Time to cull 'the Living Dead'.
Oddly enough, I was reminded of this story recently while researching an article for this magazine. It seems that the UK is not alone in its love of ancient paper machines, since a U.S. group had just shut a machine that would be older than my grandparents--if they were still alive.
While I concede that I am not in a position to comment on the true extent of paper machine antiquity in North America, it does leave a question mark in my mind. Is it possible in this day and age that any mill could afford to run a machine originally built in the 1920s? Even after traveling in China and India, I can safely say that machines of such distinguished service are becoming far harder to find even there. So what are they doing--outside of a museum--in a country that once boasted the most advanced pulp and paper technology in the world?
Thankfully, I don't have to answer that. After all, I'm not in charge of any of these mills. But for my own part, I simply don't see how it can make any sense to keep old, inefficient machines working in any form.
Of course, I've heard the argument that since the machines are there anyway and in "working" order, it makes sense to run them. Using such machines when demand is high simply means that the unit is a cash cow and a license to print money. But personally, I don't see how anyone seriously interested in driving either productivity or long-term profitability can take such an argument seriously.
For a start, old machines consume a lot of work. Even if the machine only springs into action in good times, it will always require some modicum of maintenance, which means that it is costing real money in manpower, spares etc, as well as taking up space. Just as importantly, such machines end up diverting management time and staff expertise that could be better focused on improving productivity elsewhere.
NEED FOR INVESTMENT
Clearly, it's not for me to say, but I can't help feeling that there is something amiss with the investment strategies of certain U.S. companies. As an analyst pointed out to me just last month, some U.S. companies no longer have a shareholder mandate to invest anything more than the bare minimum.
That is simply a tragedy, because without investment--i.e. real, structured, long-term, focused investment that involves balancing new capacity and shutting down old machines--then any mill is simply moving into the zombie zone until someone takes pity and finally puts it out of its misery. How long will "The Night of the Living Dead" for old paper machines go on?
Editor's Note: Jim Kenny wrote an article on some of the future prospects for new paper products, "Seeing a bright future through a technological window," on page 40 of the February 2005 issue of Solutions! The article includes a discussion of how technological advances are opening up new opportunities for paper; how RFID and electronic inks could help re-shape packaging; and how paper companies can embrace new markets by exploiting R & D relationships. Kenny explains how paper companies have a great opportunity to push into higher margin businesses by embracing advances in technology, but that they must move soon.
JIM KENNY, CONTRIBUTING EDITOR
ABOUT THE AUTHOR
Jim Kenny is contributing editor/Europe for Solutions! magazine, and is based in Brussels, Belgium. He is the former vice president of editorial for Paperloop and today heads his own company, DSI. Contact him by phone at +32 2 534 4960, or by email at firstname.lastname@example.org.
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|Title Annotation:||MANAGER'S NOTEBOOK|
|Publication:||Solutions - for People, Processes and Paper|
|Date:||Apr 1, 2005|
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