The Center for Paper Business & Industry Studies – CPBIS – -- An Overview -Hercules Visit – December 2005 – 1 Agenda Alfred P. Sloan – The Benefactor The Sloan Foundation – An Overview Sloan Industry Centers – The Genesis A Sloan Industry Center – The Context CPBIS – An Overview Who Wh and d What Wh t is i CPBIS Vision, Mission, Strategic Platform Key Alliances & Support Programs – Focus Areas and Outputs Illustrations 2 Discussion – Questions – Issues Looking Out Alfred Pritchard Sloan, Jr., 18751875-1966 3 1875 – Born New Ne Haven, Ha en CT 1892 – Admitted to MIT (electrical engineering) 1899 – President P id t off H Hyatt tt R Roller ll B Bearing i Co. C 1916 – President of United Motors 1918 – Vice President, General Motors 1923--1946 – CEO, GM 1923 1934 – Established Alfred P. Sloan Foundation 1937--1956 – Chairman of the Board, GM 1937 1966 – Passed On at The Age of 91 . . . Th Alf The Alfred d P. P Sloan Sl Foundation F d ti Philanthropic nonprofit institution based in New York with assets of more than $1 billion Has p programs g in Science & technology Standard of living g & economic performance p Education Careers in science & technology gy 4 One initiative in the second category is the Industry Centers Program Sl Sloan I d t Centers Industry C t 5 "The objectives objecti es of this program are to create an academic community that understands industries and to encourage a direct approach to the companies and people of each industry for data and observations. observations. We believe observation--based work by well informed observation academics will, in the long run, lead to practical ti l contributions t ib ti t to th the i d ti industries studied" What Wh t Is I A Sloan Sl Industry I d t Center? C t ? An academic unit focused on an industry sector A joint venture of academe, industry and the Sloan Foundation A creator and disseminator of business and social sciences based knowledge g An attractor of business and social sciences faculty and students to industry The nucleus of an academic community that understands industry 6 There are Now 26 Centers … Legal & Consulting Paper Information Storage Airlines Managed Care Motor Vehicles Financial Software 7 Travel Tourism Aluminum Forest Products Biotech Food Steel Trucking Construction SemiSemiConductors Apparel PharmaPh Pharmaceuticals Industrial Performance PCs Telecom Printing Materials Metallurgy Electricity Retailing … at 18 Major Host Institutions UC San Diego MIT Harvard Minnesota Tennessee Georgia Tech Carnegie Mellon Kentucky Wharton Worcester Poly RIT Pittsburgh Columbia UC Berkeley VPI UT Austin Maryland 8 IPST UC Irvine A Sl Sloan Center C t E Example l -- A b broad broaddbased and highly collaborative team effort ff …. 9 …. created the Center for Paper p Business and Industry Studies in Late 2000 Or – CPBIS 10 CPBIS S Seminal i l Events E t 11 Sloan -- IPST contact in 1999 Survey of industry leaders (CEOs) D t Determination i ti off hosts h t – GT & IPST -- interest i t t IPST--GT collaborative proposal development IPST CPBIS (Center) established in Fall 2000 with $2.1 MM Sloan Grant & $1MM industry funds Sl Sloan Renewal R l Grant G t Approved A d Fall F ll 2003 ffor $1.3 MM Plus Industry Funds to Expand S Second d Sloan Sl Renewal R l Grant G t Set S t For F Fall F ll 2006 AU Unique i C Combination bi ti IPST – A leading g research center in paper p p industry technology Georgia Tech -- GT -- liberal arts, management and engineering units Ivan Allen College DuPree College of Management College of Engineering Sloan interest -- parallel efforts & funds Paper industry support -- financial and inin-kind 12 Center Vision CPBIS is an internationally recognized academic research center providing business knowledge of relevance to the global Forest Products Industry Research Led – Business Focused 13 Center Mission The overall Mission of the Center is to become the preeminent business studies research and education enterprise dedicated to business, management, and social science i issues off the th global l b l Forest F t Products P d t Industry. Its purpose encompasses several important elements -- 14 Center Mission Elements Focus on research issues in the pulp, paper, and more generally, the Forest Products industry Identif de Identify, develop, elop and support s pport research on business, b siness management management, and social science issues that are of critical interest to industry stakeholders Conduct research that studies the industry by direct observation observation, providing research results that are of high, practical value to the industry Create an academic community that together with stakeholders understands the Forest Products Industry Disseminate and communicate research findings to the global Forest Products Industry in order to facilitate better decisiondecision-making in an increasingly competitive environment Provide programs and forums to build management and analytical capacity within the Forest Products industry Produce skilled, skilled industry industry--oriented Ph Ph.D. D and M M.S. S graduates in a variety of disciplines 15 Center Objectives j A basic Center objective, consistent with the Sloan Industry Centers Program and with Industry Leadership, is to gain an improved understanding of strategically important managerial managerial, economic economic, social, and organizational challenges facing the Industry in a global environment. environment Creating an integrated set of high quality research programs and innovative educational offerings g will achieve this . . . 