Supply chain costs of a small board lot: sheet cutting and logistics

Succeeding in small board lot (0-20 tons) deliveries, is not always prosperous and failures as well as extra costs compared to standard costs arise. Failure deliveries from converting plants to customer locations tie a lot of unwanted and unexpected costs. Extra costs are handled as quality costs and more precise, internal failure costs. These costs revolve from unsuccessful truck payloads, redundant warehousing or unfavorable routing as examples. Quality costs are becoming more and more important factor in company’s financial decision making. Actual, realized truck payload correlates with the extra costs occurring, so filling the truck payload all get-out well is a key to lower the extra costs. Case company in this study is Corporation A, business segment Boards. Boards have outsourced half of their converting in order to gain better customer service via flexibility, lead time reductions and logistics efficiency improvements. Examination period of the study is first two quarters of year 2008 and deliveries examined are from converters to the customer locations. In Corporation A’s case, the total loss in failure deliveries is hundreds of thousands of Euros during the examination period. So, the logistics goal of getting the right product to the right place and right time for the least cost, does not completely realize.

Unitizing in Supply Chain – Case SECU Container

The aim of this thesis is to analyze how increasing the level of unitizing affects to the costs in the transport system of a Finnish paper and board company. The parts of the supply chain where costs are analyzed are limited to domestic inland transport and port operations. Supply Chain management is important aspect of modern day companies’ strategies. Intermodal transport and different transport systems are the key items which are studied in the theory part of this thesis. In the case study the payload simulations for SECU container (Stora Enso Cargo Unit) stuffed in mills sites are base of the cost analyze of this thesis. Thesis also makes a glance for the restrictions and development trends in Finnish railroads. In analyze SECU containers are moved up to the mill site for stuffing. This increases the level of unitizing in supply chain. Analyze is made for three variation of current traffic lines. Analyze shows that when idea of intermodalism is well used there is considerable cost savings to gather in pre-transportation and port operations. But also effects to mill sites and destination ports needs to be take under considering. In analyze the effects of increased axle weight for SECU container transportation in Finnish railroads is studied. When transport unit is stuffed in earliest possible point supply chain and unloaded the last possible point the savings made in chain can be considerable. In case study of this thesis almost 40% savings in total costs could be reached in pre transportation and port operations when unitizing level is increased in supply chain.

Energy Supply of Detached Houses in Russia and Finland

The problem of choosing the heating system is always relevant when building new houses. Type of energy source (solid fuel, liquid fuel, gas, electricity, alternative sources) is the main issue in choosing the heating system. The work gives a comprehensive overview of heating methods, determines their advantages and disadvantages taking into account economical and ecological situations in Finland and Russia. Quantitative contribution of single Finnish and Russian detached houses in the overall level of carbon dioxide emissions is estimated when using each method. Comparison of Russian and Finnish energy markets and their impact on electricity pricing is made in the work. The influence of air pollution on environmental offsets according to Russian and Finnish legislative and normative acts is determined.

Frequency converter protection against supply network phenomena

This master’s thesis is focused on power supply network disturbances and their effects on the frequency converter – one of the components of modern process crane electrical system. The most critical disturbance types, their causes and the effect they bring to crane electrical system was determined in this work. Variety of protective devices used for mitigation of disturbances is investigated. Device protection solutions for the frequency converter used in crane applications are presented. Analyses of the power supply requirements for frequency converter and various components of crane electrical system were carried out and as a result the crane power supply requirements list that guarantees normal crane operation was built. This list is to be included in crane projects for troubleshooting purposes in order to determine potentially dangerous network.

Supply chain cost saving potential analysis

Target of this study was to examine the current supply chain with focus on external part and identify the cost potential areas which lie there. The goal was to evaluate the cost save potential and give estimate what would be required in order to realise it. Base data related to study was searched and examined with using company’s enterprise resource planning system. In case feasible two types of scenarios were built in order to describe the scale of save potential. First scenario was theoretical and achieving it would require further investments and second scenario was realistic approach where more limitations were taken into account. The results clearly show that there is high save potential in supply chain costs linked to balance between internal and external operations. Realising of it would require at least minor investments as current internal capacity is not on a level to fully absorb the additional volumes which are needed in order to realise the potential. This study can be used as a basis when starting new projects related to investment needs.

