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GreyLetter Series 6 Issue 9

March 2018

In This Issue

Page 1 Integrated business planning:

Greycon’s Perspective

Page 2 China’s impact on the global pulp

and paper industry

Page 3 Spotlight on Pankaj Poddar, CEO,

Cosmo Films

Page 4 GreyconMill - developed with the

user in mind

Integrated Business Planning: Greycon’s PerspectiveThere is a lot of hype about Integrated Business Planning (IBP) in the market place. IBP can be interpreted as a rebranding of Sales and Operations Planning (S&OP) but such rebranding is not without substance.

“Greycon’s view is that traditional S&OP processes and systems are indeed limited. Research shows that 75% of business and IT executives anticipate their software projects will fail and 62% of ERP roll-outs were judged a failure. A study published by Harvard Business Review, which analysed 1,471 IT projects, found that all but one in six projects had a cost overrun of 200% on average and a schedule overrun of almost 70%,” says Abder Guezour, Global Business Development Manager at Greycon.

Greycon prides itself in offering optimisation solutions that combine the conflicting objectives of different business planning functions and in offering expertise for the roll-based industry (plastic films and flexible packaging, nonwovens, metals, converting, and paper and board). This is key in accompanying customers in an IBP journey.

Traditional S&OP would operate each process in a sequential manner:

The process steps are often open to debates, for example, what comes first: capacity planning or inventory planning? The terminology and the concepts also overlap,

contributing to more debates, for example, Master Production Schedule (MPS), Rough-Cut-Capacity Planning (RCCP), Sales Inventory Operations Planning, etc.

Greycon has a unique feature combining, in one optimisation run, the processes of Supply Network Planning, Demand vs. Capacity Balancing, Capacity Planning and Inventory Planning. These cover the following capabilities:• Balancing demand (forecast, sales orders including

netting) and capacity (production) and inventory.• Creating replenishment orders for Make-to-Stock,

including for VMI (Vendor Managed Inventory), DCs (Distribution Centres) warehouses.

• Optimising using synthetic multi-criteria objectives aimed to find a balance between different business objectives:

Ȥ Production efficiency: the system optimises production cycles in order to minimise production costs and transition-switchover times.

Ȥ Customer service: adherence to delivery times. Ȥ Inventory targets: adherence to inventory policies. Ȥ Transportation lead times and costs.

Welcome to the Greycon GreyLetter. PAGE 2 “China’s impact on the global Pulp and Paper industry”

Editor: Carla Matthews, Greycon Marketing Manager

Cont’d on page 4

Multi-criteria optimisation. As the algorithm runs, detailed

progress information is displayed

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China’s impact on the global pulp and paper industry

Global economic trends have far reaching implications on the pulp and paper market. From consolidation, to an increase in the importance of trade, activities that take place in one part of the world can now have tremendous impact in another.

A recent Fisher International webinar examined the impact of China’s growth and government regulations on the global marketplace. Here is a recap of key points.

Although China’s growth in the pulp and paper industry is in its early stages, it is already impacting other parts of the world. Given the nation’s size and dense population, a small percentage change in the China market can have wide ranging consequences worldwide. As an example, China is the world’s biggest producer of tissue, yet consumption is less than half of more developed countries.

China is continuing to grow its wealth, and as consumer behavior is changing, its consumption of tissue is growing rapidly. The same holds true for containerboard. Fisher estimates that if China continues to grow as projected, it will need to add more tissue and containerboard machines than exist in all of North America today!

It is estimated that China could easily account for a third of all global pulp, paper, and tissue production in just 10 years time. It is also driving global demand for traded recycled fiber, representing 51% of recycled furnish consumption. This is more than double that of the next four largest countries combined.

In 2017, China implemented new wastepaper restrictions that have had far-reaching effects in the global market: imports of unsorted wastepaper were banned, while quality requirements and capacity minimums have been mandated. As a result, wastepaper imports have declined and Chinese domestic recycled paper prices have skyrocketed by 50%. Additionally, China is now facing a shortage of coated recycled boxboard, as small mills are unable to obtain the necessary permits to import recycled fiber.

