BRUSSELS, May 24, 2010 (RISI) -PPI was recently invited to visit Voith Paper Automation's Center of Products and Manufacturing just outside the town of Neuwied, in central Germany. The center has some history, and has been a hive of activity - specifically for the pulp and paper industry - for over 60 years, being first set up in 1949. Since then it has been through various transformations, most notably as the automation company LSC and then finally and most recently in January 2007 it became fully owned by Voith Paper Automation.
Since its inception in 2002, the automation sector of Voith's business has shown rapid growth. It now has a workforce of 460, worldwide sales of over Euro 140 million, and the company says that even during the financial crisis the results were satisfying. Voith puts this success down to being focussed solely on the pulp and paper industry, as well as being attached to the Voith Paper brand, one of undisputed leaders in the supply of some of the world's largest and fastest paper machines.
As we started out on the factory tour during my visit, a clear illustration of just what the company produces was there in giant form right in front of us in the "staging area", which is also where final assembly and finishing takes place. During PPI's visit, the frames for some of the 10 biggest sensor frames to be produced were being prepped for delivery to APP Hainan Island where Voith is installing the world's largest paper machine. The frames themselves have a width of 14.5 meters for a machine width of 11.8 meters, containing up to 10 different measuring sensors.
And this throws up the subject of just what goes on at Neuwied; it is not the size of the sensor frames that is so impressive, rather, what is contained in them. The company supplies sensors and high tech measuring equipment that allows a papermaker to ensure that maximum quality is achieved running at the fastest speeds possible - consistently.
Richard Windheuser is the very busy man that heads up the operation here. He even wears two professional hats, one as managing director of the Center of Products, Quality Control Systems (QCS) and the other as sales director for Automation Global. Windheuser explains what happens at Neuwied: "Everything here is centered around the development and manufacturing of sensors, which has become arguably the most important part of the papermaking process."
The one thing that strikes a visitor to such an important area of supply to the industry is the small number of people here. In fact the Neuwied plant has only around 60 employees. Windheuser says: "The people we have working here are committed to the core area of expertise, sensor development. We have experts in R&D, development, production, testing and staging, and then service. All areas are optimised and we have outsourced everything which is not central to our expertise, for instance fabrication and final assembly. We concentrate on what we are best at, which also of course makes us highly competitive as we outsource only when we need to."
Richard Windheuser, a very busy man at Voith Paper Automation
A clear focus on the lowest total cost of ownership
If the research, development and manufacturing focus at Neuwied is firmly on supplying the ultimate in effective sensors for the paper machine, the overall focus is the increasing demand from customers for the lowest Total Cost of Ownership (TCO). This of course means not just the purchase price, but the running costs and the return on investment as well. In a financially challenging world, each and every investment has to be shown, and above all proved, to be worth investing in for the long term. In this same challenging environment it would be easy to simply install the least expensive solution on the market, without looking further ahead. Windheuser says: "To be able to fully exploit the potentials for reducing costs, in the selection of investment alternatives the costs as a whole should be considered over the service life of the product or system. The minimization of capital costs (of the purchase cost) is therefore not a suitable criterion for a decision. The decisive factor for the selection of a product alternative is the minimization of the total costs incurred throughout its life, the TCO. This may initially involve higher purchase costs, but over the complete period of utilization it is the more economical alternative."
Windheuser also says that in its extensive experience in the field, Voith Paper Automation is aware that a lot of customers do not know the hidden costs of their existing QCS system. "With our experience we try to help customers to get a clear overview. TCO analysis includes the cost of acquisition of a system and the operating costs over the life-time, for example costs of maintenance, modernization as well as costs due to production losses or customer complaints. Opportunity costs are economic opportunity losses that exist because the best alternative is not installed in a machine. For example: due to an outdated automation system money is lost as a consequence of a bad 2-sigma moisture profile."
Ultimately, the investment in automation on a paper machine is to allow a company to produce more quality paper, more quickly, allowing more profit. To do this, it is absolutely essential that the machine has maximum "availability", or up time. One of the focuses at Neuwied has been just that; to ensure that if there needs to be any replacement of parts, they can be quickly and easily replaced, in a lot of cases in as little as 30 seconds, and without any special tools. This has a direct effect on the TCO.