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Industrial IT - A robust portfolio of interoperable

solutions

Pulp & Paper

Document No. 2PAA101225

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Growth and Profitability in Pulp & Paper

Not all companies have been successful in obtaining profitable growth. Value destruction is common in the pulp & paper industry.

- Average sales growth in USD, % / year -

- Average pre-tax return on capital employed (ROCE), % -

-10 -5 0 5 10 15 20 25 30

Size of the bubble is relativeTo the sales in USD in 2003

Average growth rate 8.0%

Cost of capital (8-12%)

Value Creation

Value Destruction

1999-2003

Source: PWC Global Forest and Paper Summit 2005

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Percent Planned Work (by Industry)A shift in maintenance strategy can bring dramatic bottom line results

Source: HSBRT 2005

World class companies plan at least 95% of their maintenance activities

Planned maintenance has significant benefits over a reactive strategy

In a recent study, companies in all industries showed room for improvement

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Return on Capital Employed

Improvement Areas / Solutions Production planning

MES application Finishing

Overall equipment efficiency (OEE)

Asset utilization Mill Operations

Integrated operations and maintenance

Integrated Production Integrated planning,

maintenance and operations

Improvements to ROCE by lowering capital costs can be made in the following areas using Industrial IT solutions.

Benefits Minimize grade change losses Delivery date accuracy Reduced WIP Reduce time to market More predictable capacities and

delivery times Reduce time to enter work order Efficient review for accuracy and

incident investigation Maintenance scheduling based

on production profitability

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Industrial IT solutions

ABB has robust solutions for Pulp & Paper in each improvement area:

Planning = Collaborative Production Management Finishing = Industrial IT System 800xA:

Real time production intelligence (RTPI) Asset Optimization Production Information

Mill Operations = Integrated operations and maintenance:

Industrial IT System 800xA Integration with partner CMMS systems Production Information

Integrated Production = Integrated operations, planning and maintenance:

Industrial IT P&P solutions Business logic and single information model from ABB

and solution partners

CPM/MES

RTPI/OEE

CMMS

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Focus on integrationIndustry Trend: Where focus was on plant efficiency and production, customers are now placing new emphasis on data and information from both the manufacturing systems and the business systems

Production Maintenance Quality Inventory

Operations Systems( Scheduling, MES )

Business Systems( ERP, Financials )

Documentation Systems(Specifications, Documentation)

Process Control Systems(Field Measurement and Control)

MillOperations

Production Maintenance Quality Inventory

Operations Systems( Scheduling, MES )

Business Systems( ERP, Financials )

Documentation Systems(Specifications, Documentation)

Process Control Systems(Field Measurement and Control)

MillOperations

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OEE identifies areas for improvementMeasuring real-time performance provides real time production efficiency data to understand the true performance and realize the full potential of production lines

The KPI OEE is the multiplication of the Availability , Performance and Quality factor and takes all these losses into account, revealing the hidden plant. (OEE = A*P*Q)

Theoretical Production TimeTheoretical Production Time

Planned Production TimePlanned Production Time

Gross Operating TimeGross Operating Time

Net Operating TimeNet Operating Time

Valuable Operating

Time

Valuable Operating

Time

PlannedDown Time

PlannedDown Time

Unplanneddown Time

Losses

Unplanneddown Time

Losses

SpeedLosses

SpeedLosses

QualityLosses

QualityLosses

Equipment FailureEquipment Failure

Setup & AdjustmentSetup & Adjustment

Idling & Minor StopsIdling & Minor Stops

Reduced SpeedReduced Speed

Defects in ProcessDefects in Process

Start up LossesStart up Losses

PlanningFactor

(Pf)

PlanningFactor

(Pf)

AvailabilityFactor

(A)

AvailabilityFactor

(A)

PerformanceFactor

(P)

PerformanceFactor

(P)

QualityFactor

(Q)

QualityFactor

(Q)

OEE: Overall Equipment Effectiveness is maximized through efforts to keep control of and to eliminate production’s “six major losses”:

True performance canbe determined through real time measurement, analysis, and improvement of Key Performance Indicators (KPIs)

OEE (Overall Equipment Effectiveness) is a KPI and is one of the best measures of performance

Real time monitoring and alarming of asset KPIs facilitate fast, reliable implementation of corrective actions

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Predictive maintenance strategy delivers value

Maintain on Condition 30%-40% savings over Reactive

Maintenance

8%-12% savings over Preventative Maintenance

Benefits Extend life of assets

Shift from prevent to correct

Catch potential problems before impact to quality or productivity

Avoid unnecessary tasks and focus on higher value work

Predictive maintenance revenue potential realized by leveraging existing conditions monitored by equipment and infrastructure (but otherwise ignored).

Predictive maintenance compares the trend of measured physical parameters against known engineering limits for the purpose of detecting, analyzing, and correcting problems before failure.

0 %

5 %

1 0 %

1 5 %

2 0 %

2 5 %

3 0 %

3 5 %

R ou tin ech e ck

N oP ro b le m

C alib ra tio nshift

Ze ro O ff P lu gg e dlin e s

F aile d

35%

28%

20%

6% 6%4%

Source: Shell Global Solutions

63% of maintenance labor results in no action!!

0 %

5 %

1 0 %

1 5 %

2 0 %

2 5 %

3 0 %

3 5 %

R ou tin ech e ck

N oP ro b le m

C alib ra tio nshift

Ze ro O ff P lu gg e dlin e s

F aile d

35%

28%

20%

6% 6%4%

0 %

5 %

1 0 %

1 5 %

2 0 %

2 5 %

3 0 %

3 5 %

R ou tin ech e ck

N oP ro b le m

C alib ra tio nshift

Ze ro O ff P lu gg e dlin e s

F aile d

35%

28%

20%

6% 6%4%

Source: Shell Global Solutions

63% of maintenance labor results in no action!!

