What does the future hold for engineering: the 1990s saw an enormous change in the fortunes of U.S. pulp and paper engineering. Will the next decade see change of a similar magnitude?

IN THIS ARTICLE YOU WILL LEARN:

* How U.S. pulp and paper engineering has, over the past decade, moved from building new machines and mills to improvement projects, while paper companies have downsized or eliminated engineering staffs.

* That today's engineering projects should focus en improved paper products that meet customer demands and needs while producing superior financial performance

* How projects will likely change, using 3-D design, modular construction, composite materials, new building shapes, and more.

After getting off to a roaring start in the early 1990s, U.S. paper industry engineering finished the decade on a down note. During the late 1980s and early 1990s, paper companies were building new machines at a rapid pace (Courtland, Eastover, Ashdown, Savannah, Mansfield, Norpac, International Falls, etc.) and preparing for compliance with the U. S. Environmental Protection Agency's Cluster Rule. This was also the last time U.S. greenfield mills were built, such as Cedar River, Bennettsville, and Newsprint South.

While these projects were forecast to have good rates of return, in retrospect the industry did not employ capital effectively--many projects did not achieve returns equal to those of U.S. savings bonds (see Fig. 1). These projects, coupled with a change in the U.S. economy, have created an oversupply in many paper grades.

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Today, with few exceptions outside tissue, U.S. companies are installing very few machines. Rather than focusing on production increases, paper companies are concentrating on mergers and acquisitions and the resulting consolidation that must occur to realize synergies promised to the financial community.

Cost reduction is a key factor. In recent years, companies have shut down hundreds of paper machines and downsized or eliminated R&D, technical, and engineering departments. During the late 1990s, engineering companies and other suppliers increased their technical staffs, taking advantage of the talent available due to paper company downsizing. As a result, the industry's technical resources have shifted from paper companies to service suppliers.

REORGANIZING AND REFOCUSING 

Today, due to the state of the economy and type of available projects, pulp and paper consulting engineering firms have been forced to reorganize and refocus. Instead of gearing up for large projects, most engineering companies are focused on small pulp and paper projects and other industries.

Small projects typically do not require the save level of engineering sophistication or in-depth thinking as machine installations, so engineering companies are struggling to keep their senior staff engaged in meaningful work. When paper companies select engineering firms to support them in their projects, they all state technical expertise is a critical factor in selecting an engineering firm. However, it appears that final selection usually focuses on price. In many cases, this is short sighted, because a higher degree of technical expertise may insure the project meets business needs at minimal capital costs.

QUALITY FOCUS

The North American paper industry is still spending about US$ 9 billion per year on capital projects, which is below performance maintenance spending (see Fig. 2). However, projects today focus on quality, switching to "value added" grades and reducing operating costs rather than productivity. Examples are dilution profiling headboxes, on-line super calendaring, installation of shoe presses for printing and writing grades, coating technologies, energy projects, etc. Most projects are mill defined and do not appear to be part of an integrated strategic plan to improve overall corporate performance. This short-term strategy eventually must change if corporations are to survive.

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Large or small projects still need to follow good engineering principles, including those providing for capital effectiveness. They must be justified on a rational business basis that includes need, quality, customers, government regulations, and costs.

With strategic and operating capital in short supply, today's projects must yield higher rates of return than in years past. Each project must compete for available capital, making it imperative that they be well thought out. The project team must carefully define its goals and provide tight, controlled scopes. During scope development, the team must consider the project's impact on margins, customers, competition, markets, facilities, and organizations. Technology employed must be based on current and future product quality demands and the needs of both operations and customers.

Project assessment must also consider reliability and maintenance issues, which are sometimes left out of the planning process. To be capital effective, teams should consider all options, should not be constrained by past paradigms, and should evaluate "out-of-the-box" strategies. When planning a project, the team should remember that the most effective projects employ front-end loading (FEL) and use multidiscipline teams. Figures 3 and 4 summarize the reasons.

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Since most major equipment suppliers have shut down their U.S. manufacturing facilities, projects are becoming more complicated. Specific engineering data for equipment must be supplied from Europe, which tends to extend project length.

Many mills have had their capital and maintenance spending reduced to levels so low that operating effectiveness has suffered, resulting in reduced productivity and quality (see Fig. 5). If this trend continues, more North American mills will be unable to compete with more modern European and Asian mills. Also, if mechanical conditions slide too far--and in some cases this has already occurred--companies will be forced to shut down and/or replace the mills rather than rebuild or repair them.

