THE CASE OF

GLOBAL PAPER
MANUFACTURING
COMPANY
Presented By,
Subhashini Jayram
Renzhou xue
Qazi Irtaza
Tao liu
FACTS ABOUT THE CASE
COMPANY
 Industry: Paper and pulp industry
 Location: Finland
 Paper mills: 28 mills located in Finland
 90% of production exported ( 2006)

Why this case company?

 The geographical position of Finland- reason
for 10% additional transportation costs.
 Role of supply chain management developing
in paper industry
CONTINUED.....
 Need for more economical logistics solutions
since most of the production is exported
 Unstructured supply chain thinking
LOCATION OF FINLAND
CASE COMPANY’S STRATEGY
 a) Customer service strategy
 b) Logistics strategy.
 c) Supply chain ownership
 d) Preferred partners’ strategy

These strategies do not have integration to

have an efficient supply chain network, in
the case company’s corporate strategy.
 CUSTOMER SERVICE STRATEGY
 Purpose: Creating value with innovative
solutions
 Vision: The most attractive paper company
 Key success factors: Customer success,
Corporate brand
 Behavioural principles: Openness, trust and
Initiative
 Corporate Responsibility: Social and
Environmental Responsibilities
LOGISTICS STRATEGY
 Logistics strategy includes preferred
partner’s strategy
 Preferred partner’s develop new logistics
solutions and perform logistics operations
 Collaborative strategy implementation
 Communication of logistics strategy
implementation to customer service strategy
to match requirements of customer service
strategy.
INTERACTION BETWEEN CORPORATE &
LOGISTICS STRATEGY
 FOUR MAIN ELEMENTS OF
LOGISTICS STRATEGY
 The integration into the business divisions
and the preferred partners

 Sales forecasting and logistics planning

information.

 Supply chain management

 Management systems with preferred

partners
LOGISTICS STRATEGY( 2 DIRECTIONS)
 LOGISTICS STRATEGY: SALES
FORECASTING & LOGISTICS PLANNING
SUPPLY CHAIN OWNERSHIP
 Traditional style: Supply chain manager
 Main task: Develop supply chains – structural
level
 Base on customer service strategy: customer
service team – sales network- supply chain
management
 Sales organization: operational and financial
supervisory
 Logistics- mills and sales organization service
provider
PREFERRED PARTNER’S
STRATEGY
 Logistics service providers as preferred
partners
 Transactional exchanges to relationship
exchanges
 Channel captain – organization sets strategic
objectives for logistics providers and the
supply chain
 Intensive partnerships into relatively
standardised business/ contracts
 LOGISTICS COMPONENTS IN
PREFERRED PARTNER’S STRATEGY

 Integration with the preferred partners

 Integration with the strategic management
of the preferred partners
 Supply chain management
 Management systems with preferred partners
 E-logistics
 Transport risk management
KEY PERFORMANCE INDICATORS

 (KPI) are financial and non-financial

measures or metrics used to help an
organization define and evaluate how
successful it is, typically in terms of making
progress towards its long-term organizational
goals.
 KPI’S FOR SUPPLY CHAIN
MANAGEMENT
 Automated entry and approval functions
 On-demand, real-time scorecard measures
 Single data repository to eliminate
inefficiencies and maintain consistency
 Advanced workflow approval process to ensure
consistent procedures
 Flexible data-input modes and real-time
graphical performance displays
 Customized cost savings documentation (CSD)
 Simplified setup procedures to eliminate
dependence upon IT resources
 CASE COMPANY, LOGISTICS KEY
PERFORMANCE INDICATORS
 Strategic issues- no measurement tools to
support business
 Financial issues- optimal inventory policies
and cost benefits of technology sharing not
measured
 Context issues-isolated and incompatible
measurement indicators used
 Management issues- different within
organization, supply chain partners
ISSUES IN THE CASE COMPANY

 Logistics – same service provider owns

responsibility for overall transportation in
sales network regions as well moving from
mills to ports and over the sea.
So, Who should have the supply chain
ownership?
 Warehousing & customer delivery process –
Who should be responsible? Logistics
organization or business divisions?
ISSUES... CONTINUED....
 Partnership in sub-contracting 4PL service
provider – in the hands of logistics
organization.
Is it not that business divisions and logistics
organization (both)should take responsibility?

