Achieving Customer Centricity: Part 5 in our Series on The Intelligent Enterprise for Paper and Packaging
Customers Expect a consumer grade experience in all aspects of life and work
You know the feeling - you are on hold with your insurance company or bank - or online trying to navigate their underperforming website - and becoming increasingly annoyed. You are thinking, "how can a company today not have the same level of experience of an Amazon, Uber provide so effortlessly?" Customers, of course, now expect certain outcomes, and the feedback they provide can be used to create products that really matter. The world is shifting into an Experience Economy, and paper & packaging companies can benefit from better understanding their customers.
It is imperative to understand how your customers are using your products to deliver value for their customers - all the way to the end consumer. If the expectations of that end consumer are changing, that will drive ripple effects all the way back up to your business. True customer centricity means understanding the ultimate end consumer and how their behavior is changing, and then make every business decision based on this insight. Today's dilemma for paper and packaging companies is that they are disconnected from the consumer, as these relationships are typically owned by consumer products companies, for example, who use packaging materials made from paper.
In 2025 paper and packaging companies will be able to maintain customer-for-life relationships with shared risk and a focus on long-term value based on a 360-degree understanding of their customers, starting with the detailed understanding of requirements and needs through experience management and ending with the knowledge of how customers use the products in their daily operations. They will interact seamlessly with their customers on a constant basis through multiple channels, from Web to direct and including IoT connectivity. And they will find ways to gather information about their customers' customers - for example, through analyzing social media or tracking their own goods throughout the entire ecosystem. This encourages open interchange of data and ideas, and the offering of new products and services - all of which improve the final customer value.
Paper and packaging manufacturers start toward this goal by evolving their current routes to their customers into a true omnichannel model. This means that customers can be served seamlessly even if they change the channels by which they interact with your company. This situation will then be extended to include a real-time view - not only of the customer itself and your interactions, but of all products that they bought from you in the past, including how the products are performing and the conditions under which they are used. These multiple perspectives will finally allow you to transform the collaboration with your customers into a 360-degree relationship, from product design and sensing demand to delivering value through products and services.
Putting the end customer's point of view at the center of every decision is a key prerequisite for success in the digital age and experience management helps in capturing these prerequisites. This does not stop in the sales department but also applies to which products are built and what services are offered. Paper and packaging companies want to become customer-centric enterprises, and the ability to focus on their most valuable customers is one of their key priorities. Since short and reliable delivery times are important for their customers, paper and packaging companies want to prioritize the production of their products based on the individual importance and individual product configuration of each customer.
Technology can support the journey to customer centricity
In many paper and packaging companies today, disparate information and data silos are hindering the ability to have a clear picture of customers' orders and order status, leading to some common challenges:
Achieving consistent product configuration in the area of mill products can cause significant effort.
Production, costing structures, price, and more need to be calculated based on product specification.
Changes to customer orders will impact many different levels and departments, leading to lack of visibility.
Order fulfillment and delivery are separate processes, making product and delivery tracking difficult.
In case of claims, many departments need to be consulted to understand the situation and provide appropriate assistance to the customer.
What the future can look like
Having a uniform approach and underlying technology platform supports a company to put customers' success at the center of all activities, leading to a single point of truth, 360-degree view of past and current customer activities, leading to better decisions, the ability to react quickly to late order changes and the ability to track goods and delivery, enabling instant service on claims. Consider if the following capabilities would help you win and keep more happy customers:
The customer requests unique product features, and machine learning can propose the correct product configuration.
All dependent processes will adapt based on custom requirements. Change requests to orders can take effect immediately, and decisions can be communicated to the customer in a timely manner.
A high level of integration across sales order processing allows for total visibility of cost drivers at all stages. Knowing transportation details helps avoid delays and find alternatives. Product status and origin can be tracked across all material levels.
Transparency of customer history and activities helps make better decisions. Machine learning can automatically define the right reaction in case of claims for timely reaction.