16 . . . Center Objectives j An equally important objective is to build and sustain ties between the Industry and the academic community in ways that address issues of interest to Industry y stakeholders and scholars. This will include such arenas as relationships between culture and organizational effectiveness, ff i Industry I d responses to the h changing business environment, shifting regulatory processes processes, and emerging trends in information technology. Thus, the programs developed are intended to fuse practical and theoretical concerns. 17 Center Core Strategic Themes The Center focuses on five strategic themes, jointly identified by industry and the academic community to encompass the business issues most critical for successful industry performance: GLOBALIZATION – international forces ENTERPRISE EFFECTIVENESS – factors affecting company performance/competitiveness WORKPLACE TRANSFORMATION – organizational & human u a resources esou ces c changes a ges INNOVATION – opportunities to stimulate new thinking – products – practices – technologies COMMUNITY – relationships with constituencies 18 Center Faculty & Management Functions RESEARCH FACULTY 50+ from GT,, IPST,, UGA,, Ecole Poly., MSU, RIT & U. FL AFFILIATES from Other Universities Director Research Director Education Director Admin Assistant Operations Manager 19 Executive Director Development Industry Liaison IT & Web Site Center Leadership – Staffing Key Personnel Director – School of Economics Executive Director – Industry Executive Emeritus Director – Technology Center Associate Directors – Colleges g of Management g & Liberal Arts/Social Sciences + Technology Research Education Industry Liaison 20 C t O Center Organizational i ti l Structure St t -- Follows F ll Board of Executives Vision & Strategic Direction Vice Provost Research Center Organization Chart -- Staff Support -Business Operations Plus Internet & IT Support, Development, & Communications and Administrative Assistant Associate Director - Research - 21 Management Board Center Steering Committee Director -- Research & Academics -Center Administration Executive Director -- Center Development, -Industry Connectivity Outreach Programs -- Emeritus Director -Center Administration & Connectivity Associate Director - Education - Industry Advisory Board --Tactical Direction -Connectivity Associate Director - Industry Liaison - Industry Support – IAB & Financial 22 Abitibi-Consol AbitibiConsol’’d Accenture Albany Int’ Int’l ArborGen APRIL AstenJohnson Australian Paper BE&K Bowater Buckman Labs ForestExpress Forestw Forest web Georgia--Pacific Georgia Gulf States Imerys I l d Paperboard Inland P b d Jacobs Engineering Kruger g MeadWestvaco P. H. Glatfelter Potlatch Sappi--North America Sappi Stora Enso Tembec Tradition Financial Services UPM––Kymmene N. UPM N Am. Am Weyerhaeuser Alli Alliances – In I -Kind InKi d Support S t & IAB 23 PIMA TAPPI AF&PA USW (PACE) PAPRICAN PAPTAC FPAC Forestw Forest web PaperAge Ecole Polytechnique NC State University Oregon State University A b Auburn U i University it Finnish Forest Research Institute Fisher International Center Board of Executives (BoE) The purpose of the Center Center’s s BoE is to provide a crucial link to leading executives, thinkers and senior administrators -- both inside and outside the Industry -- that can help provide guidance and input to advance the mission and strategic pathway of the Center by better connecting the Center to the world outside the campus environment environment. 24 Center BoE -- Voting Members 1. 2. 3. 4 4. 5. 6. 7 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17 17. 18. 25 19. Weyerhaeuser Company – Executive Vice President (BoE Chair) Buckman Laboratories – Chairman (BoE Vice Chair) Caraustar Industries -- President & CEO Metso Paper -- President Georgia Pacific Corporation -- President & CEO Canfor Corporation -- President & CEO Albany International Corporation – Chairman & CEO Forest Products Association of Canada (FPAC) -- President & CEO Nucor Steel -- Executive Vice President CIBC World Markets -- Managing g g Director John Hancock Financial Services -- Managing Director PACE/USW -- President Federal Reserve Board of New York -- Vice President Sloan Industry Trucking Center -- Director North Carolina State University -- Provost Institute of Paper Science & Technology -- Director Mead Witter Foundation – President Georgia Tech -- Vice Provost Georgia Tech -- Ivan Allen College Dean C t B Center BoE E – Non N -voting Nonti Members M b Irving Forest Products -- Vice President (Center IAB Chair) Imerys y -- Vice President ((IAB Vice Chair)) Center -- Director Center -- Associate Director, Industry y