The ERP system enabling Billerud to become totally data driven

Throughout its 150 years, Billerud has a long tradition of adapting to change in the forest and paper industry.

Today, the company has 5,800 employees in over 19 countries, and nine production units in Sweden, Finland, and the US. 

In the past, a proper business system was only available in the US, but over the coming years, the entire global operation will be linked to SAP S/4Hana, as the system gets rolled out to all nine production units. 

“What’s interesting about our project is it’s a pure greenfield,” says CIO Jens Nielsen. “We’re building it from start to finish. Almost all of my colleagues have an ERP system in their legacy that needs to be upgraded, but we’ll install from scratch.”

Flow to the factory

Another thing that’s unusual about Billerud’s rollout is that business systems generally have difficulty fully supporting the process industry, especially when it comes to production planning. 

This has to do with the fact that manufacturing industries normally involve taking many parts and putting them together to create a product. But that’s not the case in the process industry, where you do the same thing but in reverse, says Nielsen. 

“We build a product and then split up the large paper roll to different customers,” he says. “Historically, there’s been no ERP that’s been able to support this. But now SAP can handle the entire business flow down to the paper machine.” 

By stitching the company together from the business side all the way to the factory, it’s possible to lay the foundation to meticulously analyze and use data. 

A calculated approach to AI

Everything won’t be AI-driven tomorrow, however. In around three years, Nielsen believes AI will be of great importance, but not in its current form. 

“AI is very difficult to navigate, not least because in the IT industry, there are too many consulting and software companies with far too large marketing budgets that try to create demand by giving company management a guilty conscience,” he says. “It’s important to keep your eyes on the ball. What we want now are automation to increase productivity, and insight to win customers and new markets.”

In those areas, there’s already a lot today to show for, such as statistical inference analysis and machine learning. 

“What I want to discuss are automation, efficiency, and insight,” he adds. “If AI can help us, that’s great, but AI in the sense that systems learn completely by themselves, we’re not there yet.”

A natural progression

AI will gradually enter the business by being embedded and integrated into applications. “I think most things come in that way,” he says. “Then you can build specific applications as well.”

Regarding gen AI in particular, Copilot is currently used but Nielsen says Billerud hasn’t confirmed a long-term strategy. 

“We’ve cut a lot of slack to find our strategy,” he adds. “So within the next year, we’ll have something in place based on an approach to upskill all our users.” 

Even though AI is integral to future success, insight into automation is taking up a lot of Nielsen’s bandwidth. 

“The common thread for us is automation,” he says. “It’s fundamentally simple. Automation means consistent data throughout the chain.”

And for many years, there’s also been a group within the company working with advanced data analytics. According to Nielsen, the group has already saved the company hundreds of millions by optimizing energy use and machinery.  

“I usually call them Billerud’s hidden asset,” he says, “as they’re not visible and there’s not many of them. But we’ll expand group over time.” 

And there’s plenty of data to feed the analyses and insights, not least in the giant paper machines at the mills. 

“That’s where we have the best control over our data,” says Nielsen. “The data is there to analyze and optimize the machine. But on the administrative side, things aren’t as good, so that’s what we’re going to get in order, by taking the big step to S/4Hana.” 

Bringing down the firewalls

As the company becomes more data-driven, the internal firewalls that previously existed between production-related IT and the regular IT operations are also being eliminated.  

“There’s a lot of data going between us, so that firewall is like Swiss cheese,” says Nielsen. “That’s why you have to work together in a completely different way, both for data exchange and to make the supply chain work together. My challenge isn’t unique there since in many places IT and operational technology are combining in new ways.” 

To ensure success, modernizing the IT department itself is also required, and the journey has begun with two separate IT organizations — one in the Nordics and one in the US — to become a global organization. In total, there are now 170 people, but the plan is to increase to 200 by the end of the year. 

Maintenance and safety

One particular priority is to make the IT organization better at working with preventive maintenance since there’s still far too much break-fix, according to Nielsen. Another area is cybersecurity. And there’s one area where preventive maintenance and cybersecurity have in common: to be good at both, you need to have control over your equipment and systems. 

“If you have control over your IT, you can simplify the environment as well as automate the processes,” says Nielsen. “So then cybersecurity becomes a path to greater efficiency within IT. They’re also prerequisite to succeed with AI, as it requires us to deliver the right data at the right time to the right place or person. There are simply no shortcuts.”  

Above all, preventive maintenance is a prerequisite for serious data-driven work. 

“By harmonizing and keeping track of things, we can automate, which makes us safer and gives us more efficient IT,” he adds.