The Center for Paper Business and Industry Studies (CPBIS), in partnership with the Institute of Paper Science and Technology (IPST) and working in concert with other global industry organizations plus the AF & PA's Agenda 2020 initiative, will host the second "Rethink and Discovery" program beginning at 2 PM on June 20th from the Colonial Room in the Westin St. Francis Hotel in San Francisco. The program will be simultaneously web-broadcasted for interactive participation by paper industry professionals worldwide.

This "Thought-Leadership Program" is designed to share business and technological views that clarify understandings and help stimulate an industry-wide change and transformation process. The plan is for three yearly such programs that will each be led by different and innovative panels of distinguished academic, business and industry leaders presenting informative and provocative views to help stimulate and guide the discovery of needed industry changes in education, business and technology.

The first "Rethink & Discovery-I" program ("Beyond Today's Papermachine") was web-broadcast from the Paper Summit 2002, held in March at the Georgia World Congress Center in Atlanta. Taking a first look at gaps, needs and barriers in the technology and business management arenas for the paper industry, the first program had some 150 conference attendees, and it attracted interactive participation from 36 other multi-participant locations around the world, including real-time questions and views being submitted from Finland, Brazil, England, Spain, Mexico, and the U.S. to the panelists.

According to Jim McNutt, Executive Director of CPBIS, "Industry leaders are mindful of the issues and the need for fundamental change and transformation of the industry; the problem relates to the old adage of defining the process to fix the bicycle while continuing to ride in the race."

Del Raymond, Director, Strategic Energy Alternatives at Weyerhaeuser will give the keynote address at the June 20th thought-leadership program entitled, Rethink and Discovery II -- Superintendent's Roundtable. Dr. Raymond also has been a pioneer in championing and developing the forest products vision, Agenda 2020, a strategic planning document that describes where the industry will need to be in the year 2020 to be competitive. He has been involved with the U.S. Department of Energy's Industries of the Future Program since its inception. He is currently Chair of the Chief Technology Officers Committee that guides implementation of this vision for the forest products industry. His keynote will set the overall tone for the program and lay out the key linkages between it and the ongoing Agenda 2020 process.

Rethink and Discovery II will focus on Division and Mill Level operations management issues. It will include two panel sessions, one with the recent past, current, and incoming PIMA Presidents, and one with Seven Mill Level Management leaders. The "Thought-Leadership Program", of which Rethink and Discovery II is a part of, is designed to share business and technological views that clarify understandings and stimulate an industry-wide change and transformation process. The plan is for three yearly such Rethink and Discovery programs that will each be led by different and innovative panels of distinguished academic, business and industry leaders presenting informative and provocative views to help stimulate and guide the discovery of needed industry changes in education, business and technology.

Katherine Buckman-Davis, Chairman of the Board of Buckman Laboratories Group will kick off the event with an overview of what Rethink and Discovery is all about and a synopsis of Rethink and Discovery I. Del Raymond will follow with his keynote address, and then Jim McNutt (CPBIS) will host the first panel. His fellow panelists will include PIMA Presidents (Past, Present, and Incoming) Rick Larrick (GP); Barre Mitchell (Bowater); and Ray Heuchling (Irving). Each of the panelists will provide their own observations of what is and is not working in the industry today.

The second panel will be hosted by DD Smith (Buckman Laboratories). His fellow panelists will include Boyd Curtis (Potlatch -- Lewiston), Tiger Teng (Green Bay Pkg. -- Morrilton), Doug Howard (Boise Cascade -- Boise), John Martin (Riverwood -- Macon), Nyle Parchim (Weyerhaeuser -- Campti), Simon Gore (Bear Island, Retired -- Ashland), and Steve Farmer (IP -- Roanoke Rapids). This panel will provide their observation on what are the critical issues for this industry at the mill level and what are the roadblocks and barriers to success.

The Rethink and Discovery II program (see the Agenda following) will be from 2 PM to 5:45 PM [Pacific Daylight Savings Time- GMT minus 8], in the Colonial Room of the Westin St. Francis Hotel. The program will be simultaneously web-broadcast for interactive participation by paper industry professionals worldwide, and it will be recorded for later review and comments.

