According to a survey made by Bain & Co, the pulp and paper (P&P) industry has been a forerunner in maintenance outsourcing. Pulp-PaperWorld.com sat down with Pertti Weissenfelt, Pulp and Paper Industry Segment Manager for Quant to get an insight into why this industry has outsourced more maintenance than any other industry.
Has the P&P industry been under harder cost pressure than other industries?
They are today, especially printing paper production where the demand is declining all the time because of the digitalization that has had huge defect on printing paper consumption. Paper producers are looking for all possible ways to cut costs and ensure their own competitiveness in the market where prices have been declining for years.
Board and pulp producers are in a lot better market situation and basically they can sell what they are able to produce. For them, the most important thing than pure cost cutting is the reliability of the machinery to ensure the highest possible production efficiency – without forgetting the maintenance costs.
So one main driver for maintenance outsourcing in the P&P Industry has certainly been due to cost cutting. This is especially in Europe and US, while in some other regions the main driver has been the need to keep and improve maintenance capabilities and expertise.
Are P&P industry maintenance organizations more traditional when needing a culture change?
This is the main reason in many cases for maintenance outsourcing in every industry. Outsourced maintenance is driven as a business, which makes it vital for everyone to always consider the most efficient way of their own work. Furthermore, continuously develop it to be able to guarantee the most cost efficient solution to the customer and stay competitive in the market.
Does outsourcing maintenance give more flexibility than having it in-house?
This has always been important in the P&P industry. This is because the need for maintenance resources varies a lot for a longer period of time. For example, a pulp mill shut (normally between every 12-18 months) requires a lot more resources compared to the production phase. Secondly, due to a weak market (like now), when paper machines need to be occasionally stopped temporarily for days or even weeks due to lack of orders, the machines don’t need any maintenance. Both these situations are easier for the customers to outsource this maintenance cost, which guarantees better flexibility for resource allocations.
Do P&P mills contain more complex technology than other industries?
Today the P&P mills are highly automated and that has caused quite a big reduction of people working at mills. For example, the European P&P Industry had 420 000 employees in 1992. However in 2014, the amount was 180 000. Production at the same time has increased from 65Mt to 90Mt.
This result creates a higher automation rate, making machinery and maintaining them more complex, which requires an in-depth knowledge and skill base from the maintenance team. P&P mills don’t have many employees anymore. All of them have their own expertise, therefore they support the increasing development of maintenance outsourcing to companies who have a wide enough customer base to keep all needed resources. Pulp and paper production processes are already by themselves, complex enough to be managed. By outsourcing maintenance, the production organization can concentrate 100% on their own core, pulp and paper production.
Pertti Weissenfelt, Pulp and Paper Industry Segment Manager
From Finland, Pertti has 30 years of experience in industrial maintenance most of that being from Pulp and Paper industry in Finland, Belgium and Australia. He has been working as Maintenance Manager, Project Manager in Greenfields and Rebuilds, P&P Industry Specialist in Asia Pacific, MPC Manager for P&P, VP Engineering & Projects, VP Business Development, Global P&P Industry Sales Director and latest as Cluster Manager for Finland and Baltics.
“Pulp and Paper industry has always been a strong segment in our maintenance outsourcing business and we have a great track record and references in it. I’m exited being back in the global team and looking forward to work together with our regional teams to get us growing in P&P Industry.”
Do P&P Industry customers get more benefit out of outsourcing than other industries?
It is maybe easier in the P&P industry to define the full potential that exists in maintenance than in some other industry. This is because paper machines are quite similar for each different paper and board grades. Regardless of the original equipment manufacturer (OEM) who has made the machine, the machines have been like that for decades. This similarity makes them easier to compare.
Usually P&P companies are comparing their own machines to identify the ones that perform and the ones that don’t. Quite often, company targets are set based on their top sites. That still doesn’t demonstrate to the company if they are among the best compared to their competitors. Quant has been benchmarking the P&P industry for over 10 years and has a wide global database of paper and board machines’ efficiencies and maintenance costs, divided by production grades and geographical regions. Benchmarking with the best in the P&P industry is a strong tool when defining the full potential of maintenance.
Having such a similar machinery makes it more important to have the capability to find, share and implement best practices. There is basically no new equipment failures in the P&P industry. If you get a machine failure or problem that you haven’t seen before, it most certainly has happened somewhere else earlier and there is maybe a solution for it already.
Quant being a global industrial maintenance company with experience in the P&P industry over 25 years has wide network in the industry as well as other industries. This guarantees the access to best practices and specialists.
In your opinion, did the Pulp and Paper industry just happen to be the first industry where outsourcing started?
In some cases this may be true. Many of Quant’s (ABB at that time) first outsourcing agreements were done in the P&P industry and we became very good references that encouraged others in the same industry to outsource as well.
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