 Sales network has no integration with the

supply chain management.
Should they not understand the network and
cost elements to manage lead times?
SOLUTIONS .....
 Integration of supply chain with logistics
network – ICT IN SUPPLY CHAIN
 Fragmented supply chain management model
to integrated supply chain management
model- CROSS FUNCTIONAL APPROACH
 Sales network integration–better supply chain
relationships ( DIAMOND MODEL)
 Warehousing issues- reduce cost of big
warehouses in each region – CROSS DOCKING
 Engage 4PL services in each region –
SUBCONTRACTING for cost and time benefits
ICT IN SUPPLY CHAIN
 Application of IT tools for integration of the supply
chain network
 ERP -Shang and Seddon (2000) characteristics ERP
system as seven points
 Embedding process
 System configuration and diversity of data access
options
 Closely associated data and processes
 One point data entry
 Continuous improvement of functions
 Highly complex knowledge
 Trend for better supply chain integration
CROSS FUNCTIONAL APPROACH
 The involvement of the different functions of the
organization – supply management, operations, design,
quality, customer service, finance, IT, logistics.
( Monczka & [Link], 1994)
 Benefits : future supply chain approach for world class
organization
 Synergy
 Input from all affected functions
 Time and cost compression
 Overcoming organizational resistance
 Enhanced problem solving
 Negotiations
 Co-ordination and co-operation
SOLUTIONS ... CONTINUED..
 Supply chain relationship model:
Creating closer relationships :
From BOW-TIE APPROACH ( traditional model)
To DIAMOND APPROACH ( multiple contact model)
The benefits are:
 Contact between functions are encouraged
 Active relationship management
 Supplier development
 Overall communication improves, integrated and
synchronised supply chain
 CONTINUOUS IMPROVEMENT
FRAMEWORK TO REDUCE LEAD TIME
CROSS DOCKING
 Cross docking refers to moving product from a
manufacturing plant and delivering it directly to
the customer with little or no material handling in
between. Cross docking not only reduces material
handling, but also reduces the need to store the
products in the warehouse!
Types of cross docking
 Manufacturing Cross Docking
 Distributor Cross Docking
 Transportation Cross Docking
 Retail Cross Docking.
 Opportunistic Cross Docking
CONTINUED.....
 Benefits of cross docking :
 Reduction in labour costs, as the products no
longer requires picking and put away in the
warehouse
 Reduction in the time from production to the
customer, which helps improve customer
satisfaction
 Reduction in the need for warehouse space, as
there is no requirement to storage the products
 Reduced lead times, faster delivery
 More organized distribution
ROLE OF 4 PL SERVICE
PROVIDERS
 Relationship is information based
 Logistics functions –daily operations
responsibility in service provider
 More visibility in tracking of material
 Cost cut down
 Merge in transit approach
 Sub contracting will improve supply chain
relationships and more reliable and faster
delivery schedules
 Regional internal logistics costs saved
INTEGRATION OF LOGISTICS AND SUPPLY
CHAIN IN CASE COMPANY- A MODEL
CONCLUSION....

 To attain a WCSCM ( World Class Supply

Chain Management) the integration of three
main elements represented by a WCSCM
Triangle
 World class Supply Management (WCSM)
 World class Demand Management (WCDM)
 World class Logistics Management (WCLM)
WCSCM – TRIANGLE

WORLD
CLASS
SUPPLY
MANAGEME
NT

WORLD CLASS
SUPPLY
CHAIN
MANAGEMENT

WORLD WORLD
CLASS CLASS
DEMAND LOGISTICS
MANAGEME MANAGEME
NT NT
THANK YOU FOR
LISTENING..!
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CONTINUED...

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