Wet end management: paring down, pairing up: mills and suppliers can cooperate to manage increasingly complex chemistry successfully despite scaledback resources.
For papermakers and chemical suppliers, industry developments have meant consolidations and tighter margins. "Although the paper industry has seen some improvements in recent months, it is still not healthy. I do not believe that the global economy will improve sufficiently in the short term to help papermakers," said Bob Watts, global product director sizing and strength, Bayer Chemicals. "Further consolidation and retrenchment will occur. Consequently, chemical suppliers are also not in a healthy situation. Global economic growth will probably not improve this. I foresee further supplier consolidation."
The rate of technological development in wet end chemistry has nearly outpaced the ability of a typical mill to accommodate it. While technical support is critical to effective wet end chemical operations, many mills have drastically reduced their technical departments, and many suppliers can no longer afford to provide the high levels of service once expected. "The technical part of papermaking is more and more complicated every year; the speed of the machines is increasing as well," says Jeff Thorne, director, technical resources, papermaking technologies, Buckman Laboratories, Memphis, Tennessee, USA. "In light of these developments, technical support is becoming increasingly critical to the papermaker."
Several strategies can bridge this "service gap." Advances in automation have certainly helped, but they are not a panacea (see sidebar, right). For more definable results, technical teams that draw suppliers and mills together are a natural start. According to Thorne, teams should start by focusing on what is critical to the unique operational needs of each mill. "This process reduces technical support that is not vital to an operation and allows suppliers to focus on what is really necessary at a mill site. After agreeing on a series of key technical services, for example, a secondary level of technical work can diagnose and correct a problem when something strays outside expected ranges."
Another strategy is to classify supplier services into a menu from which mills can pick and choose considering need, priorities, and budget. Costs relate to each basic component supplied-the chemical product itself, shipping, feeding equipment, routine service, and problem-solving expertise.
"At Paradigm Chemical and Consulting, the process is 'de-bundling'", said president and general manager James Herrin. "The supply side has traditionally sold all these components under one bundled price per pound or dollar per ton scenario and called it value added, over the last several years, the cost to sell and service customers has skyrocketed; simultaneously the technical proficiency of the on-site service personnel from the chemical supplier has decreased drastically. While most mills have reduced technical departments, our experience is that current staffs found in most mills can easily assume a large portion of this 'on-site' service.
"Mill management values experienced problem solvers who can diagnose problems and institute best practice methods," Herrin continued. "These needs are usually temporary, and we have found that the customer would prefer to pay for these services only when they need them--not every day through every pound of chemical purchased."
"Ultimately, whether routine service comes from a mill staffer or a supplier representative is not important," said Steven J. Moore, Director, Production Technology for Mead-Westvaco Corp., Chillicothe, Ohio, USA. "All specialty chemical programs in a mill need a champion in the mill. A champion can reside in only two places--the mill or the supplier. In either case, the champion must have intimate knowledge of the process and product requirements regarding the chemical program. Mills need senior management support for the headcount necessary, or mills need to develop true partnerships with suppliers to ensure mutual benefits to the mill and supplier for cost-effective chemical programs," he said.
"Suppliers can reduce overall costs by using skilled sales representatives as the champions for multiple programs and use technicians to insure that all applications are functioning properly," Moore continued. "Two key ingredients are necessary for this strategy to work-the right person for the job and proper training. The mill should be part of the selection process."
A third source of expertise is an independent consultant. Staff reductions at paper and supplier companies mean that many technically experienced professionals are available. "The only limitation is that consultants may lack intimate knowledge of the process at a particular mill," said Roger Mallette, vice president, North American sales for Raisio Chemicals. "To be effective, mill level technical support involves a high level of prevention--an once of prevention is worth a ton of cure. The prevention aspect of on-site technical support is impossible with someone who is focused on solving problems."
Another strategy favored by some chemical suppliers is to broaden their product base to leverage fixed costs across a larger revenue base. "This is a strategy that has worked for Hercules Pulp and Paper Division," noted Mark Meixner, director--strategic planning. "In many instances when mills have chosen us as their sole or major supplier, we have increased our technical support. This approach also allows us to take a more holistic view toward addressing needs of a mill, and we find ourselves developing better solutions."
