A common strategy of mill-wide information systems in a pulp and paper company is to provide a framework that efficiently reports production and variable costs to the mill’s ERP system at the end of every product run. By exposing lost time, energy consumption and accurately reporting raw material consumption for each mill order, production planning systems and their users can gain valuable insight into profit margins by grade. Additionally, the mill’s information system should be used to contribute valuable information back to the planning and scheduling system at the corporate level to share this insight for future scheduling allocation.
Typically, a paper company receives a sales order for so many tons of a given product or grade of paper. The product recipe or Bill of Materials can be found either in the company’s ERP system or in the mill MES system (or both). The recipe typically outlines the anticipated raw material consumption for manufacturing a given product. At the end of each month, a physical inventory of all materials is done and the variances of raw material utilisation are assigned according to the ratios found in these recipes. The cost applied to the mill’s finished product inventory for each grade run is only as accurate as the recipe of record. The actual consumption of raw materials across any given grade run is not validated or confirmed by this method at all. Many times, the recipe differs from machine to machine and certainly from mill to mill. Also, it is rare that all the variable costs that are collected by the mill information system (PI System) are actually assigned to the recipe anyway. Nevertheless, the mill information system tracks the start of a grade run and the end of the grade run and all of the material flows during that run. The key to balancing these real-time flows with the actual recipe is found in the integration of these data sets. PI contributes the totals for the actual raw material consumption and can be used to account for actual costs in near-real-time and add reality to the grade costing process.
When a mill wants to actually see what raw materials are consumed in any given grade run, the recipe line items must be mapped and checked against the PI tag calculations that represent the aggregation across the grade run (or batch). Customers have used various interface methods to map and record this valuable information up into an ERP system to help determine where grades are manufactured most cost effectively. SAP MII is one such platform for integrating SAP Bill of Materials (recipes). Another method used by customers is OSIsoft’s RLINK business package. Other customers have configured internally developed applications within their own mill MES systems with a link to PI such as PI-RDBMS to do similar mappings. Although mill company strategies for connecting grade recipes to PI data vary, the results of comparing accurate costs of manufacturing are always eye-opening and uncover many opportunities for process insight.
Execute on a sustainability strategy
In this age of corporate social responsibility, environmental sustainability is not just critical from a reporting and compliance perspective, it also makes sound economic sense. The more material you keep with the product and the less you lose out of your mill’s waste water and air streams, the more money you make. Stricter governmental regulations only strengthen the business case for ‘going green’ and staying ahead on the sustainability curve. The first proactive step for mills to take is to use their PI System tools to keep track of and report environmental excursions, detailed energy usage by asset, benchmarked asset performance, and then identify opportunities across all areas for improvement. As a result, many existing mill control technologies can be strengthened and applied to bring performance gaps into compliance yielding significant returns to the business. Some examples of using the PI System software effectively in sustainability initiatives are:
* Reporting and visualisation of data on a regular basis can minimise raw material, fuel and other energy costs associated while maximising production and yields.
* Implementing simulation technology on top of a PI System can be used to model complex production and energy loops including supply and demand, heat integration systems and boiler feed water circuits, and combustion optimisation can help reduce emissions and fuel consumption.
* Using wireless technology or manual collection PDA devices to collect additional environmental or energy performance data from places that are not easily accessible, or where wiring costs are prohibitive. These supplemental data can often complete the needed data sets required for extensive process evaluation and environmental reporting.
Companies such as RockTenn are saving 1% in energy costs by implementing an enterprise-wide PI infrastructure across the corporation, which also resulted in a reduced carbon footprint due to a decrease in the consumption of fossil fuels. Other paper companies like Abitibi-Consolidated and Smart Papers have been able to balance their paper production with on-site boiler capacity to sell power back to their electric provider and give these mills an additional source of revenue when previously they were faced with lower orders and excess operating capacities, turning idle assets into profit centres in tough economic times.
In summary
A mill’s return on investment is measured by factors such as agility to respond to changes in demand, greater operational efficiency, better managed inventories, increased output of assets, and ability to re-invent itself and thrive in a declining economy. In today’s highly competitive paper market, mills are challenged to make profitable manufacturing decisions and act on the best available information to make mission critical decisions that can differentiate them from their competition. The PI System software can provide this type of information in a scalable, maintainable and actionable framework.
The competitive advantage many paper companies strive to gain can be found in the collection of data from disparate sources, the data history and the combination and presentation of the PI System information in a format that mill management can utilise to create high value opportunities in today’s global economy.
Readers wanting more information on OSIsofts PI System can visit: http://instrumentation.co.za/+C14093A
For more information contact Nick Stead, OSIsoft, +27 (0)31 767 2111, nstead@osisoft.com, www.osisoft.com
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