How Industry 4.0 is Transforming the Pulp and Paper Industry

Today’s pulp and paper industry faces a challenging environment. While total consumption of paper products such as newsprint has fallen due to the prevalence of digital substitutes, many products like personal hygiene products remain essentials, and the demand for packaging materials and sustainable alternatives to plastics continues to rise. Although this demand helps keep pulp and paper mills in business, it also puts pressure on them to increase production output while improving sustainability and maintaining profitability. This is no small task with energy and raw material costs on the rise and added complications from the COVID-19 pandemic, but Industry 4.0 technologies offer ways for companies to adapt to this new business environment.

What is Industry 4.0?

Also known as the Fourth Industrial Revolution or 4IR, Industry 4.0 involves digitalization and all the ways it can make operations more efficient. Connectivity and the Internet of Things (IoT), big data, analytics, artificial intelligence (AI), machine learning, and other advanced technologies work together to produce new levels of automation and accuracy.

The manufacturing sector began adopting Industry 4.0 almost a decade ago, and it has spread widely since then, with many companies around the world considered it to be an important strategic priority. The pandemic intensified this, as businesses struggled to maintain production in the face of physical distancing requirements, reductions in staff, an increase in the amount of business done over the internet rather than in person, and other challenges.

There are many technological elements to Industry 4.0. Sensors collect data on factory operations and transmit it via the IoT, allowing employees to monitor processes and enabling AI to scan for defects and other quality issues in real time. Computer programs can analyze this data and use it for applications such as improving operational efficiency and determining when to conduct preventative maintenance, maximizing output and minimizing downtime. Virtual reality (VR) and augmented reality (AR) are also valuable tools, from facilitating training in a safe environment to remotely operating machinery and vehicles or offering expert guidance to on-site personnel.

Despite the essential role that technology plays in Industry 4.0, however, it’s of little use without trained workers to operate that technology and to interpret and make decisions based on the information it collects. Training existing employees and hiring new ones is therefore essential when upgrading a site or an entire company. Upskilling and reskilling employees — teaching new skills for them to use in their current position or to allow them to change positions — needs to be accounted for in the planning and budgeting process.

Adopting Industry 4.0 provides value from the start of the manufacturing process through to customer orders and fulfillment. By collecting, storing, and analyzing data throughout the value chain, it becomes easier, faster, and more efficient to do things such as ordering supplies and materials, determining optimal quantities and types of products to manufacture, accepting and filling customer orders, and providing up-to-date information on where those orders are in the fulfillment process. This allows manufacturers to cut down on factors like storage space and lead time, reducing waste and costs as well as improving customer satisfaction.

Another advantage of Industry 4.0 is sustainability. Because it can significantly improve operational efficiency, it can reduce energy usage and waste, both by improving the manufacturing process and by reducing the amount of inventory keep on hand and the risk of stocking more than the company can sell.

Pulp and Paper Industry Overview

The early stages of the COVID-19 pandemic disrupted growth in the pulp and paper industry. But although the continuing trend towards paperless media may still threaten future growth, the sector’s revenue is expected to rise somewhat over the next several years, from around $350 billion in 2021 to over $372 billion by 2029. Improving efficiency will therefore be a key way to keep revenue increasing during a period that promises a slow growth rate.

Not all segments face the same market forces, however. Unlike the industry as a whole, demand for containerboard is expected to grow by 27% over the next several years. Increased ecommerce activity due to the pandemic, along with pressures to reduce the use of plastic packaging, have made paper and cardboard packaging a much more popular item than in the past.

Industry 4.0 in the Pulp and Paper Sector

Demand fluctuations and workforce challenges make Industry 4.0 technology more attractive than ever. Change can be slow in the paper and pulp manufacturing industry due to factors such as the scale of operations and the size of the investment needed to upgrade facilities, and without a clear vision and sufficient resources and knowledge, many digitalization projects can and do fail. However, adoption of digital solutions has picked up speed recently, rising from 6% adoption to 32% over the past several years. The pandemic further accelerated the move towards digitalization, as it helped businesses adapt to physical distancing requirements, worker shortages due to illness, remote work, and other challenges.

Inventory Management

On the supply end of things, raw materials typically make up more than half of a paper company’s costs. This means that applications like demand and price prediction models can create significant value by helping businesses order the exact amount of materials needed at the best prices, rather than buying an excess amount or needing to scramble to make up for a material shortage.

Maintenance and Repair

In pulp and paper mills it’s common for machinery to be running around the clock in order to meet production targets and maintain profitability. This can place a significant amount of stress on the machinery, and any downtime due to faults or breakdowns can be very costly. With Industry 4.0, sensors and analytics allow for these machines to be monitored, for issues to be caught early, and for preventative maintenance to minimize the amount of downtime needed to keep things moving smoothly and avoid larger delays caused by breakdowns. This lowers the risk involved in lean operations.

Workplace Safety

Efficiency isn’t the only aspect of operations that can be improved by digital transformation. Safety is an important concern at any mill, for the wellbeing of employees but also because accidents can cause substantial disruptions to operations. Smart technology can monitor factors such as chemical levels and air pollution, and can also detect dangerous issues with machinery before something becomes serious enough to harm the workers.

Keeping Ahead of the Competition

The average pulp or paper mill has upwards of 20 or 30 buildings, with machinery, activities, materials, products, and workers to monitor in each one. Collecting and centralizing data from all of these operations results in a more cohesive business with more accurate inventories, expense tracking, and maintenance plans. While initial costs for Industry 4.0 implementation may be steep, the returns can more than make up for them. As growth slows and the pulp and paper industry becomes more competitive, every edge that technology and digitalization bring can mean the difference between making a profit or running a deficit.

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