Sector Report No. 3/2006 ICT and e-Business in the Pulp, Paper and Paper Products Industry ICT adoption and e-business activity in 2006 European Commission Pulp, paper and paper products About e-Business W@tch and this report The European Commission, Enterprise & Industry Directorate General, launched the e-Business W@tch to monitor the growing maturity of electronic business across different sectors of the economy in the enlarged European Union, EEA and Accession countries. Since January 2002, the e-Business W@tch has analysed e-business developments and impacts in manufacturing, construction, financial and service sectors. All results are available on the internet and can be accessed or ordered via the Europa server or directly at the e-Business W@tch website (http://ec.europa.eu/comm/enterprise/ict/policy/watch/index.htm, www.ebusiness-watch.org). This document is a sector study by e-Business W@tch, focusing on the pulp, paper and paper products (P&P) industry. Its objective is to describe how companies in this industry use ICT for conducting business, to assess the impact of this development for firms and for the industry as a whole, and to indicate possible implications for policy. Analysis is based on literature, interviews, case studies and a survey among decision-makers in European enterprises from the P&P industry about the ICT use of their company. Disclaimer Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of the following information. The views expressed in this report are those of the authors and do not necessarily reflect those of the European Commission. Nothing in this report implies or expresses a warranty of any kind. Results from this report should only be used as guidelines as part of an overall strategy. For detailed advice on corporate planning, business processes and management, technology integration and legal or tax issues, the services of a professional should be obtained. Acknowledgements This report was prepared by empirica GmbH on behalf of the European Commission, Enterprise & Industry Directorate General. It is a deliverable in the context of e-Business W@tch, which is implemented by a team consisting of empirica GmbH (co-ordinating partner), Berlecon Research, Databank Consulting, DIW Berlin, Lios Geal Consultants, RAMBØLL Management and Salzburg Research, based on a service contract with the European Commission. e-Business W@tch would like to thank Mr Bernard Lombard of CEPI (Confederation of European Paper Industries) and Mr Henry Ryan of Lios Geal Consultants, who are members of the Advisory Board in 2006, for supporting the work on this study. Contact For further information about this Sector Study or the e-Business W@tch, please contact: empirica e-Business W@tch European Commission Gesellschaft für c/o empirica GmbH Enterprise & Industry Directorate- Kommunikations- und Oxfordstr. 2, 53111 Bonn, General Technologieforschung mbH Germany Technology for innovation, ICT Oxfordstr. 2, 53111 Bonn, e-Mail: industries and e-business Germany [email protected] e-Mail: e-Mail: [email protected] [email protected] Rights Restrictions Material from this report can be freely used or reprinted but not commercially resold and, if quoted, the exact source must be clearly acknowledged. Bonn / Brussels, 2006 2 Pulp, paper and paper products Table of Contents Executive Summary ................................................................................................... 5 1 Introduction ......................................................................................................... 9 1.1 About e-Business W@tch ................................................................................................ 9 1.2 "e-Business" – the conceptual framework................................................................... 13 2 Industry Context and Background .................................................................... 19 2.1 Sector definition.............................................................................................................. 19 2.2 Industry background ...................................................................................................... 22 2.2.1 The European pulp & paper industry ................................................................... 22 2.2.2 Trends and challenges......................................................................................... 26 2.2.3 International competition...................................................................................... 28 3 Adoption of ICT and e-Business in 2006 ........................................................... 30 3.1 Use of and Access to ICT Networks ............................................................................. 31 3.2 ICT Skills, Outsourcing and ICT Budgets..................................................................... 35 3.2.1 Demand for ICT skills and skills development ..................................................... 35 3.2.2 Outsourcing of ICT services and ICT investments............................................... 38 3.3 Standards, Interoperability and ICT Security Issues .................................................. 42 3.3.1 Types of e-standards used................................................................................... 42 3.3.2 Interoperability challenges ................................................................................... 45 3.3.3 Use of Open Source Software ............................................................................. 47 3.3.4 ICT security measures ......................................................................................... 49 3.4 Internal and External e-Integration of Processes........................................................ 51 3.4.1 Use of software systems for internal process integration .................................... 51 3.4.2 Use of ICT for cooperative and collaborative business processes...................... 53 3.4.3 Deployment of e-invoicing.................................................................................... 55 3.5 e-Procurement and Supply Chain Management.......................................................... 58 3.5.1 B2B online trading: companies placing orders online.......................................... 59 3.5.2 e-Integrated supply chains................................................................................... 64 Case Study: Supply Chain Integration at VPK Packaging Group, Belgium ..................... 67 3.6 e-Marketing and Sales .................................................................................................... 73 3.6.1 Companies receiving orders from customers online............................................ 73 3.6.2 e-Integration of marketing processes: CRM and ICT links with customers ......... 76 3.7 ICT and Innovation.......................................................................................................... 79 3.8 Drivers and Inhibitors for the Uptake of e-Business................................................... 81 3.9 Summary.......................................................................................................................... 85 3 Pulp, paper and paper products 4 Current e-Business Trends and Implications.................................................... 87 4.1 papiNet® – a Success Story in e-Standards ................................................................ 89 4.1.1 Introduction .......................................................................................................... 89 4.1.2 The organisation of papiNet................................................................................. 89 4.1.3 papiNet® Standards............................................................................................. 90 4.1.4 Implementation status .......................................................................................... 92 4.1.5 Success factors.................................................................................................... 94 4.1.6 Outlook on expected developments..................................................................... 96 Case Study: Stora Enso, Finland...................................................................................... 98 4.1.7 Summary and conclusions................................................................................. 105 4.2 ICT as a Driver of Process Efficiency ......................................................................... 106 4.2.1 Introduction ........................................................................................................ 106 4.2.2 Substitution of paper-based processes.............................................................. 106 4.2.3 Peer-to-peer instead of marketplaces................................................................ 110 Case Study: Enhancing Relations With Business Partners - Mayr-Melnhof, Austria ..... 112 4.2.4 Impact on work organisation .............................................................................. 119 Case Study: ICT for Quality Management at Rexcell Tissue and Airlaid AB, Sweden .. 121 Case Study: Integrated e-Business Innovation in Office Paper Production ................... 125 4.2.5 Impact on production processes ........................................................................ 130 Case Study: Nordic Paper, Norway ...............................................................................