How A Major Pulp & Paper Manufacturer Reduced MRO Inventory Using RCM Principles, 20PEERS Conference

Tissue Mills like many other capital intensive industries, know that cost cutting from the Maintenance budget can be a difficult task when done in an environment of fixing equipment when it breaks. With no understanding of when and why equipment is failing, there are too many unknowns to deal with.  We tend to find that cutting maintenance budgets and repair & operating (MRO) inventories beyond a certain level becomes more and more difficult.  As tissue mills age there is a tendency towards growth in MRO inventory. 

A Mill Manger once told me that MRO inventory levels were a good indicator of the maintenance culture within a mill.  High levels of inventories along with decent run ability indicated to him a reactive firefighting culture.  While relatively low MRO levels and good run ability indicated a culture that pointed more towards proactive maintenance.  Please understand that, whatever a Mill’s maintenance culture is, that culture is less of a reflection of the Maintenance Department than it is a reflection of the overarching believes of the Mill’s leadership.  Maintenance culture is Mill culture not departmental. 

Today’s Tissue Mills face a competitive manufacturing market that is tied directly (or almost) to it consumer base.  In the Pulp/Paper/Tissue industry, Tissue more so than any other product is directly tied to the point of sale consumer.  In fine paper, while many individuals buy some paper for individual use, the bulk of paper sales are to customers who do not directly use the product.   

Here is an example of what I mean:  A health care insurance company may buy a lot of tons or paper which makes them a customer, but the actual consumers of the paper are that companies employees.  So the consumers are at least one step removed from the manufactures.  The same holds true in liner board, typically a consumer is driven to make a purchase based on the product contained within the packaging.    I know there are always exception, but for the most part people buy a brand of cereal because they like the cereal not because they like the box it comes in (fancy graphics and marketing aside).  In Tissue, more so than not, the customer is the consumer. 

I know the big box store makes the first purchase, but they in turn resale to the consumer.  So for the big box store to make the first purchase, the consumer must be satisfied with the product.   

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