The industry’s approach to digital technology
Today, forest products companies are investing in digital technology across the organization. However, they are most often focusing their digital efforts on quality management (cited by 62 percent) and IT (59 percent), followed by production execution and the supply chain.
Currently, forest products companies are using a variety of digital technologies, but cloud is the most widely deployed, with 61 percent of respondents having adopted it or piloted it in their organizations. However, companies seem to be shifting their focus to other technologies—in particular, analytics, artificial intelligence (AI) and advanced process control (APC). Executives see these three technologies as being strategically important and having a positive impact across a wider range of activities (e.g., quality management, maintenance, etc.), compared to other technologies. They also see them as having the greatest potential for overall return on investment. Not surprisingly then, analytics, AI and APC are expected to be the top areas of digital investment over the next three years.
These findings suggest that the executives feel that the shift to the cloud is well in hand, and they now are focused on the next phase of digital adoption. For example, forest products companies have been capturing large amounts of data from process control systems for years, especially in paper mills. Analytics and AI will enable them to make effective use of that data to improve operations. And by extending the use of APC from paper mills to downstream converting operations, they will be in a better position to take advantage of data-driven intelligent automation, which will not only increase efficiency, but also help address growing shortages of skilled production labor.
When asked about the potential benefits they see from digital technology, executives most often cited predictability in manufacturing, and greater service differentiation. These were followed by improved ecosystem collaboration, more effective operations and plant management, and faster process/reduced lead time to market.
But executives also see challenges to realizing these benefits, such as a lack of internal data management capabilities or the immaturity of digital technology. However, data security concerns topped that list, with operational reliability being viewed as a key area of cybersecurity risk.
Forest products companies are not especially confident about their ability to deal with growing cybersecurity threats. More than half of the respondents said their organizations are not able to execute various cybersecurity activities, such as managing financial risk from breaches, minimizing disruption from a cybersecurity breach, and identifying the cause of a breach. Most forest products companies (83 percent) track cybersecurity breaches. However, while 39 percent said breaches were successfully detected within hours, more than half (55 percent) said that it took days, weeks or months to do so.