Each issue of PaperMoney is approximately 500 fact filled pages.
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Management Side
The Final Word by Jim Thompson
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Humankind’s progression down the path of industrialization, automation, and productivity is becoming extremely interesting. One hundred years ago, an application of human skills, in both dexterity and mental categories, coupled with energy producing devices, created a certain level of productivity, unheard of in the history of the world to that time. Since then, dexterity skills have diminished in importance while mental skills, at least for some time, continued in importance. In the last 25 years, the increasing capabilities and relative low cost of computers has further diminished the requirements of mental skills and nearly eliminated the need for skills of dexterity, except in the arts and sports. Said another way, industrial progression first trivialized the need for skills of dexterity. Now the computer age is trivializing mental skills. On top of that, countries that used to be called 3rd world countries are rapidly catching on and joining the progress.

Looked at another way, one can look at the proportion of “doers” vs. “administrators” in any manufacturing company. When manufacturing was a blacksmith or a wagon maker, the company was composed of all “doers” and no “administration.” Today, it is not uncommon for companies to be staffed well over 50% in what would traditionally be considered administration functions. In fact a very large company I worked for way back in the 1970s touted as an advantage even then that their work force was only 50% engaged in direct manufacture of its products. Now, additionally, those administration functions are becoming less and less mental skill requirements and more and more computerized. In the future, for society as a whole (not an individual company issue), the problem may be how to gainfully employ everyone, for we have succeeded in trivializing the production of very high quality goods and services (hint: adopting the view of the Luddites is not the answer). I think the “interesting times” our own industry has experienced in the last decade and a half, may be a mere prelude to those ahead for society as a whole.

Take, for instance, textile manufacturing. There has been much weeping and wailing here in the southeastern United States concerning textile jobs going offshore. What hasn’t been said is this: if they ever come back, they will come back with more productivity tools than they had when they left. In other words, it will take significantly less labor to make a shirt in the South Carolina textile factory of the future than it did in the U.S. shirt factory of the late 1990s. It is inevitable.

So far, all of this has resulted in higher and higher standards of living. Look at the goods and services that you have compared to those your parents had. A great example is in the pet food and services industry — I heard recently that in the United States it has grown from about USD 13 billion in the mid 1990s to nearly USD 47 billion today, a mere dozen years later. What an indication of growth in disposable income. So here is our challenge: what can we do to tap into this rising standard of living; indeed what can we do to exploit all the issues I have brought up here to the betterment of the pulp and paper industry? The winners will be those that can successfully answer this.


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