Benchmarking: a tool to improve mill performance.

Benchmarking is a tool that companies can use to improve their manufacturing operations. Although many people in the pulp and paper industry claim to know mills that have used benchmarking to improve their operations, few are willing to say if and how many mills currently use this tool.

Solutions! recently interviewed several industry consultants to determine how the industry uses benchmarking:

CLEMENT B. EDGAR, senior consultant, Klass Associates Inc., Wayne, Pennsylvania, USA

KENNETH C. HILL, president, Johnson Systems, Lenoir City, Tennessee 

JERRY D. KAHN, principal, JK Consulting, Fayetteville, Georgia 

KASY KING, consultant, Papermaking Process Consulting, Appleton, Wisconsin 

ROBERT B. KINSTREY, director, process technology, Jacobs, Greenville, South Carolina 

GAIL PETERSEN, consultant, Datamasters, Vancouver, British Columbia, Canada

RICHARD A. REESE, consultant, Dick Reese and Associates, Norcross, Georgia, USA.

These people represent various groups working on aspects of benchmarking. Edgar and Hill are instructors of TAPPI's Paper Machine Audits Course. Kahn and Petersen have completed benchmarking studies of industry maintenance practices through TAPPI and PIMA, respectively. King and Kinstrey are consultants who have seen companies successfully use benchmarking to improve performance. Reese offers the perspective of a former company engineer who has seen the industry undertake various improvement processes in the last 25 years.

What is benchmarking? Benchmarking is a process tool mills use to determine how they compare with other mills. This comparison can be very broad, such as comparing the costs per ton of one machine to another. The comparison can also be very specific, including comparing the moisture content of a sheet as it leaves a press section and enters a dryer.

Those interviewed by Solutions! offered these perspectives:

KAHN: Three different types of benchmarking are internal, competitor, and best of industry. The pulp and paper industry primarily does internal benchmarking. The industry rarely does competitor benchmarking because the information is so difficult to obtain. Pulp and paper is a very competitive industry, and nobody wants their competitive advantages open to the public.

KING: Benchmarking is seeking a high standard of perfection, evaluating that standard, and applying it to an operation. Internal benchmarking can be between individuals, departments, mills, and companies.

KINSTREY: The industry typically uses benchmarking as a way of comparing mills. Therefore, it usually benchmarks operating rates or paper machine efficiency of paper. The difficulty with this process is that paper companies use different definitions of efficiency. A person can calculate this number by multiplying percent uptime by percent salable product, although other methods are available.

EDGAR: Benchmarking is a process whereby people working on a machine determine critical variables in the papermaking process. After collecting data on these variables, someone can use benchmarking to compare these numbers, this operation, or this machine to top industry performers.

HILL: Benchmarking is comparing certain paper machine operations to what would be considered top industry standards. Mills should perform benchmarking on specific machine operations to determine how well they are doing and to identify areas or opportunities for improvement.

PETERSEN: Benchmarking was originally intended to identify best practices from mill to mill through comparative analysis. The current process is not accurate, robust, or meaningful. Maintenance benchmarking is poorly done in the industry and usually consists of comparing an individual mill to the best.

Petersen and Kahn believe that benchmarking of maintenance practices is an area that can help mills and the industry be more competitive in the global marketplace. "Through best practices in maintenance, (the paper industry) can extend the life of our assets, increase operational reliability, and contribute to safety, environmental compliance, and quality," Petersen says.

Kahn believes that looking at other industries, such as steel and textiles, that are continuous process industries is good. "For example, benchmarking of these industries reveals that money spent on training of employees results in fewer maintenance problems," Kahn said. Perhaps this is one practice the pulp and paper industry should seriously consider if it wants to remain competitive in the global marketplace.

QUESTION: How do we define top performers and compare our operations?

Most interviewees said the biggest difficulty in benchmarking comes not in identifying top industry performers, but in making fair and accurate comparisons between one specific papermaking operation and a top performer.

"No two paper machines are the same; no two mills are the same," Hill said. This makes comparisons difficult. "We need a combination of internal and external resources to determine these numbers," he added.

Edgar says that it is especially difficult, if not impossible, for a single paper machine operation to obtain these numbers. "This is where an outside audit of the paper machine can prove beneficial," he says. "These consultants have a broad background of information, know TAPPI standards, and can bring objectivity to an operation."

Petersen, who presented a paper at a PIMA conference on new benchmarking standards for maintenance practices, says benchmarking the maintenance practices of a 70-year-old mill with one that is 20 years old is useless. "(The pulp and paper industry) needs to devise new measurements. We cannot use the old standard measurement of maintenance costs per ton because this does no good in telling the mill what it needs to improve."

King says that comparing one mill to another is difficult. "I agree that each mill is different. We may need to compromise when we do benchmarking to look across grade structures and not necessarily the best mill for competitive reasons."

Reese believes that personnel in most top performing mills know the performance levels and operating costs in competitive mills. Personnel use these benchmark levels to establish targets for operation improvements, cost reduction, and justification for capital projects.

