Helen Roush, Executive Vice President of Paperitalo Publications

McKinsey & Company recently made the case for resetting cost competitiveness in pulp and paper packaging through the use of AI.

The article states that "successful companies are harnessing AI to pursue cross-functional interventions that target the total cost baseline of a mill."

The article goes on to state that "the pulp and paper packaging industry is undergoing a structural reset. For several years, the industry has faced slowing demand with limited growth, partially due to factors such as the COVID-19 pandemic, the war in Ukraine, the conflict in Iran, and increased use of tariffs. Persistent overcapacity across grades and elevated volatility in input costs, particularly for fiber (in certain geographies such as Europe and large parts of North America) and energy (across the globe), have also had an impact. Traditional tactics for addressing performance, including procurement optimization, lean manufacturing, and energy efficiency, can no longer fully bridge the cost gap, leaving companies with limited room for incremental gains.

In this environment, functional excellence is no longer the only path to creating value; rather, organizations need to optimize at the system level. The most successful players are moving beyond siloed cost programs toward integrated approaches that address the full production system. This requires tighter coordination across operations, procurement, energy, and analytics, supported by advanced data capabilities and gen AI."

You can read the full article by clicking here.