Liaison Center -- Development Director Center -- Executive Director 26 C t F Center Focus A Areas Hi Highlights hli ht Research Education Connectivity 27 & Engagement C t R Center Research hF Foundations d ti 28 Generates o own n data through thro gh field work ork and observation--based methodology observation Studies the industry -- not just things important to the industry Primarily business/social sciences -- rather than technology technology--oriented Results disseminated to both academic and industrial audiences C t R Center Research hP Projects j t Fifteen projects, with subject matter representative of each of the five core CPBIS strategic themes: Globalization Enterprise Effectiveness Workplace Transformation Innovation Community 29 Projects run for 11-3 years Center Research – Globalization Example 30 Chinese Demand – Findings indicate that paper consumption in China has grown in lockstep with GDP but has the potential to increase more rapidly given the comparatively low usage of paper per capita. Demand has grown more responsive to price with increasing privatization of the Chinese economy since 1993. C t R Center Research h – Globalization Gl b li ti & Enterprise Effectiveness Example 31 Market Pulp – Careful modeling indicates that mills producing napkins could improve their financial performance f b using by i pulps l off enhanced h d quality. lit Alternative pulps, if resulting in savings of approximately pp y 5% in manufacturing g or in products p carrying a 5% price premium, would generate increasing returns even if they cost as much as 16% more than current pulp pulp. Tests evaluate characteristics of various pulps and suggest which ones might offer economic returns of this sort. Center Ce te Research esea c – Enterprise te p se Effectiveness Example 32 Industry I d t Consolidation C lid ti (and ( d Antitrust) A tit t) – A variety i t off studies t di examine the changing competitive structure of the industry and its performance across time. Historical studies document the role of antitrust in shaping industry structure and competitive strategy. They suggest that government policy, which blocked firms from achieving market dominance in particular product segments and regions while tolerating diversification into new markets, may well have discouraged certain forms of innovation. Economic analysis of consolidations since 1970 indicate that increasing g consolidation has been accompanied p by improved priceprice-cost ratios, but that firms have not generally succeeded in pushing prices higher. Overall economic performance, despite the improved ratios, has lagged during this period of increasing concentration. C t R Center Research h – Enterprise E t i Effectiveness Example 33 Forest Biotechnology – A modeling exercise suggests that genetically engineered loblolly pine containing t i i 20% higher hi h specific ifi gravity, it if substituted b tit t d for 20% of existing plantings in the Southeastern U.S., could g generate as much as $300 million in savings per year in a standard linerboard mill operating in the region. Existing tree breeders who reviewed the model affirm its presumptions regarding forest practice as realistic. Center Research – Enterprise Effectiveness Example 34 MRO Supply Chains – Response to a survey of mill managers, though limited, indicates that mills are limiting the number of contractors for maintenance, repair, and operations and are entering into contracts of longerlonger-term duration. This result suggests that mills are positioning themselves for ongoing partnership arrangements with suppliers, which have proved beneficial in other industries. industries Center Research – Enterprise Effectiveness Example 35 Integrated Environmental and Economic Performance – Working in collaboration with industry partners at two newsprint mills, researchers developed novel spreadsheetspreadsheet-based accounting systems intended to map traditional economic performance meas measures res alongside a set of meas measures res based upon resource inputs and outputs (expressed in terms of mass, energy, etc.). This work provides tools for alternative assessment of mill performance under different regulatory and economic conditions. Center Research – Enterprise Effectiveness Examples 36 Price Forecasting – Researchers developed a tool for forecasting prices for linerboard, semisemi-chemical medium, hardwood pulp, and softwood pulp. It is freely available on the web. Trucking Logistics – Corrugated box plants vary considerably in the ways they organize outbound shipments. While most have turned to thirdthird-party operators p to handle scheduling, g, contractual arrangements vary significantly. Potential savings through use of best practices range from 9 9--33% at three plants studied in detail detail. Center Research – Workplace Transformation Example 37 High Performance Work Systems – A survey of human resource managers offers a profile of various workforce practices deployed at paper mills during the past decade. As of September 2004, the results covered some 31 plant locations. Center Ce te Research esea c – Innovation o