May 9, 2012  
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Five hurdles on the new technology path

(Editor's Note: The May/June issue of Paper360°(soon to be published), will contain an article about ozone bleaching and the problems one company faced while trying to convince customers of the benefits of their technology. In the process, they identified five hurdles on the path of new technology, which are summarized below. Be sure to read the full article in the May/June issue of Paper360° to learn more.)

Outdated Information
Keeping abreast of progress in technology, including changes in the market, are basic requirements for in-house technical experts, as is keeping an open mind and being curious about new ideas and concepts. However, many companies very often have difficulty bringing fresh ideas into their own internal technical culture, which generally rests in the hands of just a few people. This shows that they are mainly focused on internal improvements and not spending enough time scanning market activity or listening to what has been successful in other plants.

Executives need to trust their technical specialists, but they should also discuss the introduction of new technologies with various independent experts and not rely completely on one internal resource.

Copy and Paste Culture
A pulp and paper company seeking to modernize its fiberline or build a complete new mill, typically turns to an engineering company to learn about the most advanced and reliable technologies. These companies are often chosen based on price and delivery time, so it is to their benefit to lower their input and expenses and standardize their work. As a result, it is a lot easier for them to recommend technology they have used before. The interests of the investor and the engineering company are not always the same.

The "copy and paste" model promoted by some engineering companies, is certainly efficient as a short-term strategy, but it is the responsibility of companies to not only ask for proven systems but to seek answers regarding opportunities and threats in the mid- to long-term.

The Marketing Paradox
One very curious phenomenon is that equipment suppliers that have developed a new technology, implemented it at full scale and promoted it in several articles and conferences, often remain ambivalent when independent experts ask them to recommend it in place of its principal older technology. Why would they do this?

Representatives of suppliers who sell both the old and new technology, are in an unclear and difficult position. On one hand they want to promote the new technology, but at the same time they don't want to raise objections to the choice of the engineering company. If a conservative customer has already agreed with the engineering company's technical choice, he might simply buy the older technology from a competitive supplier. On the other hand, deciding to go for the new technology would mean that several of the executives from both the customer's company and the engineering company would be taking a risk.

Such misguided advice can lead to a loss of coherence and a lose/lose situation for both the company and the equipment supplier. Being proactive and keeping the initiative regarding technology choice are key factors for success in many projects.

Conservatism in the Industry
Mill owners have been working with their technical managers for a long time and rely heavily on them. During a modernization, the main technical decisions may be taken by the mill and then implemented by an engineering company.

It may happen in such a case, that the mill owner overestimates his employees' desire for innovation and their dedication to its interests. The technical manager in charge of the project might not be ready to take any risks and may prefer upgrading the fiberline to a less modern technology, but one that he is more familiar with and that requires less change in the day-to-day production, fewer training courses, less stress and less new expertise. In that case, the technical management recommends a technology better than what is in use today, but less efficient than the best available technology.

Short-Term Strategy
An investor understands the need for modernization but at the same time would like to lower the total investment as much as possible. A far-sighted investor will try to keep such feelings aside and accurately calculate, despite his gut instincts, how much would be required and what would be the ROI.

A short-sighted investor will roughly calculate the required amount of investment, cut it by 20% - 40% and ask his technical management to proceed with the modernization, secretly hoping his employees will find a way to make it work. The result is that the mill will not opt for the best available technologies but something only slightly better than they have today. The investor is not only depriving himself of significant benefits but may also be forced to modernize once again only a few years later, which in the end will cost a lot more than what would have been required at the beginning and will have a significant negative impact on the economics (and environmental impact) of the mill.

As financial conservatism is linked to large investments, long-term payback, and technological risks, one of the best approaches should remain long-term vision in an unpredictable world.

Pr. Emil Germer ([email protected]) is with the Saint-Petersburg State Forest-Technical Academy; Alexis Métais ([email protected]), Brendan Van Wyk ([email protected]) and Dr. Jean-Christophe Hostachy ([email protected]) are with Xylem Inc.

 

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