Uptime: Matt and Jefferson, WESCO

Crib Crawls and Curve Balls:

Wesco's Jefferson Smith and Matt Lasnicki on Supply Chain Challenges
From aging infrastructures to multi-company mergers, Wesco's Jefferson Smith and Matt Lasnicki  have helped their pulp and paper industry customers through a variety of supply chain challenges. As Smith shares in his Paper360° article, Operations Depend on Equipment Supply Chains, it's an area mills ignore at their peril: One delayed part can rack up millions of dollars in downtime losses.

In this episode of Uptime, Jeff and Matt, along with co-hosts Mark Rushton and Jan Bottiglieri, discuss the current reality for supply chain management—and some strategies for dealing with a world that's increasingly disruptive. "It all compounds," says Lasnicki. " The cost to operate (mills and converting facilities) keeps going up and if they don't find ways to drive efficiency, it's going to be a much bigger challenge for them in the future."

Stick around for the Uptime Lightning Round, when we ask Matt and Jeff about the most exciting things they see ahead for supply chain management in paper and packaging. Thanks for listening!

Access additional articles and case studies about effective supply chain management through Wesco's Knowledge Hub.

 Review Wesco's products and services for pulp and paper industry customers.

 Access more resources through the TAPPI OnDemand platform:

• Paper360° Archives of searchable articles
• Search a variety of other industry topics, including Market Trends

Transcript

SPEAKER_03 0:03

The pulpit paper, tissue and packaging industries are always growing, changing, and surprising us every day with something new.

SPEAKER_04 0:11

And what drives that dynamic growth? Our industry's people. Hi, I'm Dan Bodellary, editor of Paper360.

SPEAKER_03 0:20

And I'm Mark Rushton, editor of Tissue 360. Welcome to Uptime, a paper and packaging podcast. Each month we will connect our readers and listeners with some of the best stories and articles from Tappy publications.

SPEAKER_04 0:37

A dose of positivity to fuel your workday. That's Uptime. Let's get started.

SPEAKER_05 0:44

We're here with our folks from West Coast to talk about supply chains. Could you guys introduce yourselves?

SPEAKER_02 0:52

So my name is Jefferson Smith, and I'm a director with West Coast Global Accounts. Primary responsibilities for the pulp and paper industry.

SPEAKER_00 1:00

Hi, I'm Matt Laznikki. I'm the uh global account manager that uh is responsible for managing some of our large uh global account customers in the pulp and paper industry. And uh I've been with Wesco since 1987 and handled many, many different industrial accounts in my career based in upstate New York, and uh glad to be here today.

SPEAKER_05 1:24

Terrific. Thank you guys. Well, you provided a really interesting article for Paper 360's May June issue, which is sort of focused on supply chains. It's such a huge topic that I think you guys really address something that isn't always talked about, and that is supply chains regarding equipment. You know, North America has such a um has kind of an older base of equipment, so there are some real issues, I think, with maintaining those supply chains, right? You make a great case for the importance of equipment supply chain management in our industry. Um, do you think that's sort of an overlooked part of the supply chain?

SPEAKER_02 2:07

So I think we probably could all agree and understand is that they're not building as many or new uh paper mills uh in the industry. So a lot of these facilities are uh uh north of 20, even some uh cases 50 years old. So the installed base of the equipment is very aged, right? So and the complexity around uh the different OEMs is pretty broad. And so what we've seen is that this aged equipment uh needs to really have a clear sense of not only the system of itself, but the spare parts that actually are used to maintain it, right? And really zeroing in um on what those parts are uh from a component level is so important because in large cases the electrical category can be one of the most um complex categories when it comes to obsolescence, right? So really understanding exactly how we can navigate uh some of those obsolescence and zero in on what that spare part component is, um, really can help to keep that mill operation um uh uh in line. But so that's just at the spare part level. But then do you take the whole system, right, for a whole huge uh breaker system, motor control system, um, in large capacity, it may be to just cost prohibitive to actually replace these. So it's also being important to be able to understand is there alternative ways to be able to kind of get that equipment and back in line through either a refurbished or repair opportunity. So there's a number of ways to kind of navigate these, but really understanding exactly the at the component level, at the system level, um uh what's aged and what's obsolete, how you can replace it is so important. Matt, is there anything else you want to add to that?

