Tightening competition and increasing customer-side demands require agility and speed from manufacturers in the paper and board industry.
By 2015, it had become clear to Saica that the existing supply chain was not ideally meeting the needs of its customers. The make-to-order operating model had difficulty in reaching the demanding new service levels imposed by customers, especially lead times, which necessitated a thorough rethink of the fulfilment process.
This led to the formulation of the Saica 2020 vision: to be the leader in efficiency and value for customers. To realise the vision, it soon became evident that many simultaneous changes were required.
The entire order-to-fulfilment process was thoroughly analysed. It appeared that starting work at the time the customer made the order meant lagging behind expectations from the start. A predictive model was clearly needed.
This was even more important as fulfilling a customer order often requires deliveries from several geographically dispersed plants Europe-wide. In addition to aligning production between them, logistics was a significant factor. As an example, in the UK alone, the organisation is dealing with 300 SKUs from 10 different plants. Moreover, much of the work was done manually, which tied up lots of the staff for performing routine tasks.
A study was commissioned to find out how to deploy better solutions and tools for supply chain management.
IT systems had been developed in-house; now new tools were searched from among innovation outside of the organisation. Changing the way of working also necessitated organising personnel to work as a united, cross-departmental team to put the customer in the centre and become quicker in decision-making.
Saica set up a specialised department for end-to-end supply chain management. Its goal is to align the supply side with forecast demand, balance production and ensure On Time In Full (OTIF) delivery to customers.
Obviously, far-reaching digitalisation and automation were needed. Therefore, a new Sales & Operational Planning (S&OP) system was introduced that integrates into the company's ERP system and all the way to shop floor systems. Based on both historical data and predicted demand patterns, the system also allows what-if scenarios to prepare for different situations.
On the people side, personnel received extensive training to use the system as a unified team and enhance prediction accuracy by adding their own observations. An important factor was total management commitment, which accelerated adoption.
After four years in operation in the UK, the achievements of the new operating model and end-to-end digital supply chain management are impressive.
Stock levels at customer warehouses are down 32 per cent. The service level has improved by 20 per cent. OTIF deliveries have reached 95%. Lead times have been shortened by 11 days. Average truckloads increased by close to half a tonne.
Additionally, mill waste has been reduced, and including more customers in a vendor-managed inventory and make-to-stock models creates considerable savings at the customer end.
Bringing together data and people through efficient use of data generation, analytics and machine learning is crucial for success – and most importantly, customer satisfaction – in today's marketplace, all the more so in a tightly competitive business. Some success factors I think are important:
With excellent experiences in the UK and Ireland markets, Saica Group is now rolling out the new operating model to its units in France and Spain.
About Saica Group
With 115 sites in 9 countries and growing, the Saica Group operates in four related industries:
Saica Natur – Integrated waste management
Saica Paper – Recycled paper for corrugated cardboard
Saica Pack – Corrugated cardboard packaging solutions
Saica Flex – Flexible packaging solutions
Saica is the fifth-largest player in the European paper, packaging and related recycling industry. Founded in 1943 and based in Zaragoza, Spain, the company now employs more than 10,000 people generating an annual turnover of 4.1 billion euro.
David is an industry expert in the paper & packing sector after a career of 20 years. He started in a consultancy company as a business analyst and then joined SAICA Group to implement its ERP solution as project manager. David's insight into both supply chain and IT solutions for commercial, planning and logistics areas grows from his tenure in the Packaging and Paper business in the role of project director at SAICA Group. Since 2016, David has worked as the Supply Chain Director of SAICA Paper.