Proving Your METAL
High technology is a given at Bowater’s newest sawmill in Thunder Bay, ON, but management says what really sets the mill apart is the layout, its flexible, motivated work force, modern management systems, and clear goals.
By Scott Jamieson
Once upon a time, in a land of surging lumber prices and record housing starts, just about every pulp & paper executive thought he was a sawmiller. Hire a consultant, contract a turnkey supplier to build an optimized mill, push the big green button that says “start”, and you’re making money and cheap chips faster than you can say overcapacity.
Seems it’s harder than it looks, and in today’s world of sour markets and bashful buyers, many of these turnkey wonders lie dormant or are bleeding red ink. Sawmilling is a complex, challenging business, and as Luke Drapeau, general manager of Bowater’s Ontario sawmills explains, you need more than technology and a cheque book.
“The newest sawmilling machinery only takes you so far,” he notes, a bit of a startling confession given his history over the past decade. After cutting his teeth in the sawmilling industry in BC, Luke worked with Avenor to build and then manage a two-line sawmill in Ear Falls, a very remote corner of northwestern Ontario (Bowater has since bought Avenor, and Weyerhaeuser Canada now owns that mill).
More recently, he worked with a Bowater team to design, build, and launch a state-of-the-art three-line sawmill in Thunder Bay, ON, a project originally conceived back in the mid ’90s when Avenor owned the operation and was looking for a lower-cost, higher-utilization alternative to its vast bush chipping operation. In these tasks, Luke has spent much of his time keeping pace with the relentless technological changes in the industry and agonizing over detailed machinery comparisons. He’s a gear guy, alright, but like the sawmill he runs, that’s just a part of the equation.
“Anyone can buy all the equipment we have off the shelf, but that’s not all that defines success in this business. Success has more to do with how you lay it all out, the systems you have in place, the people who put it all together and then run it on a daily basis, and truthfully, how you control your losses.”
In fact, like many recently built sawmills, the entire Thunder Bay mill started as a project to control losses. The area, and Bowater’s predecessors (Avenor and Canadian Pacific Forest Products before that) has a vast history of bush chipping. In fact, Avenor helped pioneer many of the techniques and much of the gear still used by bush chippers across Canada. Yet in comparison to the sawmill-pulp mill synergy, even the best bush chipping system falls short when it comes to value recovery.
“This sawmill and the Ignace sawmill rebuild came out of a fibre optimization study that Bowater did,” Luke explains, “and is based on the fact that we were doing a lot of bush chipping. Obviously the return per cubic metre is higher with a mix of chips and lumber, and it brings a cheaper, and better quality residual for the paper mill.”
The Ignace mill, just west of Thunder Bay, is a singleline mill that sends green lumber to Thunder Bay for drying and planing, and acts like a fourth line at the Thunder Bay mill. Overall, Bowater runs 10 sawmills in Eastern Canada and the US.
Chip costs aside, the profitability of this formula depends on the sawmill’s ability to compete as a worldclass lumber supplier. This is where the human side of the equation comes in. This mix includes experience, proper mill layout, people, maintenance, and metric management.
Experience is priceless
Actually, it’s damn expensive, so it’s nice to be able to take advantage of it when projects like the Thunder Bay mill come along. Bowater drew from a raft of veterans from the Avenor Ear Falls project, including current Bowater VP of building products Jean Beaulieu, who hired Luke for both projects; Claude Lebel, a consultant who acted as construction manager on both mills; Lloyd Pedersen, a wellknown sawmill consultant from BC; and Luke, who was project manager and then general manager. Sawmill superintendent Guy Legarrie was instrumental in establishing a component standards document that was used by all vendors to standardize mill components. Also on board again was turnkey supplier Comact.
The Ear Falls mill remains an impressive operation, and the Thunder Bay project shares many of the successful design features. Still, the project started with a clean slate, and boasts many of its own features, such as an extremely spacious building and very robust machine footings.
Bowater also took advantage of modern machine reliability, log handling gear, an open layout and design, and CCTV systems to keep mill staffing to a minimum. As an example, the mill runs with four Valon Kone 17-in Kodiak debarkers. All four, as well as a separate infeed for cut- to-length (CTL) logs and a reclaim debarker are managed by a single operator. Similarly, all three Comact breakdown lines are run by a single operator.
“We have a remote operator console on the mill floor that we used at start up, and still use for training and troubleshooting, but regular mill production is handled by that one operator. That’s a target of 35,000 logs per shift, all debarked with one operator and processed as far as the lumber transfer with another. We’ve had records of 89,000 eight or 10-ft blocks in two 10-hr shifts.”
Human touch
If you are relying on a few key people to put through a lot of wood in a hurry, they’d best be good. Building a mill in a regional center like Thunder Bay (pop: 110,000) gave Bowater the chance to put the right people in place, and Luke says it was an opportunity they did not waste.
“It begins with people, and it ends with people. We were fortunate enough to be able to hire the top 3% of our applicants, so we’ve got some tremendous people. On top, we have a modern agreement with a non-unionized environment that lets everyone work to their full potential.”
In some ways the floor runs similar to a modern union operation. There are employee reps, and Luke adds that they have more meetings than union mills he’s worked at.
“We also have a dispute resolution mechanism, and we’ve gone to the Labour Board on one matter. We have employee and safety reps on each crew, and it’s pretty open. We have some consensus-based decision-making and a lot of consultation going on. What sets us apart is that the individual has formal and informal avenues to provide their valuable business imput. There’s also an incentive program based on meeting targets around the mill’s six key business success factors (see page 28), and it involves the same drivers as my incentive program. The employees take it very seriously, as it can be a significant amount of money at stake.”
