Technologies enable strategy, development and innovations · Figures are based on management...

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Technologies enable strategy, development and innovations 23.1.2020 KRISTIINA LAMMILA, CIO

Transcript of Technologies enable strategy, development and innovations · Figures are based on management...

Page 1: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Technologies enable strategy, development and innovations23.1.2020

KRISTIINA LAMMILA, CIO

Page 2: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Ahlstrom-Munksjö

Page 3: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Ahlstrom-Munksjö – Global leader in fiber-based solutions

• Fibers are at the core of what we do and the common

denominator for our products and solutions

• Natural fibers represent 94% of our total fiber use

• We offer custom made specialized fiber-based materials

• Our value proposition is based on innovation, quality and service

• Our offering contributes to a more sustainable everyday life by

providing renewable materials that are alternatives to non-

renewables, and solutions that make the end product more

sustainable

Key facts

• Global network of sales offices and 45 plants and converting sites in

14 countries

• Approximately 8,000 employees, More than 40 different nationalities

• More than 7,000 customers in over 100 countries

• Pro forma 2018 net sales of approximately EUR 3 billion

• Shares listed on Nasdaq Helsinki and Stockholm

• Head office in Helsinki 3

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Page 4: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Balanced end-use and

geographical exposure

KEY STRENGTHS

• Leading position in chosen segments

• Operating in growing markets

• Balanced geographical exposure to a

broad range of end-uses

• Designed sustainable and innovative

solutions for customers

North

America

Asia

Europe

Rest of the world

South

America

Transportation

Industrial Health Care & Life Science

Consumer

Goods

Homebuilding

& Furniture

Share of sales 4

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Page 5: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Smart solutions out of fibers

TEX-STYLE™ - an extra

resistant composite abrasive

backing

CelluStraw™ - a fiber-based

solution for paper drinking

straws

World of Colors gives

heavyweight papers a great

design look

Optilam™ - a release material

to optimize RFID inlay

lamination

GenReleaz™ specimen

collection card for cost-effective

biosamples

Trinitex® Advance W3200 for

gas turbine filtration products

Extia® 1000 for industrial

filtration applications

TrustShield™, single-use

fabrics for ultimate protection

ReliaMAX™ microfilters for

sample preparation and particle

removal

HighFlow - a reinforcement

fabric for wind and marine

industry

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Page 6: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Leading positions in growing markets

# Market position in strategic segments

% Market growth in percentage

* One of the leading suppliers in the relevant segments

Figures are based on management estimates.

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Page 7: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Sustainable and innovative fiber-based solutions

Human rights

Community engagement

Employee well-being

PEOPLE

Supply chain

Energy, water and waste

Carbon dioxide

PLANET

Profitability

Innovation

Business ethics

PROSPERITY

BETTER PERFORMANCE LOWER IMPACTFEWER RESOURCESSAFER MATERIALS

Diagnose diseases and purify polluted

drinking water

Formaldehyde free abrasive backings

and fluorfree food packaging materials

Plastic free and compostable tea and

coffee materialsFilter materials to purify air and protect

people from viruses and bacteria

Code of Conduct | Sustainability Policy | Sustainable Business Council

Sustainable everyday life

EcoDesign Tool

MISSION

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Page 8: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Profitability

Strategic transformation supporting profitable growth

2013-2016 2017 2018

Ahlstrom and Munksjö separately

focused on profitability

improvement

and deleveraging

Creating a growth

platform through the

merger of Ahlstrom and

Munksjö

Acquisition

driven growth

Caieiras

Expera

Targeting global

leadership in

chosen growth

segments

Growth focus,

increased

capex

2019

Continued shareholder

value creation and

deleveraging

Strategic alternatives for

Decor and plan to divest

fine art paper business

Comparable EBITDA (illustrative)

Measures underway to maintain and improve competitiveness, and drive growth1)

1) Illustrative (not necessarily in scale), not to be considered as guidance

2) Munksjö’s reported adjusted EBITDA margin for 2015

3) Pro forma comparable EBITDA margin in 2018

Comparable EBITDA margin-%

2015 2018

Cost synergies

from Expera

and Caieiras

in 2019

Annual

impact

from organic

investments

Business

synergies

from Expera

2020 onwards

Remaining

Ahlstrom-Munksjö

merger synergies

in 2019

Cost savings

program

2020

8% 2) 11% 3)

Variations in

volumes, selling

prices and raw

material costs also

impact profitability

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Page 9: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

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New organization structure based on core capabilities and

business characteristics, effective 1.1.2020

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Page 10: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Ahlstrom-Munksjö IT transformation – Building foundation for future

Page 11: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Ahlstrom IT Transformation started 2014 –

Starting point required fundamental IT turnaround

Very person dependent IT. IT competences distorted.

High cost level. Poor visibility to IT costs. Unhealthy balance betweencreate and run.

Not common governance for ITIT not owning IT – functions and businesses doing on their own many topics

Very limited documentation. Poor asset inventory.

Business continuity not secured. Not holistic security approach.

Auditor compliance at poor level.

