GLENS FALLS -- When a small valve broke on one of the Finch Paper machines recently, an energy-consumption report was the only indication that something had gone awry.
The machine's energy use jumped $4,000 in a single day, prompting workers to quickly find and fix the faulty part.
Just a year ago, though, the company could have easily gone weeks or months without realizing the very expensive problem at hand, according to Finch Paper President and CEO Joe Raccuia.
"We probably wouldn't have noticed it," he said.
Daily operating reports to monitor energy usage throughout the plant are among a handful of changes implemented at Finch Paper since last fall.
Called the Finch Paper Continuous Improvement Initiative, the company has created an energy model to track and forecast consumption, and formed action teams made up of hourly and salaried employees to tackle high-priority problems.
Since the teams began more closely evaluating the daily operations, energy usage has dropped 4 percent, or $2 million; greenhouse gas emissions are down 13 percent; and manufacturing-related improvements have saved the firm another $4.2 million.
The teams have turned a critical eye to just about all areas of the business, including accounting, employee relations and inventory.
The store room of spare parts for machines was downsized by about 2,600 items. And the stock of finished paper goods was reduced 20 to 25 percent over nine months, moving about $7 to $8 million worth of product out the door.
According to Roger Dziengeleski, who is overseeing the initiative, the teams have successfully tackled many of the longtime paper maker's recurring problems.
"They've been very productive and effective," Dziengeleski said of the teams. "Many of those issues (such as excessive inventory) have been chronic in the business."
For John Kvocka, Finch's chief financial officer, finding ways to save money by operating more efficiently is the only smart way to grow in today's economic climate.
"That redeployment of assets is the whole key to improving the business," Kvocka said.
"It's not a matter of going to the bank and borrowing that money, you have to self-fund."
Despite a difficult year for the paper industry, the company is ahead of plan for 2009, and has outperformed the prior year, according to the executives.
For Raccuia, though, the biggest accomplishment may well be the collaboration among management and hourly workers that's behind the changes.
"In the past, it may have been more confrontational in the relationship that existed; now it's becoming more collaborative," Raccuia said. "We took it to the next level by getting a heck of a lot more people involved in the process."
Just last week, two union locals representing the majority of hourly workers at the plant applauded the spirit of cooperation after ratifying a new four-year employment contract.
The industry has also taken note of the changes underway at Finch.
On Wednesday, the company was given the Pulp & Paper International Award for efficiency improvements at a ceremony in Germany.
Rep. Scott Murphy, D-Glens Falls, congratulated the firm Thursday.
"Finch Paper is working hard at not only maintaining a global industry presence, but taking important measures to increase energy efficiency," Murphy said in a prepared statement.
While Finch seems to have found its stride with Raccuia, who joined the company in February, the "metamorphosis" under way is far from over.
Last week, Finch spent $1 million to upgrade its fastest paper machine, the No. 4, which produces 400 tons of paper a day. The upgrades should help reduce energy consumption by an additional $450,000 a year.
There are plans to invest several million dollars in cutting-edge technology to move the company forward next year.
And a five-year go-to-market strategy is in the works.
"The improvement process is going to go on and on and on and on," Raccuia said. "If you do meet a target, you set another target."
Posted in Local on Sunday, November 1, 2009 12:15 am Updated: 1:05 am. | Tags: Business, Finch Paper, Glens Falls
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