"Rethink & Discovery - II - Superintendents' Roundtable"
Process for Simulating "Innovation and Creativity"
PIMA International Management Conference, June 20, 2002
Colonial Room, Westin St. Francis Hotel, 2 - 5:45 PM

The industry must begin to operate much more innovatively, creatively, effectively and economically to survive! This program will provide a set of work sessions focused on Division and Mill Levels Management issues. The goals will be to identify: 1) the major gaps, need, barriers to improved mill efficiencies and financial results; 2) what must be done to improve mill efficiencies; 3) what criteria are needed to assure effective management of improved mill efficiencies; 4) what are the proper roles of capital, human resources, training, maintenance and so on for enhanced mill operations efficiencies and financial results?

The overall intent is to use "Innovative/Creative Economically Grounded Best Practices" to seek enhanced mill operating efficiencies aimed at improved enterprise financial performance. This program is the second in a series of an ongoing thought leadership process aimed at identifying substantive industry gaps, needs, and solutions to better enterprise financial performance over time.

Program Agenda:

2:00 To 2:20 PM -- Introductory Remarks: Kathy Buckman-Davis of Buckman Laboratories will set The Stage For The Special Program by outlining The Approach And Goals -- Including Down Stream Plans For More Rethink & Discovery Programs plus Introduce Key Players For The Program & Keynote Speaker and provide an overview of the March 2002 Paper Summit Rethink & Discovery - I "Beyond Today's Papermachine" Program

2:20 To 2:40 PM -- Keynote Commentary: Del Raymond of Weyerhaeuser and a key leader for the Industry's Agenda 2020 Program efforts will provide focused/to the point keynote comments to set the overall tone for this special program and lay out linkages to the ongoing agenda 2020 program.

2:40 To 3:15 PM -- First Panel Session: Jim McNutt from the Center for Paper Business and Industry Studies (CPBIS) will host the first panel session, which will include the past, current and incoming PIMA Presidents -- Rick Larrick (GP); Barre Mitchell (Bowater); & Ray Heuchling (Irving). Each panelist will provide a "From The Heart -- What Is Working And What Is Not" Address.

3:15 To 3:45 PM -- First Panel & Keynote Speaker Q&A/Open Forum Facilitated Session

3:45 To 4:15 PM -- Second Panel Session: DD Smith of Buckman Laboratories will host the second panel session, which will include seven mill level superintendents -- Boyd Curtis (Potlatch -- Lewiston); Tiger Teng (Green Bay Pkg. -- Morrilton); Doug Howard (Boise Cascade -- Boise); John Martin (Riverwood -- Macon); Nyle Parchim (Weyerhaeuser -- Campti); Simon Gore (Bear Island, Retired -- Ashland); and Steve Farmer (IP -- Roanoke Rapids. The panel is to collectively address - "What Are The Mill Level Critical Issues And Roadblocks/Barriers To Success" they see and why?

4:15 To 4:45 PM -- Second Panel Facilitated Push/Pull Discussion Session: This session is intended to draw out superintendents' viewpoints on pre-conference submitted questions/issues.

4:45 To 5:15 PM -- Second Panel Q&A/Open Forum Facilitated Session

5:15 To 5:40 PM --First & Second Panels Joint Facilitated Q&A/Open Forum Session: Jim McNutt, DD Smith and Kathy-Buckman Davis will co-host this program ending session - an interactive audience exchange on gaps, needs and barriers to optimal mill financial performance across time.

5:40 To 5:45 PM -- Closing Remarks & Adjourn: Kathy Buckman-Davis will wrap up the program.

• Program Premise = Paper Industry must modernize/retrofit innovatively, creatively, economically.
  
• Program Assumption = Integrated/focused program will stimulate out of box thinking;
  
• Overall Mission = Seek innovative ways forward for enhanced industry returns & value creation;
  
• Program Goals = Stimulate dialog on ways forward;
  
• Program Activities = Facilitated meeting of industry thinkers - brainstorming/discussion mechanism;
  
• Program Outcomes = Understand that this is a process, not an event - we need to focus on long term efforts to identify gaps, needs, barriers and next steps forward.
  

