The paper and packaging industry faces a series of transformations driven by digital disruption. In all aspects of business, technology is transforming how the industry operates.
Imagine a new series of business processes that transform how a paper mill operates. With continuous data flowing, decisions are better informed. Assets can self-identify problems early. Efficiency measures are constantly updated.
The digital paper and packaging industry
For decades there has been a standard business model for the paper and packaging industry. The model centers on building and operating large mills. These mills produce a commodity at a particular quality level. Costs are driven as low as possible to maximize profit margins.
That model is changing.
Instead, five digital pillars today guide new business models. These new models need a new modality to thrive, based on a keen understanding of five digital pillars.
Collectively these pillars are critical for future success in the industry. Paper and packaging companies that develop a digital strategy that covers all five pillars are poised for future success.
The pillars are:
- Outcome-based customer experiences. Customers today expect rich, interactive outcomes while using your products.
- Integrated transactions and analytics. Platforms are needed to bring together transactional and analytical data in real time. To be responsive, this information needs to drive “live” or real-time decisions and interactions.
- Smarter and engaged workforce. Employees and contractors need the right information in real time to connect with customers. Decision-making needs to be better informed by data analyzed fast and delivered to staff who need it.
- Customer collaboration to increase growth. Customers are willing and able to provide insights, share usage data, and suggest changes. Companies must be able to respond rapidly to customers wherever they are and whenever they want to interact.
- Big Data and the Internet of Things. With more smart, connected devices, there is tremendous opportunity. With devices collecting and sharing data, companies need complex tools to gather and report on information. The rise of Big Data means better data storage options are available, including in the cloud. Stronger analytics programs now inform all elements of production.
For companies that embrace the need to use digital technology in new ways, there is great promise. This evolution does not necessarily mean major capital outlays.
In fact, as a recent CapGemini Consulting white paper indicated, existing capital may be the key. “Companies that are mature (in the digital space) are better at driving revenue through their existing assets,” the paper states.
An example of transformation
Let’s look at a hypothetical example of how this digital transformation could play out. (What is Digital Transformation?)
It starts with sensors
Consider the use of sensors.
Connected machines equipped with sensors offer a bounty of data. These sensors can continuously collect, store, and send data in real time. The data in turn provide insights on machine status, productivity, and health.
All of these data points are fed into advanced analytic models that can predict failures early. Decisions are made quickly in response. Spare parts are ordered with a few keystrokes. Experts are called in to assess the issue. Maintenance, repairs, or other corrections are done proactively. As a result, the company avoids lengthy downtime and damaged product. Costs and lost revenue are both mitigated.
Those same sensors can feed predictive analytics programs that helps improve operations. Analytics can be used to assess likely production yield and product quality. This information also can help optimize energy consumption.
Analytics drive quality, improved customer service
With real-time data analytics, plant managers can be sure the mills provide the right level of quality for each individual customer. In turn, the need to rework orders because of quality flaws or production delays is much lower. This efficiency lets the company provide reliable and accurate expected product availability dates. Proven reliability is crucial for commodity businesses like paper production. With accurate availability windows, customers are less likely to switch suppliers.
More services possible
With better information, companies can enhance relationships with customers in other ways, too.
Detailed product information available for sale is possible with the collection and analysis of data. Collaborative product planning and development services can improve on-time delivery rates and help suppliers plan better. Proactive, data-driven resolution of claims builds credibility and customer retention.
What it means
The potential benefits are heady. Better integration of digital technology leads to major business advantages. There is a higher rate of return on deployed assets. The work environment is safer and more efficient. There is less product rework. In some cases, equipment monitors itself, recommends repairs or maintenance, and even orders parts.
In addition, products are made with the least possible energy use and at the ordered quality. Customers have a much greater level of satisfaction.
Evolutionary innovation in the paper and packaging industry is bound to continue. All this performance data can guide future R&D efforts. Intellectual property may emerge in the form of patents, copyrights, and trademarks. With integrated systems, R&D can partner better with sales, marketing, and production areas.
It is a time of opportunity for the paper and packaging industry. While technology has made for tighter profit margins and shifting demands, there is vast potential. With better information and smarter tools, modern companies can find new ways of modeling and doing business.
For more on this topic, see our white paper on How Digital Transformation can save Pulp, Paper and Packaging.