Capital Argument $

A trademark of Paperitalo Publications
Published on the 15th of every month
September 2017
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Four kinds of Money, Part 1    


I'll not completely explain the heading of this article this month.  You'll have to come back the next three months to see the full picture.  Sorry, I just think people have so many preconceived notions about money in business that their ability to think about it can be hampered if they see a sentence or two and think, "I already know that."  They escape the exercise of really thinking about the subject in new way.

The first kind of money, and the one we are going to discuss this month, might not be considered money at all.  It is, however, and you likely know it by another name: "paralysis by analysis."

Why do some companies seem to move ahead boldly while others in the same grades languish about, never quite grabbing the market share available to them?  It is because the former has learned to overcome "paralysis by analysis" and the latter have not.

In my long career, I have seen companies follow both of these paths.  Paralysis is the more likely stance that companies take.  There are two reasons for this.  First, the people who put together the budgets for new projects (be they revisions to an existing asset or an entire greenfield facility) love to analyze options.  Be they engineers, schedulers or project accountants, developing scenarios is fun for them.  The second is the natural propensity to look for a bargain or, even taking it a step further, being loath to spend money under any circumstances.

Now, I think we should all build projects as economically as possible, but there is a time to stop analyzing and get on with doing.  I am convinced I have seen companies fail to optimize long term financial results because they failed to be first (or even second or third) to market with the latest product specifications or the latest economical method of manufacturing a product.

I've told the story many times of the mill I was called upon to visit by a client who had just bought a machine there and was going to remove it from its existing location.  A colleague and I went to visit the machine.  Originally installed in the mid-1950's, at the time of its installation, it was the last of its type for the grade it produced.  Over the years, it had had several rebuilds, and as we could tell from the dates, in each case, the rebuilds were the last of their type before a better technology eclipsed them.  Then here we were, in 1989, watching this machine being removed.   The new owners got it for free, all they had to do was remove it.

Besides graphic examples like this, there are the many projects that are never done and that could have improved the financial health of the owner, had leadership just been bold and moved forward.

Time is money.  Over analyzing a situation wastes time, hence money, and furthermore, allows opportunity to slip from one's grasp.  I have seen people agonize over four or five million dollars in a $200 million-dollar project thus letting the competition grab market share that was just waiting to be claimed.  They become fixated on the four or five million while they let tens of millions of future revenue slip from through their fingers.  This is an extremely short sighted and na├»ve approach.

Next time you are involved in developing a project, make sure you have your perspective correctly adjusted and know where the real money is.

What is your opinion?  Drop me a line at jthompson@taii.com.  I would like to hear from you.
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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 jthompson@taii.com.  We will seriously consider it.
 
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Current Patent Activity is available here.
 
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Capital Arguments Engineering Manager of the Year
Hall of Fame

CA Logo
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.



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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.
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Not Awarded 2014

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

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Not Awarded 2013

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

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Not Awarded 2012

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

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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. 
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Not Awarded 2010

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

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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























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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 jthompson@taii.com with "EMOY Nomination" in the subject line. 
 
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Please write when we tickle your brain cells!  Email jthompson@taii.com





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