Almost 70% of the crew had sawmill experience at startup, which also had a major impact on ramping the mill up and meeting the original design goals quickly. Still, the mill runs a Sawmilling 101 course that all employees must take to ensure a common base, and employees were exposed to a wide array of training tools, both mechanical and soft skills, ahead of startup and beyond.
“Training has always been a key to good start ups, and so was one area Bowater decided to put even more emphasis on here – We’ve tweaked the training, and with the caliber of employee we have, the return is high.”
On top of incentives, training, and a flexible working environment, Thunder Bay mill employees stay focused through continuous job rotation.
Safety as investment
When people are that important to your business plan, safety comes naturally. While the mill has the whole gamut of safety representatives, milestones, procedures and programs, the backbone of this mill’s safety program is the maintenance department.
“When there is a safety incident, how often does it happen on a day when you’re breaking production records or the mill is just smoking? Maybe never. It’s on those days when machines are breaking down, people are rushing around getting things working again, and the mill is not running as it normally should that people get hurt. Focus on preventive maintenance, keep machines running through the shift, and people stay safe.”
Beyond this, the mill has a clear focus on safety apparent to visitors even before you step foot on the mill floor. In fact, you can’t step foot on the mill floor before a staff member provides a detailed safety check and orientation, regardless of your mill experience, and no exceptions for CWPeditors. My hi-vis vest failed the test (it is not a newer tear-away model), so after I am loaned a new model and given a pair of gloves (second skin approach), we’re off.
Through the mill a range of safety details stand out, but Luke doesn’t bother pointing them out, as they are now second nature. Aside from the open, uncluttered mill design and network of walkways and catwalks, some items include:
- * Excellent and highly visible lock-out designs, including air shut-off right next to the power lock-out.
- * Signs warning of dangers are common, including the ubiquitous three-point contact reminders at every staircase and ladder.
* Student employees that stand out thanks to large STUDENT signs emblazoned on their garb, so that others can keep a special eye on these high-risk workers.
* Holsters for log pikes, brightly coloured and widely used to eliminate one more tripping hazard.
Safety is a work in progress, but to date the mill has the safety awards to show it’s on track.
Profits staying up?
The best people on the fastest machines ain’t nothing if the gear’s idle, and given the pace required for this mill to meet budget, downtime is not welcome. The high cost of fibre here means the mill uses sawlogs down to 3.2 inches. Stems were coming to the mill topped at two inches during CWP’s visit, although Bowater had plans to change that to four inch tops in December.
“The small logs here mean we’ve gotta go fast,” Luke says. “One of our sawlines may hit close to 20,000 blocks in a single 10-hr shift, with wood like this,” he says, holding his hands in the shape of a hockey puck. “So no, we don’t like downtime. In fact, maintenance control generally sets apart the good mills from the rest. We target a 95% PM completion rate, and it’s critical for our overall success. If we get that right, goals around safety, production and quality become a whole lot easier to reach.”
Bowater’s staff has the financial incentive to keep the mill running, and management have helped out by putting in the proper tools as well. These include a Dynastar PM tracking software system from USNR, as well as Peltor communication head sets that allow all staff to communicate quickly and effectively.
For quality control, the mill relies on a host of tools, including Si-Cam hand-held digital calipers as well as one of the supplier’s real-time laser-based size control systems on the large line canter. Info from both is shared freely among managers and the fileroom.
The mill also runs regular tests on all its machine centres, to verify that everything from optimizers to machine alignment are on.
“These are done between shifts and include electricians, QC staff and the responsible millwright. They are crucial, and we don’t take anything for granted.”
It all comes back to having measurable goals, and then measuring performance against those goals regularly.
Get with the plan
For Bowater Thunder Bay, the basic goal is simple – to be among the world’s best. The mill bench-marked with PricewaterhouseCoopers, and then established success factors in six key areas aimed at making the mill a top quartile producer. Perforex then provided tracking andreporting systems that manage performance against targets and their individual key performance indicators. Basically, with the exception of log quality and marketing, these six drivers cover the essentials of modern sawmilling, including:
- * Safety: A recordable incident rate (RIR) of one or less under the US-based OSHA system. * Environment: An environmental incident rate (EIR) of one or less.
- * Recovery: While eastern integrated sawmills average 235 bdft/m3, Bowater Thunder Bay targets 250. “It’s aggressive when you see our log size and the value we’re trying to reach.”
* Productivity: The goal is 5,000 bdft per man-day. - * Sales value: The target is 90% as stud or better. “With the pulp mill, we’re not trying to make a lot of economy.”
* Conversion costs: This is survival 101 in today’s markets, and as a sawmiller with close ties to his BC Interior roots, Luke knows who the competition is.
“We know there are BC mills in the $70s. We’re a stud mill, and we can’t compare block sizes with those mills, but in the end we are all selling in the same market.”
He adds that growing cut-in-two programs among BC Interior mills are not making things any easier.
“We need to be a top quartile producer, so to me these six drivers say it all. We don’t just hang them on a wall and then move on. Every day our actions drive toward these dynamic targets. Our incentive programs are based on exceeding them, and we measure ourselves constantly against them. Metrics surrounding them are the focus of our meetings.”
So how do they measure up, some three years into production? Luke admits the big disappointment last year was safety, with a RIR of 1.9 under a system where one or less is considered world class.
“Still, we’re doing very well in safety in many ways. It’s a big focus for us, the mill is designed around it, and in fact we’ve won regional safety awards for our results. The metrics can cloud success – Our severity rate is excellent, for example. But an RIR of one or less is the target we are still driving to.”
The EIR for 2005 was zero, and as for the rest, they are more than holding their own in the face of some real challenges.
“We’re basically running the mark for LRF and sales value, despite the fact that our log size has averaged 15% smaller than planned this year. Productivity has been challenged as a result, but we’re in the ball park in all six drivers.”