The role of power relations in strategic supply management – A value net approach

Supplier relationships are key elements of supply management and thus have attracted substantial research interest among academics and practitioners. The collaborative nature of relationships has been the focus of the mainstream research, and limited interest has been channelled towards power in buyer–supplier relationships. However, power is one of the key factors determining the outcomes in many business relations. Hence, one of the main objectives of this dissertation is to clarify how power may influence the nature of buyer–supplier relationships and, moreover, the depth of collaboration. Another main objective is to clarify the role of power relations in strategic supply management. Given the different nature of relationships, the firm needs divergent strategies in its supply management in order to handle them efficiently. Power has been identified as one of the factors that affect the nature of buyer–supplier relationships, and firms should thus develop strategies for handling power relations. Three research questions are addressed in pursuit of these objectives, the aim being to clarify the sources of power, the influence of power on collaboration, and the role of buyer–supplier relationships in the firm’s supply strategy. This dissertation has two parts. The first part provides a synthesis of the overall dissertation, and the second part comprises five complementary research papers. The qualitative research method is applied in an empirical case study from the Finnish food industry. The main contribution of this dissertation is that it clarifies the role of power relations in strategic supply management in value nets, and discloses the nature of power as an influencing factor in supplier relationships. It extends the discussion on power in buyer– supplier relationships in highlighting the context of networks and raising the question of network effects on power relations. It also illustrates how power positions and power relations in value nets can be determined based on the sources of power of the network actors, and shows their influence on collaboration.

Strategic supply chain alignment to customer buying behavior

In search for competitive advantage, designing and managing supply chain networks have become a necessary competence for organizations. The target of this thesis is to answer a question, how to design a multiple supply chain network. The purpose is to study, what kind of different supply chain designs exist and, how to choose appropriate supply chain designs for a company. In the thesis, the focus is on the supply chain alignment to customers, more specifically to customer buying behavior. The research method was a case study. A framework for measuring customer buying behavior was developed based on the literature and it was used in the study of customer buying behavior in the case environment. In the case company structured interviews and data records were used as sources of evidence. Persons working in the customer-interface were interviewed face-to-face and through an e-mail questionnaire. When analyzing the data, a Quality function deployment matrix was used as one analysis method. As a result of the thesis, supply chain network of the case company is proposed to be divided into three separate supply chains, which focus on different areas and they could be called lean, agile and continuous replenishment supply chains. In conclusion, in the supply chain alignment to customer buying behavior several aspects have to be studied from different perspectives. According to the results, a multiple supply chain strategy is recommended to be implemented in the case company, since the diversity of the customer needs cannot be managed efficiently through a single supply chain.

Finnish Critical Industries, Maritime Transport Vulnerabilities and societal Implications

Maritime transports are very essential for Finland as over 80% of the foreign trade in the country is seaborne and possibilities to carry out these transports by are limited. Any disruption in maritime transports has negative consequences to many sectors in the Finnish economy. Maritime transport thus represents critical infrastructure for Finland. This report focuses on the importance of maritime transports on security of supply in Finland and for the so called critical industries in particular. The report summarizes the results of the Work Package 2 of the research project STOCA – “Study of cargo flows in the Gulf of Finland in emergency situations”. The aim of the research was to analyze the cargo flows and infrastructure that are vital for maintaining security of supply in Finland, as well as the consequences of disruptions in the maritime traffic for the Finnish critical industries and for the Finnish society. In the report we give a presentation of the infrastructure and transport routes which are critical for maintaining security of supply in Finland. We discuss import dependency of the critical industries, and the importance of the Gulf of Finland ports for Finland. We assess vulnerabilities associated with the critical material flows of the critical industries, and possibilities for alternative routings in case either one or several of the ports in Finland would be closed. As a concrete example of a transport disruption we analyze the consequences of the Finnish stevedore strike at public ports (4.3.–19.3.2010). The strike stopped approximately 80% of the Finnish foreign trade. As a result of the strike Finnish companies could not export their products and/or import raw materials, components and spare parts, or other essential supplies. We carried out personal interviews with representatives of the companies in Finnish critical industries to find out about the problems caused by the strike, how companies carried out they transports and how they managed to continue their operations during the strike. Discussions with the representatives of the companies gave us very practical insights about companies’ preparedness towards transport disruptions in general. Companies in the modern world are very vulnerable to transport disruptions because companies regardless of industries have tried to improve their performance by optimizing their resources and e.g. by reducing their inventory levels. At the same time they have become more and more dependent on continuous transports. Most companies involved in foreign trade have global operations and global supply chains, so any disruption anywhere in the world can have an impact on the operations of the company causing considerable financial loss. The volcanic eruption in Iceland in April 2010 stopping air traffic in the whole Northern Europe and most recently the earth quake causing a tsunami in Japan in March 2011 are examples of severe disruptions causing considerable negative impacts to companies’ supply chains. Even though the Finnish stevedore strike was a minor disruption compared to the natural catastrophes mentioned above, it showed the companies’ vulnerability to transport disruptions very concretely. The Finnish stevedore strike gave a concrete learning experience of the importance of preventive planning for all Finnish companies: it made them re-think their practical preparedness towards transport risks and how they can continue with their daily operations despite the problems. Many companies realized they need to adapt their long-term countermeasures against transport disruptions. During the strike companies did various actions to secure their supply chains. The companies raised their inventory levels before the strike began, they re-scheduled or postponed their deliveries, shifted customer orders between production plants among their company’s production network or in the extreme case bought finished products from their competitor to fulfil their customers’ order. Our results also show that possibilities to prepare against transport disruptions differ between industries. The Finnish society as a whole is very dependent on imports of energy, various raw materials and other supplies needed by the different industries. For many of the Finnish companies in the export industries and e.g. in energy production maritime transport is the only transport mode the companies can use due to large volumes of materials transported or due to other characteristics of the goods. Therefore maritime transport cannot be replaced by any other transport mode. In addition, a significant amount of transports are concentrated in certain ports. From a security of supply perspective attention should be paid to finding ways to decrease import dependency and ensuring that companies in the critical industries can ensure the continuity of their operations.

