Delivering tangible customer benefits to Sappi Fine Paper
23 November 2010
Sappi Fine Paper produces fine paper reams and flat packed paper pallets. Sappi contracted Goldfields Logistics to do the warehousing as well as the primary and secondary distribution of both paper reams and flat packed paper. A long-term successful business relationship with tangible customer benefits.
Project Duration: 2000 – present
Imperial Logistics Operating Company: Goldfields Logistics
Background
Sappi Fine Paper produces fine paper reams and flat packed paper pallets. The company produces approximately 200 SKUs. Goldfields Logistics moves and stores > 281,400 tons of paper per annum at a contract value of approximately R130m. Sappi contracted Goldfields Logistics to do the warehousing as well as the primary and secondary distribution of both paper reams and flat packed paper. The warehousing takes place at facilities in Cape Town, Germiston and Pinetown with a total of 27,000 m² storage space. To date Goldfields Logistics has played a significant role in initiating additional opportunities to utilise empty transport legs and optimise warehouse space by introducing complementary products in the supply chain.
Challenges
- To counter mistrust between both parties at the onset of the outsourcing agreement.
- To overcome misalignment of goals between Logistics and Sales functions.
- Integrity of the WMS was poor and lacked transparency – this needed to be corrected.
- Low OTIF, wrong stock at the wrong warehouse, high stock levels and poor load plan adherence needed to be addressed.
- Lack of leadership and vacancies existed at the DCs and dispatch bays and needed to be filled.
Deliverables
- Over the years Goldfields Logistics has managed to drive waste down (7 ton returns/damaged stock out of 3,800 ton thus only 0.18%).
- Sappi is comfortable to outsource more products and even inbound raw materials to Goldfields Logistics due to the high service levels achieved.
- Goldfields Logistics managed to sustain a core fleet of own vehicles contracting additional vehicles during peak periods. Volumes vary between 12,000 and 31,000 tons per day.
- Goldfields Logistics placed a Transport Planner within the Sappi organisation to proactively do the route and capacity plans working off the customers SAP system.
- There is total visibility of the inventory in the supply chain due to integration between the various systems in the supply chain.
- The warehouses make use of Sappi’s SAP WMS and the system is managed by Goldfields Logistics.
Key Outcomes/Benefits
- With the support of Goldfields Logistics, Sappi has an annual cost avoidance and savings of in excess of R30m per annum.
- Due to the optimisation of the supply chain and subsequent stock reduction, the warehouse capacity can be used to accommodate Sappi Kraft products being distributed via the same network.
- The inbound starch requirements to the factories can also be accommodated at the warehouse resulting in saving on both warehouse and transport costs due to the better utilisation of the warehouse and return loads on the vehicles.
- In the Durban warehouse Goldfields Logistics has already managed to incorporate Sappi Kraft with the Fine Paper using the same warehouse resulting in savings due to shared resources and facilities.
Contact Details
T: +27 56 514 9301 / 211
F: +27 56 515 4012 / 4510
E: wynand@goldfields.ih.co.za
W: www.goldfieldslogistics.co.za
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