Why supply chain efficiency is the new black for packaging and paper

For possibly the first time ever, in 2021 supply chains became a topic of everyday conversations. We saw them trend on social media, we read daily headlines about shipping backlogs at ports, and we dealt with the frustrations of empty store shelves and months-long delivery windows for orders.

For the forest products, paper, and packaging industries, the stories of supply chain woes were no surprise. Early on in the pandemic, decision-makers saw how volatile demand for toilet paper, for example, disrupted traditional supply chain planning, resulting in a firefighting mindset and a struggle to adapt. Overnight, producers had to pivot to running their operations remotely. They had to shrink a planning cycle that was simply too long and inflexible in the face of quickly changing market conditions. And they had to adapt their internal operations and better synchronize siloed functions such as sales, finance, manufacturing, and distribution to keep the lights on and the doors open.

New questions, elusive answers

With the fundamental shift in market dynamics, producers had to find new answers to difficult questions, including:

  • How do we adapt to lagging demand in one geography and a spike in demand in another?
  • Can we analyze demand and supply to make better informed “make or buy” decisions?
  • Can we perform deeper planning across material levels to identify alternative supply sources—such as locating stock from other warehouses to fulfill orders?
  • What is the right pricing strategy, given the rapid fluctuations in demand and new production challenges?

The producers that lacked a single, integrated source of supply chain and manufacturing data struggled to answer these questions. Spreadsheet-driven analyses and urgent calls to suppliers weren’t enough to match the unpredictability and accelerated pace of business. Companies needed real-time visibility into supply chain disruptions and shortages. They needed reliable, up-to-the-minute data across all lines of business to act and react at the speed the market demanded. Without that data, many lost out on unprecedented opportunities. Unhappy customers turned to other suppliers who could provide clear answers on product availability and shipment timing.

Forget about getting back to normal

Going forward, producers can’t wait for the dust to settle and get back to business as usual. Instead, they’re planning for a new world where disruption is a given and agility and flexibility are prerequisites to success. To continue to thrive, they’re looking to consolidate data related to their supply chains, inventories, costs, production, quality, and delivery. They need the ability to alter production in response to volatile demand—and they need to accelerate the quoting and delivery cycles. Customers want certainty, so delivering product when and as promised is a prerequisite to staying in business.

Providing customers that certainty calls for more agile collaboration within the enterprise. Sales, finance, marketing, manufacturing, supply chain— they all need to operate from the same version of the truth so the entire enterprise can think and act as one to address new challenges and manage disruption. Reliable and relevant data fuels the ability to play out alternative market and supply chain scenarios and to deliver a workable Plan B before events bring business to a halt.

Effective collaboration also includes customers and suppliers who can share planning insights and help sharpen forecasts. Armed with that data, producers can provide their customers with greater confidence on delivery dates and order availability. And when disruptions do occur, customers get greater visibility into the effects sooner—and adjust their own planning accordingly.

ClearMetal, a project44 company, has worked closely with the forest products, paper, and packaging industries and provides customers ocean-shipment visibility data to improve on-time delivery, reduce logistics costs, and optimize inventory. A vice president of supply chain for a global forest products manufacturer recently commented, “ClearMetal will not make vessels go faster or resolve congestion in the port.  But the solution might be able to help avoid congestion, or at least give customers a heads-up that their shipment might be late.”

Lessons learned from the toilet paper “crisis”

The “Great Toilet Paper Shortage of 2020” is a case in point. While many store shelves went empty, there was no actual shortage in the supply chain. With the ability to re-route shipments, optimize inventory, and automate warehouse processes, suppliers could have better accommodated localized spikes in demand. With state-of-the-art, cloud-based tools, producers could eliminate the single points of failure that threatened system-wide disruption and anticipate the weak links in the supply chain that required alternative strategies.

Interested in how the industry’s most innovative producers transformed their supply chains to thrive in the post-pandemic world? You can find their stories here.

 

 

 

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