Where there are problems, there are consultants: in this age of downsizing, consultants are needed more than ever. The question is how mills can effectively use them.
Who are these consultants? They range from one-person operations to multi-million dollar corporations. Some personnel have Ph.D. degrees. Others have more than 30 years of experience working in pulp and paper mills. Consultants offer services to pulp mills, paper mills, paperboard mills, finishing and converting operations, industry suppliers, and even government agencies.
What consultants "bring to the table" is expertise--knowledge, skills, experience, and an outside perspective to a problem or opportunity. They offer ideas, recommendations, and caveats. Their roles are clear--help devise strategy, solve problems, offer perspectives, and bring knowledge to bear on business and operating problems.
These individuals, groups, and corporations may traverse the globe offering their services, or they may remain local legends. In either case, consultants are the people who pulp and paper mills and industry suppliers call upon to help them solve problems relating to people, processes, and business strategy.
Consultants fill a variety of roles. Perhaps the most common role is "problem-solver." James Atkins, Atkins Inc., Flemington, New Jersey, USA, describes this role in specific terms. "Consultants are engaged for short times to solve specific problems," he said.
Kasy King of Papermaking Process Consulting LLC, Appleton, Wisconsin, whose expertise is optimizing the performance of wet-end chemicals, agrees with Atkins' assessment. "A company might call me in to optimize their wet-end performance, but it may eventually consider modernizing their pulp mill or installing new equipment," he said.
All consultants believe that they are results-oriented individuals. "We come in to fill a specific need or solve a specific problem," King said.
"Our employers judge us by our economic results," said Chuck Klass of Klass Associates Inc., Radnor, Pennsylvania. Despite these claims, determining how to evaluate the return to a mill on their consulting investment is no easy task.
Determining which consultant to use depends as much on the scope of the project as the nature of the services offered. TO determine whether a mill is receiving a good return on investment (ROI), mills need to ask four simple questions:
* Did the consultant solve the problem?
* Did the consultant do the work at a reasonable cost?
* Is our process operating at improved efficiency and ROI because of the consultant?
* Did the consultant add value?
Consultants believe that mills will obtain the best return on their consulting investment if they have clear objectives, define measurable results, and make the consultant "part of the team." Klass said the single biggest reason why mills do not have a better return on their consulting investment is poor communication. "I sign a secrecy agreement when I go into a mill. This should make providing information to consultants easier for mills," said Klass.
Teppo Koski, executive vice president-business development for CTS Engineering Oy, Kouvola, Finland, agreed with Klass by noting that pulp and paper companies should develop a trusting relationship with a consultant. "Customers have an independent partner to help them select the appropriate solutions and save money by not keeping a large technical staff available always," explained Koski. CTS provides pre-feasibility and feasibility studies; pre-, basic and detailed engineering as well as services for commissioning, start-up and training. The company also provides market and due diligence studies.
To select the proper consultant, mills must have a clear objective, In some cases, the objective for the mill might be fuzzy, such as "Should we change our paper grade manufacturing?" Klass said that consultants can clarify the question for the mill. Atkins adds that this clarification may simply be staling whether the mill can make copier paper or value-added grades. It might be more complex--"If we can make this grade, how much will it cost to make the changes needed to produce it? Can the mill sell it?"
Ted McDermott, a business/technology consultant based in Palatine, Illinois, USA, with 20 years of experience on the manufacturing, technology deployment, and business planning sides of the paper industry, has also worked extensively in other vertical industries.
"The biggest things we can learn from other industries is to focus more on how to grow new markets and better collaborate with customers and suppliers," McDermott said. "The question the industry needs to ask itself' is hove to create markets, not simply how to control costs."
McDermott believes that the industry has become very good at cost cutting and at facing investor pressures to increase shareholder value. It has not done a good job at growing the industry. "We are manufacturers not marketers. That hurts us," McDermott noted.
King said that consultants bring specific knowledge, objectivity, and breadth of experience not found at a mill "Mills can obtain the best ROI from their consultants by optimizing these factors," said King.
CTS Engineering's Koski believes that mills should judge consultants by comparing their work with that of a permanent staff. "Use of consulting services does not simply mean outsourcing the project management or engineering services. It can also result in implementation of savings and higher efficiency," Koski said.
Koski also noted that the consultant is a trusted partner. "He acts as an advisor for product, process, and project," he says. "The consultant brings the best, appropriate, and proven technology to a project and uses the most modern design tools."
Because many consultants have years of experience working at paper companies or suppliers, they have unique and pointed perspectives about what is happening within the industry and what steps the industry needs to be successful.
Consultants agree that a capital intensive industry like pulp and paper must pay attention to its infrastructure, or it will pay for it in the end. "We run the risk of becoming too much like the steel industry in the United States," Atkins said McDermott added that North American producers have historically been aggressive at adding new, highly productive capacity. Only recently have they started shutting or converting outdated machines. The European community has used a "build new to replace old" philosophy much more effectively.
Koski senses that the industry may be moving too quickly into mergers and consolidation. "Consolidation can prove to be very expensive if the prices for obsolete capacity are too high," he said. "Organic growth seems to be a better solution."
Atkins, King, and others caution that the industry may have gone too far in its cost-cutting initiatives. "Our cost-cutting priority often limits the ability of a company to truly understand its process capabilities or be aggressive about new product development," said McDermott. "This resource limit also impacts the ability of a company to look for cost savings within their extended supply chain. It forces a discussion with suppliers and customers to be cost-driven instead of business value-driven."
Klass also believes that cost-cutting measures of the industry may be too drastic. "We are cutting through the fat and the flesh and have now reached the bone," stated Klass. Atkins sees the result as overworking of people. "We are finding mill personnel being so busy and so overworked that they do not know they have a problem," said Atkins.
Perhaps the greatest concern of consultants is that the U.S. paper industry is at a crucial stage. It needs to turn itself around or relinquish leadership to European, Asian, and Latin American competitors. "This industry will never downsize itself to greatness!" said Klass.
IN THIS ARTICLE YOU WILL LEARN:
* The roles consultants play in offering services to the industry
* How to obtain a good return on a consulting investment
* What consultants think the industry should do to be successful.
* "Ask the Exports," a free service for TAPPI members: Go to www.tappi.org and click on link from the home page
* Website for CTS Engineering Oy: www.ctse.fi
About the author: Jerome A, Koncel is a freelance writer who has covered the pulp and paper industry for more than 15 years most recently with American Papermaker and PIMA's North American Papermaker. Contact him by phone at + 1 847 524-6210 or by email at: firstname.lastname@example.org.
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|Author:||Koncel, Jerome A.|
|Publication:||Solutions - for People, Processes and Paper|
|Date:||Mar 1, 2003|
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