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These trends, if they continue, will damage the relative global competitive business position of North American producers. However, the continued loss of older facilities may actually benefit the U.S. industry, including the engineering segment, in that it will force companies to modernize.

TIME TO CHANGE

It is obvious that we must change. So what will engineering look like in 2010? The industry's approach to capital projects and engineering will be different than in the 1990s. Projects will focus on improved paper products that meet customer demands and needs. Management will demand superior performance for all capital projects. In order to accomplish this, the following is likely to occur:

Engineers will study and understand economics. Projects will be based on "real" business needs that consider:

* Products and markets

* Product quality and costs

* Manufacturing operations, including maintenance and reliability

* Financial strategies and capital deployment

* Development of products, processes, and markets

* Organization performance

* Government regulations.

The U.S. paper industry will continue modernization efforts to be competitive with Europe and Asia. Efforts will keep supply in line with demand, but older, less efficient machines will be replaced with modern, efficient machines capable of producing product quality demanded by end users.

3-D design will be a given. Vendors will have libraries of their equipment available for cutting and pasting into 3-D designs. The standard for rework will be less than 1%.

Construction crews will use portable field terminals, not blue prints.

Modular construction will be widespread as a means to reduce costs and facilitate quicker start-up curves.

Mill buildings will have very different shapes than today's rectangular shapes and paper machine buildings will be mostly single story.

Stock chests will be limited; most of what we know today will be replaced with inline mixing devices. Equipment will be placed remotely and operated automatically to facilitate reduced capital, operating costs, and crew sizes.

Mills will be designed to be "truly" environmentally friendly (water, solids, energy, etc.). Minimum waste discharges will be the norm and mills will not have any visible emissions or vents. Use of fresh water will be minimized.

Mill and machine construction will rely on a broad range of composite materials, instead of just steel and concrete.

Projects will undergo intense scope scrutiny and management. PDRI (Project Definition Rating Index) and other "Best Practices" will be the standard and they will be applied to all projects, no matter the project size.

Engineering companies will continue to supply critical engineering and process expertise.

European equipment companies will continue to supply leading edge technologies.

WHAT LIES AHEAD?

Looking at the rapid and evolving technology experienced by other industries, such as microelectronics, computers, aviation, and telecommunications, one has to wonder what lies ahead for the paper industry. What will paper be used for 10, 20, or 50 years from now? What will be the needed performance attributes? Who will be the customers?

It is difficult to think the roll of paper will stay as it is today! I hope that papermaking technology will see many significant developments, including replacement of the 1800-vintage, fourdrinier-based paper machine. As the role of paper changes to match the needs of customers and product demands, technology also will develop at increased rates. I wonder if paper technology will ever develop as fast as microelectronics has in the recent past.

As paper specifications change to adapt to new uses, machine life will not be 50+ years, as in the past, but will encompass a useful life of about 20 years. This shorter life cycle will be caused partly by future paper products being very different from today's products, evolving as customer needs change. Today's machines may not be adaptable to significant advances in state-of-the-art (leading edge) technology we may see in the future.

Of course lot this to happen, paper-based products must meet customer needs, R&D must advance, and capital costs must be reduced. Finally, product pricing must be realistic, reflecting the true value of paper--a very useful product based on renewable resources.

Acknowledgement: I would like to thank Fred Christiansen at Jacobs for his help in reviewing this article. Cost curves were provided by Jacobs Consultancy, Atlanta, Georgia, USA.

ADDITIONAL RESOURCES:

* "Rethinking the paper machine: creativity as a best practice," Robert B. Kinstrey, Solutions!, February 2002, p. 25.

* "Engineering in the age of optimization," Donald G. Meadows, Solutions!, September 2001, p. 68.

* Ordering information for the 2002 TAPPI Technology Summit CD-Rom can be found at http://tappi.org/index.asp?rc=1&pi d=20960&ch=8&ip=

* For additional views from Jacobs Consultancy on engineering for the pulp and paper industry, visit http://www.jacobsconsultancy.com/

Bob Kinstrey is director, paper, forest products and packaging for Jacobs, Greenville, South Carolina, USA. He has 34 years of consulting, operating, and technical experience in the manufacture of pulp and paper. Contact him by phone at [phone], or by email at [e-mail].