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Arcus Innovation Leaders Series 

How business leaders use innovative approaches to shape their strategies.

 

Domtar’s view on the Innovation Imperative: An interview with Mr. Andrew Tremblay, Business Development Manager, Domtar EarthChoice, Corporate Markets Canada, Domtar Corp.  Mr. Tremblay says that in capital intensive businesses, innovation needs to be seen as a way to increase the return on capital employed.         Read the Arcus      Innovation Leaders    Report.    Unilever    Maple Leaf Foods    Siemens    Domtar Tweet

 

Arcus research indicates that executives are focussed on revenue growth is the primary driver of shareholder value and the main challenge for companies around the world. Yet, at this time, the industry’s growth objectives are often tempered by a continuing focus on cost containment. No surprise, then, that the topic of innovation has been gaining ground as CEOs seek to incorporate concepts like “rate of innovation” into their assessments of a company’s long-term value.

Business leaders need to evaluate the role of innovation in both creating and sustaining revenue growth. Defining innovation in its broadest terms — product, process, services and breakthrough strategies — we propose that lasting revenue strategies come from process and service innovations. The size of the prize for those that succeed in this process is likely to be significant.

 

 What is the biggest challenge with innovation? 

In our business, we see innovation as a way to get a better return on the capital we employ.  Domtar is in a capital intensive business.  One of the areas that is very important to us is natural resources.  We need to constantly evaluate our costs and find ways to use as much of the raw materials we procure as we can.  Consider what we can derive from tree fiber, for example. 

When Domtar separates fiber in the pulping process, we get both fibre for paper and biomass that can be used to make energy.  We try to recoup costs from everything we do in the whole process, including using the chemicals and steam from production.  We try to close the loop; we are always innovating new ways to do things that will reduce cost and also go beyond compliancy, do more than the minimum required by law.

 So, the innovations you are putting in place seem to touch on three areas: Product, Process and Organization – where do you feel most of the innovation occurring today is taking place?

It is probably in the product area.  Well, process and product.  First, you have to bring the product the consumer wants to the market. People want high quality products, that’s a given, and they also want it to be environmentally and socially responsible, but they don’t want to pay a lot for it. 

We look at several things when seeking to innovate - whether it be more efficient turbines or using the solid waste from our manufacturing process for fuel.  We have a continuous improvement process, Kaizen, which we use, too.  We bring different stakeholders in from within the company to look at things.  We could have someone from customer service come look at a production process in a mill. 

They may know nothing about production, but they look at everything and everyone involved and they may see something – a simple idea from somewhere else within the company. We’re constantly using that kind of process to increase what we do and lower our cost.  We want to use less water/fiber/energy – we’re a cost-driven business. 

The bonus is that reducing our consumption of those materials is great for the environment. Domtar has been an innovator for years – the market keeps challenging us to “go beyond”.

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