Possible global effects if market pulp prices increase due to China’s wastepaper shortage include:

• Non-integrated mills get pressured – e.g., European coated freesheet and specialties

• Increased competitiveness allows integrated players to take share (North American integrated tissue players like G-P, Resolute, Clearwater, Irving)

• “Swing capacity” opportunity costs increase, which drive up operating rates in swing grades – like fluff

• Opportunity for imports of integrated virgin grades• Imported Kraft linerboard may offer an effective

substitute for domestic production, but supply and demand costs could change the economics of switching

Given the size of the country, an increase or decrease of even a few percentage points in any of the above can have substantial impact on the global market.

There is a huge base of demand and factory capacity in China. Currently, Chinese pulp and paper mill equipment suppliers own over 70% of the Chinese market. Yet they have virtually no presence outside of the country.

This is an untapped opportunity for China - but possibly not for long. Does China turn from a “land of opportunity” for Western suppliers to a “land of threat?” And, if Chinese equipment is cheaper and still performs, should Western mills buy it to lower maintenance and capital costs?

Fisher International supports the pulp and paper industry with business intelligence and strategy consulting services. With research resources in nearly every pulp and paper producing country in the world, Fisher’s comprehensive databases, analytical technologies, and expert consultants are used by the paper industry around the world every day. The company’s FisherSolve™ platform helps organisations minimise risk and expose opportunities by replacing current assumptions (about competitors, market conditions, and costs) with fact-based, data-driven decision making.

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Spotlight Pankaj Poddar CEO Cosmo Films

Pankaj Poddar is CEO of Cosmo Films and sits on the board of Organization of Plastic Processors of India.

Recently he was awarded with the “Indian CEO of the Year award” by the Association of Business Communicators of India. He is a regular speaker at packaging industry forums and is quoted frequently in

the press and on television commenting on the packaging industry. Under his leadership since 2011, Cosmo Films has passed many milestones including being recognised as top 25 value creators in Fortune’s Next 500 companies, being recommended by experts in top ten multibagger midcap stocks to buy in 2017 published by ET Markets.com, and finding a place in the top 500 companies list published by Business Today. Pankaj’s career spans a period of 22 years in various leadership and management roles in companies like Avon, Delphi Automotive Systems, Reckitt Benckiser and E&Y. He has a B.Com (H) from SRCC, is a qualified Chartered Accountant and holds a diploma in management. Pankaj is happily married to Aarti, a dietician by profession. They have two children, Jahnavi Poddar (9 years) and Aditya Poddar (15 years). In his free time, Pankaj likes to spend time with his family or play sports like cricket and squash.

We asked Pankaj what his vision was for the role of IT in providing a competitive advantage to Cosmo Films:“We have always believed in power of IT in delivering a competitive advantage and started investing early on in the digitalisation of business processes and smart manufacturing practices. Today, we can boast of some of the most advanced tools that have been put to use that the peers can only envy. This includes the likes of Salesforce CRM, Success Factor for HR, SAP on Hana platform for faster business transactions execution and Greycon for trim waste optimisation.

“Let’s look at some of these tools and what they have helped us with:

“CRM: The tool was introduced to significantly reduce non value adding conversations between the customer and the company as all the required information could be sent out to the customer through an automated process or it can be retrieved online. For customers, this included complete visibility of stage-wise progress of orders right from order receipt to order dispatch as well as claims status, if any. Similarly, for the sales personnel, the tool allowed a single window for managing all transactions with the customers (order entry, complaints, receivables, and the complete purchase history, to name a few).

“Success Factor: Was introduced to automate all HR

processes in phase 1. However, the tool will be used to enhance employee engagement across the organisation in the forthcoming phases with features like learning and development, rewards and recognition, 360 performance review, succession planning, etc.

