Paper Industry Reveals Productivity Lessons

With the help of automation and software upgrades, companies like International Paper are proving their technology prowess by making existing assets more effective.

The electronic age is upon us. That’s good news for the majority of industries looking for faster, more efficient ways to share information. It’s bad news, it seems, for the paper industry.

Think about it: When was the last time you picked up a paperback book vs. downloading the novel onto an e-reader? Do you stop to grab the daily newspaper or read the headlines on your smartphone? And, when there is an important company meeting, do co-workers request a hard copy of the PowerPoint or do they ask that you email it to them?

The paper industry has been subjected to disruptive digital technology that has threatened the very livelihood of some companies. To that end, indus- try pundits have put the “luddite” label on the pulp and paper industry because of its slow reflexes when it comes to adopting new technology. With a lot of capital investment in machinery that, in some cases, is decades old, plus the old idea that there will always be a need for pen and paper, perhaps it is no surprise that paper manufacturers were hit hard by the digital evolution.

Nevertheless, some of these paper companies have not only survived an industry obstacle, but they are thriving—and are now teaching other industries a thing or two about weathering a disruptive technology storm.

“This is a 100-year-old industry, and most of the technology processes we utilize today were designed and built 50-100 years ago when energy and raw materials were inexpensive,” says Tommy Joseph, senior vice president of manufacturing and technology at International Paper (www.internationalpaper.com‎), headquartered in Memphis, Tenn.

The new mantra in this energy-and raw-materials-intensive industry: Make more product with less energy. “There is nothing new in the overall process. There is not a new way to make paper—it is a tried-and-true process,” Joseph says. “The real opportunity is around efficiency—investing in new processes, new technology and new capabilities that will reduce consumption and make more product with less energy.”

With the help of automation and software vendors, companies like International Paper are proving their technology prowess. Because, quite frankly, Joseph adds, “the pulp and paper industry gets a bad rap. We have to be innovative.”

So innovative, in fact, that International Paper has figured out how to adapt, change and reinvent itself to accommodate the market.

“Everyone sees the digital age as a death knell for paper, but it is growing,” says Mark Humphlett, industry and solutions director at Infor, a supplier of enterprise business applications, noting new opportunities in the paper industry.

Specifically, traditional paper mills are positioned for growth in new product areas such as industrial packaging, food containers, corrugated boxes, tissue and fluff pulp—used in diapers—which is big in the expanding Asia-Pacific market.

It’s just a matter of rethinking, repositioning, retraining and some equipment retrofitting.

Packaging needs paper
In 2005 and 2006, International Paper underwent a major transformation, selling $11 billion of the company’s vast forestland assets, as well as various non-core businesses to focus on packaging and paper. To that end, between 2008 and 2012, the manufacturer invested $11 billion in acquisitions that transformed the company. Global business is now tied heavily to packaging paper and pulp. This past July, the company announced that years of North American restructuring are starting to pay off, reporting that operating earnings increased 42 percent in the second quarter to $409 million, despite a 1.7 percent decline in net sales.

While some plants have closed, International Paper is retrofitting others. For example, a mill in Franklin, Va., which produced white office paper, was closed in 2009 only to reopen in 2012 as a fluff pulp producer. Similarly, the company is making a $70 million investment to double the size of an Ohio plant and convert its paper-making processes to better serve the food service industry by making paper cups, lids and plates.

Transforming the type of products the plants churn out does not always require the rip-and-replace approach to equipment. Rather, it requires a technology investment that can be layered on. “The great big chunks of steel that go round and round can be reused; the speed of controls to make it happen is what we replace,” says Joseph.

Automation technology vendors like Honeywell Process Solutions (www.honeywellprocess.com) and ABB (www.abb.com) are also seeing their pulp and paper customers asking for new tool-sets that will enable them to monitor the health of a machine and make adjustments online.

For example, the linerboard of a box will have different strength characteristics to meet performance requirements of customers. “We have the ability to measure things related to fiber orientation. Sensors measure everything online and make adjustments in order to achieve the specific strength characteristic of the board,” says Brad Garnett, marketing director for Honeywell’s pulp and paper business.

Paper companies are also moving to advanced process control that can model a process and predict how it will respond to changes. In this scenario, operators can set a system to run at any level of consumption as long as the end product costs less, for example.

