Trends, business pains & IT challenges
In addition to the general decline of the global economy following the Internet boom of the late 1990s, established pulp and paper companies are currently facing challenges on two major fronts: increased competition from new low-cost markets in the Asia-Pacific region, and the continuous need to keep up with improvements and innovations in product and asset management technology.
Industry players are seeking innovative ways to cut operational costs by consolidating business processes, increasing visibility and integrating IT systems across the entire enterprise, as well as streamlining collaboration with suppliers and partners.
Operational setbacks
Developments in information technology, as well as innovative asset management and process technologies, are paving the way for further process optimization in the industry. However, many firms still operate with stand-alone legacy systems that are inflexible and offer no standard interface to systems used by partner companies. This problem is particularly apparent when a company merges with or buys into another industry player. The resulting "joint" company is composed of diverse IT systems and applications across multiple locations as well as disparate, or even redundant, business processes.
Many papermakers are still struggling with poor financial and business reporting due to low levels of automation in data-collection, inadequate information for customer, production and profit analyses. Further obstacles include ineffective tracking of maintenance needs and machine downtime as well as low transparency of inventory. IT departments in many pulp and paper companies are struggling with frozen or reduced budgets and are under pressure to deliver a quick return on investments and a low total cost of ownership.
Companies are therefore seeking cost-efficient ways to optimize their operations and enable closer and synchronized collaboration with internal and external suppliers and partners. This is only possible when managers and decision-makers are able to make informed business decisions based on comprehensive, real-time information drawn from the entire organization.
The objective is therefore to leverage diverse applications in an integrated platform which harmonizes data and consolidates information from all IT systems and applications and makes them available to users in the entire collaborative network, when and where they need it.
Integrating people, processes and information
As production output does not always match the pre-defined quality standards or customer requests, follow-up activities such as reassignments or rework need to be taken into account during planning. Organizations must therefore be flexible in their reaction to unplanned output. Integrated business process management across the heterogeneous IT environments facilitates the speedy tracking and monitoring of operations and maximizes the value of sales force and marketing activities.
Developments in Internet portal technology have made it possible for users to easily access the data they require via a Web browser. Not all business partners are equipped with state-of-the-art technologies, but most have access to a Web browser. The portal therefore serves as the one-stop shop for all their information needs. Real-time virtual collaboration tools - such as newsgroups, chat, team calendars, application sharing and document stores - can be configured according to the role of the user and support this process of information exchange. Felix Schoeller, the global market leader in photographic base paper is offering added-value service to customers. Schoeller's collaborative portal provides customers with up-to-date and reliable supply chain information along the entire value chain - from material availability through to production, logistics and delivery - enabling online orders and real-time order confirmations. The company is also implementing a new technology platform to integrate business partners using third-party systems into its collaborative supply chain network.
Strategies in information technology
The key to resolving the business issues currently affecting the pulp and paper industry is an IT solution that allows a comprehensive overview of all relevant data in an integrated system landscape accessible to all users across the enterprise, as well as to external partners and geographically separate sites. This solution must be able to synchronize real-time information from different system sources and facilitate collaboration with suppliers and partners, giving companies the necessary flexibility to respond quickly to changes or disruptions in production.
Web services technology based on open standards such as XML helps companies maximize existing IT investments, ensuring high levels of system availability and accessibility. Such technology also enables companies to create new applications and leverage them in the integrated organization, giving them the scalability they need to adapt easily to changing requirements and ensure a low total cost of ownership from day one.
Manufacturing industries such as the pulp and paper sector are increasingly focusing on improving customer retention and loyalty in order to generate new business opportunities. Successful customer relationship management depends on the availability of accurate information on customers, sales and the supply chain.
Reinhild Gefrerer, is vice president, Industry Business Unit Mill Products, SAP AG. She is responsible for product development strategy and the global roll-out of SAP for Mill Products, SAP's industry solution for the metal, forest products, textile and building materials sectors.