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Integrated operations and maintenance: Streamline work order entry

Provide failure condition data

Reduce investigation time

Ensures data integrity

Mill integration drives even greater value

The greatest savings can be achieved when execution, maintenance and production planning are completely coordinated.

Execute(automation system)

Maintain(maintenance system)

Plan(ERP/MES system)

Mill Operations

EnterpriseTotal mill integration: Integrate planning and maintenance scheduling

Optimize downtime around production to minimize overall cost

Basic Integration: Production requests synchronized from planning to production

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Example: Operations & Maintenance IntegrationThe fan pump feeding stock to the paper machine has shut down. What happens next in the integrated maintenance scenario?

Mill Operations

Sequence of Events:

1. Fan Pump Stops2. Automation system

asset monitors detect fault

3. Operator station receives alarm and asset condition details

4. Specific problem with fan pump motor identified automatically

5. Maintenance work order submitted electronically to CMMS

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Sequence of Events:

1. Maintenance planner receives work order request in CMMS

2. All detail information is included, eliminating the need for additional investigation

3. Detailed planning and scheduling of repair

Enterprise

Results:

1. Identification of problem in complex machine

2. Automatic detection and communication to CMMS system

3. Verification of circumstances and conditions of fault

Mill Operations

Work order request with diagnostic detail

The fan pump feeding stock to the paper machine has shut down. What does the planner do with the work order request?

Example: Operations & Maintenance Integration

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Enterprise

Benefits:

1. Reduced investigation time

2. Easy identification of correct skill set

3. Maintenance engineer prepared with the right tools and parts

4. Reduced Mean Time to Repair

5. Optimized mill operating cost!

Mill Operations

Work order request with diagnostic detail

Planner sends right person with right tools and parts to fix the fan pump

The fan pump feeding stock to the paper machine has shut down. How does integrated maintenance benefit the paper mill?

Example: Operations & Maintenance Integration

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Example: Mill Integration

Maintenance Module

Additional Benefits:

1. Predictive maintenance functionality enables scheduling of repairs, before failure, during a time of least economic impact

2. Maintenance costs become a component KPIOperations Module

Maintenance system has visibility into the production schedule and asset utilization plans

The fan pump feeding stock to the paper machine needs repair. How can closing the integration loop provide additional savings?

Sequence of Events:

1. Maintenance planner requests window for fan pump repair

2. IIT solution determines repair window based on production ROI

3. Maintenance schedules repair based on product profitability

Planning Module

Planning is based on machine availability, condition and maintenance status

Repairs can be scheduled at the

time of least financial impact

Work order request with diagnostic detail

Mill IndustrialIT Solution

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Industrial IT Architecture

Single window environment for information access

Context sensitive decision and action tools

Unique object-oriented architecture Certified “building blocks” for maximum

interoperability Field bus technology support for

intelligent devices

At the core of Industrial IT is an information architecture that seamlessly links equipment and applications in real time. Industrial IT technology consists of:

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The Industrial IT information architecture …

… combined with the IIT ecosystem of interoperable products and solutions, enables ABB to deliver unprecedented business value.

Asset Optimization Real time monitoring of asset health Asset monitors trigger CMMS work orders Identifies asset performance problems before

failure Automatic notification of asset conditions

Reduce preventable breakdown costs!

OEE Analysis Tools Alert generation for non-productive equipment

states Integrated root cause analysis tools Identification of improvement areas in real time OEE display in single window environment

Reduce unplanned downtime!

Process Engineering Tools Automatic configuration of 800xA loops, tags

and configuration Bi-directional data synchronization Automatic population of controllers and I/O Difference viewer to identify changes

Reduce engineering time!

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The Industrial IT information architecture …

… combined with the IIT ecosystem of interoperable products and solutions, enables ABB to deliver unprecedented business value.

CMMS Systems Automatic entry of maintenance work orders Viewing of CMMS work orders from 800xA Seamless integration between operations and

maintenance Single electronic audit trail

Reduce mean time to repair (MTTR)!

Field Bus Devices 800xA HART, FF and Profibus device libraries Device asset monitors allow early identification

of issues Object types include faceplates, diagnostics,

asset monitors and configuration support

Reduced integration and lifecycle cost!

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Industrial IT Solution Architecture

Collaborative Production Management

Quality Control

Scanners & Actuators

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Industrial IT Paper Solutions

Chemicaldelivery

Pulping controlsWet end measurement Quality control

Webimaging

Paper machine drivesMachine health

Collaborativeproduction

management

Power plant

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The Proper Balance = Sustainable Competitive Advantage

Manufacturing EfficiencyC

ustomer Service

Supp

ly C

hain

Cos

ts

•Reduce inventory levelsReduce inventory levels

•Longer delivery lead timesLonger delivery lead times

• Higher machine flexibility (cost)Higher machine flexibility (cost)

• Higher inventory, transportation, Higher inventory, transportation, and distribution costsand distribution costs

• Fewer / Longer machine cyclesFewer / Longer machine cycles

• Higher Inventory CostsHigher Inventory Costs

Optimized Production Scheduling => Improved Cost of Sales

Optimal Balance of;

$ StoraEnso NA APS •3 to 5% Savings in COS

Smart Papers•WIP Reduction – 35%•Slow Moving Inventory Reduction – 40%•Customer Service Time Reduction – 11%•Manufacturing Cycle Time Reduction – 4%

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