Production and supply management strategies in Nordic paper mills

Ari-Pekka Hameri and Juha-Matti Lehtonen

Scandinavian Journal of Management, 2001, vol. 17, issue 3, 379-396

Abstract: The traditional production management strategy in paper manufacturing is based on a volume-intensive approach. This involves the measurement of overall performance or productivity, while aiming at a high level of capacity utilisation and minimum waste levels. This approach has proved successful in mills producing high volumes with a limited and standardised product range. The situation changes radically when paper and board products are being tailored to customer-specified dimensions and quantities. The volume-based approach is no longer appropriate, and production has to be controlled by an approach that considers inventory performance along the full length of the supply chains. This paper presents five empirical examples to illustrate the use of the two strategies. The detailed analyses of production cycles, the logistical solutions applied and the inventory levels at various stages of the supply chain, show that the Nordic paper industry is slow, with average lead times of 79 days to market. When production cycles are reduced and logistical alternatives are fully exploited, it can be seen that 30% of the inventories can be regarded as slack. The summary of the cases shows that speedier operations easily generate direct cost savings amounting to 2-5% of annual turnover. All these results can be achieved without additional investment; all that is required is a change in production planning principles and logistical control procedures. The paper concludes with a challenge to the Nordic paper industry to be the first in its field to achieve the higher level of productivity that faster operations can generate.

Keywords: Paper; production; Supply; chain; control; Logistics; Inventory; performance (search for similar items in EconPapers)
Date: 2001
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0956522199000421
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:scaman:v:17:y:2001:i:3:p:379-396

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/872/bibliographic
http://www.elsevier. ... me/872/bibliographic

Access Statistics for this article

Scandinavian Journal of Management is currently edited by Janne Tienari

More articles in Scandinavian Journal of Management from Elsevier
Bibliographic data for series maintained by Catherine Liu ().