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Focus on the Pulp and Paper industry
The market is changing. Global overcapacity and increased competition results in shrinking margins. For European and North American companies emerging markets present both opportunities and threats. Many companies have realized that cost cuttings are not sufficient enough to improve profitability. Global consolidation has been a buzz phrase in the industry for several years. However, looking at the bottom line, smaller companies have proven to be more profitable than their larger competitors. - A result of better control over operations? New challenges, new decisionsIt seems that the pulp and paper industry has never been undergoing a restructuring phase as challenging as it is right now. Now - more than ever - future success or failure is largely determinated by decisions made today. The Pulp and Paper industry represents a fundament in the industrial life of the Nordic countries. In Finland around 25 per cents of total export revenues come from the industry and corresponding number in Sweden is about 13 percents. Figures that really emphasizes the importance of this industry. UnitedLog, with its Nordic heritage - and expert competence within strategy, information and operations - works actively to assist Pulp and Paper companies to overcome recognized challenges within Supply Chain Management. The industry is the leading buyers of railway transportations. For example 45% of all railway transports in Sweden are tendered by Pulp and Paper companies. The industry thinks of railway transports as challenging due to the inflexibility and difficulty to control shipments. Due to the many actors involved in a Pulp and Paper supply chain, the average transport is often relatively short. In Sweden, for example, the average truck transportation is only 100 km and the average railway transportation 400 km – indeed the shortest averages of all industries. This highlights the importance of accurate distribution strategies. We know that supply chains in the industry are characterized by long lead times and actors in multiple tiers - resulting in the need of system support helping companies to take control over operations. We also know that the industry is the most frequent transport buyer and that it spend large amount on logistic services - in general between 10-15% of total costs are logistic costs. Importance of cash and costs
Within the Pulp and Paper industry we have seen a grooving interest for financial services. This, of course, goes hand in hand with the down turn in the economy. All firms are required to maintain a balance between liquidity and profitability while conducting its day to day operations. This can be tough, especially in today’s financial climate where many businesses are facing a cash crisis. The importance of cash as an indicator of continuing financial health should not be surprising in view of its crucial role within the business. We help companies to release tied up capital ensuring a satisfying flow of cash. No matter if challenges lie in the fragmented system legacy, financial management, sourcing, distribution, production etc. we know that globalization is transforming the world and indeed the Pulp and Paper industry. We are a partner for companies that are at the forefront of this transformation. What we offer is extensive, in-depth knowledge for use in creating the changeable logistics answer of the future.
By Mikael Cederholm, UnitedLog
Read on > How has the recession impacted Supply Chain Management? |
It is no news for anyone that times are tough, the Pulp and Paper industry is no exception. Most Pulp and Paper companies are adjusting to the changing business environment, where supply continues to exceed demand, prices are falling, energy costs are up, currency fluctuations are prevalent and on top of all this, the global financial crisis adds additional uncertainty and turbulence.
For companies facing shrinking margins and high costs, cost cutting are of constant concern. Working with lean manufacturing strategies has traditionally not been much enrooted in the industry. We have however seen acts of transformation lately. Waste is any activity that consumes time, resources, or space but does not add any value to the product, service or process. The core of lean is founded on the concept of continuous product and process improvement and the elimination of non-value adding activities. Lean initiatives have immense potential for the Pulp and Paper industry. By helping companies to eliminate waste we create better overall efficiency and establish smoother supply chain flows which lower cost for logistics. 