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SSCC Panama City quantifies success ... one step at a time.

How many times have you fixed something in your house, like a leaky faucet, only to have it break again a week or month later? You then fix it again without trying to discover why it broke in the first place. Both "fixes" wasted your time and made your "home operations" less efficient.

What if instead you had discovered the reason the faucet was leaking and addressed that problem instead of rushing in and "fixing it first?" And what if you checked back periodically to make sure that your faucet was still operating properly? Most likely, you would find that the faucet stays fixed and your home operates more efficiently.

That practical philosophy undergirds operations at Smurfit-Stone Container's Panama City, Florida, USA containerboard and market pulp mill. Built in 1931 by International Paper Co., the mill has changed hands several times and is now owned by Smurfit-Stone Container Corp., Chicago, Illinois. When Jefferson Smurfit Corp. merged with Stone Container Corp. in 1998 and integrated the two mill systems, the company began to transfer production of specific grades to different plants that could run them the best, thereby raising the efficiency of mills in the system. As a result, Panama City (a Stone Container legacy mill) focused on the grades it was best at--45-96 pound heavyweight linerboard. The mill also produces bleached hardwood and pine market pulp--about 90% is shipped overseas, while 10% goes to domestic customers.


Panama City's relentless focus on Overall Machine Efficiency (OME)--based on detailed observation, measurement, control, and troubleshooting--allows the mill to be competitive in today's global economy.


The mill operates a woodyard, kraft pulp mill, bleach plant, and two paper machines producing heavyweight linerboard. The mill uses OME to measure the amount of time each machine is producing salable product, subtracting unplanned downtime. The mill strives to continuously improve efficiency through increased production of top quality products. In 2002, the Panama City mill was named Smurfit-Stone Container Plant of the Year in recognition of its achievements in quality, efficiency, productivity, and safety.

It wasn't always that way. In the late 1970s and early 1980s, the mill was in a reactive mode, fixing problems as they occurred. Problems were not tracked and recorded, and as a result the same problems kept recurring.

In the mid-1980s, the mill began changing the way it approached problem solving, moving toward a philosophy of continuous improvement. The basic idea was that when a breakdown occurred, mill staffers needed to do the hard work of determining what went wrong, document it, repair it right, and make sure the problem stayed "fixed." This culture change paid off -OME rose, downtime decreased, and operating costs were reduced. The continuous improvement culture has remained strong since then.

Jack Prescott, mill manager at Panama City since 1988 and a Panama City employee since 1974, makes sure the mill stays focused on its ultimate goals. "Throughout my career in mill operations, I've observed that people tend to put up barriers between their areas of responsibility and others. My challenge is to break down those barriers and make sure that different areas work together. That is one of the key principles of continuous improvement."



Panama City competes in a brutal international market with more modern mills and machines. How does a "mature" mill stay competitive?

"There are three ways," said Prescott. "First, we use modern control technology--properly superimposed on equipment--to make it run better. Second, we 'trap' any negative event in a system and through the process of analytical troubleshooting attempt a permanent cure. We have a system to check up on it, periodically, to make sure the problem stays fixed. Third, we find opportunities for cost reduction and improved operating efficiency. For example, over the years we have cut about two thirds of the purchased energy out of this plant through internal heat collection and recycling, improved instrumentation and control, and improved operating efficiencies."

The result is a mill that can hold its own in today's market, said Prescott: "We have an operating efficiency that will meet or exceed most operations in the industry." The keys to Panama City's operating efficiency are simple: stability of operations, continuity of operation, high equipment uptime, and making salable product a high percentage of the time.

As one manager said, "We have a lot of older equipment running, but a lot of newer technology supporting it." The mill has used capital wisely. Its managers point to a distributed control system (DCS) far more advanced than at comparable mills. The woodyard is highly automated and the bleach plant was heavily upgraded in 2000--it runs better than most new operations, according to the mill.


Panama City maintains a relentless focus on solving operating problems. The process begins with identifying and documenting problems as they occur and producing a report using troubleshooting analysis methodology. A small team of management and operating personnel investigate each problem and prepare a "process improvement opportunity" report. Those reports are reviewed by a cross functional group of 20 to 25 people.

"We don't solve problems in the meetings, which are held twice a month," said Prescott. "Instead, we review results of the problem solving methods and try to improve on them, if possible, or accept the solutions as is. People from the woodyard, pulp mill, bleach plant, paper machines, maintenance, E & I, and the technical department are all involved. Everyone listens to the solution, and sometimes the one that knows the least about it comes up with the best solution."

After a permanent fix is made, it is entered into an audit system maintained by the maintenance department to sustain the "fix" over time. This audit system is vital to the process, said Prescott.

"In the early part of my career, I would notice that, when a department was in trouble, the mill would focus on it and get things back under control. Then we would go off to solve problems in another area, and when we looked back the first area was slipping back down the hill. We were failing to assure permanent fixes and lacked the continuity needed to sustain them. At Panama City, we got tired of fixing the same things over and over again."

The mill's predictive maintenance department maintains a document system that reminds the responsible person to check on permanent fixes on a regular basis--monthly, quarterly, bi-annually, annually, or every two years as needed. "When you are running a mill, you tend to focus on today's problems and tomorrow's problems, but you ignore the problems you've just fixed," said Prescott. "Basically, we have a tickle system to remind us to look at yesterday's problems. Systematic follow-up and documentation is key."

