• Manufacturing

How digitalization can enable sustainable forest and packaging operations

For forest and packaging companies, managing forest and fiber assets in a competitive yet sustainable way is becoming a core strategic capability. Digitalization is a key enabler in this work. Tobias Eriksson, Vice President and Managing Director of EFESO Consulting for the Nordic region, gives a deep dive into the complexity of the industrial landscape and outlines the steps that can be taken to navigate it.

“Forest and packaging companies need to innovate to overcome a contradiction between the ability to drive and capitalize on increased downstream innovation to capture growth pockets and at the same time managing industrial supply chain assets efficiently,” says Tobias Eriksson. As Vice President and Managing Director of EFESO Consulting for the Nordic region, he leads the forest and packaging industry practice within the group, which serves forest and packaging companies worldwide in building an industrial future.

“If forest and packing companies want to achieve sustainable and profitable growth, they must effectively manage this contradiction between value chain integration and multi-specialization,” says Eriksson. “In a macro sense, the digitalization of forest and packaging companies must support, enable and align with these two elements.”

Enhancing adjacent circular flows

Because fiber and its derivates, such as packaging solutions, can enter adjacent circular flows, there is an increased importance of the strategic capability to understand and enhance adjacent circular economic flows. This makes it crucial to leverage usage data and process loss intelligence data within an ecosystem of partners across adjacent flows, and digital sustainability product passports that follow products throughout the cycle.

“Digitalization, data activation, analysis, monitoring, end-to-end tracking and tracing, and forest fiber origin guarantees come together with solid TPM and Lean based operational platforms to allow these companies to deliver on sustainability and consumer demand while still remaining competitive. Future investments in the industry should already upfront be leveraging digitalization opportunities as part of the move to transform white- and blue-collar work into higher value-adding activities. Modern early management techniques are well fit for this,” Eriksson states. 

Keeping up with a changing landscape

There are good examples of intelligent locally developed digitalization use cases and proof of value initiatives that help to paint the picture of how forest and packaging companies are innovating to keep up with all this change through central funding and testing.

“Drone-based inspection of forest assets, virtual 3D simulation and training environments for emergency shutdowns in pulp production, image-based quality inspection of paperboard production via intelligent analysis tools – these are just a few examples of what’s out there,” enumerates Eriksson.

Local initiatives often do not scale due to the long investment cycles of the industry. This can lead to phenomena such as multi-generational production line equipment within a single mill, or non-integrated software environments. “The fact that a solution works in one site does not mean that it scales well into others,” he points out.

Today, the industry can be analyzed via big data. “Allowing different shift teams to work in different ways makes it hard for artificial intelligence to provide real prevention and prediction insights. You could analyze signals around a paper machine to prevent web breaks,” says Eriksson.

“But this can only be done effectively atop basic total productive maintenance (TPM) procedures in place, as a foundation, to involve and engage co-workers in the digitalization journey. Standards and routines eliminate unnecessary system noise, so, as an example, standardized deeply embedded cleaning, inspection, and lubrication (CIL) procedures are crucial. We see people engagement as a prime success factor for the bottoms-up part of the digitalization journey.”

Integrating IT work with Kaizen

One of the key challenges along the path to unlocking the full potential of Industry 4.0 is the question of how to integrate horizontal smart digitalization platforms and modern high-performance operations systems based on the Shingo Guiding Principles – which act as the basis for building a sustainable culture of organizational excellence – and Lean and TPM models.

“There is a concrete path towards this goal, that industries are starting to address now,” says Eriksson. “And that’s to fully integrate IT organization work with an organization’s continuous improvement teams – part of the Kaizen approach of making constant small positive changes that can result in significant growth and efficiency enhancements – and other more focused improvement teams, more top-down project driven change.”

Circular economy flows – economic systems aimed at minimizing waste – are replacing traditional value chains. The forest and packaging industry has the means to this transformation not only for its own directly controlled circular flows, but also as it enters into others’.

In addition, Eriksson highlights a cultural acceptance of losses in particular in the Forest and packaging industry that must be challenged. “Many operational losses can be eradicated by routines developed by the people working in processes: we believe in reducing web breaks to zero, reducing water consumption by 30%, reducing material losses by 70%. If these examples were expanded horizontally across the industry, the world would be in a much better state and the companies of our industries would be better equipped, standing on a fundamental capability to also attack sustainability losses in all areas in the same systemic way.”

Further to this, a good example of a transformational step-change opportunity to minimize strategic losses in circular flows lies in volume and routing planning software for transportation system solutions for packaged goods. “Up to 50% of sustainability losses here originate in goods transportation,” says Eriksson. “Forest and packaging companies must understand that this step-change shift in mindset, thinking broader is also a necessary part of digitalization.”

Creating a roadmap towards sustainable operations

Forest and packaging companies must build a robust Industry 4.0 strategy roadmap for their digitalization journey. This must, in turn, be supported by a target information and communication technology architecture. “EFESO has found that, for the forest and packaging industry, taking a five-year perspective is optimal, with a zoom-in on the first 12 to 36 months,” says Eriksson.

Circular economy flows—economic systems aimed at minimizing waste—are replacing traditional value chains, and the forest and packaging industry has the means to this transformation not only for its own directly controlled circular flows, but also as it enters into others’.

EFESO has likewise identified that investor screening of poor environmental, social and governance (ESG) scores for forest and packaging companies, with investors and pension funds selling shares in so-called “dirty” companies, can follow negative publicity.

“The fact that ESG share price valuation indexes strongly influence the direction of forest and packaging companies means that there is a need here for increased transparency—another opportunity for digitalization,” says Eriksson.

Changing the system itself

To fully unlock the potential of sustainable digitalization, forest and packing companies must adopt the sustainability agenda systemically. Sustainable Development Goal 9, in particular, calls for action for sustainable industrialization and encourages organizations to take control of their internal sustainability losses, integrate sustainability work into operations, and engage co-workers on every level, leveraging a strong TPM-based backbone capability.

Today, machine learning and pattern recognition can be used to predict and prevent defects and disturbances, a technique has been around for many years now. “If forest and packaging companies address the challenges and implement the basic TPM work, there are huge opportunities to get support on the journey to zero losses with existing solutions and further spurred and accelerated by new technology. We just need to constantly stay abreast, injecting new competence while involving and engaging the know-how that we have in our organizations. ‘There is no substitute for knowledge,’ as the improvement guru W. Edwards Deming would have said,” Eriksson concludes.

This article is part of a series where different stakeholders discuss the opportunities offered by digital innovation for the manufacturing sector, ahead of our virtual roundtable ‘How can digitalization deliver circular and sustainable manufacturing?’.

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