PIMA it: collaboration and integration keys to success.

Leadership in business management, leveraging information technology, and excellence in manufacturing reliability are the key factors that all manufacturing companies need to pursue to stay viable. Excellence in just one or two of these areas is no longer a sustainable business model to ensure profitability and meet the needs of investors--whether they are public or private. PIMA's 2005 Leadership Conference, held this past June in Nashville, Tennessee, USA, created an excellent venue for attendees to see different approaches and hear first hand from companies that are starting to integrate these three areas to achieve organizational synergy.

Information technology (IT) has become an integral part of the corporation on all levels: plant floor, enterprise, and external supply chain. The ubiquitous nature of IT in companies on the leading edge of adoption has transformed them into leaders in their sectors and allowed them to change the question from "how do we get the data" to "how do we leverage the information we have to improve business performance?"

This subtle shift applies to plant level data that improves manufacturing performance/reliability, enterprise level data focused on customer order management, and financial data on facility performance. This shift in focus also impacts external supply chain connectivity to reduce transaction costs or allow for improved customer/vendor management.

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CONFERENCE THEMES, SESSIONS AND EXHIBITORS

The major themes of the PIMA Leadership Conference were the integration of management and IT, and the organizational structures needed to improve business performance. The discussions in IT sessions touched on achieving the value still remaining in the supply chain, leveraging the enterprise view of information provided by installed ERP systems, IT organization structure and effectiveness, and the impact of consolidation in the industry.

Management sessions focused on improving business performance by leveraging teams (collaboration), most notably "Rapid results teams," by Richard Larrick of Georgia-Pacific and Ronnie Hise of MeadWestvaco. The always popular roundtable panels of superintendents, customers, and mill managers were also very well attended and provided great real world insight.

This was the first year there was a separate track for manufacturing reliability (MR) breakout sessions and the presence of speakers in this track from other industries was the greatest item of note. The MR sessions focused on information technology, human factors, and business impact in real world case studies. The MR track provided something for business management, IT professionals, and maintenance department attendees. It was a good addition to PIMA's integrated management and IT conference format.

The conference had a wide array of sessions, technology showcases, and exhibitor solutions in the business/plant floor IT, manufacturing reliability, and supply chain integration areas.

This year's creation of a prize drawing for a passport stamped by all exhibitors helped encourage exhibit floor traffic, as did the integration of meals in the exhibit area. One of the greatest improvements for next year's conference would be providing free time to allow participants to browse the exhibits without breakout session competition.

The conference ended with the CIO (chief information officer) panel. The panelists were Russell Bishop, Director of Manufacturing IT, Weyerhaeuser Co.; Bernie Campbell, CIO, Sonoco Products; Palmi Moller, vice president of IT, Stora Enso North America; and John C. Williams. IT strategy and architecture, Nalco. Their presentations and subsequent discussion focused on IT organizational structure/challenges and how their companies are leveraging IT to improve business performance. The mix of centralized vs. decentralized structures and varied IT systems in the panelists' companies was indicative of there being no one "silver bullet" IT solution. However, the speakers all emphasized the integration of information among all levels of the organization. They also emphasized that future value depends on keeping a "supply chain view" of information flow in the company and externally.

The following quotes from the CIO panel illustrate the challenges and issues faced by the industry faces, and how the CIOs' companies now view IT:

* "What is your personal value proposition to your company?"

* "Outsourcing is not good or bad; it is appropriate for commodity services but not for business analysts, relationship management, or project management."

* "IT workforce was cut by 30% in the past year ... but we did it well."

* "Lack of standards in the paper industry is costing us lots of money."

* On IT and business alignment: "Be a better partner; show how value can be realized and IT now has a seat at the table," and "IT is part of the fabric of business decisions instead of an afterthought."

* On Sarbanes-Oxley financial reporting requirements: "The headcount impact of providing IT systems and support is unknown, but it will place a large burden on the business."

* On convergence of IT and process control: "Simply view it as the internal information value chain," and "A data warehouse approach (between layers) helps bring order to the volume of data," and "We have a good design for data flow; the challenge is to convert the data into useful information."

* On IT spending: "We see IT as part of the business strategy, thereby avoiding the view of IT spending as an arbitrary percentage of revenue. The benchmark of spending 1% of revenue on IT is viewed as a beginning instead of a firm metric to achieve by cutting heads."

SUMMARY

Collaboration of teams leveraging a consistent set of enterprise or plant level data to improve business performance is the future key to corporate profitability and long term company viability. This seemingly simple "motherhood and apple pie" statement is difficult to achieve for most companies because of the complexity of balancing existing IT investments with future expenditures, market challenges, and the pressure to run as ultra-lean organizations.

Responding to challenging markets is all about having the right information to make the best business decisions. The main advice from the CIO panel was to see IT as part of the business strategy, focus on the value of information within an organization, and ensure that IT is a partner with a seat at the table. These are the requirements for the information needed to seize market opportunities and respond to market challenges.

Like the integrated nature of this year's PIMA Leadership Conference, each company must integrate its information and create a collaborative, learning environment for its employees. This years PIMA Conference provided examples of the approaches companies are taking and the IT/organizational solutions companies are using to meet today's challenges. Surveys of attendees confirmed that they found real value in attendance for their area of expertise and thought there was real value in cross organizational attendance. Keep this in mind when the "Save the Date" reminders arrive for the 2006 PIMA Leadership Conference, or when employees ask to attend the conference.

For a company to meet market challenges, it must have information about customers, manufacturing capabilities, financial impacts, and business performance goals--and the ability to analyze the information. Let the learning continue at next year's conference in Orlando.

ABOUT THE AUTHOR

Ted McDermott is a member of the TAPPI Editorial Board and the PIMA Information Technology Specialist Group. He is an e-business/technology analyst and consultant based in Palatine, Illinois, USA. He can be reached at [phone], or by email at [e-mail].

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TED MCDERMOTT, SOLUTIONS! EDITORIAL BOARD

IN THIS ARTICLE YOU WILL LEARN:

* How IT has become an integral part of the corporation on all levels.

* Why the themes of the PIMA IT Conference were the integration of management and IT, and the organizational structures needed to improve business performance.

* How CIOs view the IT challenges facing the paper industry.

ADDITIONAL RESOURCES

* "PIMA IT: Don't just survive, thrive!," by Ted McDermott, Solutions!, November 2004. To access this article, type the following Product Code in the search field on www.tappi.org: 04NOVSO45. Or call TAPPI Member Connection at 1 800 332-8686 (US); 1 800 446-9431 (Canada); [phone] (International).

* "Mill Technology Utilization--UPM's Holistic Approach," by Ted McDermott, Solutions!, May 2005. Product Code: 05MAYSO51.

* "'Value Propositions' for Pulp and Paper IT," by Ted McDermott," Solutions!, February 2005. Product Code: 05FEBSO37.