“SAP on Hana platform: Has been helping the company to execute large business transactions in no time, perform faster real-time analytics and implemented new functionalities such as financial supply chain management.

“BIW (Business Intelligence Warehouse): With the help of this tool, all the information is made available live, to view at any time of the day, for departments such as production, purchase, finance and sales. The information is made available in a format which facilitates faster decision making.

“X-Trim for Waste Management Optimisation which I will elaborate on further under our interactions with Greycon.

“Some of the tools in the pipeline include:

• Document Management System (DMS) to enable switch to a greener paperless working environment

• Production Planning automation• Product Lifecycle Management system from product and

R&D perspective.”

Interactions with Greycon

Pankaj added: “Cosmo Films’ interaction with Greycon began as early as 2009 with the objective of optimising trim waste emerging from slitting operations. In fact, our company was first in India to make use of the software.

“Its implementation has helped our company reduce its trim waste by 1.5 % and therefore the tool today is used across slitting operations of all BOPP lines (spread across three plants). With time, interface between X-Trim and SAP has also been built which enables customer orders to be fed ++directly into X-Trim. This arrangement not only helps in the right jumbo selection based on available orders but also provides operators with multiple slitting options defining the waste percentage along with the number of changes required in blade positions.”

Abder Guezour, Global Business Development Manager for Greycon said: “Cosmo Films has always impressed us with its professional and innovative approach to developing and adopting technologically advanced systems to increase performance and achieve improved customer service. We are very proud of our long-standing association with them, which started in 2010, and our continued work with them to achieve further value added solutions. “India is an important region for us and we are privileged to work with a prestigious company like Cosmo Films.”

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Thank you for reading, if you have any comments or questions regarding this current newsletter or future editions please do not hesitate to contact us.

Greycon Ltd, 7 Calico House, Plantation Wharf, York Road, SW11 3TN.

+44 207 978 0700 | info@greycon.com | www.greycon.com

GreyconMill Developed with the user in mind

Manufacturing Execution Systems (MES) save valuable labour hours for manufacturing companies where previously they were reliant on planning and tracking their production manually using paper forms. GreyconMill promotes automated data collection and reduces the potential of human error which can result in unacceptable product quality and costly decisions.

Vassilis Gkamouras, Senior Consultant at Greycon, says: “Training the shop floor users to execute existing or new business processes through new software screens is crucial in ensuring a successful implementation. GreyconMill was built with these users in mind and provides options for screen configurations and enabling the creation of a library of customised screens.”

The example below shows the “Configurable Editor” which allows the configuration of the production registration screens

used by the shop floor operators when creating new material on a primary machine, either being a paper machine, a film-line, coating machine, etc.

The “Configurable Editor” contains the available fields in the GreyconMill database. Adding or removing fields is seamless and intuitive, using “drag and drop” functionality. The system also supports the option to add sections on each screen for displaying customised reports. This extends the customisation options further and makes training easy. Once a custom screen has been created and saved, administrators can “publish” it for other users to work on. This functionality enables you to have a “master set” of screens as well as the creation and the management of a personal set of customised screens which can be updated easily and shared with the relevant users.

Integrated Business Planning (cont’d from page 1)

The output of this process is an optimised capacity plan / block plan with customer orders and demands allocations and an optimised inventory plan. The system allows ‘What-if’ scenarios and KPIs to support the evaluation and the acceptance of the plans.

To use an analogy, the above process is the heart and brain of an integrated business planning body. For the body to survive, it needs to be fed (in this context with accurate demand, good quality data and feedback from the operations). To thrive, the body needs discipline, direction and learning (in this context it is about industry best practices, direction from the management-

planners and machine learning). We will cover these aspects in future editions of the newsletter and provide real-life examples of overlapping business planning scenarios.

Configurable Editor Dialogue

List of currently displayed fields

Search for field to display

Available fields to display

Orders

Projected inventory profile

Capacity/Block Plan