Straw into gold
Production management "shelfware" at acquired paper mill unlocks companywide gains
By Malcolm Wheatley, senior contributing editor -- Manufacturing Business Technology, 8/1/2006 6:00:00 AM
In fall 2004, David Krupp, enterprise manufacturing systems manager at what was then International Paper's Hamilton, Ohio-based mill, got his knuckles rapped when he went out and bought the production management module of GE Fanuc Automation's Proficy Plant Performance and Execution suite.
Krupp's plan was to improve order entry and scheduling, and do so in a way that seamlessly linked with existing Proficy applications.
Sitting on top of OSIsoft's PI System historian product, the Proficy Quality module had been in use in the plant since 1998. International Paper's corporate IT people knew Proficy, too, explains Krupp, as they were closely involved in both the decision process and the first implementation of Proficy within International Paper.
Best of all, Krupp could point to millions of dollars of documented savings already achieved using Proficy. The new module had the potential to increase savings even further by eliminating a legacy system that handled some of the needed functionality.
But the plan was blocked, despite the fact that the purchase had been made.
"I got in some trouble," concedes Krupp. Corporate policy dictated that as International Paper pressed ahead with development of a companywide supply chain initiative called EDGE, skunkworks projects such as Krupps' were frowned on. The newly acquired Proficy module became—quite literally—shelfware.
What happened next
In May 2005, the Hamilton plant was sold to Cohoes, N.Y.-based Mohawk Fine Papers, giving the plant just three months to forswear the existing International Paper-owned legacy applications: BOSS, an order-entry and rudimentary supply chain system; and WIPITS, a work-in-progress and inventory-tracking system.
"The sooner we transitioned off them, the sooner we'd start seeing savings," claims Krupp.
But transition to what? The question threw into sharp relief the disparate nature of the two companies, explains Paul Stamas, VP of information technology at Mohawk.
International Paper is a $25-billion global behemoth, while Mohawk is a relative minnow. Acquiring the Hamilton business would literally double Mohawk's size: $150 million of sales revenues would now be $300 million, and corporate headcount would leap from 400 employees to 800.
The business models were very different, too. Mohawk specializes in nimble customer response, explains Stamas, changing grades on its paper machines several times a day. The Hamilton plant, in contrast, didn't even schedule its own paper machines—this was done at a corporate level—and generally ran for longer on a given grade, sometimes staying on it for days at a time.
What was required, then, was a way of scrapping BOSS and WIPITS while finding the scheduling and paper reel-trimming capability needed for a nimbler business model. In theory, says Stamas, the solution was straightforward—that is, simply mirror what was already in use within Mohawk:
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SSA Global's BPCS enterprise system as a financials and transaction layer, augmented by two applications from Greycon;
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S-Plan, a paper industry-optimized advanced planning & scheduling system; and
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X-Trim, a reel-and-sheet cutting optimization package.
In practice, the situation was more complex. One complicating factor, it turned out, was Proficy. While the initial plan was to move Hamilton to Mohawk's systems, the pre-acquisition due diligence unexpectedly highlighted the value of the Proficy/PI System combination to the business.
"Once Mohawk started looking at what we had, they realized the wealth of information at our fingertips," recalls Michael Cargioli, then manufacturing manager at the Hamilton plant, and now Mohawk's director of Ohio operations. "I could get up-to-the-minute reports and metrics on every key operating parameter that was important to me—output, downtime, energy usage, chemical consumption, and [waste]—with just a couple of keystrokes."
To Mohawk, the discovery was significant. Through in-depth attention to plant-level detail, explains Stamas, Mohawk had become an exceptionally low-cost producer. Now, just as sources of potential improvements in the core Mohawk operations seemed to have bottomed out, the Hamilton acquisition revealed new vistas.
"In terms of how far we could go with our existing approach, we were pretty much stalled," says Stamas. "With what we saw of Proficy and PI at Hamilton, we could go to the next level. There was simply no mistaking that it was a paper industry 'best practice' that would profit from further development."
The way forward
Rather than scrap everything at Hamilton and replace it with its Mohawk equivalent, Proficy and PI would be integrated with BPCS, S-Plan, and X-Trim in a way that could be rolled out to the rest of Mohawk.
The key was the shelved Proficy production management module, bought months before. "Throw that in, and it filled in the gaps," says Krupp.
S-Plan and Proficy, it turned out, fit each other "like a glove," recalls Krupp. "There was a common approach that stretched all the way from how an order was planned through how it was executed on the shop floor," he says. "In terms of data required, and how it was presented, there was a consistent flow all the way from order-taking to how the resulting trim pattern was put out on the shop floor."
Krupp called in GE Fanuc's support group for help with implementation and integration. Formerly Mountain Systems, it had been from this organization that he originally bought the quality solution installed at the mill. "Key was the ability to work with people who knew about the models and applications we had built," says Krupp.
Development of these models and applications translates into a significant contribution to the ROI Proficy delivers. In particular, the mill is on course for an eye-popping $4 million in documented savings in the 2006 financial year due to applications and tools such as the Proficy automated Web server, while a waste-reuse application is projected to deliver as much as $1.25 million in savings in 2006. "We reuse waste more consistently, but also see less variability in production," points out Krupp.
Despite tight timetables, the move went off without a hitch. The mill took advantage of the project to update its Proficy installation, replacing pieces of custom-developed code specific to the plant and written by one of the original Proficy developers, with equivalent functionality now part of the standard software package.
Objectives onward
With the combined Proficy-PI System platform enthusiastically supported by Mohawk management, the mix of models and applications is even richer.
"We're reducing downtime and 'broke' [waste] by tracking key operating parameters that were in force the last time we successfully ran a given batch—and doing so electronically," says Cargioli. "Trying to do it manually took a lot of time."
Reports deliver detailed information on electricity usage, steam consumption, and other significant costs in a time frame short enough to be meaningful, rather than as an "after-the-event" variance summary. A nice touch is the ability to "dollarize" progress toward improvement targets based on impact to the bottom line each day.
"We can take an objective such as a speed increase or a reduction in steam consumption, and everyone from the CEO to the guys on the floor can relate to it," says Cargioli.
Krupp and Stamas, meanwhile, have a goal of their own. "Our first objective is rolling out what we've got at Hamilton across the rest of Mohawk," says Stamas—an objective that's targeted for completion during Q4 2006, or early 2007.
For a business that already prides itself on a culture of data-driven improvement, Stamas doesn't doubt that Proficy's new operational insight will be considerable. "It's going to take us to the next level," he concludes.
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