“It’s about squeezing incremental productivity and additional cost to make existing assets more effective,” Garnett says.

ABB’s Jim Fisher agrees that paper manufacturers are looking for new ways to get more out of the machines. The focus is on measurement and control of the product that is made so that the quality is as good—or better—than the competition, and increasing the tonnage produced each day.

Advanced processing tools like online spectrum analysis help engineers collect and measure data in order to make adjustments that will result in better performance. But companies want more expertise and support, especially as they expand plants globally and work with different operator skill sets.

Fisher says ABB’s ServicePort is a data collection and measurement tool with a twist: The onsite toolset delivers information and ABB system experts who can remotely analyze and make changes to the system. “They have our expert eyes on any system, anywhere and anytime,” he says.

International Paper has enlisted the help of Rockwell Automation (www.rockwellautomation.com) experts to remotely keep an eye on some of its rural plants. In addition, the company is turning to its automation suppliers to connect its own subject matter experts (SMEs) internally.

Joseph says about 200 SMEs are currently flying around the world with a mission of improving productivity. But they can’t be everywhere all the time. So the company has developed a system that provides online real-time access to unit operations in any plant around the world.

“An operator in India can be communicating with an operator in Russia and Brazil and helping them with the same [system] modification,” Joseph explains. The goal is to apply technical resources and knowledge more effectively across multiple facilities worldwide.

A paperless paper plant?

Similarly, the ability to share information quickly is driving technology purchases at Shanghai Zidan Printing Co. Ltd. (www.hktdc.com) in China, which specializes in manufacturing printed food-packaging bags and boxes, as well as catalogs and booklets. Some of Zidan’s key customers are Yum! Brands (www.yum.com) (KFC, Pizza Hut) and As a printing company, Zidan may not have experienced the same paper problems as International Paper, but they face the same market pressure. “Customer demand is always changing,” says Zidan’s general manager Lu Wai Da. “The more obvious changes in the past few years include pricing, which is getting lower; the growing demand for variety; and an increasing change in frequency. Overall, there is a demand for increased innovation.”

Zidan has enlisted the help of Infor to help automate the sequencing of production jobs. Infor’s (www.infor.com) SyteLine software manages the company’s varied manufacturing environments in small lot sizes by coordinating material movement and work instructions.

“In almost all industries, customer lead times are getting shorter and shorter,” says Dale List, Infor’s vice president of software development. “The ERP [system] is fully updated on what materials were used and what can be shipped out later that day.”

Historically, operators on the shop floor have relied on paper-based instructions that lead them to material pickup locations. When the information is tracked electronically and the operator is using a handheld device, turnaround on delivery and even changes to the order can happen later in the process but still be delivered accurately and on time.

According to Zidan, SyteLine manages large volumes of orders every day, arranging the required material for production and effectively monitoring the production process. It also keeps an eye on business performance at any moment by visualizing the cost details of every individual situation.

“Without that automation and real- time feedback in both directions, a company wouldn’t be able to respond to the pressure of reduced lead times,” List says.

In addition, SyteLine enables all employees to share all types of information in real time. Infor’s Ming.le is social enterprise software that, like Twitter, discovers connections. This enterprise version of Twitter, however, marries communications and business processes to help deliver relevant data to employees and connect col- leagues by functional responsibility. Ultimately, it leads to faster decision-making, List says.

As decisions are made faster, products are produced more efficiently, and new markets are explored, there—Tommy Joseph, senior vice president of manufacturing and technology, International Paper is also a human element that must be considered.

“There has been a huge culture shift over the last 10 years,” says International Paper’s Joseph. With new capital and technology investments comes new training requirements. To help with that, the company is putting together collaborative online training for operators in multiple languages that can be applied while they are on the job or away from the job, in a common, systematic way. Ultimately, it’s about seamlessly sharing information.

With all of that said, what’s happening at International Paper and the pulp and paper industry as a whole is not all that unique. Every industry will suffer from a down market at some point in time, so the best advice seems to be: Build a foundation that enables a quick reaction to changing market conditions.

The ability to sense a problem, assess the situation, and batten down the hatches has served paper-industry players well, say industry observers. Yes, today’s players are more innovative than they were decades ago, but in reality, much of the progress made is as simple as going back to the basics.

According to Joseph: “What’s changed for us over the last 10-12 years? We’ve made the resources we have more productive.”

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