Veracel Revisited
The author has visited this mammoth single-line hardwood mill already twice earlier, the first time in 2005 before the mill was commissioned. The focus of this third visit was to better understand the innovative asset management organization created by the then newly appointed Maintenance Manager. The mill has been operating under that initial organization with just minor changes since the commissioning in 2005.
The Asset Management Concept vision was to minimize the support staff from Veracel and to contract the required skills from reputable service providers, thus adjusting resources to the variable workload.
Four major resource providers (Partners) were selected:
- Tecvik for mechanical services.
- Sindus Andritz for Electrical and Automation services.
- SKF Brazil for Condition Monitoring and Lubrication services
- Deplan for all other supporting services, such as scaffolding, painting, etc.
Under the concept two Veracel supporting staff represent the four major operating areas in terms of determining and prioritizing asset management work requirements within those operating areas, e.g., Woodyard, Fiberline, Pulp Dryer and Recovery Island (Figure 1). Another group of Veracel support staff (Specialists) act as business management agents monitoring and auditing the activities and costs of the four major service providers (Partners).
A Maintenance Engineering function is also provided. Rounding out the owner’s organization is a Projects Coordinator and a Planning Consultant, all managed by the Maintenance Manager, representing a total of 12 people (Figure 2).
Responsibilities of Patners and Veracel Staff
The definition of these and the partners’ responsibilities are shown in the accompanying boxes at the bottom of next page.
The Maintenance Manager, Dan Holmsten took over the reins of asset management from his predecessor in early 2007. Dan was part of the original owner’s engineering crew overseeing the construction and commissioning phase. He had previously worked in a Swedish pulp mill for Stora Enso. We asked Dan whether he has any reservations about this unique organization and if he would change anything as a result of the four years’ operating experience.
“First, I want to qualify my responses by explaining the circumstances we face here at Veracel as a result of our location within Brazil. Bahia (State) is remote and as such does not possess the most qualified people for performing technical maintenance tasks,” Holmsten explains.
“When we entered into the agreement to build this site in Bahia we committed to employing local resources for 50 % of the company’s workforce. Those resources did not exist and some skilled workers were brought in from other regions of Brazil, some were already here working as constructors.”
Figure 1. Major operating areas.
Table 1. Source Ministério do Trobalho e Emprego (Rais), Veracel Celulose.
Figure 2. Maintenance organisation.
“There is a lot of construction continuing within Brazil today and inevitably the original workers who signed on to operate and maintain this facility have since moved on to other opportunities. Our turnover among maintenance workers is over 160 % for the last four years. This means we have to pay a premium for competence,” explains Holmsten. “That situation is improving, but it was not temporary as we first imagined. You can see from this table (Table 1) that our commitment to the state is producing results.”
Veracel Impact on Local Workforce
“Our availability is acceptable at 87 % overall, but certainly there is room for improvement. Theoretically, based upon historical data, we can produce up to 3050 tonnes per day compared to the design rate of 2570 tonnes per day, so that will be our goal in the future depending upon market conditions.”
“In general terms,” Holmsten continues, “our overhead is high because of the model used. For example, each partner has to maintain some administrative staff in order to manage their efforts. Overall skills and qualifications are still a problem and require constant attention by the partners, especially for training.”
“Another major challenge,” Dan continues, “is to overcome the walls of the four groups (silo mentality). I have expressed a desire that the partners take on more responsibility, especially in the daily planning and scheduling coordination among the four major partners and for root cause analysis of problems.”
“Do not misunderstand me; we are operating quite well, under conditions that many other competitors could not tolerate. We know we can do better and the Veracel staff and our partners recognize these improvement opportunities. I am beginning to see more options with this model than I originally envisioned and it’s a matter of the partners, where it makes sense, to step up and do more. “
“I believe in the model we have in place. It allows the partners to concentrate and focus upon their specialty skills. That is efficient and effective when the focus includes good work planning and schedule coordination and good problem solving.”
Holmsten concludes by stating, “Some of the suggestions that have been made, for example by SKF, as additions to their renewed contract include developing an operator- driven reliability (ODR) program to formalize our First Line Operation (FLO) program, that should help increase reliability while reducing costs. Another suggestion under consideration is the management of the power transmission components and lubricant MRO, a cost control measure. And SKF has proposed providing root cause analysis (RCA) on mechanical rotating equipment for elimination of recurring failures which again improves reliability.”
“It is these ideas from our specialty partners that once in place, will provide the stability and flexibility for our continuous improvement.”
No maintenance manager is ever satisfied with the status quo, instead they are continuously striving for better practices. Dan Holmsten is no exception and as such demands constant revision of the elements of the asset management program depending upon current and foreseeable conditions.
When the strategy is right, tactical issues will always require adjustment. The equipment at Veracel is still relatively new and as such is not experiencing conventional failures due to wear and tear (aging). There is always the prospect of unexpected premature failure that must be dealt with on a tactical level. Being in a situation where maintenance experience with equipment is minimal is an impediment, thus placing more emphasis on the preventive and predictive measures leading to proactive actions. This is essential for good long-term asset management and Holmsten acknowledges that issue.
Veracel’s model is unique among today’s pulp and paper mills and it is innovative, founded upon logic and situational needs and providing proven value. Once mature, this organization will continue to provide value, while increasing stability and allowing flexibility to meet future market demands. Veracel’s management believes adapting to circumstances is the right strategy, knowing full well that failure to adapt results in:
‘You will always get what you always got, if you always do what you always did.’
»»Who is the author? John Yolton is a 46 year veteran of the pulp and paper industry having held management positions for several paper manufacturers, as well as several suppliers to the industry. He can be reached at john.yolton@skf.com .
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