at o & Community Example 38 Historical perspectives – Research completed in this area traces the long history of innovation and competitive strategy in the American pulp and paper industry, including several examples of product innovation. innovation One line of research here maps the industry’s response to water pollution regulations, paying particular attention to h how such h regulation l ti influenced i fl d investments i t t in i research h and, ultimately, deployment of mill technology. This project considers the role of collaborative research and it effectiveness its ff ti in i promoting ti innovation. i ti This Thi project j t helps orient newcomers to the industry and provides lessons from past experience that should prove useful as the industry responds to future changes in the competitive and regulatory environments. Center Research – Community Example 39 Black Liquor Gasification – Researchers assessed existing and potential networks among mill managers, community officials, government regulators, and scientific researchers who might organize efforts to promote black liquor gasification, one of the most promising alternative technologies in pulp production. They conclude that a strong basis for potential collaboration exists, but raise doubts about whether such collaboration will be mobilized given spotty research funding and a strong current commitment to improving existing boiler performance. T i l Center Typical C t Research R h Outputs O t t P Papers and d presentations t ti on research h findings fi di White Papers (commissioned research) “Is there a p productivity y gap g p between the U.S. and European Pulp and Paper Producers?” http://www.paperstudies.org/research/WhitePaperTe chnologyGap.pdf Database Tools -- examples Price Behavior Tool for Pulp and Paper Industry Includes price movement charts for several grades and a live forecasting tool 40 Center Research Comm Communications nications Primary Dissemination Vehicles: Papers and presentation made in academic circles and journals Industry trade journals At companies –TAPPI – PIMA – Other Industry Conferences/Venues Issues Enhanced Access to industry personnel & data for basic industry information & surveys Continual IndustryIndustry-based needs inputs & assessment Enhanced Industry awareness of CPBIS – its value proposition & potential 41 C t Ed Center Education ti Initiatives I iti ti 42 Creation and Delivery of Courses on Campus Creation of Course Modules for Use Within E i ti Courses Existing C on Campus C Involvement of Students in Research and Internships on and off Campus Professional Education (PE) & Distance Learning Webcast Programs + Seminars & Conference Programs P f Professional i l Education Ed ti Program P 43 Management Development for Enhanced Performance Art of Leadership Effectively Managing Change Creating g Successful Bargaining g g & Negotiations g Outcomes Effectively Managing High Performance Teams Leveraging People Resources for Improved Performance Improving Capital Effectiveness Strategic Decision Making Under Uncertainty Customer Relations Management On Campus WeekWeek-long Course – Twice Per Year Excellent feedback from attendees Di t Distance Learning L i Webcast W b t Program P Real Time -- Online short courses 16 16--20 sessions planned / year Offered jjointly y with PIMA Distance Learning Webcast Program Examples – 5 to 9 Ninety minute sessions per program series offering – 2 to 3 series per year: “Defining and Achieving a Reliability Culture” “Problem Solving at the Speed of Business” “Meeting Effectiveness” “Enhancing Leadership and Supervisory Skills” 44 Sponsors: CPBIS -- Paper Industry y Connectivity y [ e. g. PIMA, Paper Age] Industry/Academia/ Associations To Partners To CPBIS To Sponsors p Research Results Education Products Academic Connectivity Challenging the Status Quo Communities of practice Sloan Foundation Core Funding, Principles, & Directives Industry Access Support Contacts Research Ideas/Focus IPST@GT 45 Industry Support & Access Industry Connectivity Issues & Ideas Awareness Strategy PE Course Partnering Industry Knowledge Sharing Sh i Resources R Research Results Membership Support CPBIS To CPBIS Infrastructure Support Industry Access Support Contacts and Knowledge To CPBIS CE Course Partnering Industry Connectivity Issues/Ideas Sharing Sharing Resources Business Impacts, Improved Skills, In-depth p Knowledge g To CPBIS To IPST@GT Center Partners Research Faculty & GRAs Teaching Faculty for CE Infrastructure Support Center Sustainability y To GA TECH Research & Education $ Industry Connectivity/Knowledge Research Seminars Academic Courses Student and Faculty Support GA TECH Current Communications to Industry on g g CPBIS – Engagement 46 Monthly Electronic Newsletter Website www.paperstudies.org or www.cpbis.org Numerous Presentations on CPBIS across North America Center Brochures & Marketing Materials F Frequent t Collaborative C ll b ti Meetings M ti – Discussion Sessions with Industry Management Discussion – Questions – Issues Looking g Out – 47 Visit the CPBIS Web Site www.cpbis.org bi or www.cpbis.gatech.edu 48