• Primary manufacturing/capital intensive/fragmented/ technology based/mature/monolithic & slow to adapt industry sector?
  
• Focused on doing what we do instead of figuring out what we should be doing in the first place?
  
• Key competitive focuses are on cost competitiveness & process BMP's - not on firm uniqueness?
  
• Knowledge sharing across firms and poor sharing within firms that together damage competencies?
  
• Highly insular - internally focused - not customer focused & reactive instead of proactive?

• The North American Paper Industry is under severe pressure, failing to meet its cost of capital on average over the past 15 years.
  
• Although North America enjoys the highest per capita consumption of paper-based products globally, the majority of new consumers/consumption will be from Asia.
  
• Major new capital investments are in Asia and South America, which are resulting in the lowest cost production facilities in the world.
  
• Congruently, North America has begun to suffer from a stagnant domestic market and diminished export market potentials.
  
• Our domestic industry seems to lack innovative thinking, customer focus, effective capital assets investments and management outcomes, and a true sense of the value of human capital and human capital management.
  
• The industry needs to become people and knowledge oriented as well as customer focused.
  
• We lack effective new R&D and a sound perspective of what creates and sustains value.
  
• We need to move from a place of "comfortable inaction" to one of value creation action based on thoughtful and necessary risk taking if we are to position ourselves to implement the needed technological breakthroughs 5 or 10 years from now.

• Panel Session 1 - Hosted by Jim McNutt (CPBIS). Panel Members - Mark Wilde (Deutsche Bank, Alex Brown), Mike Kocurek (North Carolina State University), Gary Helik (Tradition Financial Services), and Jim Ferris (IPST).
  
• Panel Session 2 - Hosted by Bob Kinstrey (Jacobs Engineering). Panel Members - David Ashcraft (Temple-Inland, retired, and North Carolina State University), Dan Cappell (Asten-Johnson), Bob Harrison (formerly of Beloit and GL&V), and Bob Eamer (TAPPI Board and Domtar, retired).

• The effects of the sagging global economy and the strong US Dollar on shrinking exports
  
• Excess manufacturing capacity in highly competitive but slow growing market - potential contributors toward pricing volatility
  
• The loss of technical expertise - the short and long-term impacts of corrective measures like downsizing and consolidation
  
• A continued strategy for short-term business performance and process optimization
  
• A growing risk aversion and its relationship to dwindling investments in research and/or the commercialization of new processes, technologies, and products
  
• The growing inability to attract students and skilled labor into the industry.

• Technology - Our 100 year old technology needs risk investments and "patient" funding necessary to support innovative research. Key considerations raised were:
  • A better ROI model is needed for measuring the commercialization of new technologies, processes and products.
    
  • Need to move beyond stock performance and risk aversion, and begin rewarding innovators and risk takers.
    
  • "Look-outside-the-box" at similar industries (i.e. steel industry), and listen to the technological and business lessons learned.
    
  • Off-loading of company-concentric research to outside institutions and companies that are threatened by financial solvency and budgetary issues places needed business-enhancing R&D at substantial risk.

• Products & Pricing - We need better information and understanding of price behavior such as what global market factors most influence pricing behavior.
  

• Industry Structure & Information - Our accounting systems need to help drive computerized production and process control systems, fragmentation of industry associations interferes with effective communications. Today we see:

  • Failure of communications between supplier groups and manufacturers on how needed technical solutions can be identified, studied, and resolved.

  • Downsizing impacting our ability to deal effectively with complex issues at the mill operations level because we lack the proper change management training and tools to absorb downsizing effectively at the mill level.

• Employee Talents, Education & Training - People and knowledge are critical to success. Our failure of late is to find the needed good people, secure their attendant knowledge, advance their skills, and retain both the people and the knowledge in the industry. In this regard, we need to understand that:

  • Workforce training investments have been inadequate.
    
  • We have a growing need for new talents while image and recruiting is inadequate.
    
  • New cooperative education programs need to be developed -- where, how and what is taught needs to change - educators, suppliers, associations and manufacturers need to cooperate to affect effective, efficient needed changes in this regard.
    
  • We need to understand that there is an ROI for training and education - equally important how to derive and work with it.