Unfortunately, a focus on cost savings can blind management to the bidden costs of inadequate technical support. "Machine runnability and efficiency in many ways can relate directly to the effectiveness of wet end operations," said Kevin Hale, director of marketing for Kemira, Kennesaw, Georgia, USA. "The cost of one break, one episode of down-graded paper due to holes, loss of retention efficiency, lost opportunity to improve machine speed, and the cost of one failed chemical trial must be compared to the savings gained by using the 'low cost' supplier."
THE "SOLE" OF THE MATTER
For mills and wet end chemical suppliers working together on service issues, a logical next step is often to explore a sole sourcing relationship or at least a reduction in the number of chemical suppliers used. The transition can be difficult.
"People tend to be very emotional about their specialty chemical programs," says MeadWestavco's Steven Moore. "They often helped select the current supplier and have good professional relationships with on-site supplier representatives. The first requirement for the smooth transition from a multi-vendor environment to a preferred supplier arrangement is upper management commitment and visible support of the transition."
To that end, Buckman's Jeff Thorne offers three words of advice: "Communication, communication, communication. The supplier must know the desires of the customers' corporate headquarters and then be able to bring them to the mill environment. We focus on establishing the mill requirements at the local level. We document those needs, and then meet them. We also work with each mill to establish the goals set forth by the corporate headquarters. These tie in to form a service plan that meets the combined needs of corporate and mill. This is where we focus our energies and efforts. These concerns and requirements are dealt with immediately to help move the transition forward."
Herrin of Paradigm Chemicals agrees that communication should lay the groundwork. "The best way to manage any single source agreement is to establish the baselines for four key components that comprise each chemical application: specifications, technology, diagnostics, and manpower," he said. "The common mistake has been to take the existing programs and offer them at a reduced price with the same or greater level of on-site service. This approach uses the assumption that current practice is correct and no room for improvement exists. In many cases, no original due diligence was performed on each application to define its purpose, determine why the chemistry is best, and decide on measurement. These relationships can sour when a party perceives that deliverables were unmet--financial or operational."
"Both sides must take responsibility," added Moore. "A mill should remember that they must be a good customer in addition to the supplier being a good vendor. A mill can realize cost savings, and the supplier can plan on secure business. When that happens, a supplier can focus on solving problems rather than defending business from every competitor who calls on the customer."
Mills must be able to negotiate with suppliers for the volume of business they need to justify the technical support the mill requires. "The key here is to define a strategic supplier," said Raisio Chemicals' Mallette. "A strategic supplier can be very different at the corporate level compared with the mill level. The 'preferred wet-end supplier' and mill people should then review all the wet end applications. Both should clearly understand what specifically needs doing."
Mallette suggests a steering committee with representation from both sides to oversee the transition. When implementation conflicts occur, the steering committee works to put the transition back on plan.
Ultimately, it is still all about the chemistry. "If you are seeking high performance and the lowest overall cost, the key to success is to build around powerful performance chemistry not around a single supplier offering an endless array of ordinary products," said Dave Bakshi, director of sales and product management, Eka Chemicals, Akzo Nobel. "When you focus on performance chemistry that transforms the wet end into a simpler, stable process, you can choose maintenance chemicals as you need them. The key is optimizing the retention and drainage programs to make the most of everything at the wet end."
RELATED ARTICLE: Can automation solve the service gap?
Price pressures, the increasing complexity of wet end chemistry, and the realities of global markets are driving a wedge between the level of service paper mills need and the levels that chemical suppliers can comfortably provide. Can on-one systems and automated help systems bridge the gap?
The answer appears to be yes and no. While the benefits of available systems make them indispensable for mills concerned with quality, they cannot run themselves. Ultimate the gray matter is what matters most.
"On a state-of-the-art paper production line, eliminating the variations in incoming raw materials through process design and automation have solved most wet end chemistry problems. If wet end chemistry is not in control due to poor raw material quality control and lack of modern process design and automation, more 'human control' is necessary to adjust chemicals according to the swings in process," said Kari Luukkonen, vice president of Raisio Chemicals.
"When on-line monitoring and control for the wet end was invented in Sweden nearly twenty years ago, papermaking changed forever." said Dave Bakshi, director of sales and product management, Eka Chemicals, Akzo Nobel. "When you Know more precisely what you are making on a real-time basis, you can adjust 'on-the-fly' and produce higher quality more consistently. On-line monitoring also facilitates earning for operators and results in highly skilled production personnel."