High customer satisfaction results from individually configured products delivered on time. Value-added services such as answering "Where is my order?," identifying the product's origin, and swiftly handling claims can be provided easily.
Thought leader example: Mondi
The market for paper is fiercely competitive. Only those who personally look after their customers' needs and deliver what they promise will be successful in the modern business landscape. This is the reason why
Mondi Uncoated Fine Paper has digitalized its sales process. The European market leader for uncoated fine paper implemented SAP solutions that support sales staff to always have customer data at hand. Even on an airplane on the way to a customer, they can fully prepare as the cloud-based solution can be used offline. This makes it instantly clear what each customer really needs. Furthermore, Mondi can now better understand the strengths and weaknesses of its competition and consequently position itself more effectively.
Stay tuned for more articles coming about how technology can help paper and packaging companies become intelligent enterprises.
Alfred Becker, SAP SE, Global Lead for Paper and Packaging
Terms and Attributes
I recently had a discussion with a very well credentialed control engineer. I ask him "What is Industry 4.0?" What I heard resembled a lot of what I have heard from others. I then asked, "What isn't Industry 4.0?" After a long pause to think about it, he gave an example of an application that he did not think was Industry 4.0. I replied and offered my explanation, which was the subject of my March 2019 column. He disagreed, and that largely concluded our discussion.
As the captain said in Cool Hand Luke, "What we have here is a failure to communicate." The issue is that we are trying to use terms without defining the attributes that distinguish these terms.
As an example, imagine a baseball. Given that opening day will be significantly delayed until the virus abates, all we can do is imagine. What is a baseball? Some of its attributes are:
It is round
It has stitches
It is smooth
It weighs between 142 grams to 149 grams
Its diameter is between 73 mm to 76 mm
It has a characteristic bounce
We can likely list more attributes, but using this list of attributes will help us in the following comparisons.
Is a football a baseball? A key attribute of a football is that it has pointy ends. A baseball is round and has no ends. Therefore, we can distinguish between a football and a baseball.
Is a bowling ball a baseball? It is sufficient to notice that a bowling bowl lacks the attribute of stitches, but diameter and weight would also distinguish it. A bowling ball is not a baseball.
A billiard ball? Maybe the diameter is hard to distinguish, but try bouncing a billiard ball and a baseball and you will see a difference. Along with the lack of stitches, it is clear a billiard ball in not a baseball.
How about a golf ball? Any golf ball I have ever seen has dimples, which a baseball lacks. Along with diameter and bounce characteristic, we can distinguish between a golf ball and baseball.
Lastly, how about a tennis ball? This may be tough because it is about the same size and has seems just like the stitches on a baseball. A tennis ball is bouncier unless it is an old one, in which they might be pretty close. However, every tennis ball I have ever seen is fuzzy. Baseballs are not fuzzy, and therefore we can distinguish between the two.
I realize this was a very remedial explanation, but in the confusion of our current Industry 4.0 dialogue it is necessary to examine the fundamental premises.
What are the attributes of Industry 4.0? In my March 2019 column, I said the Internet (the global public digital infrastructure) is the distinguishing attribute of Industry 4.0. So does the German Federal Ministry for Economic Affairs and Energy, who created the term Industry 4.0 in 2011:
"For Industrie 4.0, it is not the computer that is the core technology, but rather the Internet."
If the ministry had listed all the attributes of Industry 4.0 so that we could distinguish it from Industry 3.0, there would be no reason for this article. Unfortunately, I do not see any such list. As a matter of fact, the ministry has a glossary of terms on their website which includes the following:
"I4.0 compliant: Compliant to criteria which are still to be defined (currently no definition of the content exists)"
Given that the originator of the term has not defined how to create system that complies with it, it is clear that the only attribute to an Industry 4.0 system or solution is the Internet.
