Smurfit-Stone Pursues Profitable Path with Fernandina Maintenance Program
by Clayton Smith and George Munn
Making money, not tons, has become the mantra of the pulp and paper industry in recent years. Consolidation moves in the sector have resulted in more effective management of inventories and supply, but the cyclical tendencies of the business remain. On top of that, the market is now a global one rather than being split up into regions. Managers today have to live up to the challenge of reducing costs to remain competitive in this global market. Mills face the real possibility of closure if manufacturing costs are no longer competitive in the global market economy. Future success will be achieved only by driving down costs and improving operating efficiencies.
Smurfit-Stone’s Fernandina Beach, Fla., mill is one site that is dealing with this reality. In recent years, the mill has dropped from the ranks of the most cost-effective and profitable mills in its company. This isn’t a result of increasing costs, but the impact of adding twenty additional mills through mergers and acquisitions to the Smurfit-Stone portfolio during the last two years. The mill is now finding itself in direct competition not only with competitors, but also with its sister mills in the race for survival of the fittest.
As a result, significant efforts have been made to improve the overall performance of Smurfit-Stone’s mill at Fernandina Beach, in particular by addressing maintenance operations, maintenance cost, and equipment reliability.
KEEPING TRACK. Fernandina Beach is a fully integrated, ISO 9002-certified mill with three paper machines. The mill was established in 1937 to produce kraft linerboard. Original production was 125 tpd of unbleached kraft pulp and has progressed through expansions and rebuilds to a production rate of 2,850 tpd. Fernandina Beach operates a large wood yard receiving chips and round wood, batch and kamyr digester pulp mills, and a chemical recovery system including two recovery boilers, two power boilers, and two turbine generators.
Extensive benchmarking has been conducted to compare all aspects of operating costs in each of the 21 Smurfit-Stone locations. In the maintenance area, internal maintenance costs, outside contract utilization, stores inventories, and staffing have been compared. It was recognized that significant reductions needed to be made in the maintenance costs to contribute to the economic well-being of the Fernandina Beach mill. This reduction could be realized by improving the following maintenance areas:
- equipment reliability
- planning and scheduling
- outside services and contracts
- stores inventory
The number of occurrences that were leading to major production interruptions led to a review of the entire approach to preventive maintenance. Management understood that a sound preventive maintenance program was the cornerstone for any successful equipment reliability improvement effort and directly proportional to the mill’s financial performance. Overall machine efficiency—a key indicator in the pulp and paper industry—was negatively impacted by the less-than-acceptable equipment reliability.
There has been a predictive maintenance department in operation at Fernandina Beach since 1985, consisting of two salaried employees and three maintenance mechanics. The lubrication effort of the mill was area based and many preventive maintenance work orders existed. In an effort to improve the overall uptime of the machines and equipment, the decision was made to completely revisit and revitalize the entire preventive maintenance program.
ROLE REVERSAL. As part of the overhaul at Fernandina Beach, existing roles and responsibilities of the various maintenance groups were addressed. Maintenance tasks had previously been conducted by both day and shift maintenance personnel. Preventive maintenance tasks were the primary responsibility of day maintenance staff, with some tasks being accomplished by shift maintenance. All maintenance efforts were approached from the area concept.
Management recognized that the “forces of nature” always placed the execution of preventive maintenance tasks in a precarious position. Break-in work and other emotional decisions quite often took higher priority than the tasks of the day. Management’s answer to this was to form a separate group with sole responsibility of completing preventive maintenance jobs. During 2000, the whole maintenance department organization was revised to bring the entire reliability program under the direct supervision of one leader.
As a result, shift maintenance in the mill was consolidated into a central concept that consists of a supervisor and seven mechanics on a 12-hour shift schedule. The concept was to take the break-in element out of the preventive maintenance equation by assigning it to shift maintenance. Theoretically, this would leave break-in work as the exclusive responsibility of shift maintenance.
The remainder of the department, both mechanical and electrical/instrumentation, work out of area-based shops supported by a planning and scheduling department and a computerized maintenance management system (CMMS) that was selected for utilization throughout the mill division. Day maintenance was assigned the primary responsibility of completing corrective repairs that have been properly planned and scheduled.
In theory, all three groups were dedicated to particular maintenance tasks and would not be distracted by items outside their scope. The mill management recognized that it would take some time for these concepts to work as planned. Separating these tasks into three different groups called for discipline and a significant culture change within the entire organization. On a practical level, there is likely to be some overlap of functions between all three groups, but the mill aims to minimize this problem.
PLANNING AND SCHEDULING. The Fernandina Beach mill also carried out an initiative to improve the planning and scheduling process .A significant portion of the work orders were poorly planned and often not even planned at all. In order to give the day crews ample opportunity to efficiently and effectively complete corrective repairs to equipment, work orders needed to be well-planned and ready for mechanics when they received their assignments. A new process was put in place and is currently being implemented at the mill. An important element of the new process is the emphasis on maintaining and controlling the backlog of work orders.
Stocking the correct parts in the storeroom and removing the wrong parts is high on the agenda at the Fernandina Beach mill. The high storeroom inventory is driving this initiative, but there are many other positive benefits from getting the storeroom under control.
Benchmarking data has shown that the mill storeroom inventory is considerably higher compared to mills of similar size and equipment. Additionally, if the mill measured the storeroom service factor1, the results would be low. Quite often, the storeroom has been issuing outdated parts, no parts, or the wrong parts. However, management does recognize that this is the result of a weak preventive maintenance program and an inadequate planning and scheduling effort, rather than the result of poor storeroom management.
