy over the life of a mill to pump from one tank to another--not to mention complicated control schemes that may be unnecessary in a gravity-fed configuration.

Where else can we use gravity to our advantage?

If you have some ideas, please respond to our quiz on line here.

For safety this week, an energized device that can be eliminated is one that cannot provoke an accident.

Be safe and we will talk next week.

You can own your Nip Impressions Library by ordering "Raising EBITDA ... the lessons of Nip Impressions."


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