Capital Argument $

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Published on the 15th of every month
October 2017
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Four kinds of Money, Part 2     

Last month we started this series talking about paralysis by analysis resulting in delaying projects until they are never done because the competition has eclipsed the concept that drove the project in the first place.

This month, we want to talk about another kind of money involved in projects.  We want to make sure we do projects as fast as possible.  That will save one kind of money--construction interests costs.

Which is a good place to stop and take a side path for a moment.  In recent years, construction interest costs have not been a particularly large worry--interest rates have been low.  Someday, perhaps sooner than we think, interest rates on construction loans are going to go back to traditional levels.  Levels where we will want to pay attention to them.  We have raised an entire generation of project managers who are unaware of this issue.  It will be interesting to see what happens when these rates recover.

Now back to the point of this month's column.  The kind of money we want to talk about today is design money.  Design money is economical and we receive good value from it when it is spent on CAD drawings.  Design money is expensive, disruptive and a cause for many other money wastes when we do what I call "designing in steel."  

"Designing in steel" occurs when there are errors in the office (CAD) design work, or even more simply, the design work in the office was never done and some brilliant manager thinks they can just wave their arms in the field, resulting in an optimized, marvelous design.  Never spend money "designing in steel."  It is always wasteful, it is always disruptive and it is tremendously expensive.

As far as correcting errors in the field because of faulty CAD design, I am surprised these still happen.  With all the interference checking that goes on today, problems in the field simply must be CAD operator error or poor office management (not getting information on time to complete the design before releasing for construction).  Honestly, I sometimes think we had fewer errors when everything was done manually.  Perhaps we were all more engaged back then?

Set up systems, checks and safeguards so that field design work and field correction work is kept to an absolute minimum.  And when I say set up systems, checks and safeguards, I don't mean just do this at the beginning of the project and expect them to work automatically from then on.  Audit them every week; make corrective adjustments to your methods as you go along if necessary.  Broadcast your changes far and wide so that all involved know what is going on.  I would go so far as to consider having a bonus incentive system for designers that produce low error work.

What is your opinion?  Drop me a line at  I would like to hear from you.

Engineering Manager of the Year, call for nominations

We are looking for an individual who has done an extraordinary project, one that almost defies belief.  Its extraordinary features can be schedule, technology, cost or all three.
We have often gotten nominees that go something like this, "I nominate Joe because he has done a great job of running our engineering department for the last fifteen years." Quite frankly, we are not interested in such nominees.
However, if you know someone who has led a very exceptional project in the recent past (the last two or three years), we want to know about it.  We want to honor them and hold them up as an example for Engineering Managers in every pulp and paper mill around the world.
Just send your nomination, with as much details as you can provide, to  We will seriously consider it.

Current Patent Activity is available here.

Capital Arguments Engineering Manager of the Year
Hall of Fame

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Since its inception, Capital Arguments has believed extraordinary projects are possible.  They can be done safely, responsibly and offer a great advantage to their mills with lower capital costs and saved downtime. We established this award in 2008 to recognize those people and companies that follow this philosophy. This award is given once per year somewhere in the world.  We honor our inductees permanently here.


Mac Switkowski--Engineering Manager of the Year 2015

Mac Switkowski, center, holds his Capital Arguments Engineering Manager of the Year Award that was presented by Paperitalo CEO Jim Thompson, left, as Luis Henao, right, vice president at Pratt Industries applauds.  Mac brought the new mill at Valparaiso in on time and on budget despite a change of paper machine suppliers mid project.

Not Awarded 2014

You have to be really good to get this award.  We did not receive any qualifying nominations in 2014.


Not Awarded 2013

You have to be really good to get this award.  We did not receive any qualifying nominations in 2013.

Not Awarded 2012

You have to be really good to get this award.  We did not receive any qualifying nominations in 2012.


Ed Kersey--Engineering Manager of the Year 2011

Jim p resents Ed with the Engineering Manager of the Year for 2011.
(L - R) Matt Nilsen, Jim Thompson, Ed Kersey and Wayne South.  Nilsen is Account Manager and South is Business Development Manager for Kadant Black Clawson, underwriter of this year's award.  Ed Managed the construction of the Pratt Industries mill in Shreveport, Louisiana which took 13 months from piling to paper on the reel.  His reward?  They made him mill manager!

Peter Flynn and Steve Roush

Kadant Black Clawson was a major sponsor of the 2011 Award.  Here, on the left,  Peter Flynn, President of Kadant Black Clawson, receives the company's duplicate of Ed's Award from Steve Roush, Publisher and Editor, Paperitalo Publications. 

Not Awarded 2010

You have to be really good to get this award.  We did not receive any qualifying nominations in 2010.


Dean Abrams--Engineering Manager of the Year 2009

Now retired, Dean was an engineer at Corrugated Services, Forney, Texas, USA in the summer of 2009 when he completed his award winning project.  Dean managed a team that installed a secondary headbox in 11 hours, 30 minutes, paper-to-paper.  The experts had said it would take at least 3 days.  In April 2010, we presented the award to Dean in the presence of a number of his colleagues.

Dean Abrams Award 
Here is the award we presented to Dean:

Deans Plaque


Mike Ahcan--Engineering Manager of the Year 2008

Mike works at the UPM Blandin Mill in Grand Rapids, Minnesota, USA. In 2008, the mill's sole effluent pipe, running outside a building, almost in the Mississippi River, was determined to be in a state of imminent collapse.  The experts said it would take a week of total mill downtime to replace it.  Additionally, there was a danger of leakage into the river.  Mike and his team went to work and replaced the pipe without any downtime and with no spillage.  We had a banquet in Grand Rapids for him in July 2009.

OpTest Official Solid Background

And here is Mike's award:

OpTest Official Solid Background

We normally accept nominations in the November-December time frame.  They can be sent to with "EMOY Nomination" in the subject line. 

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