Research Strategies: Understanding and Measuring "Performance" in the Paper Industry

Report to the Center for Paper Business and Industry Studies on CPBIS Project: Integrated Environmental and Economic Performance Assessments for Strategic Planning and Policy Analysis in Paper ManufacturingFrom a sustainability perspective, we would define "performance" in the pulp and paper industry by the relative effectiveness of a mill or enterprise in transforming its capital resources— financial, technological, natural, and social—into value-added products and processes. Such an assessment would encompass the entire product life-cycle and its associated financial, environmental and social effects. It would extend beyond the production of a particular product to include the extraction and beneficiation of raw materials, the production processes, distribution of the product to customers, use of the product by the customers, and recycling or remanufacture of the product or its constituents into new products. The focus of our CPBIS project is narrower than the sustainability perspective, but is intended to provide a foundation for more complex assessments in the future. Our initial focus is on a particular enterprise, a manufacturing facility and its products, and the relevant measures of financial, technological and natural capital resource effectiveness. We will explore ways in which resource data (mass, energy, water, etc.) from steady-state and dynamic models of a production facility can be combined with financial data from an existing financial model used by the firm. For comparison, we will also develop an activity-based cost (ABC) model that integrates financial data with data on other resources used by the manufacturing site. Future studies will address the product life-cycle perspective on effectiveness (with respect to environmental and financial performance) and the relationship between performance measures of a facility and the enterprise. Our goal is to develop a tool to support both operational and strategic decision making by providing simultaneous views of the facility/enterprise from manufacturing process, financial, and environmental perspectives. Our partners in this project are Dr. Paul Stuart, the NSERC chair in process integration at the Ecole Polytechnique in Montreal, Quebec, Canada, his students, and the representatives from a paper mill in northern Ontario. The Ecole Polytechnique team will develop the steady-state and dynamic process models of the facility as well as provide an initial study on the existing financial model used by the firm. The CPBIS/Georgia Tech team will develop the enhanced ABC model of the facility. The Georgia Tech/Ecole Polytechnique team will explore performance metrics and other data interpretation schemes that combine financial data with material/energy data and take into consideration contextual factors associated with environmental effects