SPEAKER_00 3:54

Yeah, I I I think you're spot on, Jefferson. The thing I would add to that is if you look at the largest uh pulp and paper and packaging companies, they're made up of acquisitions, many acquisitions. There's been all this industry consolidation. And so, with that consolidation, each of those companies that they acquire has their own standards. And maybe they're not great standards, but they have some kind of standards that they've set. So once they become all one part of a big company, the list of items that needs to be supplied grows consistently as they make these acquisitions. Some of these pulp and paper companies have storeroom files that exceed 100,000 items.

SPEAKER_05 4:38

Oh man.

SPEAKER_00 4:39

And maybe only 20% of those are active. Right? And so there's their difficulty is in managing those parts that may not even be used anymore. How do they they they don't know? Sometimes the material is there, they just don't want to get rid of it because they think they may need it. And and that's where distribution can step in and really help these customers because they don't have a good way to manage that. So when we form a new agreement with a customer, the first thing we do is go in and do crib crawls and help and work with them and set them in max levels. And you know, it takes a lot of work interviewing all these people to find out what's going to be used or not used so that they can start to pare down these inventories that they have and manage it better.

SPEAKER_05 5:25

Sure, because there's a cost involved in just maintaining the inventory, right?

SPEAKER_02 5:29

Big time. Absolutely. Absolutely. One other thing to add to what Matt said is that you think about all the different acquisitions, those acquisitions have legacy ERP systems, right? So when you start to layer on these ERP systems and looking at the purchasing manager that entered that particular new part number 20 years ago that was part of a different company, then you layer that on the acquisition that took 10 years later and you merge the ERPs together, blending that data, which is king, and making sense of it is so important. And there most likely are so many companies out there that have the same part numbers that are existing within their inventory position that they don't even know they have because they can't make sense of the data. So though not only acquisitions, but layering ERP systems can even make it even more difficult.

SPEAKER_03 6:17

That sounds like a real challenge that you have there. I f I find the supply chain a fascinating science, actually. I I imagine that you do as well. You guys must find it. I mean, it's just incredible. But um, what is the biggest danger for MILS that can't manage their supply chain fluctuations?

SPEAKER_02 6:34

I would say the biggest uh danger in the supply chain is really disunderstanding their data, right? Uh one thing that we found with every single customer, they've either been a legacy customer, is we've been able to help maintain that data uh through constant review of the ever-changing obsolescence across so many different subcategories. So lighting fixtures get obsolete, fuses, breakers, relays, controls, PLCs, drives, all these things have an obsolescence journey. And the distributor that can keep up with that pace to provide that information allows them to be able to be nimble and not be reactive, but of course be proactive because we're providing this data and pre-sourcing that obsolescent component, right? Um so that that's one of the biggest challenges we see. And then aligning with someone that has the best access to inventory, uh, technical support, and the right pricing position across a wide array of different uh electrical categories is important, right? Uh it's always two things that drive a decision, right? Price and lead time, right? And so making sure that a distributor has the right price because they have the right inventory, uh, but deliver in a timely manner allows them to make the right business decision to get that part or that equipment back in line. And then the final component of that is uh is right to have the right technical support. There's always going to be obsolescence in the electrical. And they're gonna throw a curveball at the supply chain partner and say, wait a minute, this is the limited amount of data that I have in my system for this part, because it was created 15 years ago and I need it. What is it? Go find it. In some cases, you'll be able to have to really be nimble to be able to work with your OEM supplier partners to be able to figure out what that is. And so that's very, very important. Matt, would you add anything to that?

