The evidence of things unseen

From global to worldwide. From solution provider to promoter of new approaches to production processes. The impact of the quiet revolution under way at Perini will not take long to make itself felt.

Paolo Canton

Industrial production, particularly in large factories, is characterised by its material aspect. As it is currently perceived, industrial activity consists of assembling pieces of metal, electrical wires and different components in a predefined and efficient manner in such a way as to produce objects intended for the most varied uses.

Hence the great importance attributed to manufacturing quality and technical innovation as indices of the capacity for producing new objects which can better meet the demands of customers - whether consumers or businesses - at lower cost and more efficiently and reliably.

And hence, too, the traditional focus of this Journal on quality and innovation.

But there is also another way of looking at industrial enterprises and their products: in terms of what cannot be seen or touched.

An inevitable evolutionary step, like that of homo habilis, our tool-making and using ancestor, who evolved into homo sapiens, capable of producing and spreading knowledge.

THESE THOUGHTS WERE SUGGESTED TO ME BY A PHRASE FROM GUIDO FINOCCKÌ, EXECUTIVE VICE PRESIDENT SALES, MARKETING & SERVICE OF KÖRBER PAPERLINK. When I asked him what doubts beset him on a daily basis, he replied: “I talk about problems of technology and production, the capacity to respond to technical challenges and identify new markets, but I'm aware that that avoids the real core of the question. More and more often, technology and manufacturing quality are taken as read by our customers, by the people with whom we are involved in commercial negotiations, or by those who see us as a potential partner. It's clear that because Perini has had a significant and growing share of the market in machinery for processing paper and tissue for decades, it is able to meet this basic - I would even say minimum - customer requirement. The ability to build machinery, and to do it well, is now just one precondition for our survival.

Even I, when I'm confronted with a specific request, tend to regard our ability to provide a technical solution as a foregone conclusion. It may take us a little time to find it, but there will be a solution.”


To tell you the truth, when I arrived in Mugnano I was mentally prepared for everything except the determination not to talk about machines. Or rather, to talk about them in a way which is completely different from the usual. Perini is no longer just a manufacturer of machines for processing paper and tissue. Nor can it remain a “solutions provider” for very much longer. The market is beginning to demand that we shift from solutions to ideas.

Put like that, it just seemed like provocation. I asked him to explain himself better, to put it in more everyday terms. He chose to start back in the past.

“JUST TEN YEARS AGO, FABIO PERINI CAME UNDER THE CONTROL OF KÖRBER, a major German industrial group. It was an epoch-making change, which has made us what we are today. The change, which was hardly noticeable at first, is obvious today: over the past ten years an integrated approach has developed, which has radically changed Fabio Perini.

We were used to just thinking about ourselves, and what we needed for growth. We've had to get used to the idea of being part of a big group and tailoring our strategies for growth to a broader perspective (which, I must admit, seemed obscure to us at times). This enabled us to follow the market in its shift from demanding machines to searching for solutions, integrating our products with those of other companies in the group, following the rationale of a complete production line.

WE ASKED MARTIN WEICKENMEIER, PRESIDENT OF BOTH FABIO PERINI S.P.A. AND THE GROUP HOLDING COMPANY, KÖRBER PAPERLINK, FOR HIS THOUGHTS. His idea - which has underpinned the KPL and Perini strategy for some years - is very simple, but complex in practice.

“KPL came about by the agglomeration of enterprises noted for their excellence. KPL's task was to transform this capacity into a leading position. Today, with years of work behind us, we can justly claim to be the leader in tissue, paper and packaging. But for some time we have been wondering what we need to do to maintain this leading position. And for some time we have focused our strategic efforts on the transformation of our companies into centres of skills. But to make it possible for them to coordinate and integrate their actions, we have also established an infrastructure enabling them to tackle the markets conjointly, with a single voice, strong enough to make themselves heard under increasingly globalised and concentrated conditions.”

So we have developed a decentralised and delegated management model, distinguished by guidelines for behaviour intended to foster integration between the various companies in such a way as to present the group as a supplier of production systems and a partner in the manufacturing process for businesses in the paper and tissue sector.

GUIDO FINOCCKÌ TOOK UP THE STORY: “HOWEVER, WHAT MATTERS MOST, FROM OUR POINT OF VIEW AS A SINGLE COMPANY WITHIN THE GROUP, is that the broader perspective of a large industrial group - along with its financial solidity - has enabled us to focus on drawing up long-term strategies. We've had the luxury - at least from time to time - of forgetting about what to eat for supper in order to plan the menu for Christmas 2010. Being able to detach ourselves from day-to-day events suggested to us - almost without our noticing - a number of changes which, in the light of events and with the passing of time, have turned out to be rather more revolutionary than we expected.”

LIKE ALL REVOLUTIONS, THIS ONE HAD A SPECIFIC TRIGGER. In this case, the spark which ignited the flames was a management change, significantly enough in the last year of the last century (we're talking about 1999, of course), when the current president of Fabio Perini Spa and Körber PaperLink took up his post.

“His key focus,” Finocckì remembered, “was on customer-orientation. At first it was difficult for us to appreciate what kinds of strategic consequences such a vague declaration might have, and in any case we believed that we already shared his approach.