Supply management capability

The objective of this thesis is to define supply management capability. The thesis study what factors consist of supply management capability, and which of those factors are critical to achieving competitive advantage. One objective is also to study how firms can measure their supply management capability. This study is a qualitative research. The thesis examines the literature regarding to supply management and the context of capability and there are used Delphi panel to examine the current and future insights of supply management professionals concerning of supply management skills and capability. The empirical data of the thesis was collected by interviews. The Delphi panel was used in data collection and analysis and for prioritization of the factors of supply management capability. The thesis includes lists of factors of supply management capability. Main findings of the study were that there is no one clear, generally suitable set of supply management skills which bring competitive advantage for all firms and the most important factors of supply management capability, according to the experts, are total cost analysis, customer focus, general business view, market knowledge and supplier relationships. In this study the supply management capability is defined as organization’s overall capacity and ability to achieve a holistic understanding of purchasing needs, manage its suppliers and collaborative partners, and conduct its internal tasks, routines and responsibilities in a way that achieves desired results. The results of this thesis show also that Finnish firms need more right kind of supply management knowledge.

The analysis and mitigation of risks in FMCG supply chain: the case of British American Tobacco Eastern Europe

This work investigates the Bullwhip Effect, which is one of the most important phenomena in contemporary supply chain management. The author uses most recent theoretical apparatus to analyze operational activities of a leading FMCG company British American Tobacco Eastern Europe. This paper investigates and describes the process in BAT supply chain management and considers the impact of the Bullwhip Effect together with the potential risks threatening company's operations. Emergence of the Bullwhip Effect leads to supply chain inefficiency. This paper contains methodological supply chain risk mitigation recommendations, description of a real case study and an analytical study of internal and external supply chain processes

The effect of wood supply and bleaching process on pulp brightness stability

One hundred different 5.5-year-old Eucalyptus grandis x Eucalyptus urophylla wood clones were cooked to kappa number 15-17.5 and the resulting kraft pulps oxygen-delignified to kappa 9.5-11.5 under fixed conditions, except for chemical charges. Thirteen samples showing large variations in effective alkali requirement, pulp yield and O-stage efficiency and selectivity were selected for brightness reversion studies. These samples were bleached to 90-91% ISO by DEDD and DEDP sequences and their brightness stability and chemical characteristics determined. Heat reversion of the eucalyptus kraft pulps was strongly influenced by the wood supply, with brightness loss varying in the range of 2.1-3.6 and 0.8-1.7 %ISO for ODEDD and ODEDP bleached pulps, respectively. Pulps bleached by the ODEDP sequence showed reversion values 1.3-1.9 % ISO lower than those bleached by the ODEDD sequence. Pulp carbonyl content decreased by 35-40% during the final peroxide bleaching stage. Carbonyl and carboxyl groups correlated positively with brightness reversion, as did permanganate number and acid soluble lignin. Pulp final viscosity and metal and DCM extractives contents showed no significant correlation with brightness reversion. Pulping, oxygen delignification and ECF bleaching performances also showed no correlation with brightness reversion.

BIOMASS SUPPLY CHAIN ANALYSIS WITH DENSIFIED WASTE

ABSTRACT The possibility to vary the energy matrix, thus reducing the dependency on fossil fuels, has amplified the acceptance of biomass as an alternative fuel. Despite being a cheap and renewable option and the fact that Brazil is a major producer of waste from agriculture and forestry activities, the use of these materials has barriers due to its low density and low energetic efficiency, which can raise the costs of its utilization. Biomass densification has drawn attention due to its advantage in comparison to in natura biomass due to its better physical and combustion characteristics. The objective of this paper is to evaluate the impact of biomass densification in distribution and transport costs. To reach this objective, a mathematical model was used to represent decisions at a supply chain that coordinates the purchase and sale of forestry and wood waste. The model can evaluate the options to deliver biomass through the supply chain combining demand meeting and low cost. Results point to the possibility of an economy of 60% in transport cost and a reduction of 63% in the required quantity of trucks when densified waste is used. However, costs related to the densifying process lead to an increase of total supply costs of at least 37,8% in comparison to in natura waste. Summing up, the viability of biomass briquettes industry requires a cheaper densification process.