3rd party vendor agreements lacking service level targets and other critical terms andconditions

Not one

unified

service

offering and

not standard

service levels

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Page 12: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

IT and Business Process Management key targets

IT Vision

We are a proactive

enabler which provides

secured, value-added

solutions and services

to support

Ahlstrom-Munksjö

strategy fulfilment and

provide value for

business to achieve its

objectives.

Enable Ahlstrom-Munksjö strategy implementation

Provide services for end-users

Secure business continuity 24/7/365 in all countries

Ensure compliance with privacy regulations and protect company security

Drive aligned Business process management

with Business areas and Functions

Ensure reasonable and fit-for-purpose cost level (opex and capex)

Ensure compliance with external and internal auditor requirements

Protect company security and minimize other IT

related risk

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Page 13: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Ahlstrom-Munksjö IT transformation journey key milestones

Ahlstrom-Munksjö journey

Public

2015 2016 2017 2018 2019

Ahlstrom

IT transition

to Tech M

Ahlstrom

small IT

transition

to Tieto

Munksjö

IT transition

to Tech M

Expera

and Caieiras IT

transition to

Tech M

Osnabrück

plant

carve-out

Ahlstrom

and

Munksjö

merger

Expera

Speciality

Solutions

and

Caieieras

acquistions

Several

M&A cases

Establishing and

continuously

developing ITIL

based IT

management

setup

Several

M&A

cases

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IT investments increased during to years to enable Ahlstrom-

Munksjö strategy and development

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IT capex 17 M€IT capex 12 M€

Delivery of projects

with 300 person yearsIT capex 8 M€

IT capex 500 k€ IT capex 500 k€

2015 2016 2017 2018 2019

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Page 15: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Ahlstrom-Munksjö IT having strong & business driven governance

IT Steering Group

• Managing Ahlstrom-Munksjö IT project portfolio, approving all projects

• Main technology decisions

• Managing and monitoring Ahlstrom-Munkjsö IT high-level performance and main partners high-level

performance (annual risk analysis, external audit compliance, service levels etc)

• High-level IT cost monitoring

• Approving IT policies (prior going for EMT and Board / Audit Committee approval)

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Page 16: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

IT Business partners

To build strong relationship between

business areas, functions and IT

IT business partners for

• Filtration and Performance Solutions

• Advanced Solutions

• Decor Solutions

• Industrial Solutions

• Food Packaging and Technical Solutions

• Finance, HR, Procurement

• Communication, Legal

• R&D

• Technology, OT

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Page 17: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Ahlstrom-Munksjö has been under heavy development and

changes since 2015

Fast company development and large Ahlstrom-Munksjö

arrangements would not have been possible without

strong & scalable IT platform

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Page 18: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Enabling Business DigitalizationEnabling new solutions and capabilities for company’s development

and growth. Enabled with versatile partner network and effective

data & analytics solutions.

Enabling Business

Efficiency

Ensuring business gets maximum benefit out of key applications.

Building new ERP and other key application landscape. Ahlstrom-

Munksjö IT services portfolio continuously developed to provide

required capabilities for company’s development.Securing Business

Continuity

Securing Ahlstrom-Munksjö

IT services continuity,

required by the business

and related risks mitigated

effectively. IT setup on

the level required to

enable achievement of

all focus areas.

2018 2019 2020 2021 2022

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Ahlstrom-Munksjö IT focus points – Now ready for future challenges

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Page 19: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

IT enabling Ahlstrom-Munksjö strategy, development and innovations

Page 20: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Ahlstrom-Munksjö strategy overview

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Page 21: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Ahlstrom-Munksjö strategy implementation

requires strong IT contribution

➔ Sustainability & traceability

➔ Innovation

➔ Growth and company arrangements

➔ Growth and production investments

➔ Local accountability

➔ Efficiency and agility – Strong global IT platform a must

➔ Customer value

➔ Ahlstrom-Munksjö vision enablement – Growth segments

➔ Teamwork

➔ Long-term commitment

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Page 22: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Global IT service portfolio

• 75 % of revenue done with SAP, OrderPlan (O2C ERP) and CarelMill (MES)

• OrderPlan own-coded system (late 1990) with non-sustainable coding technology

– According to detailed evaluation OrderPlan can’t survive next 10 years

• CarelMill old product, not used by other companies any more

• Company having several ERP & MES technologies

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Page 23: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Reasons for planned Business renewal and IT renewal

Final decisions not done

Business and IT renewal covering business operations and renewal of core IT

applications (ERP and MES)

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Ahlstrom-Munksjö long term strategy enablement

Required Ahlstrom-Munksjö business renewal

Aging IT application landscape

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Page 24: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Renewing

Ahlstrom-

Munksjö as a

Company

Ahlstrom-Munksjö business renewal agenda from two directions

Ahlstrom-

Munksjö as

effective

Portfolio

company

• Enable flexible asset model

• Effective finance and procurement

management

• Capacity optimization

• Effective customer management

• Working capital optimization

• Strong platform for M&A cases and synergy realization

• Audit, Regulatory, Privacy Compliance

• Transparency & traceability

Disruption

caused by

A-M

Optimize business Transform business

Disruption

caused for

A-M

Traditional supply

chain

Future supply

chain

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Page 25: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Summary on identified Business transformation opportunities

