Volume 5 Issue 1 January 2023

In this Issue

Welcome to Industree 4.0 for January, 2023, exclusively sponsored by SAP.


By Kai Aldinger


Six ways paper and packaging companies can survive and thrive in uncertain times

Like many industries these days, paper and packaging producers face a complex and uncertain world. For reasons spanning geopolitics to the whims the buying public, these firms find themselves under intense pressure from rising costs, supply-chain hang-ups, and economic upheaval. They must adapt quickly to survive in the short term and build resilience for the long haul.

Energy costs are front and center. Many mill products industries – including paper, steelmaking, aluminum smelting, and cement production - are famously energy intensive. But even before prices skyrocketed in the wake of the war in Ukraine, energy comprised about 20% of paper production costs. It takes a lot of heat and power to turn rock ores and wood into metal coils and rolls of newsprint.

While extreme energy prices in Europe are the biggest news, no one is truly insulated: Even energy-rich countries are seeing huge increases in natural gas and electricity prices because its LNG exports subject domestic users to global pricing. “It terrifies me about the longer-term impact, where people pack up their tent and go home, because it’s just too hard and no one’s making enough money,” BlueScope Steel CEO Mark Vassella recently told the Wall Street Journal.

Other challenges loom. High interest rates and the threat of recession not only lend uncertainty to sales forecasts, but also impact capital-investment calculations. Raw materials costs are volatile. Labor issues abound, from trucker shortages to threatened strikes by aggrieved rail workers. Layer upon that the longer-term – and legally mandated – need to reduce carbon emissions and you have an industry slipping into crisis. Here are six ways paper and packaging companies can survive today and position themselves to thrive tomorrow.

1) Reduce financial impact

This involves mitigating financial risk through better forecasting, hedging material and commodity prices, and optimizing energy use. On the energy front, that means monitoring meter data in real-time and matching it with energy contracts and bills, and looking for ways to time-shift production to off-peak energy-price windows. Given financial pressures, paper and packaging companies need up-to-the-minute insights into global bank balances and liquidity forecasts. That requires the integration of relevant data from disparate sources on a common platform. Looking ahead, sophisticated cost modeling and risk management tools for commodity price, working capital, and financial risk management will benefit the business in the longer term.

2) Create end-to-end transparency

This requires visibility into costs and delivery timing across the supply chain and using that information to manage production more efficiently. Near-term approaches include GPS-based alerting and predictive ETAs for incoming shipments and real-time order tracking. Predictive monitoring of multimodal transportation arrivals enables exception alerts related to delays that could impact production. Longer-term solutions include simulations of supply chain disruptions and manufacturing performance using advanced analytics, machine learning, and AI feeding off real-world supply-chain data, IoT sensors, and other human and automated inputs.

3) Adapt production to a new reality

That new reality is one in which it’s crucial to optimize energy consumption and efficiency through more responsive maintenance and process improvements, a tighter grip on energy and material costs, and more precise production planning. In the near term, it’s about cutting overhead costs and work delays through the continuous assessment the entire production process, from materials consumption to inventory management to equipment usage and maintenance. Going forward, companies that harness prescriptive maintenance and scenario-plan asset performance and production alternatives will be able to quickly adapt to changing market conditions and exploit emerging opportunities.

4) Secure access to production inputs

In the immediate future, this means responding swiftly to supply disruption and swings in demand, staying connected to trading partners, and plugging in new sources of supply quickly. Going forward, it will be about predicting possible supply shortages in advance and collaborating with well-vetted suppliers to manage supply chains in ways that balance inventory availability with the risks of disruption.

5) Optimize business planning

Are there opportunities to adapt the product mix to optimize margins, taking into account the different energy consumption of particular products, and to use short-term market-demand signals in demand planning? Simulating various scenarios based on real-time, real-world data from across the company is indispensable here. Looking ahead, paper and packaging firms can cut costs and improve asset utilization with the help of scenario-based demand, capacity, and transportation simulation and planning.

6) Improve competitiveness

All of the above will improve competitiveness. But in addition, now is the time to maximize profits by implementing dynamic pricing. That means quickly responding to market changes, assessing buying habits, fine-tuning customer segments, and forecasting the impact of pricing changes before you implement them. While AI is already deployed in dynamic-pricing solutions, it will play an increasing role over time as planning and analytics become more deeply integrated – as well as more powerful – thanks to unified, cloud-based data architectures.

