May 31, 2017

The future of pulp and paper: from experience to analytics, from isolation to ecosystems

Thomas Hohenauer

Director, Tieto Austria, Tieto

Driven by digital possibilities, also the pulp and paper industry has taken big steps forward in recent years. While new ways of working are already emerging, a massive restructuring of business models is on the horizon. As cooperation is increasing, partnerships within the industry and with external players will create a fluid industry ecosystem – and digitalization is the glue that holds all this together.

Digitalization is the new catalyst of success

Forest and paper are sometimes regarded as conservative industries. In today’s new business environment, though, they are quickly embracing digital solutions for competitiveness. 

With diminishing lot sizes, the requirement for more flexible pricing and the challenges in maintaining a competitive advantage, digital experts like Tieto are now in great demand.

Why? First, the number of people involved in day-to-day decision-making is dwindling. Second, decisions need to be made faster and more accurately. The only way to achieve these two goals simultaneously is to employ digital solutions that include efficient analytics for demand forecasting and production planning.

Tieto’s PE & TIPS day, organised in Barcelona, Spain in April 2017, brought together 60 forest and paper industry leaders from more than 10 different countries. The event revolved around the possibilities of Tieto Integrated Paper Solution TIPS and the theme Production Excellence. Besides giving the participants an opportunity to reflect on the future of the industry between them, the event provided important glimpses into where the industry will be heading in future.

The future happens in ecosystems

There is broad agreement within the industry that development requires collaboration. Gone are the days of huge one-time system investments; today’s development is fast, incremental and short-cycled. This is visible on two fronts that work hand in hand:

1) Traditional production and its data: detailed machine data helps the vendors optimise while the quality data of the finished goods helps the customer to produce more exact on his end.

2) IT systems and services are expanding beyond old boundaries: external microservices and collaboration partners, such as universities, students and startups, are brought into the mix.

A good example is a hackathon organised in Finland in collaboration between Tieto and UPM. It produced new ideas to solve business problems, such as logistics challenges that the industry has not been able to meet till now.

An ecosystem-based approach will also enable cross-disciplinary innovation that at its best can bring up totally new business models and growth opportunities.

Wherever we look, the idea of integrated “business platforms” is talking hold. Basic integration challenges are mastered, value is generated by using relevant data on top of that.

The parts have been around for many years, but now technological advancements and combining the full ecosystem together yield much better results. Quality measurements from the production line flow into the ERP system, and only acceptable products are sent to the customer. The customer’s production machines receive automatic instructions to work with the exact properties of that batch – dramatically cutting wasted quantities. This integration across several stages unlocks new optimization potential and, consequently, increases margins!

Cutting-edge technologies making their way into a conservative industry

Lean new solutions and a microservice concept making use of tools for looking at data from different angles allows simulations based on real-world data. This opens up new possibilities to enter a totally new realm in optimising. IoT, the Internet of Things, is a crucial element in collecting the data for instant analysis.

Even new technologies that at first sight might seem unlikely can be used to improve performance. Examples are Augmented Reality (AR) and Virtual Reality (VR), useful in increasingly fast product development. The look of new materials and colours can be tested without lengthy pre-production cycles, and innovation can be presented to the customer not only fast, but at a new level of experience.

Pulp and paper, the new frontrunner in digital?

Time will tell. But the tools and the willingness to act are already there. With the help of an industry IT expert, making the leap into the 21st century is now easier than ever.

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