What started out in 1983 as three sheets of paper has grown into a documentation system consisting of dozens of carefully filed and maintained notebooks. "The most important thing is that people in the mill have signed on to the system. It's all voluntary now. People will volunteer to produce process improvement opportunity reports and commit to developing a permanent cure. They know that resources of the mill are behind the corrective action process."

Process improvement at Panama City is not dictated by management; troubleshooting and solution development involve teams of hourly workers and management. "Teams are composed of the best people for the job--the ones with the skills, knowledge, and commitment to produce the cure," said Prescott. "The worst thing you can do is have a bunch of technical people and engineers doing that on their own. When you involve everyone in the process, you get a groundswell of support because people develop ownership in the process and ensure that it works."


Panama City's teamwork system is based on good union/management relations. Mill management meets with the union leadership once a month to discuss problems and issues. "The bottom line is that this is a very flexible operation," said one member of the management team. "When a problem comes up, our folks get it corrected--they have ownership of the process and their jobs. That is impressive--especially for those of us who have been here 25 years. We've seen the culture change from 'that's not my job' to 'let us figure out how to make it work.'"


Panama City's predictive maintenance department is a key part of the continuous improvement process. The mill's maintenance philosophy stresses integrating maintenance operations with operations on several levels. High operating efficiency--made possible in part by an aggressive predictive maintenance program--has allowed the mill to increase overall efficiency using the same equipment. The mill worked closely with the Florida Department of Environmental Protection to ensure that any necessary permits were obtained before implementing production increases--even those achieved through greater efficiencies.

"In addition to an increase in efficiency the mill has also realized savings in the cost of energy," said Prescott. He pointed out that the mill's maintenance efforts focus on permanent solutions, not just direct maintenance costs. "When you fund corrective actions, you have a different type of maintenance cost. In any mill, you of course have to deal with long-term wear and tear, but with modern maintenance techniques such as vibration analysis, sonic analysis, and thermal imaging, things don't break like they used to. By investing in proactive maintenance, we've developed a less costly way to operate the mill--fixed costs per ton have gone down."

Panama City has benefited by integrating its maintenance and production staffs. "In the years prior to about 1988, we followed the general industry trend and had a maintenance pool," said one of the mill's management team. "As a result, the pulp mill superintendent was fighting the bleach plant superintendent for maintenance crews. Today, we have separate maintenance crews assigned to the pulp mill, the bleach plant, the powerhouse, etc. They work with that area superintendent every day. When we have a major outage, all the maintenance people converge on the project. That is one of the biggest changes I have seen--eliminating the gap between maintenance and production. We all take care of all business."

Physical proximity has encouraged teamwork at Panama City in another way as well. "In 1983, the mill manager at the time put all of us--the operating departments, the general maintenance superintendent, the assistant superintendent and the operating engineers--in the same offices," said one of the mill's management team. "Before that, we were all in separate offices. Having us work together helped us understand the problems other departments were having and develop better relationships. Before that the paper mill folks were strangers to me. I saw them once a month. Now, we are all together and we can informally work on solutions to various problems. Over time, you become more sympathetic about other people's problems."


In addition to being highly efficient, Panama City is an unusually clean mill. "Housekeeping is an absolute expectation," said Prescott. "For one thing, it is hard to make superior quality in a dirty environment. But the main result is that a clean mill is a safer mill; it becomes an expectation and a mentality. People tend to behave more safely if their mill environment is clean. If a parking lot needs to be cleaned, we do it. The bathrooms, breakrooms, and refrigerators are all clean."

Indeed, the Panama City mill has made remarkable strides in safety. In the early 1980s, the mill averaged 250 injuries per year. It implemented Dupont's safety management system and went from 250 to about 25 injuries in 2003, including six OSHA recordable incidents. The mill publishes a daily safety newsletter that is color coded--blue means everyone worked safely, yellow means there was a safety incident of some type. The mill's safety program includes monetary incentives. The mill's five departments can earn gift certificates from local vendors each month they have no OSHA recordable incidents. This encourages friendly "peer pressure" to avoid unsafe situations. When the mill does have a recordable incident, it thoroughly investigates what happened.


Panama City recently received an award from Smurfit-Stone Container for the "Best Sustained Safety Performance--3 years" in its division.


If there is one word to sum up Panama City it would be efficiency. As a visitor, I was invited to participate in the entire morning meeting, where it is clear that the mill has a very effective and efficient work process. An important production problem was discussed, but no one blamed anyone else. The team admitted its problem, got it on the table, came up with a path forward, and appeared ready to execute it. The mill clearly has a superior system for communication--and a great majority of it is done on paper. The mill has a "war room" with information updated by 8 a.m. every day.

The result? Panama City is a high performance mill--one its people are clearly proud of and dedicated to improving every day.

Editor's Note: The Panama City mill weathered September's Hurricane Ivan with minor damage. The mill shut down as the hurricane approached and restarted soon after it passed through the city.



* How Smurfit-Stone Container's Panama City mill moved from a "fix it when it's broken" system to a "make sure it doesn't break" system.

* Why teamwork is such a high priority at the mill.

* How housekeeping and safety are closely related.


* Smurfit-Stone Container Web site:

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Article Details
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Title Annotation:Mill Profile
Author:Rooks, Alan
Publication:Solutions - for People, Processes and Paper
Geographic Code:1USA
Date:Oct 1, 2004
Previous Article:Optimizing PMC operations.
Next Article:Where, oh where, have the engineers gone?

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