ERP for pulp and paper industry: Continuous optimization for process excellence

What does a pulp and paper enterprise understand better – its intricate paper and pulp machinery or its core ERP system?

Modern production lines are marvels of engineering, equipped with thousands of sensors relaying data in milliseconds. They’re constantly monitored via detailed dashboards and optimized for peak efficiency, quality, and sustainability, guided by comprehensive operational plans. This represents a state of remarkable visibility and control over physical assets.

In capital-intensive industries like pulp and paper, the focus has been on maximizing the performance and availability of expensive physical assets so investments flowed into their monitoring and optimization. ERP for pulp and paper industry was implemented as necessary for transaction processing and accounting, but not necessarily understood as dynamic systems for continuous process improvement.

This historical focus has led to an imbalance where the ERP receives less attention in terms of continuous monitoring and optimization. Yet, a striking contrast often emerges when examining the ERP system – the “process machine” that orchestrates the entire business. Frequently, these critical systems operate as black boxes. Once configured, they run with minimal scrutiny, leaving a significant gap in understanding how closely their embedded processes align with current business needs or performance standards.

This isn’t merely a technical oversight; it’s a critical paradox. Disparity often arises because physical machinery offers immediate, visible feedback, whereas ERP inefficiencies can remain hidden, their impacts diffused across the organization.

As physical machinery becomes even more intelligent through IoT and AI enhancements, the gap with a a static, unexamined ERP system can widen, potentially creating a two-speed organization where advanced manufacturing is hindered by outdated back-office processes.

In an industry facing intense pressures to integrate AI, meet stringent sustainability regulations, and diversify into new growth areas like biochemicals and bioenergy, such an operational blind spot becomes a big liability.

ERP for pulp and paper industry: The true cost of an unseen “process machine”

The consequences of this “black box” ERP are far-reaching. Imagine attempting to operate a sophisticated paper mill without its sensor arrays or trying to upgrade critical machinery without detailed engineering blueprints. Such scenarios are unthinkable in the physical realm, yet they often reflect the reality for the “process machine” ERP.

This lack of clarity leads to a cascade of issues:

• Are processes designed a decade or more ago still fit for purpose, or have they become overly complex and outdated?
• Is a more efficient standard process available within the system, but simply unused?
• Crucial information, such as how frequently specific processes are executed — be it a few times a year or thousands — remains unknown, hampering prioritization for optimization.

Furthermore, this opacity creates major compliance hurdles. Identifying precisely where system modifications are needed to meet new sustainability reporting requirements or other regulations becomes a high-stakes estimation.

Similarly, successful AI integration hinges on well-defined processes and high-quality data; an opaque ERP makes it difficult to pinpoint suitable processes for AI augmentation or to ensure data integrity. Strategic diversification into new product lines, such as biochemicals, demands substantial process adaptation—a task made exponentially harder without a clear view of the existing process landscape.

Over time, unexamined + unoptimized ERP processes accumulate a form of process debt — ingrained inefficiencies and outdated logic that become increasingly costly and difficult to resolve, actively draining resources and agility.

The cumulative effect can be a state of strategic paralysis, where the organization sees market opportunities but feels incapable of seizing them due to the perceived complexity and risk of altering core systems.

How the U.S. paper and packaging industry can weather the tariff storm

Managing a volatile landscape of tariff uncertainty demands more than just reactive adjustments; it requires a proactive, strategic approach focused on building resilience and optimizing operations.

“Sensors” and “blueprints” for your ERP

While modifying and upgrading complex physical machinery is a significant undertaking, it’s achievable with accurate documentation and real-time sensor data. A similar approach is now viable for ERP.

SAP Signavio, for instance, can be likened to the “sensors” for business processes. It delivers process mining and intelligence capabilities, enabling companies to visualize how their processes actually execute in real-time. This allows for the identification of bottlenecks, deviations from standard procedures, and hidden inefficiencies.

Complementing this, SAP LeanIX acts as the “engineering blueprints” for an enterprise’s entire IT landscape, including the ERP system. LeanIX provides comprehensive enterprise architecture management, helping to map IT components, their interrelationships, dependencies, and how they collectively support overarching business capabilities.

Together, these solutions work to demystify the ERP, providing the clarity essential for informed decision-making, targeted optimization, and robust strategic planning. The synergy is powerful: Signavio reveals how processes are performing, while LeanIX clarifies what systems and architectural components underpin these processes and the broader business strategy.

The combined visibility allows a shift from reactively fixing process or system failures to proactively governing and designing them for optimal performance and strategic alignment, moving from crisis management to strategic control.

From insight to impact: Real-world wins for pulp & paper

The practical application of such clarity translates into tangible benefits for pulp and paper CIOs. Consider sustainability: understanding and optimizing processes with tools like SAP Signavio is fundamental to reducing waste, minimizing energy consumption, and lowering emissions.

SAP LeanIX can then map these sustainability KPIs to specific applications and processes, helping to identify improvement hotspots and track progress towards Environmental, Social, and Governance (ESG) targets.

In the realm of innovation, a “clean core” ERP—a common objective in digital ERP transformations facilitated by enterprise architecture tools and streamlined processes create the agile foundation necessary for impactful AI initiatives. These tools also smooth the path for entry into new markets, such as biochemicals or bioenergy, by making the mapping of new business capabilities and the design of efficient supporting processes manageable endeavors.

Pulp & paper ERP: Charting a path to a smarter process future

The pulp and paper industry is navigating a period of profound transformation, driven by demands for greater sustainability, efficiency, and innovation.

In this dynamic environment, an opaque, inefficient process machine type of ERP isn’t just an operational drag; it’s a critical risk. The ability to truly see, understand, and optimize core business processes and the underlying IT architecture is paramount.

MES is the backbone of your industry. When it comes to worldwide manufacturing execution systems, wouldn’t you rather run with a leader? Thought so. Learn more HERE.

Editor’s Note: This article first appeared in Paperitalo and is republished here with permission.