3 Ways to Minimize Digital Risk


Digital adoption is a natural fit for companies in media, entertainment, finance, health care, and education. But progress has lagged in many industrial sectors, including paper manufacturing. A McKinsey study found that 80 percent of process companies considered digital manufacturing to be a critical driver of competitiveness, yet only 13 percent said their organization was “digitally capable.”1

One of the barriers is the disconnect between operational technology, or OT (which deals with operating machinery) and information technology, or IT (which manages the flow of digital data). These two infrastructures are inherently different, posing challenges for facility managers, engineers, and CIOs in setting goals, integrating systems, anticipating conflicts, and realizing the promised outcomes of automation.


The world of IT is fast-paced and highly adaptable, with programmers and developers routinely pushing out new technologies and software. If a new technology has any issues, developers are accustomed to deploying fixes and updates on the live application until the issue is resolved.

However, within an OT environment, stability, reliability, and safety are the priorities. The complex and sensitive legacy equipment and control systems found in paper mills require careful maintenance and thorough testing prior to making upgrades. One wrong move could result in production delays to the tune of millions of dollars.

Integrating low-risk approaches to digitalization can yield measurable results.

Fortunately, the Industrial Internet of Things (IIoT) is enabling the convergence of OT and IT, allowing companies to systematically evolve their entire operations. The connectivity of all equipment and devices in the cloud and the deployment of data tools have the potential to transform businesses. But how does a company pursue digitalization? Very few process manufacturers have the resources to get there overnight.

I head a data analytics and digital solutions company called merQbiz® that works with the paper industry and recycling supply chain to streamline processes, reduce costs, improve quality and increase revenues. Our customers want to invest in technology that carries minimal risk and delivers real business value. This is possible through the use of three low-risk approaches to digital deployment. These are:

1. Pilot projects. The initial project implementation should be small and manageable: Establish benchmarks, monitor progress against those benchmarks, and calculate the outcomes to inform future deployments.

Making a facility-wide or enterprise-level leap to the IIoT is often impractical due to the costs associated with personnel, implementation, and continued monitoring. For this reason, many papermakers are opting to carry out incremental improvements—identifying areas with the greatest need for optimization where the most substantial gains can be achieved.

Be transparent and thorough in identifying pain points across your organization in order to pinpoint areas where automated processes, better data collection, and an improved user experience can deliver significant value. Finding a viable starting place and identifying areas of need are arguably the most vital steps, as the decisions made at this stage will drive actions and expenditures. Pilot projects executed correctly can help tackle challenges related to procurement, production, quality, inventory, logistics, maintenance, and more.

Case in point: Cascades Recovery, a division of Cascades, Inc., was concerned about recovered paper quality and bale yield in light of China’s ban on recycled materials. The company entered into a pilot project at its Greenpac mill in Niagara Falls, NY, to test merQbiz’s BaleVision quality assessment and data analytics platform.

During the trial, Cascades found that bale inspections could be conducted in minutes rather than hours, and with far more accuracy. Results from the pilot also revealed opportunities for cost reduction in raw material procurement and potential for optimization within the mill’s operational and administration processes. The pilot approach gave Cascades the opportunity to experience the advantages of a technology before committing to a full deployment.

2. SaaS technologies. Bypass lengthy contract negotiations and painful installations of on-site software applications and instead use the flexibility of “Software as a Service” (SaaS) to quickly ramp up nearly any type of business technology.

While SaaS—or cloud-based software—has been around for decades, it has become mainstream only in the past few years. And its use in industrial automation is rapidly growing. According to 2020 findings from Software Advice, more than 60 percent of software seekers are interested only in web-based products, while less than 2 percent specifically request on-premise software.2

With SaaS, customers retain ownership of their data, which is stored in the cloud. Vast improvements in data protection and industry-specific security protocols have made web-based data now more secure than data stored on in-house servers, giving companies confidence in SaaS for critical data management.

Because SaaS solutions are subscription-based, they are typically less expensive than software purchased for on-premises use. They provide easier plug-and-play implementations and greater agility for customizing per use case.

Case in point: A new SaaS is now available that measures and certifies the quality of recovered paper before it leaves the seller’s location. Quality data is accessible by all parties electronically via a subscription-based cloud solution, giving both sellers and buyers full transparency to confirm that the product meets the agreed-upon quality standards. This is especially valuable to exporters who can now have confidence, before the shipment ever leaves the port, that their counterparts in Asia and other locations around the world will accept the recovered paper without rejects or downgrades.

Like most SaaS solutions, this quality inspection and certification platform is plug-and-play for rapid deployment. Users can log in from anywhere in the world, and the features are continually evolving to provide greater functionality and deeper insights.

3. Data analytics. Gain control of your data and use it to enable fact-based decision making and strategic risk management. The very foundation of Industry 4.0 and the IIoT is based on the ability to collect and analyze data. Today, data acquisition is fairly easy; but extracting meaning from the data is a different story. The research firm Forrester estimates that between 60 percent and 73 percent of all data within an enterprise goes unused for analytics.3

Many companies are simply overwhelmed by a surplus of data, or worse yet, take ill-informed action based on data that are interpreted incorrectly. This points to the need for more effective and transparent data that can be translated into useful insights and ultimately create value with impactful business decisions.

When used effectively, data can be extremely valuable and offer clear direction for supply chain management. As with IIoT pilot programs, data can be extracted to solve specific problems like process improvement, procurement, and logistics management. From providing transparency between buyers and sellers to enabling effective communication to measuring supplier performance, data enables fact-based decision making and strategic risk management.

Case in point: Thanks to big data, a leading packaging producer now has a clear picture of its suppliers’ performance in recovered paper quality. Data related to bale content (measurement of moisture, plastic, ash, etc.) are being collected, analyzed, and sent to dashboards that give the papermaker insights about bale content, yield, landed costs, and supplier performance. This company has determined that eliminating the lowest-performing 25 percent of its supplier base (based on yield) could result in savings potential of US$2.3 million annually.

The most exciting possibilities for big data lie in predictive analytics. When the appropriate data are collected over time and combined with external inputs, such as weather trends, procurement patterns can be predicted based on business fluctuations and needs.


In today’s highly competitive paper industry, digital innovation is critical to addressing key business drivers and remaining competitive. Papermakers need manageable and economical ways to drive technology within their organization while balancing the risks and rewards.

Pilot projects, SaaS solutions, and data analytics allow incremental progress to be made without the financial, personnel, or workflow interruptions that larger deployments entail. With focus on solving a specific problem and a faster realization of ROI, these approaches to digitalization will uncover management insights and instill confidence to take bolder steps in the future.   

John Fox is president and chief executive officer at merQbiz®, a Los Angeles-based data analytics company serving process manufacturing and supply chain industries. For more information, contact [email protected].


1.  https://www.mckinsey.com/business-functions/operations/our-insights/digitizing-the-value-chain
2. https://www.softwareadvice.com/resources/saas-10-faqs-software-service/
3.  https://go.forrester.com/blogs/hadoop-is-datas-darling-for-a-reason/