Forest products industry looks to increase digital tech
June 21, 2018 – A new report from Accenture suggests forest products companies plan to increase their investments in digital technologies over the next three years in part to protect their market share and competitive advantage.
Based on a survey of 200 executives at forest products companies in 10 countries, the report, “Forest Products: The shift to digital accelerates,” also found that cybersecurity remains a concern for these companies, with only a minority able to counter attacks effectively, thereby prompting data-security concerns.
Among the report’s key findings: More than four-fifths (82 per cent) of the executives surveyed said their organizations are investing more or significantly more in digital technologies than they did in the previous financial year. An even greater number (88 per cent) expect to increase their overall digital investment over the next three years. Among the top three technologies cited for digital investment, the most popular were big data/analytics/edge computing; artificial intelligence (AI) / machine learning (ML); and advanced process control, cited by 46 per cent, 41 per cent and 38 per cent of respondents, respectively.
The predicted upward spending trend can partly be attributed to the perceived risks from insufficient digital investments. Lost opportunities for market-share growth and lost competitive advantage ranked as the most significant threats of not investing in digital, each cited by approximately half of executives. The business benefits of applying digital technologies cited most often among the top three by respondents were improved product quality (cited by 44 per cent); greater flexibility/agility to meet customer needs (39 per cent); and greater collaboration with the business ecosystem (37 per cent).
It is also notable that, at a time when the industry has a laser focus on cost reduction, an overwhelming 94 per cent of forest-products executives said that their organization is able to determine the financial benefit of using digital technologies — which will likely provoke further investment in relevant technologies.
The digital technologies that respondents cited most often as among the three offering the most potential for overall return on investment in the next 12 months were big data (43 per cent); AI/ML (41 per cent); and advanced process control (37 per cent) — the same technologies cited as being the most popular for investment.
“In this asset-intensive industry, the application of digital technologies to collect data is not a new phenomenon,” David Rossi, a managing director at Accenture who leads its Natural Resources consulting practice, said. “However, forest products companies must accelerate planned investments in technologies like analytics and AI to unlock the value from this data to fully capitalize on the potential of Industry X.0 technologies for business reinvention.”
Lower cybersecurity investment threatens business value from digital
In spite of the fact that survey respondents cited data security concerns as the greatest barrier to achieving greater business value from digital, industrial cybersecurity is seeing lower levels of investment allocation than other digital technologies. Only one-third (33 per cent) of respondents predict it will be within the top three areas for investment, despite the increase in digital technologies and thereby connectivity in operations that creates new attack vectors.
The low level of expected investment in industrial cybersecurity could be due to the fact that executives perceive its ROI as fairly low, with only one-third (34 per cent) of executives citing it as one of the top three technologies that have the most potential for ROI.
As a result of the low investment, forest products companies struggle to identify and respond to cyber threats. More than half (54 per cent) of the companies that currently track cybersecurity breaches reported more than 30 attempted breaches in the last year, with approximately the same number (55 per cent) unable to detect a cybersecurity breach until days, weeks, months or even years after it had taken place. More tellingly, less than half felt they could execute various cybersecurity activities within their company, including monitoring for breaches (cited by 46 per cent of respondents), managing the resulting financial risk (46 per cent), minimizing disruption (45 per cent), measuring the impact of a breach (42 per cent) or identifying its cause (40 per cent).
“As digital technologies become more embedded across the value chain, forest products companies’ exposure to cyber threats will increase, and investment will be crucial to bolster their response and resilience,” Robert Boyce, a managing director and cybersecurity lead for Accenture’s Chemicals & Natural Resources practice, said. “While the industry has not suffered a high-profile breach in recent years, cybersecurity should not be allowed to slip down the agenda. The wisest companies will invest now in data-centric security capabilities, enabling swift reaction and intervention, when industrial operations are threatened.”
Accenture conducted an online survey of 200 C-level and top management executives in the forest products industry, focusing on the use of, and investment in, digital technologies. This research focused on forest products companies with global annual revenues greater than US$500 million and that currently leverage digital technologies and/or are pursuing digital transformation. The survey was fielded between October and November 2017 and included executives from companies headquartered in Australia, Brazil, Canada, Finland, Indonesia, Malaysia, Norway, Singapore, Sweden and the U.S.
Worker found dead at White Birch's Quebec millOctober 15, 2018 – Investigators are looking into the cause…
Buckman increases pulp and paper freight pricing in North AmericaOctober 11, 2018 – Buckman, a global company specializing in…
Ahlstrom-Munksjö acquires Expera Specialty SolutionsOctober 10, 2018 – Ahlstrom-Munksjö has completed the acquisition of…
Closing the loop on paper costs: raw materials in papermakingOctober 11, 2018 – Efficient use of raw materials in…
BLRBAC 2018 Fall Meeting
October 22-24, 2018
PEERS 2018 Conference
October 28-31, 2018
International Bioenergy & Bioproducts Conference (IBBC)
October 29-31, 2018
PaperWeek Canada 2019
February 4-7, 2019