Last week was the 2018 Light Green Machine Institute Technology Tour. Based out of Helsinki, meetings were held with a number of researchers and leading-edge companies. Over the next few months we will have articles and commentary on this tour. Please look for these in Nip Impressions and the Light Green Machine Institute monthly newsletter (if you are not receiving the LGMI monthly enewsletter, please contact me a jthompson@taii.com and we will put you on the list).

At the end of the week, as I reflected on the tour, I came to two big conclusions.

First, the pulp and paper industry is on the cusp of a series of changes, related and unrelated, that will likely be the largest we have seen since the French realized we could make paper out of wood. Stated another way, cellulose is the new plastic. This will upend the industry over the next few decades.

Second, the Internet of Things (IOT) or Industry 4.0 or the digitization of manufacturing, whichever you want to call it, is going to be the biggest short-term disrupter of the industry since we staggered through the Internet's affects on our markets in the mid-1990's. What SAP has been to business processes, Industry 4.0 is going to be to technical processes.

My view is this. Up to this point in time, modern process control has been a life extender for old mills serving thriving markets. We have been able to control processes and extend the lives of machines that would have otherwise died of obsolescence. The new process data agglomeration is going to be a swamp-draining experience. It will work this way--Industry 4.0 will allow specification control on final products to move to a very narrow range. In this tight range, paper machines with tight tolerances will be able to push their costs down, for they will be able to manufacture very close to the lower end of acceptable product tolerances without violating those tolerances with process drifts or perturbations. In classic cost quartile models, this will move these machines, likely already first quartile machines, further towards the low-cost corner.

This means machines that are sloppy mechanically now, because they have to center their processes at a higher value in order to not violate standards on the bottom end, will not be able to compete. And let me clarify what I mean by mechanically sloppy. These are machines which in and of themselves do not have the dimensional stability to hold to tighter tolerances. Yet, it is more than this--it includes machines with poorly or archaically designed hood systems, for instance. Machines still using throttling valves instead of variable frequency drives and on and on and on. A machine assessment will likely conclude that thriving in the future will simply mean building new assets to tighter standards, on an existing site or elsewhere. The existing assets will simply require too much investment to move them to the 1st Quartile.

Jim Thompson is CEO of Paperitalo Publications.