Volume 4 Issue 6 June 2022
In this Issue
Welcome to Industree 4.0 for June, 2022, exclusively sponsored by SAP.
By Kai Aldinger, SAP
Coping Mechanisms for the Carbon Clampdown

Five focus areas to help paper and pulp companies turn regulatory readiness into a competitive edge

A war in Ukraine may have diverted focus from the war on climate change for the moment. But the global regulatory push to curb carbon emissions continues unabated, with initiatives such as the U.S. Security and Exchange Commission’s newly proposed rules to require corporations to disclose a range of information about climate-related risks and greenhouse gas emissions.

Besides requiring companies to disclose how they manage climate-related risks and how those risks could impact their business, the SEC proposal unveiled in March also would require them to provide information about greenhouse gas (GHG) emissions — those produced directly from their own operations as well as indirect emissions from the energy they purchase, and from upstream and downstream activities along their value chains. The rules would phase-in over the 2023 to 2027 fiscal years.

Similar standards are set to take hold in Europe as part of the EU Taxonomy, a policy designed to establish uniform sustainability and GHG reporting standards across the European Union. The EU also is moving to implement a plan to tax imports of certain materials and goods based on the greenhouse gases emitted to manufacture them. Though the Carbon Border Adjustment Mechanism (CBAM) policy approved in March initially will apply to goods deemed at highest risk of carbon leakage, including steel, cement and aluminum (but not pulp or paper), policies like these put all carbon-intensive industries on alert that their regulatory responsibilities are likely to mount in coming years. In the U.S., various states have enacted or are actively exploring extended producer responsibility (EPR) policies that would shift responsibility for end-of-life management of products upstream to producers/manufacturers. EPR policies already are in place in five Canadian provinces and throughout Europe, according to the National Caucus of Environmental Legislators. While organizations like the American Forest & Paper Association aren’t big supporters of EPR mandates, some of the world’s largest corporations and brands are. 

As customer preferences align with regulatory policy in pushing for a more sustainable, producer-centric approach to managing paper and packaging waste, the opportunity for paper and pulp companies to gain a competitive edge by taking a leadership position with respect to sustainability and carbon-reduction grows stronger. To capitalize on that opportunity, they’ll need to focus on five key areas:


Factoring sustainability considerations, including greenhouse gas emission reduction, into decisions made across the business.

Manufacturers have begun to make sustainability part of their organizational DNA, factoring carbon footprint and other sustainability-related KPIs into their end-to-end processes and decision-making, from sourcing to product design to manufacturing operations to transportation/logistics. Having the ability to centrally monitor, manage and optimize business/operational processes is critical to making this a reality, giving organizations a clear line of sight into the relationship between sustainability investments and business success. How does a simple adjustment in the type of ink used for a paper product impact that product’s recyclability? How will switching from virgin material to recycled material impact the performance and profitability of a product? Answering questions like these begins with responsible design of products.


Strengthening supply chain visibility and control.

To comply with the next wave of carbon-reduction policies, companies need integrated tools to collect, track and analyze the make-up (and prove the origin) of the materials and equipment they use, and the products they make. With the ability to periodically calculate product footprints at scale across the entire product lifecycle, they can optimize products and processes via a continuous feedback loop. Externally, meanwhile, this track-and-trace capability enables a company to evaluate its supply chain partners based on their sustainability performance. How does one wood or fibers supplier or pulp mill stack up versus another in terms of emissions, in addition to their price and quality? In a world where the poor sustainability performance of one link in the value chain can undermine a company’s own sustainability goals and initiatives, organizations must be capable of evaluating suppliers on factors beyond just price and reliability.


Beefing up reporting/disclosure capabilities.

Visibility and track-and-trace are just part of the compliance equation. With new reporting requirements like those from the SEC and the EU taking hold, companies also must have the ability to collect and standardize data from disparate, sometimes unstructured sources, both internally and from other entities in the value chain, then package that data in various formats to meet reporting requirements that may differ substantially from jurisdiction to jurisdiction. What they need, essentially, is a single reservoir from which to draw trusted data, with the ability to standardize and tailor that data to meet varying reporting requirements. With the help of a standard cloud platform supported by machine learning- and artificial intelligence-driven tools to detect patterns across locations and units, doing so becomes significantly less daunting. It also makes measuring progress toward internal sustainability goals that much simpler. 


Building and actively participating in business networks.

Complying with EPR policies, and evaluating current and potential procurement and supply chain partners based on their sustainability performance, requires close communication, cooperation and alignment with other companies. Digitally connected business networks give companies the framework within which to share data to fulfill reporting responsibilities, work together to deliver more value to customers, and even collaboratively explore new business models, services and revenue streams with waste- and emission-reduction in mind. As part of a network, they’re aligned and sharing risk in working toward their sustainability goals.


Keeping a close eye on regulatory/policy developments in all the countries and markets in which they are active.

Staying abreast of new government policies, statutory requirements and rules isn’t getting any easier, particularly for companies that do business in multiple countries, regions and markets. Here’s another area where machine learning- and artificial intelligence-driven tools can help, by scanning a huge array of documents, websites and other relevant sources to identify — and alert organizations to — any legal, regulatory or policy developments that could impact the business. So if a new tariff requirement emerges in Asia, or a new EPR law is passed in New York, they’ll know about it.