Therefore, any industrial automation technology or solution that lacks the Internet as an attribute cannot be Industry 4.0. The Internet is the enabling power of Industry 4.0, upon which new solutions can be built. The enabling power is the attribute of each phase of industrial evolution, as shown in this table:
Industry was powered by humans and animals
1600 - 1800
The piston engines of Newcomen, Leopold, and Watt replaced muscle power with steam
1880 - 1920
Edison and Tesla provided the means of harnessing electrical power for industrial use
Muscle power, steam power
1950 - 1980
Digital converters and processors enabled automation of human activities in industry (SCADA, DCS)
Human labor, pneumatic controls, electrical relay logic
A public network infrastructure for the entire planet enabled connectivity of industrial facilities with minimal effort and investment
Proprietary networks, human labor
How can we distinguish Industry 4.0 from Industry 3.0? It is not the evolution of Industry 3 usages. Each phase in the table above replaces a prior means of empowerment. The evolution of a technology is not a replacement and therefore cannot be considered Industry 4. For example, Moore's Law is 50 years old and does not show a noticeable inflection point that coincides with the introduction of Industry 4.0 in 2011. It cannot be argued that greater computing power is an attribute of Industry 4.0. The applications that existed prior to the Internet can be enhanced by Industry 4 but they are not replaced. Therefore, the following are not uniquely Industry 4 applications:
Are there other attributes of Industry 4.0 that distinguish it from Industry 3.0? If so, I would like to know what they are. If you would like to take a swing at it, please email me at firstname.lastname@example.org. Batter up!
Pat Dixon is Southwest Region Engineering Manager for Global Process Automation (GPA), a controls system integration firm.
In the last month, a short 29 days ago, the shortest month this year, the world has turned upside down in ways none of us could not imagine "way back then--23 February 2020." Retreating from a world of globalization and getting close to each other, we are rapidly finding ways to be effective at a distance.
Industry 4.0 is a prime way of doing this. I predict Industry 4.0 will be advancing at light speed now. We must find ways to maintain our businesses and keep our distance at the same time. Artificial Intelligence, along with plain old software coding (done in modern, creative ways as SAP can do) are the keys.
Internally, here at Paperitalo Publications and Talo Analytic International, we have been doing this for a long time, nearly twenty years, at the small company level. We are now working exactly the same way every day that we always have. We are
not spending any time asking what will happen to us. We
are spending our time asking what can we do for the pulp and paper industry?
For your enterprise, I urge you to contact SAP. If you need help making that contact, let me know, we can put you directly in touch with them.
Certain trends are becoming visible and shaping organisational efforts in the coming year. First, the industry will see a greater sense of connectedness emerging between people, process and machines.
Second, technologies like mixed reality, AI, ML and autonomous technologies are becoming mainstream and will bring greater attention to supplementary elements such as AR/VR based visualisation, predictive maintenance and self-heal algorithms. Cyber security will become mandatory as discussions about device and data security are slated to increase over time.
Integrating Customer Relationship Management (CRM), Enterprise Resource Planning (ERP) and Product Lifecycle Management (PLM) systems to enable every team to know in real-time how their work affects others is key.
Predictive maintenance via IoT offers big upsides, but few easy wins
Not having a top-to-bottom plan for getting real value out of the oceans of data an IoT project can generate is the biggest reason that companies don't see measurable results from predictive maintenance, said Forrester analyst Frank Gillett. Businesses sometimes get excited, place sensors everywhere they can, and then expect the payoff to develop on its own.
For a smart factory to deliver maximum value, all the devices and equipment on the network need to have non-stop, perfect connectivity, be it short- or long-range. This way operators can operate the machinery from anywhere in the compound, remotely collaborate on tasks, and be alerted about problems in advance.
Technologies and Processes for Industry 4.0
Another technology massively influencing the adoption of IIOT is the use of augmented reality (AR) in the form of industrial augmented reality (IAR). IAR uses computer vision (usually in the form of embedded systems) to create visual prototypes and digital simulations which can massively reduce R&D costs and time to market.