The mill’s management team also realizes that the storeroom initiative is very important and will reap financial benefits once under control. Getting this process in order will require good planning and scheduling, significant reductions in break-in work, and management ensuring that the storeroom has the right parts for the job. Significant progress was made in this initiative during the past year.
TEAM TALK. “World class” has been set as the target for all the new maintenance initiatives at the Smurfit-Stone mill. Accepting yesterday’s standards and ways of doing business is no longer the answer for successful organizations. Each initiative has been assigned team members and leaders, and goals and measurements reflect world-class results.
The Fernandina Beach mill selected IDCON as the consulting firm to help guide the new team. This selection was based on the firm’s experience in the preventive maintenance area, combined with its international experience and ability to offer a large database of benchmark information and the best practices in the paper industry.
The consulting firm’s services consisted of eight weeks training over a six-month period, and its primary responsibility was to provide guidance in setting up a new preventive maintenance process. The firm also provided preventive maintenance training modules for both salaried and hourly personnel. Mill management dictated early on that the consultant was not to come in, set up a new process, and then leave a mass of documentation for the mill. It would be a process developed by mill personnel with a consultant’s assistance.
In addition, an in-depth gap analysis was also conducted by IDCON to identify the gap between the Fernandina Beach mill and world-class organizations. The various teams use this as a tool to set goals that will help the mill achieve the highest results. The maintenance and engineering (M&E) manager is the champion of all these initiatives.
DEFINING DUTIES. Defining the functions of the new group was the next step in the process. The functions were divided into the following four categories: essential care, condition monitoring, training, and root cause failure analysis (Figure 2). Training was seen as a crucial part of any reliability process and would be a core function of this new group, which the Fernandina Beach mill chose to call the “reliability group.”
The mill was currently performing many of the listed functions, such as vibration analysis and motor testing. Other functions were completed within the area maintenance crews, such as lubrication and equipment inspections. Functions such as mechanical infrared inspections were new functions. All of these tasks have been pulled into a centralized preventive and predictive concept.
The role that the reliability group would play in each of the above functions could be, but was not limited to, any of the following: developing standards, implementing training guidelines and programs, and actual performance of the function listed.
Increasing overall machine efficiency (OME) and reducing the operating cost of the mill are the ultimate goals of the reliability group. The reliability group will positively influence OME by impacting the variables that affect machine uptime, speed, and quality. Some examples of how the operating cost will be reduced are as follows:
- fewer failures, leading to less money spent on material and labor
- early failure identification, leading to planned and scheduled work, which is more cost-effective than unplanned and unscheduled work
- fewer breakdowns and better planning ability, creating opportunity for lowering the inventory cost of spare parts.
After determining the functions that the reliability group would be responsible for, staffing the functions was the obvious next step. This stage would also prove to be the first real challenge in the process.
For reliability functions, the historical filling of such jobs by seniority was not an option if this group was to have the best chance at success. The group truly needed individuals that were motivated, talented, and had a real desire to make improvements in the mill. The maintenance management team set out to get the support of the union on this sensitive issue.
Obviously, setting up a new maintenance process has taken time and energy at the mill. The original team charter and mission statement were written in November 1999. The implementation team spent the next four months designing the new process, training hourly employees, and visiting facilities with model preventive maintenance programs. Implementation of the new group began in March 2000 with the kick-off of mechanical inspection route building. The addition of new functions and personnel is scheduled to occur gradually, so that not too many new functions are taken on at one time.
The full implementation of the new preventive maintenance process, including all documentation, is scheduled for completion in October 2001. Much of the time line represents the time required to complete the documentation for each of the individual preventive and predictive maintenance functions.
CHALLENGES AHEAD. As most people in the industry realize, making changes of this level are easy to design but very difficult to implement. There are a number of barriers that are being addressed along the path of implementation. The Fernandina Beach mill knew going into the process change that it would be an uphill battle, and it has taken every measure to make these barriers seem like minor bumps in the road.
Lack of communication is always the greatest problem in any organization attempting to implement change, but it can be the easiest to correct. As this was recognized, the implementation used many different forums to communicate why change needed to occur, who would be affected, and when the change would occur.
Another important factor in the new process is cooperation. This system cannot work without the full support and cooperation of the operations personnel. The production areas have to be “in-step” with all the changes and have confidence that these changes are the right thing for the entire organization. Without this support, there is no reason to even begin implementation. At the Fernandina Beach mill, the M&E manager and the production manager spent months discussing all these initiatives privately before any were undertaken. The result was unified support between the operating and maintenance departments.
Changing the culture is probably the hardest barrier to overcome in the workforce. A culture change is definitely required at the Fernandina Beach mill. With the changes that have been made, management is sending the message to supervisors, planners, and the hourly work force that preventive maintenance is a high priority.
Significant results are not expected overnight, though. Focus is still in the implementation areas of centralizing work tasks, developing inspection routes and new work standards, and learning the various technologies in the reliability field. As the new functions come online, a positive impact on equipment reliability and the overall performance of the mill is expected .A process to measure and report these changes is in place and will be utilized to monitor the impact of revitalizing a preventive maintenance program.*
Clayton Smith is maintenance, engineering, and stores manager; and George Munn is reliability group leader at Smurfit-Stone’s Fernandina Beach, Fla., mill.
1. Storeroom service factor is a measure of how often parts are on-hand in the storeroom when requested. World-class service factors are typically close to 96% (IDCON benchmarking data).
2. (Figure 2) Operating personnel will have primary responsibility for detailed cleaning of equipment. It is also important that the operating personnel take ownership of the overall maintenance and housekeeping of the area and equipment.