SPEAKER_00 8:25

Or yeah, I think again, spot on Jefferson, I think the the one thing I would say, the big danger really it leads to and boils down to downtime and the reliability of these facilities, which when those facilities are down, it's hundreds of thousands of dollars in uh downtime costs when they're not producing their uh their products. Um if you think about it, a lot of these big companies, too. Uh the largest pulp and paper company has over 500 locations. Now, not all of those are paper mills, and these are global companies, right? So you have all these facilities that have to be managed. And in a lot of cases, they'll have redundancy built in from one plant to the next. But that's very costly too, right? So if you think about it, if they've got a very important customer and they have to keep producing, if they go down in one mill, they might have to ramp up production in another mill. But the more that they can manage that, they can start to pare down these facilities and not have as much expense and cost to uh to run their businesses.

SPEAKER_05 9:28

Right. Well, first of all, I want to say Jefferson, thank you because now I'm, you know, if people notice that I'm getting older, I'm just gonna say I'm on my obsolescence journey. Which I think sounds so much more interesting and romantic. Um but um Matt, you mentioned the fact that some of these companies now, through acquisitions or you know, um mergers have become global companies with with locations around the world. We know our supplier base now is completely global with you know suppliers around the world. But you know, I don't want to get too political, but right now global supply chains are really being disrupted. So there are so many factors, um just the same ones we have been facing, which is competition and information exchange, but also now, you know, local conflicts and energy costs. How can Mills adapt to all that disruption?

SPEAKER_00 10:31

It's more than a challenge, it really is. Um, you know, you mentioned all the uh the things that they do run into uh from a day-to-day uh when when you look at the world today, it's very uh disruptive. And one of the things that um I think about is when I walk through a pulp and paper mill or through a converting location, if you look at the nameplates on a lot of those machines, they're made in typically in Europe or in Germany. And so when there's um when there's wars that are happening in the world, things like that, it does, it is disruptive, right? It's harder to get products moved across the the ocean to keep these machines running. And it is a big challenge. The other big challenge is inflation, right? Uh, you know, you look at the last year around this time we were going through all the tariffs, uh, and that was a huge challenge for any of the industrials that need to uh manage their supply chains. And and the energy costs going up now, that's gonna be really if you start to look at it all compounds and the cost for them to operate their businesses keeps going up and up. If they don't find ways to drive efficiency, it's gonna be a very, very bigger challenge for them in the future.

SPEAKER_02 11:50

What I would add to that is that you look about what we had to go through with COVID, uh, with tariffs uh uh and even the some of the conflicts that are going on right now. Uh, you know, one thing I think we saw is is that our ability to kind of weather that storm was really centered around the fact of having the right inventory position, right? Um, being able to be nimble, uh, but also understanding where those components are from a lead time perspective and providing that information so the customers can make businesses. For example, if you think about this medium voltage 15 kV cable, right? Pre-COVID, that would be Jefferson.

SPEAKER_05 12:30

That's all I think about.

SPEAKER_02 12:31

Well, I can tell you, I can tell you, our our pay-for-mill operations are thinking about how they're powering their plants, and that's one of the most important components. So that lead time pre-COVID used to be around 20 weeks. Post-COVID, it turned into being like 54 weeks. Just a liquid-filled transformer went from being, you know, you know, 40 weeks to two years. So it is so important for uh for us to be partners with our companies to be able to provide this information so they can say, wait a minute, the current lead time with all the single manufacturers that make media ball to cable is across this spectrum. Same thing with motor control centers, breakers, lighting fixtures, every single thing that if we can provide information, what they have to do is thread the needle with all their outage schedules across all their pay for mill operations. And so bring that information to them and say, wait a minute, your outage in 2027. What's in scope? Understanding that the supply chain complexities around the world allows them to make business decisions because they may delay certain scopes of an outage because they can't thread the needle. Or most importantly, and I'll give a real life example. Um we sourced a motor control center to a very large pulp and paper company, and the whole motor control center was manufactured, but it was right there in 2021. The whole manufacturer stopped in its tracks because they couldn't get a fiberglass fuse. A single fuse because of the supply chain complexities of the COVID era, and so they had to delay the installation of that motor control center from a simple fuse. And so that's one thing that I look back and say, wow, that's some things that we should look to be able to stock for them, uh, or even have proactive discussions or be able to pivot, knowing that it was going to be a disruption in that manufacturer installation process. These things are going to continue, so partners are are really uh motivated to kind of have these disciplined discussions to kind of avoid those type situations.