Modern papermakers have access to online chemical controls only dreamed of by their forebears. These include systems to monitor turbidity, charge demand, pH, temperature, consistency, entrained air, and feed systems; systems to check inventory, take measurements, centre chemical flow, and alert operators when toe system exceeds parameters: and custom extranet sites that can share information across a mill or even between mill sites.
"Simply having the raw data printed is not much help to anybody in the mill," noted Jeff Thorne, director, technical resources, papermaking technologies, Buckman Chemicals. "Informed personnel must monitor, gather, and interpret all this data and make it meaningful for the mill. Process data correlated to finished product characteristics--quality, brightness, opacity, and formation--are now available at the finished product point. This is highly useful information when gathered into a daily database for interpretation of success or failure regarding paper quality."
Valuable information is wasted--sometimes not even collected--if a mill lacks a high level of on-site expertise. As paper companies trim personnel to save money, they increasingly look to suppliers to provide it. "We place considerable resources behind the on-site representative and the papermakers in the mill to help interpret all the available data. Thorne pointed out. Mills and suppliers should first work together to determine the most important process information so technicians do not waste time collecting and interpreting marginally critical data
According to Del Boardman, marketing group leader far Kemira, the tools available to control the processes and diagnose the problems have become far more informative. "The new on-line automated systems give the papermaker better control of his systems and make the process more efficient Like all good engineering, more valuable equipment requires more valuable service to maintain and calibrate it," he said. "Attempts to automate monitoring devices to replace service people in mills have not been very effective. Technical reference materials can improve access to information and logistics efficiency but do not replace the need for experienced technical personnel onsite."
RELATED ARTICLE: Managing the transition to sole-sourcing.
Most couples become engaged before marriage. This helps them become accustomed to me idea of commitment. This is a good idea for any pair on the verge of the "next big step" and applies to a mill and its chemical supplier. When committing to a sole supplier relationship, a well-managed transition can lay the groundwork for future success.
Steve Braley, vice president sales. Hercules Pulp and Paper Division, supports the team approach. "Presumably, any change in supplier dynamics should be based on lowering costs, but specific consolidation objectives need precise definition from the outset," Braley said. "The most successful transitions occur with a multi-disciplinary team approach involving senior management, procurement, manufacturing, and technical representatives."
To begin, suggested Braley, team members should commit to cost reduction and then decide on key parameters that define the success of the relationship. Parameters include the following:
Specification of products: Should they be equivalent in performance to current chemicals. held to performance specifications such as corrosion rate use similar technology to minimize transition issues, or remain undefined? Will information be distributed, or will supplier audits take place?
Suppliers: Does the mill intend to truly sole-source by company, mill, or product line or only significantly, reduce the number of suppliers?
Service: How much service s necessary and at what level of expertise? Will mill management need to approve the selection of service personnel?
Economics: By changing the mill and supplier relationship, is the mill hoping for quick savings--typically price--or a reduction in total cost of ownership (TCO)? What type of cost management is preferable--cost per pound of product or a treated cost such as cost per ton? How will the team determine baseline costs?
Supplier responses: How will the mill review proposals for technical adequacy, commercial consistency, and apparent anomalies?
Transition issues: What will be the allowable impact on company resources and operations such as process engineers, new product development, and customer qualification? What is the time frame for completion? How will the team handle equipment issues or competitive response to business losses? Will the initial focus be on quick transition of big savings applications--typically higher risk--or on quick transition of lower risk items?
Once the team has defined the program and its objectives, senior management must make its commitment and communicate the plan. "The importance of this step cannot be overstated. While any change of this type will be challenging, executive understanding of the program and commitment to achieving the defined results will make or break the project implementation." said Braley.
IN THIS ARTICLE, YOU WILL LEARN:
* Conditions that create a "service gap" between mills and chemical suppliers
* Strategies for bridging that gap including the role of automation
* Tips for managing the transition to a sole-sourcing relationship
* To learn more about TAPPI's wet end operations short course, go to: http://www.tappi.org/index.asp?rc=1&pid=23875&ch=4&ip=
* To view previous Solutions! articles on this topic, search for "wet end chemistry" in the category "all journals" at www.tappi.org
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|Title Annotation:||Paper Chemistry|
|Publication:||Solutions - for People, Processes and Paper|
|Date:||Dec 1, 2002|
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