In a pulp and paper business that, according to the European Commission, already “has an excellent track record in resource efficiency and innovation,” companies that excel in these five areas will be well-positioned to build on that legacy by delivering the sustainable products and lower-carbon performance that both customers and regulators are coming to expect.

For additional insight from a recent survey of 2000 global companies into what they are doing around sustainability check out this new Oxford Economics white paper.
First published in Paper360 May/June edition.
What to do with data?
By Pat Dixon, PE, PMP

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

There is no lack of data in our industry. Our historians are full of data, and much of it we rarely look at. At the same time, instrumentation is producing more data by adding diagnostic and configuration data along with the signal. What do we do with all this data?
There are data mining applications that can look at pools of data and learn something from it. However, it takes people to setup these systems, understand the results, and apply them to provide benefit. Nothing will happen without people being involved.
Most facilities and companies do not have people with the time or skillsets to do the data analytics work. Increasing headcount to bring those people in is never an easy sell. Even if you do add such people, in order to make it cost effective you need to keep these people fully loaded with data analytics work. The problem is the demand is not constant. There are times when urgent problems require putting everything else aside to see what the data is telling you. If you are fully staffed for that occasional demand condition, you will have idle resources when those demands conditions don’t exist.
That is why outsourcing is a good option. With Industry 4 connectivity, you do not have to have people on premises. An outsourcing arrangement allows a partner to scale up or down for your demands without impacting your headcount. Firms that specialize in data analytics work and have paper industry domain knowledge can remotely connect to a system and get the historical data. While there can be reluctance to enable access to the outside, COVID made this a practical necessity and set a new expectation in the workplace. There are always cyber security concerns, but data analytics work is not writing to your system; it is a read-only case where the data is pulled into analysis to yield a discovery. Even in the case where security expectations cannot be met, exporting to external media or sending CSV files can get the job done.
It is important to understand that the data in your mill is not the only data of interest. At the enterprise level, pulling data from multiple mills can reveal learnings that would not be apparent in isolation. The Big Data approach to data analytics takes a more comprehensive approach, and the resources required may be outside your organization.
If you aren’t able to take advantage of the mountains of data being produced by your mills, and you are unable to scale up the resources when data analysis is in high demand, you are throwing away data and money. The winners in the Industry 4 era are those that will know what to do with data.  

More Computerization
The US Federal Reserve has begun investigating the concept of turning the US dollar into a digital currency. Ironically, this study has started at a time when the private digital currencies are experiencing their worst performance in their brief history. Nevertheless, there is no doubt digital currency is in our future.

Of course, one might say this is a change in name only, for how much paper currency do businesses handle now? Even physical checks have become rarer and rarer, we all move money electronically these days.

Blockchain technology should make transactions safer, but it does mean more interactions with our electronic systems. And there is another point, small vendors, upon which all business depend to a certain extent, will be slower to adopt such technology. I am thinking of the thousands of suppliers of recycled paper, essentially "mom and pop" enterprises, yet important to the pulp and paper industry today.

Then, as fast as we have new technology, the nefarious element will be trying to find ways to defeat it to their advantage (despite technologies like blockchain).

In the long run, security technology will be the portion of our enterprises which we can guarantee will grow. This is almost completely a computerization issue.

Kohler Brings Industry 4.0 Digital Transformation Directly To The Factory Floor
By Susan Galer, SAP
Imbuing the factory floor with Silicon Valley’s fail-fast-to-win ethos is central to Peggy Gulick’s mission as director of Digital Transformation Operations and Smart Factory at Kohler Co. I had a thought-provoking conversation with Gulick at the recent SAP Sapphire Orlando event, where she brushed aside the market speak to share a strategic game plan for the next generation of manufacturing with breathtaking simplicity.
IoT Security in the Era of Remote Work
By Michael Greene
Arguably one of the largest corporate impacts of the pandemic is the shift in working habits and thus remote work IoT security. At the height of lockdown restrictions, remote working became the norm, and this continues to be the preferred working model for many employees even as offices have begun to open back up. For example, according to a recent Pew Research, 76 percent of employees who are working from home cite their preference as their primary reason for doing so.
IIOT trends in 2022
By David Edwards
The Covid-19 outbreak has forced industries to automate processes with Industrial Internet of Things (IIOT) and digitize their operations as much as possible.

Within manufacturing and supply chain industry, most organizations have taken measures to transition to Industry 4.0 so they can continuously automate and improve conventional industrial and manufacturing processes and cut down wherever possible during this recession.
Edge Computing is Bringing Industry 4.0 to the Shop Floor
By American Machinist
Over the past decade, cloud-based software and services have become ubiquitous. Consumers have been first and fastest to embrace these offerings and delivery models, but adoption in the industrial sector has been slower and more measured. More recently, particularly as expertise and staffing have become thinner, the ability to centralize data and information for organization-wide visibility and analysis while reducing cost and complexity of on-premises infrastructure has led to a cloud migration by manufacturers. Many industrial organizations are comfortable running cloud-based applications today.

Industree 4.0 is exclusively sponsored by SAP