ICT and e-Business in the Pulp, Paper and Paper ... - empirica

Pulp, paper and paper products
technology change" (2005, p. 2). This is quite in contrast to the opinion expressed by
paper manufacturer Mayr-Melnhof Karton AG (see above).
This particular example may help to explain the apparently different assessments of how
'easy' or 'difficult' it is for a company to introduce RFID in its operations. To a large extent,
the innovation capacity depends on the overall IT capability of a company. A large player,
whose information management is well embedded in the overall company strategy and
where highly sophisticated systems are already in place, is probably well prepared to
implement RFID at any time. For a small company, however, which cannot draw on
comparable e-skills and resources, this is certainly more of a challenge and may need
more in-advance planning. Thus, their risk is also higher.
Strategic positioning and RFID adoption
It appears that the decision whether to adopt now or later is closely linked to overall firm
strategy. Companies with a cost leader strategy (cf. Porter 1980) may be disinclined to
adopt RFID at this point, if they are not forced to do so by customers. Firms with a
differentiation strategy, on the other hand, in particular if they focus on 'cutting-edge'
supply chain management, are much more likely to see RFID as a useful vehicle to
underline their strategic positioning.
The case study on Stora Enso (Section 4.1), which positions itself as an innovative
company with "a world-class supply chain integration strategy", is a good example for the
latter. Aligned with its claim and strategy, the company currently pilots RFID enabled
possibilities as part of its "PackAgent" solution, together with Orion Pharma (see case
study). In contrast, Mayr-Melnhof Karton AG is an example of a company that positions
itself as a cost leader in producing cardboard and related packaging solutions. The
company does not see RFID as a tool to save costs at this point of time. Thus, as
outlined above and in line with its strategy, the decision is to wait until the technology is
even more mature and less costly. 94
In the USA, a majority of firms is convinced that RFID matters for their business. In a
survey among US companies conducted in 2005 by BearingPoint, three out of five
respondents regarded RFID as “important” or “very important” to their organisation’s
strategy. 95 The case study on International Paper illustrates that RFID certainly holds an
attractive promise for P&P companies to increase efficiency, but it also shows the
challenges that are involved, even for such large players, for example with regard to the
impact on business processes and routines.
Paper production: focus on warehouse / inventory management
A key application area for RFID systems in pulp and paper production, as in other
manufacturing industries, is warehouse management. The efficiency and accuracy of
order fulfilment is closely related to the efficiency of warehousing activities. As RFID
systems promise to support the company in its warehouse management, this is directly
linked to the quality of customer service in terms of ordering and delivery processes.
94
95
Interview with Erasmus Pachta, Manager Electronic Solutions & Services, on 27 March 2006
See: "Beyond Compliance: The Future Promise of RFID", White Paper by BearingPoint,
published in May 2005, p. 3. Available at www.rfidjournal.com
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