ai customer centricity automation industry pulp and paper industry

AI & Customer centricity needed by Automation industry

The Automation industry will need to consider the key drivers impacting its pulp and paper industry customers. According to the recently published investor report there are a few key drivers to note within the pulp and paper industry:

  • Increased size of pulp lines and mills

  • New applications for bio-based products

    Industry drivers for pulp industry - Source: Valmet Annual Review - Growth Trends

Case in point: A key customer segment for the Automation industry is the pulp and paper industry. For instance, in 2019 pulp and paper customers accounted for 69% of Valmet’s automation.

It is important to understand the key drivers that impact the pulp and paper industry i.e. customers if the Automation industry seeks to grow. According to a recently published investor report, there are a few key drivers to note within the pulp and paper industry:

  • Increased size of pulp lines and mills
  • New applications for bio-based products

The year 2020 has made industry leaders rethink their operational and sales goals. The automation industry is no different in this respect. For instance, ABB saw a decline in orders by -4% (H1 2019-2020) while Valmet saw a decline in order volume by -2%. Thus going forward, the Automation industry will need to innovate on their solutions to weather this decline in orders.

The strategy industrial companies are focusing on now is to become more Customer Centric. This is reflected in, for instance, Valmet’s recent press release where they site their goa as: to provide the best customer experience across all the touchpoints of the customer journey. During times of high
volatility, becoming more customer-centric would offer the highest promise of growth. Taking this strategic route will push the providers to develop solutions that cater to the specific needs of customers.

A solution highlighted by Tieto’s recent article, to identify customer-centric opportunities is the utilization of deep AI and integration with business systems. To better utilize existing data, utilization of machine learning techniques may offer deeper insights into improvement areas in current operations.

Artificial intelligence (AI) has the potential to create value across sectors - Source: Digital/McKinsey - Driving impact at scale from automation and AI

Inspite of market fluctuations in pulp prices the pulp and paper companies are looking to increase mill capacity and explore new application areas, e.g. MetsäFiber’s latest sawmill investment. From a timing stand point, above goals are opportunity areas for industrial automation solution providers. To further their pitch and value offering implementing AI based technology with current product, will allow automation product to have higher capability and offer increased cost saving opportunities to their pulp industry customers.

Based on the reading and research above, being customer centric offers the quickest route to automation providers to identify growth opportunities.

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