A Seven Stage Synchronized Supply Chain

Background

The Paper Mill

The paper mills convert wood chips or recycled paper into pulp, utilizing mechanical and chemical pulping.  The pulp may be bleached to remove impurities and achieve the desired brightness and color of the final paper product before being processed into slurry which is then spread onto a moving wire mesh belt, where water drains away and the fibers begin to bond together to form a huge sheet of paper.  When I say huge, it is at least 2 metres wide moving through presses to remove more water and to compress the fibers together to increase the paper’s strength and density.The pressed paper sheet is then dried using heated rollers or drying cylinders to remove remaining moisture.  In some cases, paper may then be coated with materials such as clay or other chemicals to improve its print quality and brightness.At the final stage of the process, the paper is rolled up to form massive 2-metre-wide, 200-metre-long rolls which are shipped to the substrate manufacturer.

The Substrate Manufacturer

The substrate manufacturer in this case study produced substrates to be used as adhesive labels.  The process started usually with a 2-metre-wide, 200-metre-long roll of backing paper which is fed through a coating machine where silicon is sprayed onto one side of the backing paper and controlled to thicknesses measured in microns.At the other end of the process line a 2-metre-wide, 200-metre-long roll of surface paper is fed through the same coating machine and has adhesive sprayed onto one side of the surface paper and controlled to thicknesses also measured in microns.The two rolls are brought together in the middle into one single 2-metre-wide, 200-metre-long roll with the adhesive surface in contact with the silicon surface and the two paper surfaces on the outside of the sandwich.Often the rolls are slit into smaller rolls before being distributed or sent to a specialized slitting company for narrow dimension rolls.

The Slitting Company

The slitting company performs additional processes such as cutting, slitting, rewinding, or packaging before being sent out to customers, typically printers.

The Printer

Here starts an unusual tri-partite supply chain relationship between the retailer, the food packer and the printer.The retailer often provides the design inputs for a label to ensure that the label includes all required information such as the retailer’s brand, product name, ingredients, nutritional information, allergen information, barcode, expiration date, plus any other mandatory labeling requirements as per food regulations, and the labels must be both attractive and compliant with industry standards.The printer will compile the required data from the retailer and the food packer, complete the design of the label then print and despatch the labels to the food packer.  Sometimes the retailer may use its own graphic designer and provide the finished design to the printer.  The food packer buys the labels from the printer, applies them to the packed product and distributes them to the retailer.The label material suitable for food packaging, must have properties such as moisture resistance, and durability, and must be FDA compliant.  Common label materials for food packaging include coated paper, synthetic materials like polypropylene or vinyl, and eco-friendly options like compostable or biodegradable labels.The inks must be food-safe, FDA-compliant, resistant to moisture, oils, and other environmental factors to maintain label quality and readability.The printing method must suit the label design and quantity requirements.  Common printing methods for food packaging labels include:

• Digital Printing: Ideal for short print runs and variable data printing;
  
• Flexographic Printing: Suitable for large volume printing and offers high-speed production; and
  
• Offset Printing: Provides high-quality printing for intricate designs but is more suitable for longer print runs. After printing, finishing touches may be added to the labels such as laminating, varnishing, or applying protective coatings to enhance durability and moisture resistance.

This step can help protect the labels from smudging, fading, or damage during handling and storage.The printer must store the printed labels in a clean, dry environment to prevent damage or contamination.

The Food Packer

In this case study, the food packer prepares short shelf-life, chilled, cooked meat products where its customers, the retailers, would place orders on a daily basis for next day delivery.The food packer maintains processes and procedures which pay careful attention to hygiene, temperature control, and packaging materials to ensure the safety and quality of the food.A critical activity is portion control of the chilled food products into the appropriate serving sizes or quantities for packaging.  Calibrated equipment is employed to ensure accurate portioning avoiding overfilling or underfilling.The packs are securely sealed to prevent contamination and maintain freshness and labels are applied using appropriate labeling equipment to ensure accurate placement and adhesion.Once the chilled food products are packed and sealed, they are placed into appropriate shipping containers or insulated boxes for refrigerated, temperature-controlled transportation to the retailers’ distribution depots.

The Retailer

Retailers selling chilled cooked meat products face various challenges that can impact product safety, quality, and customer satisfaction.  However, their main challenge is the Customer Experience.  Providing a positive customer experience is essential for building brand loyalty and attracting repeat business.  But how does the retailer balance product freshness, value for money and availability with optimal stock levels?Maintaining optimal stock levels is important to ensure that customers have access to the products they want when they want them.  Therefore, retailers need to strike this critical balance between having enough stock to meet demand without overstocking and risking product spoilage or wastage.

The Consumer

When making purchasing decisions, consumers are increasingly looking for value for money which retailers can provide by offering value through competitive pricing, promotions, bundle deals, loyalty programs, and quality products that justify the price.  However, the consumer also expects the products to be safe, high quality, convenient to use with clear information on ingredients and cooking instructions (if applicable) and to be readily available when they want to buy.  Upward trending demands are friendly customer service and efficient checkout processes.

The Ask:

The project started at the printer with an analysis of its performance against its customer service promise.  The printer promised 95% guaranteed next day delivery but was actually only achieving less than 50%.  The printer wanted to increase its customer service performance whilst reducing its replenishment lead times without increasing stock.  Ensuring that the printer could achieve these objectives involved other stakeholders in the supply chain.

One of the challenges is that downstream to, and including, the printer, big batch manufacturing drives the supply chain.  At the consumer end of the supply chain, chilled meats are purchased in packs of ones or twos.  How do we manage this funnel?  What kind of controls can we put in place?

The Approach

First a detailed analysis was conducted:

1. Analysis of sales ledger data to determine current COTD or OTIF performance level;
2. Analysis of sales ledger data to determine Customer Demand Time;
3. Analysis of SKU data to determine minimum and maximum stock levels;
4. Replenishment lead times per SKU;
5. Usage rates per SKU.

The output from the analysis was used to build a mathematical model of the process a product family of label types.  A solution was designed and verified.  The solution was implemented as a pilot was conducted on the selected product family of label types.  This was then rolled out across all of the other products.

This approach was shared with the slitting company and the meat packer on a pilot basis.  At this point, the driver was the retailer’s daily order quantities.

The meatpacker’s labelling stock was monitored by the printer.  When the meatpacker fulfilled the daily orders to the retailer, the label stock that was used was replenished by the printer.  The printer would then order the exact replacement substrate required for next day label delivery from the slitting company who made twice daily deliveries into the printer from a local warehouse.

This model was then extended to the substrate manufacturer to replenish stock at the slitting company.

The delivery schedules were transformed to have the last delivery loaded onto the delivery vehicle first and the first delivery loaded on last to match the drop off points on the route.

Twice daily deliveries were pulled along the supply chain to exactly match demand.  This enabled the meatpacker to deliver exactly the daily requirements to the retailer which meant that the retailer’s shelves contained product available for their consumers.

Results and Benefits

• Proactive Order Processing;
• Collaborative Procurement;
• Proactive Inventory Management with accurate and real-time inventory data
• Lower stock holding;
• Space reduction;
• Streamlined manufacturing processes;
• Reduced replenishment lead times;
• Optimized Transportation Network;
• Increased productivity;
• Increased profitability;
• Reduced carbon footprint;
• Increased performance against Customer Service Promise to 98%.