By Viviane Martins, managing partner at FALCONI
Productivity is a word frequently used in speeches made in a lot of companies – if not all companies. However, those that deal with commodities depend on productivity in order to obtain fair returns to all the investments they made.
In companies of this kind, productivity may be defined as the “production volume and cost efficiency”, as in the case of the paper and pulp industry. In this industry, these leverages are essential to results, even in times of favorable currency exchange rates and amidst expectation of mild recovery of average prices.
The challenges in terms of production volumes go beyond massive investments in installed capacity. Quite often, companies are not able to produce expected volumes, whether due to difficulties in long-term planning and management of their forest areas or due to instabilities in the operation of their factories, which do not reach high levels of excellence in terms of global efficiency and performance. These difficulties result in costs – both variable costs, resulting from losses and specific non-optimized expenditures, and fixed costs – the dilution of which throughout the volume produced is affected.
The path towards continuous improvement and sustainable results is management – a competence able to distinguish companies in an industry such as this one, with processes and pieces of equipment that are often similar. One of the main management highlights is the Daily Routine Management concept, which is the basis of a management system with the efficiency to fight operational inefficiencies, both in terms of forest- and industrial-related areas of the production chain in the paper and pulp industry.
The Daily Routine Management concept can generate outstanding results in this industry, with measurable impacts noticed onto a company’s EBITDA. Experience indicates that it is possible to cut down costs and production by approximately 16% and increase volumes up to 28%. According to the value chain, these results are obtained by means of cutting maintenance costs (20%) and optimizing the purchase price of wood (6%) in the forest management area; optimizing consumption of boiler fuels up to 30% in the Utilities area; stabilizing the rate of the digester in the Pulp area (up to 40% ADT/month); improving the yield of chemical products up to 6% in bleaching processes; reducing rejects and down times in drying processes (35% ADT/month) and sheet breakage in paper machines (30% production hours/month) (1).
What leads to these results is the generation and dissemination of knowledge provided by a management strategy based on the PDCA problem-solving method, with the involvement of managers, technicians, supervisors, operators and maintenance workers to improve and stabilize processes.
In this improvement cycle, it is important to define challenging and feasible goals based on analyses and benchmarks in order to calculate the maximum potential for improvement, as well as the breakdown of large problems into specific problems and goals. For each specific problem, problems are analyzed in order to discover their underlying causes, which are prioritized and then subjected to improvement actions deemed sufficient in order to achieve the intended result. This method promotes discipline in the execution of these actions by setting a systematic approach to control these actions and achieve results in daily, weekly and monthly cycles. In case the goal has not been reached yet, a new analysis cycle is carried out in order to better understand the causes and set up complementary measures. When the result is reached, effective actions are prepared to become standardized.
Speaking of standardization, even processes that went through improvements must have a system in order to continually produce good results in levels deemed capable of meeting product specifications, such as whiteness, moisture, format etc., in a stable way for a continuous period of time. The importance of standards in industrial and administrative (management, processes and operations) environments is well known, but special attention must be paid to their implementation, since these standards do not look good only on paper (no pun intended!). You must make sure that all people involved are properly trained and enforce those standards in a consistent way. They must know how to address possible anomalies and flaws that may be found, working directly on the root cause and preventing recurrence. The quality of these treatments reduces time dedicated to corrections; therefore, teams have more time to dedicate themselves to improvements, which must permeate the entire company, triggering the definition of new goals and the prioritizing of certain investments.
When applied in a similar way to maintenance, daily routine management improves the company’s integration with production, enabling it to save hours in correction and prevention activities due to a smaller number of down times and breakdowns in stages such as causticizing, bleaching/whitening and drying, among others, which may have a direct impact on volumes produced.
In summary, management based on a problem-solving method presents itself as an alternative to the trial-and-error method and to the waste of several resources generated by it. This method provides the opportunity to improve team results based on concepts such as focus, prioritizing and analysis, in order to optimize the use of resources by companies, generating knowledge.
(1) The results shown are neither fully comprehensive nor fully excluding. They are the reflection of several studies carried out in the segment, both in Brazil and abroad.
Text published in the May edition of O Papel magazine.
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