SPEAKER_00 14:43

Great point, Jefferson. You know, I'd like to add to that too, um, one thing that separates Wesco from some of our competitors. We have a very robust supply chain group, and we put together a newsletter that goes out to our customers, which is a supply chain supplier update. It tracks raw material prices, it tracks lead times on critical materials, like Jefferson mentioned with Transformers, and it will put in there the potential lead times on a new order. And so our customers will look at that and it gives them a little bit of uh a roadmap as to what they can expect if they need to buy material and how long of a lead time they will need to place orders. And I found that it's um it's a great way to keep in touch with the customers and then also to get them to reach out and ask, you know, uh about lead times before they just expect they're going to get something in six months when it takes a year or something like that.

SPEAKER_05 15:42

I mean, that's a terrific resource. And it's all about managing all that data, right? And having extra data.

SPEAKER_03 15:50

That's right. Which uh leads us nicely on to um uh digital and AI in the whole supply chain process. Can you tell us about the evolution maybe of uh of digital and AI in the work that you do?

SPEAKER_02 16:03

Absolutely. So that you're the one thing that's exciting about the whole digital internet of things is being able to have technical resources that are internally at Wesco, but then with our supplier partners. So you think about all the different OEM manufacturers that make uh automation equipment, even switch gear. Uh they're leaning forward to help pave the way to connect the dots with all the data around predictive maintenance. Um, and so you know, us being able to help connect the dots is certainly something we're forging ahead. I would even take it a step further when you think about AI. AI is going to change the the whole pay food industry uh in short time frame, not just a decade.

SPEAKER_05 16:46

Every industry we're talking about.

SPEAKER_02 16:48

And so what we've been able to do and even have conversations, for example, we had a conversation with one of our pulp and paper customers, and we did a whole digital transformation workshop and sat down with them to say, okay, what are the most important things that you want to be able to improve when it came to your pay-per-mill operations? And we sat there, we were talking about predictive maintenance, we're talking about reliability, and the conversation over a half-day workshop turned into, say, Jefferson, the biggest problem we're having is with the winder. The winder, everything stops with the winder, and it's one of two things. It's either equipment failure or operators. Because their average age of the people actually running the winder operation is about one year. And so a lot of the stops were not only equipment, but it was just the failure of the operator pulling the wrong slitter core, right? And placing on it and having to stop the whole winder operations, right? And so we have some pretty unique partners that can make sense of these inefficiencies and provide AI agents to be able to capture when that slitter core is being pulled and inappropriate, so they can catch that particular stop or issue in the whole operation. You can even take it a step further. There are, and when I think, Jan, one thing I heard on your previous podcast, which I thought was very, very interesting, was around workplace safety. These winder rolls, I think you probably can imagine, are thousands and thousands of pounds. And so there have been instances where a lot of paper companies know that these things can fall and not only cause an accident, but also cause uh death or concern. And so there's also AI tools that can use to be able to capture when there's a hook problem with that particular winder operations and protect the entire operator from having that type of an event. So AI is not only used to actually create uptime, it's used to actually create safe, safer environments. And so it's it's pretty very motivating to be around that uh discussion because it can be a game-changing kind of element to their whole operations.

SPEAKER_05 18:56

Yeah, fantastic question, Mark, because it really I think there's kind of a sometimes a negative association with the idea of AI, you know, in that it will replace our workers. But with such a uh with such a critical need right now, at least in our industry, I don't know what you guys see in other industries, but in Paul and paper, there's such a critical need for experienced operators. Sometimes I see AI as it's not so much replacing the operator, it's just adding years of experience, right, that he might not have yet, that he or she might not have. So I, you know, I think that's really that's really critical, like you said, too, from a safety standpoint.

