Nip Impressions logo
Thu, Mar 28, 2024 11:47
Visitor
Home
Click here for Pulp & Paper Radio International
Subscription Central
Must reads for pulp and paper industry professionals
Search
My Profile
Login
Logout
Management Side
Week of 16 March 15: Maintenance Malfeasance starts at the Top

Listen to this column in your favorite format

iTunes or MP3

(Editor's Note: Our platform provider is currently having a problem accommodating iTunes files on Firefox browsers for those using PCs. We apologize for any inconvenience.)

If you are a CEO, I suspect you obey religiously all maintenance and recall notifications you receive for your Mercedes, Jaguar, or Tesla. Why don't you treat your operating assets with such care? Why do you let your mill operators get by with lousy maintenance practices? It couldn't be because you are afraid it will affect your bonus, could it?

When the pulp and paper industry got in trouble in the 1990s, the accounting departments came up with a great discovery. At least they thought it was great. Simply stated it was this: "We do not need to reinvest at the rate of our depreciation." Perhaps they can be forgiven that their search for profits, real or imagined, led to such thinking, but it was just one more burning brand on the flaming fire of deferred maintenance.

****

Maintenance Month Platinum Sponsor:

RMR Mechanical: We perform as planned. Visit us at www.rmrmechanical.com!

****

I have yet to see a detailed study that defines what level of depreciation replacement should be the level for a properly maintained mill. And, I'll surprise you--I don't think it needs to be 100%. However, I have strong feelings that the proper level is something higher than 80% - 85% of depreciation.

We have talked many times in this column about the hot-shot managers who take over well-maintained mills and slash maintenance. They know how long to stay--two years--and then they jump before the place comes crashing down around them.

The damage they cause, however, is not just to the assets; that can be fixed. The longer-term damage and the more difficult to fix is to the culture. They have turned the facility into a place of chaos, mismanagement and poor quality. This can last for years and years.

****

Maintenance Month Silver Sponsors:

Conmark Systems Inc.: Conmark introduces the maintenance-free Satron VCT . A Consistency Transmitter with superior performance for difficult mill applications- modestly priced. http://www.conmark.com/products/satronvc.htm

Fulton Systems: Our designs are built on proven methods and technology. www.fultonsystems.com.

****

And this must be laid at the feet of top management, for they are the ones, ultimately, who let this happen.

Yes, I have worked for CEOs who, when you come into their offices to tell them about problems, such as poor maintenance, figuratively put their hands over their ears and scream "The Star-Spangled Banner" until you leave. These people likely arrived at their positions by skimping on maintenance.

Boards of directors should commission outside studies on what level is proper maintenance for the types of facilities their companies operate. And then they should hold management accountable for making at least an industry-norm profit level at that level of maintenance.

When they do this, they will find they are in for a big surprise. After a fairly short period of time, four to six quarters, they will find that their profitability will beat that attained by their peers. Why? Because their facilities are running better than those of their peers. They have more uptime, make better quality products and have fewer safety issues.

****

Maintenance Month Bronze Sponsors:

Miami Machine: Miami Machine specializes in repairs and provides annual inspections for your reel spools, suction roll or felt rolls. Visit our website at www.miamimachine.com.

Seneca Steel Erectors: A mechanical contractor that specializes in boiler repair, conveyor repair, and custom metal fabrication. www.senecasteelerectors.com.

Philadelphia Mixing Solutions: We are the mixing experts. Visit www.philamixers.com.

Essco is Trusted for Performance. Visit www.esscoincorporated.com.

****

Eliminating maintenance today drops money immediately to the bottom line. But over the long term, the results of poorly planned maintenance expenditures are absolutely debilitating. When you read of a mill shutting down because it was no longer cost-competitive in a grade that is absolutely viable, the root cause more than likely may be maintenance. Capital investment and logistics play a part, of course, but poor maintenance just may be the tipping point.

What to do? I think it is time to push this problem to the top. After all, if the manager of a facility is getting by with poor maintenance, it is because some executive somewhere is allowing this to happen. Hold the executives accountable for the preservation of the company and you can stop this problem.

What do you think? How would you fix the maintenance issue? You may take our quiz this week here.

For safety this week, it is always easy to talk about safety when we talk about maintenance. They go hand-in-hand.

Be safe and we will talk next week.

You can own your Nip Impressions Library by ordering "Raising EBITDA ... the lessons of Nip Impressions."


Printer-friendly format

 





Powered by Bondware
News Publishing Software

The browser you are using is outdated!

You may not be getting all you can out of your browsing experience
and may be open to security risks!

Consider upgrading to the latest version of your browser or choose on below: