A SELF-ASSESSMENT BASED METHOD FOR POST- COMPLETION AUDITS IN PAPER PRODUCTION LINE INVESTMENT PROJECTS doc

C247etukansi.fm Page Monday, June 12, 2006 1:36 PM ACTA OULU 2006 UNIVERSITY OF OULU P.O Box 7500 FI-90014 UNIVERSITY OF OULU FINLAND A C TA U N I V E R S I TAT I S S E R I E S A B C D E F G E D I T O R S SCIENTIAE RERUM NATURALIUM Professor Mikko Siponen HUMANIORA Professor Harri Mantila TECHNICA Professor Juha Kostamovaara MEDICA Professor Olli Vuolteenaho O U L U E N S I S C 247 ACTA Timo Jortama A SELF-ASSESSMENT BASED METHOD FOR POSTCOMPLETION AUDITS IN PAPER PRODUCTION LINE INVESTMENT PROJECTS SCIENTIAE RERUM SOCIALIUM Senior assistant Timo Latomaa SCRIPTA ACADEMICA Communications Officer Elna Stjerna OECONOMICA Senior Lecturer Seppo Eriksson EDITOR IN CHIEF Professor Olli Vuolteenaho EDITORIAL SECRETARY Publication Editor Kirsti Nurkkala ISBN 951-42-8123-3 (Paperback) ISBN 951-42-8124-1 (PDF) ISSN 0355-3213 (Print) ISSN 1796-2226 (Online) U N I V E R S I T AT I S O U L U E N S I S FACULTY OF TECHNOLOGY, DEPARTMENT OF MECHANICAL ENGINEERING, UNIVERSITY OF OULU C TECHNICA ACTA UNIVERSITATIS OULUENSIS C Te c h n i c a TIMO JORTAMA A SELF-ASSESSMENT BASED METHOD FOR POST-COMPLETION AUDITS IN PAPER PRODUCTION LINE INVESTMENT PROJECTS Academic Dissertation to be presented with the assent of the Faculty of Technology, University of Oulu, for public discussion in Raahensali (Auditorium L10), Linnanmaa, on June 21st, 2006, at 12 noon O U L U N Y L I O P I S TO, O U L U 0 Copyright © 2006 Acta Univ Oul C 247, 2006 Supervised by Professor Juhani Niskanen Professor Pekka Kess Reviewed by Professor Josu Takala Doctor Kari Juppi ISBN 951-42-8123-3 (Paperback) ISBN 951-42-8124-1 (PDF) http://herkules.oulu.fi/isbn9514281241/ ISSN 0355-3213 (Printed ) ISSN 1796-2226 (Online) http://herkules.oulu.fi/issn03553213/ Cover design Raimo Ahonen OULU UNIVERSITY PRESS OULU 2006 Jortama, Timo, A self-assessment based method for post-completion audits in paper production line investment projects Faculty of Technology, University of Oulu, P.O.Box 4000, FI-90014 University of Oulu, Finland, Department of Mechanical Engineering, University of Oulu, P.O.Box 4200, FI-90014 University of Oulu, Finland Acta Univ Oul C 247, 2006 Oulu, Finland Abstract The aim of this technologically oriented study was to develop an evaluation method for postcompletion audits of investment projects in paper production lines The development work was based on the constructive research approach The objectives of the method were practical applicability, a comprehensive framework, and measures of project performance The evaluation method developed here is based on an adapted Malcolm Baldrige self-assessment framework, which has been embedded with three evaluation perspectives: project Targets (T), Risk management (R), and company Strategy (S) The compositions of these perspectives i.e TRS perspectives, serve as the fundamental basis for a value added project The evaluation criteria have been designed to fulfil the requirements of the paper industry and demanding projects Scoring guidelines are used as a basis for evaluation results Furthermore, supportive evaluation tools were developed to improve the accuracy and comparability of evaluation results Evaluation is conducted by a group which consists of qualified tutors, project experts and facilitators The latter are used especially to increase objectivity The method was tested with two cases studies which were applied in a greenfield paper machine project The first case study focused on technology choices The second case study was a full-scale study of the whole project scope The evaluation results were relatively accurate, and feedback results were particularly positive Usage of the TRS perspectives can produce information which benefits decision-making The method is capable of measuring both technical facts and subjective opinions Moreover, the method is applicable in practice and can improve the investment process in general Keywords: evaluation, paper machine, technology, TQM To my family Acknowledgements This thesis was completed while working as a technology manager in the Graphic Papers business area in Stora Enso Oyj The generation of the research idea started years ago when I was working in various positions at the Oulu paper mill, actually since 1996 The stimulus for doing the research has been the fascinating atmosphere of carrying out ever more successful paper machine projects I would like to express my gratitude to Stora Enso Oyj and to the persons in Corporate Strategy as well as the Oulu mill management for making this research possible Furthermore, I am grateful to everybody who participated in the case study of the Oulu PM7 project My special thanks go to the people in the Imatra Research Center, whose professional contribution to the search for information has been essential Mr Petri Nieminen and Mr Mauri Koivuranta as my associates in our daily work have contributed to the research with their thought-provoking discussions and viewpoints I want to thank both of them for their input I wish to thank Mr Hannu Ruokolainen and Mr Sami Pitkänen Sr for their support and interest in this research They have also inspired me as pioneers in world-class projects During all these years Mr Pertti Pitkänen has given me his continuous support and encouragement, which has been vital for doing the thesis I am deeply grateful for all this I wish to thank my supervisors, Professor Juhani Niskanen and Professor Pekka Kess, for the arrangements and their guidance in the research I wish to acknowledge Professor Josu Takala and Doctor Kari Juppi for reviewing the manuscript of this thesis and giving valuable comments Ms Sue Pearson of Pelc Southbank Languages is acknowledged for revising the English of the manuscript Finally, I would like to thank my wife Pirjo for her support and my daughter Laura for her patience, and both of them for their understanding throughout this project Kempele, April 2006 Timo Jortama References Aho T (1982) Investointilaskelmat Weilin+Göös & Suomen 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Governance and social responsibilities 70 Strategic planning 85 The Strategic planning category examines how your organization develops STRATEGIC OBJECTIVES and ACTION PLANS Also examined are how your chosen STRATEGIC OBJECTIVES and ACTION PLANS are deployed and changed if circumstances require, and how progress is measured 2.1 Strategy development 40 2.2 Strategy deployment 45 Customer and market focus 85 The Customer and market focus category examines how your organization determines the requirements, expectations, and preferences of CUSTOMER and markets Also examined is how your organization builds relationships with CUSTOMERS and determines the KEY factors that lead to CUSTOMER acquisition, satisfaction, loyalty, and retention, and to business expansion and SUSTAINABLITY 3.1 Customer and market knowledge 40 3.2 Customer relationship and satisfaction 45 Measurement, analysis, and knowledge management 90 The Measurement, analysis, and knowledge management category examines how your organization selects, gathers, analyses, manages, and improves its data, information, and KNOWLEDGE ASSETS Also examined is HOW YOUR organization reviews its performance 4.1 Measurement, Analysis, and review of organizational performance 45 4.2 Information and knowledge management 45 Human resource focus 85 The Human resource focus category examines HOW YOUR organization’s WORK SYSTEMS and your employee LEARNING and motivation enable employees to develop and utilize their full potential and AUGMENT with your organization’s overall objectives, strategy, and ACTION PLANS Also examined are your organization’s efforts to build and maintain a work environment and employee support climate conductive to PERFORMANCE EXCELLENCE and to personal and organizational growth 5.1 Work systems 35 5.2 Employee learning and motivation 25 5.3 Employee well-being and satisfaction 25 188 Categories & Items Description Process management 85 45 6.1 Value creation process 6.2 Support process and operational planning Business results Point values The Process management category examines the KEY aspects of your organization’s PROCESS management, including KEY product, service, and business PROCESSES for creating CUSTOMER and organizational VALUE and KEY support PROCESSES This category encompasses all KEY PROCESSES and all work units 40 450 The Business results category examines your organizational PERFORMANCE and improvement in KEY business areas – product and service outcomes, CUSTOMER satisfaction, financial and marketplace PERFORMANCE, human resource RESULTS, operational PERFORMANCE, and leadership and social responsibility PERFORMANCE LEVELS are examined relative to those of competitors 7.1 Product and service outcomes 100 7.2 Customer-focused results 70 7.3 Financial and market results 70 7.4 Human resource results 70 7.5 Organizational effectiveness results 70 7.6 Leadership and social responsibility results Total points 70 1000 189 Appendix REC 7.6 LUMI7 – GAP analysis REC 7.6 LUMI7 – GAP analysis Overview: GAP analysis has been made for Stora Enso Oulu PM7, LUMI7 project, and the results have been calculated according to the final report (December 1999) and common target setting (YTA) reporting Calculations for percentage scoring are based on GAP analysis principles i.e “%-linear” is the linear correlation between GAP analysis results, and “%-arsinh” is the logarithmic correlation These calculations are valid in the area Results for Item 7.6 Assets & product performance BASIC GAP ANALYSIS 7.6 Assets & product performance Production, target, [t/a] Production, actual, [t/a] GAP-capacity, [%] Cost, target, [M€/a] Cost, actual, [M€/a] GAP-cost, [%] year 