Enhancing supply chain efficiency at a leading pulp and fiber manufacturer

In today’s fiercely competitive market, a robust supply chain is paramount for maintaining operational excellence and exceeding customer expectations. This case study details our collaboration with a prominent Central European- headquartered manufacturer of specialty  wood-based fibers and pulp, a cornerstone supplier to the global textile and nonwoven industries. Despite their market leadership, the client faced several supply chain hurdles demanding a comprehensive solution.

The consulting project began with a thorough analysis of supply chain operations. Key issues included significant misalignment between strategic, tactical, and operational planning levels, as well as no unified supply chain strategy covering all business units. Only a push-based manufacturing model was used for supply of internal customers, completely decoupled from needs of the final clients. This misalignment led to inefficiencies and uncoordinated efforts across the organization. Additionally, production and inventory strategies were not linked to customer requirements, resulting in either overproduction or stockouts. The operations were siloed, with the commercial team having limited involvement in the demand and supply balancing process, leading to missed opportunities for optimization. Furthermore, the lack of transparency in performance management due to non-harmonized systems hindered effective decision-making.

Our team devised a multi-pronged improvement roadmap to enhance the client’s supply chain capabilities. We designed and implemented a harmonized global and local planning framework, aligning strategic, tactical, and operational levels across business units. This fostered better coordination and resource allocation. A new global “One Plan” tactical planning process was established, boosting internal collaboration and ensuring all divisions strive towards unified objectives.

To bridge the gap until a fully integrated planning tool became operational, an interim planning tool was deployed, leading to immediate improvements in planning accuracy and collaboration within the plants as well as globally. We also meticulously defined the functional requirements for the future integrated planning tool, ensuring it met all necessary specifications for effective supply chain management.

To further emphasize customer focus, we designed a customer-product clustering concept for future global implementation. We implemented a tiered approach to optimize supply chain costs and inventory levels while maintaining customer satisfaction and delivery reliability. We categorized customers as either strategic or non-strategic, tailoring logistics services accordingly. Additionally, we segmented products into top-selling and long-tail items, adopting distinct production and order management strategies. Top-sellers are to be forecasted and stocked to ensure rapid fulfillment, while long-tail products are to be produced on demand with limited order flexibility once production started.

Additionally, a standardized set of supply chain metrics, cascaded from strategy to operations, was established and implemented within a Business Intelligence (BI) tool. A key-performance-indicator (KPI) tree was designed to measure how well SCM functions support the implementation of the corporate strategy. This enhanced transparency, facilitated performance tracking, and empowered data-driven decision making.

The project successfully shifted the client from a push-based to a pull-based manufacturing model, optimizing the decoupling points and aligning production closer to actual customer demand. All departments now operate under the “One Plan” principle, ensuring activities are consistently aligned with customer needs. The introduction of standardized supply chain KPIs within the BI tool has simplified performance monitoring and pinpointed areas for improvement. Consequently, forecast accuracy has improved by 15%, leading to more reliable planning and reduced uncertainties. Furthermore, the project identified the potential to reduce inventory working capital by 20%, offering significant cost savings and efficiency gains.

This case study highlights the transformative impact of strategic supply chain management interventions. By addressing critical misalignments and fostering transparency, our team assisted the client in achieving substantial improvements in efficiency and customer satisfaction. This project serves as a powerful testament to the value of customized, strategic solutions in navigating the complexities of today’s supply chain landscape.