SPEAKER_02 19:38

Yeah, one of our senior executives said at a recent conference, he said, and I think this is kind of uh very optimistic, is that the majority of people are not going to be replaced by AI. They're gonna be replaced by people that know how to utilize AI better than what you're not using yourself. And so I think that that hit home um gives me uh motivation to adopt AI in my own work. And and so I think our customers are starting to embrace that as well.

SPEAKER_03 20:04

I think all of us are using it as an assistant now, almost, really, in a lot of ways of things.

SPEAKER_00 20:09

Absolutely.

SPEAKER_03 20:09

Yeah, yeah. Matt, anything to say about the uh the digital and AI in the industry?

SPEAKER_00 20:15

You know, I look back to when I started my career in in uh 1987 with Wesco, and it was a paper world. There was very few computers out there, and it it's just amazing to me. It's mind-blowing, and it's so exciting at the same time because you know we have all these potential uh opportunities in front of us that could be resolved using AI, uh, the Internet of Things, technology. Um, you know, Jefferson talked a little bit about it. Wesco has really evolved as a company. Back then, we were a distributor, we sold parts. They'd call us, we'd send them a part, that was it. Nowadays, it's about solving problems and working with them to become more efficient. And Jefferson perfectly described some of these uh pulp and paper companies, they're pointing out their problems to us, and we're plugging in our own, we have 70 engineers on staff at Wesco, and then compound that with all of the uh the manufacturer partners that Wesco has, like Eaton and Rockwell and Robesys, and you know, all these companies stacked up have expertise that we can bring to bear. And those are the uh the things that really separate Wesco and allow us to become more of a trusted advisor for our customers.

SPEAKER_05 21:31

Once a MIL does have a great partner, does have sort of a handle on the information, what do you guys see as like if they get everything right, what's the biggest gain? What's the biggest opportunity there for mills?

SPEAKER_02 21:46

Supply chain certainty, right? You never have supply chain certainty across your entire everything you need, right? But one thing that, for example, we're doing right now with one of the largest pulp and pulp and paper companies in the world is going after to do a Data analysis, like we said, right? And that's taking a look at every single thing they have in their system, zeroing in on what they actually buy the most, and tying our part number to their part number and actually helping to cleanse and sanitize it, right? Um, there's always a rule of thumb is that the data uh for a part number that they have or another ear print system may not be exactly what they have on the shelf, right? So you have to be able to actually go and find that out. Here's what your data says, here's what you have in the shelf. Now what do you want? Uh so doing that across thousands and thousands and thousands of parts that actually have usage, have volume, have velocity, and then applying our part number and our price and our lead time and holding that pricing firm for a period of time, that means they can automate thousands of items within their system and trigger it through what they call an MRP run so that we get an order for that particular item whenever they need it. Um, if you start to do that across a vast majority of what they buy the most, there's a high degree of comfortability that you're not gonna have to worry about the things you buy the most. And if you have the right partner to be nimble on the stuff that um that you're gonna need uh that are outside that high velocity items, then you're gonna be in a better situation, I believe. Matt, anything you want to add to that?

SPEAKER_00 23:22

Or yeah, I would, you know, again, just to dovetail with what you said, you know, I think the pulp and paper companies, they really are interested in in maintaining a high operational efficiency and they need to navigate that aging infrastructure that they all have. And on top of that, they have very strict environmental regulations that keep compiling, right? So you so if you look at just those three things, that's their biggest needs uh right now, I think, as companies, they need to navigate those three things. And the companies that do that well are the ones that are going to uh really prosper. And and and you're gonna see continued um uh consolidation in the industry. Um that's something that's not gonna go away. Um the other thing you're gonna see is that uh we talked about already is that the the AI and different things that are going to be uh lead to new efficiencies in pulp and paper are gonna be very, very much in play.

SPEAKER_05 24:22

Well, we're getting kind of close to the end of our time. Mark, are you ready for our lightning round?

SPEAKER_03 24:30

Yeah, I am. I've got one. I've got a question for you.

SPEAKER_05 24:34

Okay, these are just short answers. Mark's gonna fire one, I'm on fire one, and you just go. Okay, guys?