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Business opportunity General description

Business process harmonization

and process automatization

Procurement, Finance and also other opportunities to harmonize and automate processes

Sustainability & Traceability • Extensive traceability over the whole supply chain from supplier raw materials to customer can be high

differentiator for Ahlstrom-Munksjö

• Sustainability big strategic and competitive advantage for the company

Customer side pressure • Possible to integrate customer’s solutions better and provide own modern capabilities

• A-M could be as vendor available on procure-to-pay platforms

• Required blockchain solutions are possible to be blugged in

• True customer centricity possible

• Effective key account management

Knowledge driven company • With modern ERP & MES architecture possibility to have Single source of truth – Full, on-line visibility over

all levels of operations

• Ahlstrom-Munksjö is having huge amount of data – Currently majority of the data is used at one plant level

or data is not utilized at all. Turn from backwards reporting to forecasting and simulation

• Reporting, Analytics, Forecasting, Simulation – Not only looking backwards but also forwards

Personnel management • Prepared for reduction on workforce and challenges to recruit. Enterprise of Tomorrow, Employer branding

• Taking into the consideration retirement challenges and opportunities to optimize operations, Ahlstrom-

Munksjö should be able to do with less amount personnel the same as now

Factory 4.0 • Predictive maintenance, Integrated quality, Improved OEE, IoT solutions

Supply chain optimization • Working capital optimization, order management optimization etc.

R&D and Product development • Co-creation with customers, effective end-to-end internal R&D mgmt25

Page 26: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

ERP & MES capabilities are still required –

Digital solutions not replacing core business systems

Digital ecosystems requires core systems

Source: Gartner

ERP &

MESERP & MES

Different levels of systems

Core elements on

manufacturing company

management

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2020 2021 2022 2023 2024 2025 2026

Planned high-level business renewal transformation schedule

Template *)

creationPilot

Procure to Pay Finance

Rollouts

Plant to Supply Order to Cash Commercial Excellence

Template creation PilotRollouts

Wave 1

Rollouts

Wave 1

Rollouts

Wave 1

Rollouts

Wave 1

Option: Advanced Liquid Technology

core solution

Currently systems used by ALT are

not enabling business development

as required.

Template continuous development

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Page 28: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Successful business transformation requires full operational

model development – People & organizational structure,

Processes and Technology

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Page 29: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Ahlstrom-Munksjö Process and Data management model under

stabilization – Responsibility of IT and Business Process Organization

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Page 30: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Final decisions on Business renewal under preparation

• Technology vendor selections

• Implementation partner selections

• Stabilizing process and data management

practices

• Building high-level program plan

• Planning organizational change

management

Final decisions during H1 / 2020

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Page 31: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

ERP & MES technology renewal will take several yearsDuring the transformation process required new solutions will be built outside of the

program to ensure company’s success

Current on-going digital projects

• Building modern analytics and reporting

capabilities

• Digital collaboration capabilities

• Few plant maintenance related projects

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Operational IT coming close to Core IT 1(2)

Essential for future factory digitalization

• Another bigger development focus area within Ahlstrom-Munksjö is closer co-operation

between Operational IT and Core IT

• During the last two decades process automation / process control infrastructure technology

has turned to IT technology

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Operational IT coming close to Core IT 2(2)

Essential for future factory digitalization

• Due to new technologies and digitalization these layers are

coming closer together (picture on the right)

• Also paper machine and other machine vendors are having

solutions to build digital solutions for plants

• Related to digital solutions, vendor landscape is under heavy

turbulence

– To ensure Ahlstrom-Munksjö interest fulfillment, good

company level co-operation is a must

• Ahlstrom-Munksjö needs to be on the driving seat and

optimize its

– Spend

– Continuity

– Security

– Compliance

– Agreements

– Ownership of data

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Page 34: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Ahlstrom-Munksjö has built joint OT development agenda by IT and

Business Areas operation leads – Co-operation facilitated by IT

• Joint Steering Group established

– Business areas VP Operations

– Head of Indirect sourcing

– Head of IT infrastructure, Head of Production IT, CIOO, CIO

• Focus areas 2020

– OT security improvements

– Sourcing co-operation

– Improving OT management processes (patching, backups,

monitoring etc)

– Increase IT management awareness within OT

– Joint IT and OT infrastructure target architecture planning

(networks, computing, facilities)

– Tighter production investments co-operation

– Frame agreements with main OT vendors to cover

Ahlstrom-Munksjö interests

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Source: Deloitte

Page 35: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Summary of the presentation

• Strong IT foundation built to enable A-M strategy and to support

company changes on flexible manner

• Business renewal proposal, along with ERP & MES technology

renewal, under finalization

• Close co-operation between IT & OT on its way

• Digital solutions build as required already now

• Tight co-operation between business areas, functions & IT

Technologies enable strategy, development and innovations

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Page 36: Technologies enable strategy, development and innovations · Figures are based on management estimates. Public 6. Sustainable and innovative fiber-based solutions Human rights Community

Thank you!Kristiina Lammila

+358 40 801 9794

[email protected]