Paper and packaging companies are facing a litany of challenges and serious uncertainty. To survive and thrive, they’ll need to combine flexibility and agility based on a thorough understanding of costs, crystal-clear visibility into operation sand the supply chain, an ability to scenario plan along many vectors, and a commitment to continuous improvement.

Learn how industrial materials companies are creating a more sustainable future by becoming adaptable and resilient.

Room in the Inn

By Pat Dixon, PE, PMP

Vice President of Automation, Pulmac Systems International (pulmac.com)

Having recently completed the Christmas holiday, the story of a family looking for a room in an inn is fresh on our minds. For the homeless today, this is not an ancient gospel narrative.

On December 17, I participated in an online meeting to celebrate the conclusion of a project that lasted over 2 years involved over 200 engineers around the world volunteering thousands of hours to provide a system for managing the homeless condition in Nashville TN. This is an example of the 4th industrial era enabling great work.

The problem in Nashville was that it was very difficult to manage what resources were available for which people. An organization named Room in the Inn was doing its best to provide help for the homeless. From their website (https://www.roomintheinn.org/mission-history-values):

“Now, we have nearly 200 congregations from a wide variety of traditions and over 7,000 volunteers who shelter almost 1,500 men and women from November 1 through March 31 each season.”

To manage this situation, Room in the Inn had a load of spreadsheets and databases to figure out who needed help, where there was a room they could find shelter, and what their needs were. This produced a headache to manage. What they wanted was a single application that made it easy to get the information they need and keep accurate information available.

That is what was accomplished with this project. Without the ability for engineers around the world to connect through the internet to a development environment that allowed concurrent engineering, as well as communication among developers that would be impossible or much less effective without internet connectivity, this project would have been practically impossible. Today Room in the Inn has a system that eliminated the headaches they used to have and greatly improves their ability to fulfill their mission.

Many of us are aware that 4th industrial era has tremendous potential for improving industry. It also has the ability to make our lives better. It is nice the celebrate an ancient gospel narrative becoming a reality through modern technology.

System Compatibility

You might guess, my home is about as Industry 4.0 as can be imagined. I use Alexa for many tasks, from waking me up, reminding me of appointments, doing simple math, playing my favorite SiriusXM (satellite radio), weather forecasts, and so forth.

I also have a first generation Simplisafe home security system. The carbon monoxide detector recently died. I noticed that the CO detector for my system no longer in the online catalog and I thought, "Uh oh, they are going to make me upgrade." And sure enough, they are, to the latest system, Gen 3. The good news they are shipping me an entire new Gen 3 system, with the CO detector, of course, for free. The bad news is I have to locate all 30 sensors (which go from our garage to our basement to our attic and to an out building) and replace them. Then I have to configure them (that is simple, it is only giving them names) on the online dashboard. This will take a Saturday and hopefully it will be done by the time you read this. Thank goodness, the entire thing is wireless.

But wouldn't it have been easier and cheaper for all involved if a little compatibility had been designed into the new generations?

For want of a CO detector, a system was lost...

Edge computing key for rapid Industry 4.0 adoption

By Joe O'Halloran

As edge computing is set to disrupt many sectors in the Industry 4.0 era, study finds edge computing holds a promise to dramatically improve data processing for mission-critical applications and accelerate uptake.

Read the full article here

IoT 2022 in review: The 10 Most Relevant IoT Developments of the Year

By Anand Taparia

As we start 2023, the IoT Analytics team has again evaluated the past year’s main IoT developments in the global “Internet of Things” arena. This article highlights some general observations and our top 10 IoT stories from 2022, a year characterized by a skyrocketing inflation rate, ongoing supply disruptions, and a looming recession.

Read the full article here

Top Four Cybersecurity Trends For 2023

By Tim Liu

As we look to 2023, the year seems to be shaping up as a "rinse and repeat" of cybersecurity challenges seen during the last few years—with some notable new trends and variations that will no doubt keep security professionals on their collective toes. A few of the developments we're watching closely in the coming year include the following.

Read the full article here

What Is Batteryless IoT?

By Ben Calhoun and David Wentzlof

What does the future of batteryless IoT look like, and how will it impact the industry? Professors, Doctors, and Co-Founders of Everactive, Dr. Ben Calhoun and Dr. David Wentzloff, discuss just that on the Podcast. Ben and David start by sharing what batteryless IoT is, the current landscape, and where it is currently being implemented. Ben and David also share insights into the top applications of the technology, challenges in scaling, and how you know batteryless IoT is suitable for your application.

Read the full article and listen to the podcast here
Industree 4.0 is exclusively sponsored by SAP