For finding benchmarking data, Reese notes that Canadian associations collect information on newsprint machine performance and report the results to member companies. At least one supplier also conducts annual performance surveys and reports the results to participating companies. Both surveys provide good benchmark information.

Reese adds that mills can also purchase cost models that provide good approximations of mill operating costs. These estimates are usually within 10% of actual operating costs.

QUESTION: Is benchmarking in common use today?

Depending on how strict a definition one gives to "today" and to "benchmarking," some mills today use benchmarking to improve their operational performance.

Edgar says that mills doing paper machine audits are taking the first steps in benchmarking. "They are determining critical parameters, devising calculations, and comparing these numbers to TAPPI standards," he noted.

Hill says that his company performs benchmarking of dryer operations as part of its dryer optimization process. "We obtain numbers about the drying operation and compare them to TAPPI standards," he said.

Petersen said that benchmarking of maintenance operations occurs today, but only at a few mills. She noted that Buckeye Cellulose is a mill that does benchmarking. Buckeye's Florida mill won a national award for its maintenance practices. At the same time, she indicates that mills today have such concern with costs that they are losing sight of the value of best-in-class maintenance practices.

Kahn echoes Petersen's sentiments. He says that the pulp and paper industry lags behind other industries in world-class maintenance practices. In addition, the North American paper industry lags behind its European counterparts. "We need to find out what world-class maintenance practices are through seminars and by joining the Maintenance and Mill Engineering Committee of TAPPI. We must invest time, money, or both if we are to improve our maintenance practices," Kahn said.

Reese believes that the short-term view of the pulp and paper industry on maintaining mills may have adverse long-term consequences. "If we do not maintain our machines now, we may not have machines to maintain in the future," Reese said. "People are trying to do the best they can with what they have to work with."

QUESTION: Does the industry do sufficient benchmarking?

Most interviewees said that benchmarking was only as valuable as the people who used it effectively and efficiently to improve manufacturing performance.

Edgar believes that mills do benchmarking on a daily basis to improve their operations. "Mills continuously monitor their operations and track them to see how they are doing against budget. Benchmarking is comparing paper machine data against other paper machines or industry standards. Where there's a difference, there's a gap. When all is said and done, we find the biggest gaps and work to correct them," Edgar said.

Hill noted that benchmarking is critical in defining how well a mill is doing in a particular area of its papermaking process. "Benchmarking will help a mill identify areas for improvement. Moreover, it is an excellent reference to see how a specific operation performs over time," he said.

"Most mills do not use benchmarking to the fullest extent," Kahn said. "They typically do technology benchmarking. This means they find the latest technology, compare it with their existing technology, and decide on whether they should make an investment to replace the old technology."

When it comes to maintenance benchmarking, Petersen says that mills have real opportunities for reducing costs, improving equipment reliability, and increasing output. "Ultimately, mills must identify their problems and develop their operating parameters. Profitability will be the guiding light for determining the actions a mill should take to be successful," she said

QUESTION: Why does the industry not do more benchmarking to improve its manufacturing operations?

The industry does not do much benchmarking for myriad reasons.

"It is too time consuming," Kahn notes. Most mills are so involved with reducing their manufacturing costs that they do not look at the other side of the coin--improving productivity and output.

"The difficulty in achieving industry-wide standards prohibits most benchmarking practices," Kinstrey notes. He said that mills and companies cannot even agree on how many days they should use in making operational comparisons, i.e., 360 or 365. He cited the example of one mill that lumped felts, wires, and chemicals under the maintenance budget instead of under operating supplies.

"Benchmarking is a time-consuming effort, but it can have a very positive influence on improving manufacturing operations," King said. "It will help the pulp and paper industry take costs out of the manufacturing process."

"Benchmarking is only the first step in a continuous improvement process," Hill said. "The next step is to identify what a mill needs to do to become better and prepare an ROI to determine whether it should take this step."

SEVERAL CONSIDERATIONS

Benchmarking appears to be a good way to compare manufacturing operations of one mill with another--even with a top performer. Whether a mill can implement or take actions based on these benchmarking operations depends on a set of factors beyond the scope of this article. Suffice it to say that some considerations include the profitability of the mill, the return on investment, and the time and effort needed to bring the mill operation up to that of the top performer.

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RELATED ARTICLE: IN THIS ARTICLE, YOU WILL LEARN:

* Learn what benchmarking means.

* See how mills use benchmarking.

* Discover why benchmarking the pulp and paper industry is such a difficult and time consuming task.

ADDITIONAL RESOURCES

* Go to www.tappi.org and type "Benchmarking" in the search engine for additional articles.

JEROME A. KONCEL, CONTRIBUTING EDITOR 

ABOUT THE AUTHOR

Jerome A. Koncel is a contributing editor to Solutions! He is a freelance writer who has covered the pulp and paper industry for more than twenty years including ten years as editor of American Papermaker. Contact him at 847-524-6210 or [e-mail].