Industry plays a very prominent role in the world economy.
The Industry is largely based on a raw material
that is derived from forest crops with harvest rotations that can approach 100
years in length. The sheer volume of timber required for the industry's
production processes is staggering. Since timber is their largest single
production cost, paper firms historically have devoted enormous amounts of
capital to the ownership and management of secure timber resources.
Especially since the end of World War II, the
Paper Industry has experienced a massive wave of technological change that has
transformed its basic operating and process management and control systems.
Where earlier production processes relied on the craft knowledge of skilled
operators and superintendents, newer production processes incorporate
sophisticated sensors, information systems, and software-based process controls.
This shift, which began in the 1970s, has had far-reaching effects on the
industry's fundamental operations. Today, new paper machines are nearly 40 feet
wide, hundreds of feet long, and over two stories high. The Industry's
capital-intensive pulping and papermaking facilities, which can cost up to 1.5
billion dollars, are designed as high tech computer-based operating systems with
paper machines that run at speeds exceeding 60 miles per hour with production
outputs of up to 500,000 tons per year.
This significant technological advancement in
the Paper Industry has required investments of hundreds of billions of dollars.
In fact, the annual capital investment in the US Paper Industry has ranged from
8 to 15 billion dollars per year over the last two decades.4
This has required firms to develop and manage increasingly complex relationships
with external and internal suppliers of ever more complex production equipment
(including software controls). Automated process control systems also have
introduced far-reaching changes into the types of skills needed by production
crews, requiring firms to make substantial investments in the training of hourly
workers and supervisors, growing numbers of process engineers, and new
organizational systems for operations management.