SPEAKER_03 24:41

Straight off the top of your head. So, um, what's the one thing you wish everyone knew about the paper and packaging industry?

SPEAKER_00 24:50

Oh, I like that one. I'll I'll go with that one. So this is something that I heard years ago when I went into a a pulp and paper mill. But people that are not familiar with the business, the first thing they will they will say is, boy, that really smells terrible. What is that smell?

SPEAKER_03 25:10

And the smell of money, baby.

SPEAKER_00 25:13

The response is that's the smell of money.

SPEAKER_03 25:16

Yes. I love that.

SPEAKER_02 25:18

That's the smell of the packages that are on your front doorstep that come over and over every single day. The smell of money.

SPEAKER_05 25:28

All right. Well, I have one too for you guys. What's the most exciting thing you see ahead for supply chain management in our industry?

SPEAKER_02 25:39

I would say that if you want, you put an AI into the ERP system to be able to kind of move uh and make sense of the inventory so they can find out what obsolescents are on the fly, that is going to make it very efficient, right? Uh so AI within the uh the digital ERP system, I think, is going to be pretty exciting.

SPEAKER_05 26:03

Anything else to ask, Mark?

SPEAKER_03 26:05

Um actually, yeah, at the end. Um I've I've uh been uh you know watching the news as we all have lately, and and there's been some logistics experts talking about various things. And uh I heard some of some really quite interesting new words like near assuring. Are you familiar with that?

SPEAKER_02 26:22

Near assurance. Yeah near assuring. It sounds like something I may say to my wife that she may.

SPEAKER_03 26:30

I think what it means is that that you you're assured if something's near to you. You know, if you're in like we've been talking about the supply chain area, and when something's near. So so I think that some some clever logistics guy was on this morning and he had these words and he was saying these things. The other one he said was just in case, instead of just in time. That was another one that he threw in. Okay.

SPEAKER_02 26:52

Yeah. Just in case, that's the hoarding. And one thing we did find, I do find is that if you go into some of these storerooms, wow, the amount of uh uh parts that they have in there that uh some of them where you can tell that are are freshly bought, and some of them have been sitting there for decades. So just in case is a very uh tried and true uh procurement practice within the Puff of Paper to see for sure.

SPEAKER_00 27:16

That's a great uh that's a great term. I think I'll add that to the uh spreadsheet uh column when we do the uh the crib crawls. We'll call it just in case inventory.

SPEAKER_05 27:30

That's a phrase I learned from the article that you guys um did for us for Paper 360 was crib crawl. I think that's a great very descriptive.

SPEAKER_02 27:40

Yeah, absolutely.

SPEAKER_00 27:46

That's a little tip from Wesco. Brilliant.

SPEAKER_03 27:50

That was a really fascinating discussion.

SPEAKER_05 27:53

Yeah, it really was. Thank you for your time, guys. Um, I just think there are a lot here that at pulp and paper uh and packaging facilities can think about and um you know reach out to a good supply chain partner and sort of realize those efficiencies.

SPEAKER_02 28:11

Well, we appreciate the uh the invite and the opportunity.

SPEAKER_03 28:14

Brilliant.

SPEAKER_02 28:15

Thank you very much.

SPEAKER_03 28:19

We are so glad you could join us in this episode of Uptime. You can learn more about Tappy publications at tapy.org. I know you'll find something that's perfect for your career growth.

SPEAKER_04 28:31

Please subscribe to the podcast channel and share this episode with your industry colleagues and friends, because everyone could use a little more uptime. Thanks for being here.

SPEAKER_01 28:45

Hi, I'm Lawton Roberts, president and CEO of Tappy, the pulp, paper, packaging, tissue, and converting industry's trusted resource for the publications, training standards, and networking that are so vital to our industry's growth. Tappy conferences are an excellent way to build both your knowledge and those lifelong relationships that are so critical to your career. When you come to our live events, please stop me and introduce yourself. I would love to hear your story. In the meantime, check out Tappy.org for more. Thank you for listening.