MeadWestvaco does more than cut down trees
After hearing chairman and CEO John Luke deliver one of the keynotes at National Manufacturing Week last March, it became clear that this was one company that really has its act together.
By Steve Kuehn, Managing Editor
IF THERE EVER was an outfit that can tell the forest for the trees, it’s MeadWestvaco. Formed by the union of paper companies Mead and Westvaco in 2002, MeadWestvaco is a formidable $6 billion paperboard, specialty paper, office products and specialty chemical company headquartered in Stamford, Conn. This somewhat diverse, but entirely cohesive, product line is supported by approximately 23,000 employees and process/manufacturing and sales operations in some 29 countries around the world.
After hearing MeadWestvaco chairman and CEO John Luke deliver one of the keynotes at National Manufacturing Week last March in Chicago, it became clear to me that this was one company that really has its act together. I made it a point to catch Luke as he was exiting the meeting room and ask him to put me in touch with his top operations/production guy—I just had to know how MeadWestvaco was driving efficiencies in, driving costs out and boosting productivity at its mills and processing plants. Sooner than I could say “What the heck happened to National Manufacturing Week?” I got a call from one of the company’s supremely competent PR people. (Thanks AVP!) After only a small amount of grilling I was introduced to their lead operations executive Mark Watkins, a senior vice president with responsibility for technology and forestry.
“Optimizing critical loops and keeping them under control is one of the best ways to gain those big-picture efficiencies…”
Although we did discuss forestlands, it was the mill and processing assets of the company that I was most interested in. According to the company’s investor web page, process operations consist of five paperboard mills, four specialty chemical plants, four coated paper mills, one carbonless paper mill, two specialty paper mills and two extrusion plants. There are several more production-oriented facilities, but those are focused on package manufacturing, office products production and distribution, and other aspects of this dynamic company.
Of its lines, the high-quality paperboard business delivers the greatest return ($4.4 billion, 60% of total sales) and mill capacity, at 3 million tons, leads its competitors. Watkins says that the company recently exceeded the goals of a $500-million productivity initiative that had the company focusing on its paperboard operations and seeking to reduce manufacturing costs.
I asked Watkins what technologies the company was spending on for capital improvements to promote cost reductions. “Currently with most of our production assets we are up-to-date and well invested,” says Watkins, “but we are putting money into the back end of the pulping and bleaching side, to help us with environmental regulatory compliance.” He says the company has been, over the last couple of years, investing in cleaner boilers and more accurate controls to help keeps systems running optimally and as efficiently as possible—areas that can generate substantial savings by mitigating waste management and emissions control-related expenses and save money on fuel—something totally relevant in these days of $50-a-barrel oil.
Watkins has pulp in his blood and got his start at a Virginia paper mill as a process engineer. His career path reveals a steady rise through the process engineering ranks. Watkins comes off as no ivory-tower academic—our conversation revealed that he, like many of the industry’s top process engineers, has a pragmatic, no-nonsense style that has served him well career-wise and gets results.
Mantras of standardize, simplify, and sharing resources resonated throughout our discussion. Process-generated data is critical he says and recent efforts by him and his plant and mill-managing engineering staff are focused on executing (in his words) “a strategy of virtual governance.” That strategy is part of the company’s overall productivity initiative and supported by an ERP platform created around standardized manufacturing execution and asset management applications and integrated via SAP. This allows his centralized, but geographically dispersed plant operations and engineering organization to obtain the big picture while keeping a close eye on all the “trees” in the production forest.
Process information is one thing, but Watkins made it clear he truly believes in the value of optimizing process control in the production setting. “My personal philosophy is somewhat asset-intensive. I think that relatively small investments in smart process control, that is, automating processes properly, can yield huge dividends.” Watkins emphasized this point by exclaiming that “It’s all about control. You have to control the process!” Optimizing critical loops and keeping them under control he says, is one of the best ways to gain those big-picture efficiencies that translate into bottom-line sensibilities so important to the CEO and MeadWestvaco’s stakeholders.