With hindsight it is clear that the new management vision was very shrewd. As often happens, our business was going through a phase of reflecting on internal relations; the need to optimise aspects of the production process with an impact on costs, and the persistence of attitudes which were no longer in step with the times, particularly in certain areas of the business, did not allow us to be genuinely customer-centric, and certainly not to be so in a profound sense.

In particular, what we lacked was the ability to exploit and share with our customers the accumulated knowledge we had developed over years of production, marketing, and, above all, research.” Guido Finocckì then began to outline the change which had occurred in Fabio Perini over the last four years: an invisible, yet very obvious, change.

LIKE INDIVIDUALS, THE BEHAVIOUR OF COMPANIES IS CONDITIONED BY THEIR SELF-IMAGE. Fabio Perini no longer sees itself as a manufacturer of industrial machinery, but rather as a process facilitator. The focus has moved on from offering solutions to sharing a fundamental company value - human capital - with the customer, and in particular the fund of knowledge of the product, the manufacturing process and the market. The aim is to become the benchmark partner for support and guidance is all production choice.

“THIS AIM HAS AN IMMEDIATE OPERATIONAL IMPACT,” SAID GABRIELE PACINI, MANAGING DIRECTOR OF FABIO PERINI S.P.A., “When Fabio Perini ceases to be a company operating in the market for paper and tissue processing installations, but rather in the market of ideas, the relationship with the customer is transformed from a commercial to an advisory one. In practical terms this means that there are no pre-conceived solutions for anyone. Every case, from the largest to the smallest, deserves a personal response, because every business is unique. But it also has important philosophical implications: Fabio Perini cannot be a global company. To be a global company means offering the same operational, productive and commercial model throughout the world, asking customers to adapt to a standard established elsewhere. We believe rather that Fabio Perini should be a worldwide company, one which can adapt its own methods, attitude and product to the needs of the customer, to the local situation, to the demands of his market. When we succeed in that, we can truly claim to be a business that puts the customer at the heart of its structure.”

BUT OBVIOUSLY”, PACINI EMPHASISED, “IF WE WANT TO STAY IN THE MARKET AND BE EFFECTIVE PROCESS PARTNERS FOR OUR CLIENTS, WE CANNOT AFFORD TO LOSE COMPETITIVENESS. The quality strategy holds good insofar as it is supported by efficient production.” At Perini, the restructuring of processes started from the drawing board and CAD.

“The key concept was the standardisation of parts and processing, in parallel with product modularisation. This activity, which might be defined as technical rationalisation, was accompanied by a revision of processes designed to eliminate areas of inefficiency. That's easier said than done, however. In practical terms, this has led to the creation of the post of process manager, who has a task which can be summed up very simply: mould, introduce uniformity, and standardise.

ANOTHER CONSEQUENCE - MORE STRATEGIC THAN OPERATIONAL - LIES IN THE CREATION OF A REAL “RESEARCH” DIVISION acting independently of production incentives (now served exclusively by a special “development” division) to generate new concepts. In practice it was unthinkable to continue to be innovative under the day-to-day pressure from production requests, because, as Martin Weickenmeier likes to say, “the research department ought to have the freedom to be provocative, to create disagreements and friction which unleash creative energy. That means not just new machinery, but new approaches to the management of production and - why not - even new products. This business was born and has grown thanks to the intuitions of a small group of managers, but today we need to draw on a broader stock of skills and knowledge.

Continued growth calls for an abundance of new ideas in technology, production, organisation and commerce. Even diverse ideas which are in conflict with each other, because that can stimulate the emergence of something strong and innovative.

SO THE REVOLUTION IS ALREADY UNDER WAY. IT'S A REVOLUTION WHOSE EFFECTS ARE LARGELY INVISIBLE. But it's also a revolution which is going forward without ever losing sight of day-to-day reality, in all its aspects. We asked Gabriele Pacini how he expected to see his business at the end of this process of evolution.

“Perini is destined to become a world-wide enterprise, with decentralised production, but with an increasingly living and viable relationship with the land which saw its birth and which is the historical repository of the knowledge of the sector. It will be a flexibly organised enterprise to meet the constantly changing market, but able to guarantee the quality of its products; able to think big, even for small customers. On the other hand, the vital need for change which we have observed derives from the fact that the tissue sector is still a lively one, and this will inevitably mean the emergence of new competitors and stiffer competition. We must be ready and well-prepared, if we are to continue to lead the market.

SO WE COME BACK TO THE THEME OF LEADERSHIP. AND WE TURN TO MARTIN WEICKENMEIER, FOR A FINAL WORD. “What is usually regarded as the key to maintaining leadership in a market - better sales organisation, better technology, a better manufacturing structure - is only one component. And not even the most important. To maintain the lead you have to be happy to work, to compete in the market. Leadership lies in the minds of your work force, and from there it passes to the market. In this sense my task, as president of a major industrial group, is among the most pleasant: to make sure that the people who work with me are happy to do so. And this can only be so if they take responsibility for their own future. I want my fellow workers to be responsible for their own success: and for that, I have to give them the freedom to build their own future, interpreting the group's principles. And all the resources necessary for them to pursue it.”•

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