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Week of 4 September 2017: What assets are affecting your performance?

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I recently had a discussion with a long-time industry professional concerning this question: which is more important to a given mill--the technology or the management? Of course, this question can be considered only if you determine that you are in a market that has long term prospects for growth.

I argued that, within reason (that is, the mill is of an economical trim width and speed and is not suffering from maintenance neglect), people are by far the more important asset. Quality and knowledgeable managers; and a well-trained operations and maintenance force can beat newer equipment and systems assets any time. Yes, people beat physical assets.

This is not what most managers want to hear. After all, they are always proposing new capital projects. They start with a phrase like this: "If we only had a ___________ we could make ________ more quality tons per day." How many projects have you heard about that started this way and ended up not moving the needle on the net tons scales? I don't have enough fingers and toes to count all those I have seen, even after eliminating those that went over budget.


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On the people side, one must hire the best people and continuously train them. Hiring the best people these days often means being willing to pay a premium for them. There is a tremendous shortage of quality personnel in our industry and getting the best ones out of their current placements and into yours involves creative approaches and high salaries. (Put some of the money into a bonus system--make them earn it.)

I can back up my assertions in this column in two ways. One, I can repeat the stories from years ago when I saw an excellent leadership team take a mill that was about to close and turn it around. These leaders brought about record profits and another two decades of life for a mill that was in imminent danger of closing. If you have been reading this column for a long time you have heard these stories. The mill was a wreck, the neglect of maintenance was criminal, everyone was demoralized and so forth. The new management team improved quality production by 50% in a year and by 125% in two years. No capital, not one thin penny, was expended. It can be done.


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I doubt that you are in a mill that is in as poor condition as that one was. In fact, it would be hard to find a mill in such a condition. Actually, the thing that saved it until the new management team arrived was an unknown, but perceived as tremendous, environmental cleanup liability that would be triggered by a shutdown.

My other example of how quality personnel beats equipment and systems assets is an experiment you can try yourself. I thought of this while playing solitaire. Take two brand new decks of cards (these represent your physical assets). Shuffle the first one. Then take the second one and put it in the same order as the first one you shuffled (now you have two sets of identical physical assets). Take two players (who have not seen the decks), one who has a decent skill set in solitaire, the other being not so skilled. Give each one a deck and have them play a timed game by themselves. The more skilled player may actually win, and even if not, will conclude well before the other player that the game is unwinnable.

Skilled people beat physical assets every time.


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Nip Impressions has been honored for Editorial Excellence by winning a Tabbie Award!


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