Paper Technology International 2024 - Journal - Page 48
PAPERTECHNOLOGYINTERNATIONAL
I
Integrated business planning and
digital transformation - paper
and packaging industry
Tim Rech, S&OP / IBP Senior Manager at I-Plan North America
Jari Kaukiainen, Director, Business Development – I-Plan Europe
INTRODUCTION:
In the paper and packaging industry, numerous business planning decisions, both large and small, are made daily throughout the
business cycle. Each decision, regardless of size, holds the potential to create or destroy value. Ideally, every key decision variable would
be readily accessible and evaluated collectively. Such an approach would lead to optimal decisions that maximize pro昀椀t while satisfying
customer needs. However, in reality, most decisions are made with incomplete or, at best, outdated information. This leads to a bias towards
familiar and measurable factors, potentially resulting in skewed conclusions..
Consider, for example, a mill that decides to produce a more
environmentally friendly product requiring different raw materials to
meet market demand and increase order volume. Or a mill aiming
to enhance energy ef昀椀ciency by altering the production cycle for all
its grades. In these scenarios, costs are traditionally calculated by
estimating machine speeds, raw material costs, transition expenses,
etc., with margins applied to determine pricing.
But how can we dynamically understand the downstream
impact on service levels, inventories, warehousing, and the
ef昀椀ciency of downstream equipment? What insights are needed
regarding future order patterns to determine the frequency of runs,
or whether production should be based on a make-to-stock basis
requiring quick-turn inventory?
Failing to incorporate all variables in a simultaneous analysis
risks sub-optimal results and potentially incorrect conclusions
regarding costs and pricing. It also overlooks the need for assessing
more scenarios.
Even with all necessary information available, the complexity
of analysis often surpasses the capabilities of spreadsheets. More
ef昀椀cient tools are required to allow analysts more time to effectively
evaluate scenarios.
Imagine, though, making decisions by considering far more
variables than we can currently comprehend, using intelligent tools
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to explore all plausible options. Each option would be optimized
based on key business drivers and presented in 昀椀nancial metrics, a
universal language that everyone understands.
With today’s technology and real-time data availability, this
level of integrated business planning and digital transformation is
increasingly within reach.
Digital Transformation: The Path Forward
How do we achieve digital transformation, a topic widely
regarded as a priority and the future of business?
A 2022 PwC survey revealed that 60% of executives
consider digital transformation their most critical growth driver, with
digital capability being central to {business} integration.
Figure 1:
Packing line.
