July 15, 2020
Capital Allocation

 
An old timer like me often thinks of capital expenditures in terms of steel and concrete. However, in the span of my so far fifty year career, I have really seen a shift from almost 100% steel and concrete, back about 1970, to what some have called "Industry 3.0" when we introduced some autonomous controls (with electricity, compressed air and/or hydraulics as the logic and motive media) to today when we are talking about Industry 4.0.

Here at Paperitalo Publications we recognized this shift a couple of years ago when we launched the monthly newsletter Industree 4.0 (whose name we promptly trademarked, giving us a brand for our industry).

For many years here at Capital Arguments we have talked almost exclusively about the steel and concrete side of capital projects. However, as we continue to be engaged in real projects in the real world, we have noticed over the years how the computer and controls portions of projects continue to grow as a percentage of the whole.

My personal perspective has changed, too. In the early days (for me), I often looked at the steel and concrete portions of projects and thought of them as "complete." Yet even thirty years ago, we knew that was not so (if you have read any of my tales of expediting, you'll recall they often focused on electronics). Today, the electronic portion, the Industree 4.0 portion, if you wish, has become so important that the physical part of a project cannot begin to function until this portion is complete.

Case in point is a practical home example--the humble lawnmower. Sixty five years ago, when my dad first duped me into mowing the grass, he took our family reel type push mower, drilled new holes in the wooden handle so it could be adjusted to be short enough for me to use. I was so proud that I was big enough to mow the grass (boy, did he pull one over on me!). One key scheduling issue in those days was to take the mower into the mower shop for a sharpening in the winter, so it would be ready for spring. The gentleman with the mower shop would be backed up a month or so if you waited until mid-March to take your mower for sharpening. It was a late February task if you were to be ready in time.

Three weeks ago, we had a lightening strike at our home. Our mower now is a Husqvarna "Automower" which we have named "Husqui." Well, after the lightening strike, Husqui died. It has taken the dealer nearly three weeks, along with much consultation with the factory, to analyze Husqui's circuit boards and figure what was wrong. We finally got Husqui back a couple of days ago and she is doing fine. She is behind schedule, so I am running her eighteen hours a day (I could run her twenty-four hours a day, choose not to do so) to catch up. As for sharpening, Husqui has three little blades about the size of half a razor blade. Every three months you just throw them away and put on a new set.

You might be interested to know that Husqui's computer and GPS keep everything ship shape. Husqui only cuts 8 inches wide, so the last year, according to the dashboard on my phone, she has traveled over 900 miles, just in our yard.

My point of this long-winded tale, though is this. A mower's function is to cut the grass, the physical portion of the job is the severing of the blades of grass. Look what has changed over the last 65 years in how that function is accomplished. The objective is the same, but the way of doing it is radically different.

We are in the midst of this change in our paper mills. Capital projects and capital cost calculations must change radically as we move forward. The skills of project managers must change to accommodate these matters. We will necessarily move our emphasis and focus here at Capital Arguments as technology marches forward.

By the way, Husqui doesn't even have a handle.

What is your opinion? Drop me a line at jim.thompson@ipulpmedia.com. I would like to hear from you.


 
Young 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. There is an age limit on the manager eligible for this award: they must be under 35 years old when they completed the project.
 
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) and meets our age requirement, 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 jim.thompson@ipulpmedia.com. We will seriously consider it.
Current Patent Activity is available here.


Please write when we tickle your brain cells! Email jthompson@taii.com