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Better Logistics

If your mill was built before 1960, and possibly even as late as 1975, the interstate highway system was probably not an important consideration in determining its location. In fact, railroads, which have diminished in value for transporting finished goods, were probably a more important logistical consideration. On top of that, your customers are probably not even close to being in the same locations they were when your mill was built. You are losing out on the all important service category as compared to your recently located new competitors.

Your raw materials may have moved, too—especially if you are near encroaching urban sprawl. Rural locations that have found themselves urbanized probably have a great deal of hidden cost problems in this area. How far are raw materials transported now as compared to when your mill was built?

Better Maintenance

I once looked at a mill for a prospective buyer that had a basement height of about seven feet. All motors had to dragged out of and into place with chainfalls. Your mill may not suffer from problems this extreme, but there have been many improvements in how one does routine and major maintenance over the last couple of decades. These are worth big dollars when it comes to reducing downtime and the direct cost of labor and parts to perform maintenance.

Workforce right sizing and right costing

Modern technology and layout allow one to competitively staff the modern mill and build it in a way that promotes communications among and between departments. A fresh site also allows one to organize labor and the costs of labor in modern ways. There is a tremendous amount of savings to be had here.

Improved workplace culture

Even if the technology and layout of an old mill site allows one to right size and right cost the workforce, the “back in the good old days” attitude will be a major impairment going forward. On a new site, the history slate is blank and no one can spend a minute talking about how it used to be when “we had enough people to do the job right.” This may be the most valuable issue of them all, it is just devilishly hard to measure.

No legacy environmental issues

Enough said—we know how time consuming and costly these can be on an old site. Air, water, noise, solid waste can all be endless sinkholes for money on an old site.

Improved energy efficiency

I cringe every time I walk into a mill and see old coal-fired boilers that were converted to natural gas. On top of this, there is the simple fact that most process energy consumers of current design are just plain more economical than old technology. Modern energy generators plus modern energy consumers are worth big money.

Better quality through tighter process control

By process control, I not only mean computer control, but modern pressing, calendering, winding and so forth. All of these matters make for better paper and better paper will find a market faster than marginal paper.

And, then, finally, of course, is the matter of safety. The improvements in technology that lead to better workplace safety are legion. There are many, many things that can be done in a new process, layout and site design to reduce the potential for accidents, which reduces costs in a big way.

Be safe and we will talk next week.