2.year 256 243 153 129 PM7 speed, target, [m/min] PM7, actual [m/min] GAP-PM7 speed, [%] PM7 Nov-Dec '99 average CM7 speed, target, [m/min] CM7, actual [m/min] GAP-CM7 speed, [%] CM7 Nov-Dec '99 average PM7 time-efficiency, target, [m/min] PM7 time-efficiency, actual [m/min] GAP-PM7 time-efficiency, [%] PM7 year '99 average L7 material efficiency, target, [m/min] L7 material efficiency, actual [m/min] GAP-L7 material efficiency, [%] Line no year '99 average Base paper formation, target, [%] Base paper formation, actual, [%] GAP-Base paper formation, [%] PM7 year '99 avg 65 gsm, grade C 288 299 156 142 total %-arsinh %-linear 544 542 -0,4 46 50 309 271 12,3 85 62 1220 1321 8,3 81 58 1450 1490 2,8 69 53 92 82 -10,9 17 39 80 80,8 1,0 60 51 5,90 5,99 -1,5 37 48 Remarks: The target value for PM7 speed was lower in the investment card (1150 m/min for 105 g/m2 products) and higher in the YTA targets (1300 m/min monthly average); the value 1220 m/min has been used according to experts’ recommendation YTA targets for material efficiency have been low Base paper formation values are measured without eucalyptus pulp C247etukansi.fm Page Monday, June 12, 2006 1:36 PM ACTA UNIVERSITATIS OULUENSIS SERIES C TECHNICA 230 Kansanen, Kimmo (2005) Wireless broadband single-carrier systems with MMSE turbo equalization receivers 231 Tarkkonen, Juhani (2005) Yhteistoiminnan ehdoilla, ymmärryksen ja vallan rajapinnoilla Työsuojeluvaltuutetut ja -päälliköt toimijoina, työorganisaatiot yhteistoiminnan areenoina ja työsuojelujärjestelmät kehittämisen kohteina 232 Ahola, Timo (2005) Intelligent estimation of web break sensitivity in paper machines 233 Karvonen, Sami (2006) Charge-domain sampling of high-frequency signals with embedded filtering 234 Laitinen, Risto (2006) Improvement of weld HAZ toughness at low heat input by controlling the distribution of M-A constituents 235 Juuti, Jari (2006) Pre-stressed piezoelectric actuator for micro and fine mechanical applications 236 Benyó, Imre (2006) Cascade Generalized Predictive Control—Applications in power plant control 237 Kayo, Olga (2006) Locally linear embedding algorithm Extensions and applications 238 Kolli, Tanja (2006) Pd/Al2O3 -based automotive exhaust gas catalysts The effect of BaO and OSC material on NOx reduction 239 Torkko, Margit (2006) Maatilakytkentäisten yritysten toimintamalleja Laadullinen tutkimus resursseista, kehittymisestä ja ohjaustarpeista 240 Hämäläinen, Matti (2006) Singleband UWB systems Analysis and measurements of coexistence with selected existing radio systems 241 Virtanen, Jani (2006) Enhancing the compatibility of surgical robots with magnetic resonance imaging 242 Lumijärvi, Jouko (2006) Optimization of critical flow velocity in cantilevered fluidconveying pipes, with a subsequent non-linear analysis 243 Stoor, Tuomas (2006) Air in pulp and papermaking processes 244 György, Zsuzsanna (2006) Glycoside production by in vitro Rhodiola rosea cultures 245 Özer-Kemppainen, Özlem (2006) Alternative housing environments for the elderly in the information society The Finnish experience Book orders: OULU UNIVERSITY PRESS P.O Box 8200, FI-90014 University of Oulu, Finland Distributed by OULU UNIVERSITY LIBRARY P.O Box 7500, FI-90014 University of Oulu, Finland C247etukansi.fm Page Monday, June 12, 2006 1:36 PM ACTA OULU 2006 UNIVERSITY OF OULU P.O Box 7500 FI-90014 UNIVERSITY OF OULU FINLAND A C TA U N I V E R S I TAT I S S E R I E S A B C D E F G E D I T O R S SCIENTIAE RERUM NATURALIUM Professor Mikko Siponen HUMANIORA Professor Harri Mantila TECHNICA Professor Juha Kostamovaara MEDICA Professor Olli Vuolteenaho O U L U E N S I S C 247 ACTA Timo Jortama A SELF-ASSESSMENT BASED METHOD FOR POSTCOMPLETION AUDITS IN PAPER PRODUCTION LINE INVESTMENT PROJECTS SCIENTIAE RERUM SOCIALIUM Senior assistant Timo Latomaa SCRIPTA ACADEMICA Communications Officer Elna Stjerna OECONOMICA Senior Lecturer Seppo Eriksson EDITOR IN CHIEF Professor Olli Vuolteenaho EDITORIAL SECRETARY Publication Editor Kirsti Nurkkala ISBN 951-42-8123-3 (Paperback) ISBN 951-42-8124-1 (PDF) ISSN 0355-3213 (Print) ISSN 1796-2226 (Online) U N I V E R S I T AT I S O U L U E N S I S FACULTY OF TECHNOLOGY, DEPARTMENT OF MECHANICAL ENGINEERING, UNIVERSITY OF OULU C TECHNICA ... the research gap: Can a practical investment project technology evaluation method for post -completion audits in paper production lines based on a self-assessment framework produce information which... world forest area) Planted forests and new pulp mills as well as paper mills in Asia and South America have changed pulp and paper supply The world’s demand for paper and paperboard is currently increasing... the quantitative and qualitative quality of an investment project This study develops a method for evaluating investment projects in a paper production line in its technological and operational