5 Big Ways The Forest Products Industry Is Pinning Growth On Digital Transformation

Jennifer Scholze

Gathering with the leading thinkers and movers in an industry is one of the best ways to clear your head and creatively think and talk about how you and your company can move the needle.

This is what about 200 of us did a few weeks ago at the SAP Forest Products, Paper, and Packaging Forum in Frankenthal, Germany. Attendees were a mix of business and IT people from wood, timber, panels, particleboards, commodity paper, specialty paper, paper packaging, flexible packaging, and metals packaging businessesInnovative leaders from around the globe were on hand including SAPPI, International Paper, Arauco, Koehler Paper, Borregaard, Resolute Forest Products, Ilim Group, and Asia Pulp and Paper. We met for two days of in-depth discussions about the processes and technologies that will support and drive successful and sustainable forest products, paper, and packaging companies of the future.

There was ample opportunity to listen to and talk about how companies are re-imagining business models and business processes using digitization. Topics included the Internet of Things (IoT); mobile technology; in-memory computing; and the cloud to drive new revenue, improve margins and supplier relationships, increase productivity and asset performance, and reduce downtime.

Below I have highlighted five of the most interesting ideas from my perspective. Commentary or additional points of view are more than welcome, and to hear recordings of the presentations click here.

Top 5 ideas from the SAP Forest Products, Paper, and Packaging Forum

1. Fiber can make wrinkles disappear?

There was talk at the Forum that this industry might not be called the “forest products, pulp, paper, and packaging industry” in the future, and perhaps it will be called the Fiber Industry instead.

Analysts are saying that the consumption of paper is expected to grow annually by only one percent, despite massive growth in online purchases and the rise of the middle class in emerging economies. However much bigger growth rates will come from other sources such as cellulose. Replacing traditional materials using products from the forest products industry is a big opportunity. Consider the use of fiber in food as a filler, in cars as a lightweight and cheaper alternative to steel, and even in cosmetics. One company is providing its fiber products to pharmaceutical companies who are testing it as an active ingredient in a moisturizer that makes wrinkles disappear for four to six hours! Listen to this fact: one company at the Forum mentioned that their new cellulose business represented less than 20% of their revenue but more than 75% of their profit!

2. IoT will change the way MES is defined and used

Several forest products companies on a panel discussed the how IoT will impact the future of manufacturing execution systems (MES). There is a wide range of perspectives on this. Some companies have decided that the best strategy is to rebuild current platforms using the newer technology and basically take the same approach for the next 25 years. Other companies visualize IoT as a force that will drive huge changes in how MES is defined and used in the future with a much greater emphasis on integration, analytics, and algorithms. Watch this space for another blog on this topic soon.

3. Predictive analytics can predict pulp yield

Fibria talked about predictive analysis in forestry with a great story about using 40 TB of data from its technology center to analyze physiological disorders in their plantations by location. The objective is to predict yield in pulp mill from supply sources and adjust production formulas beforehand to improve yield. They have an in-house data scientist and will adjust algorithms going forward.

4. User interfaces – make it simple

A key factor in the success of any project is how quickly people who start using the designed processes and functionality can get up to speed and actually start working with them. At the Forum, many companies were talking about projects across finance, HR, procurement, and more using simple Fiori applications and other next-generation user interfaces to get projects quickly up and running. The targeted, user-specific approach is a big time saver and seems to be taking training time and costs down dramatically.

5. Customers want to engage and collaborate

It’s not only the retail and consumer products industries that care about customer interactions. Customers of all sorts in the forest products industries have much higher expectations. They want to be responsible as much as possible for their own destiny, and they like to interact more with their suppliers including having full transparency in their order process. They expect instant answers and easy-to-use communication channels.

Most companies I spoke with have an active project in their sales area to provide more insight into inquiry, order, claim, and financial status on any device. They all share two main goals:

  • To empower their salespeople to engage customers with real-time information about products, pricing, and order status via any channel they want. It sounds simple, but smarter, more informed salespeople can deliver higher revenue, more profit, and happier customers.
  • To deliver on customers’ expectations to be able to get the information they need on orders, claims, and pricing – any time anywhere – without having to even talk to a salesperson. This self-service option looks like it is not only satisfying customer expectations but can also cut down on the time forest products, paper, and packaging companies need to spend answering basic order, pricing, and delivery questions .

And those were just some of the really interesting discussions I was part of. I would love to hear more from others that attended.

SAP industry Forums and Conferences are an important aspect of fostering a vibrant community. SAP truly values, respects, and protects the special relationship we have with our customers, and we think this is a cornerstone for continued joint success. If you want to learn more about what SAP is doing in the forest products, pulp, paper and packaging industry, please check out our website.

About Jennifer Scholze

Jennifer Scholze is the Global Lead for Industry Marketing for the Mill Products and Mining Industries at SAP. She has over 20 years of technology marketing, communications and venture capital experience and lives in the Boston area with her husband and two children.