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FInal Report SupplyNetworkRepot
FInal Report SupplyNetworkRepot
SCIENCES
Faculty of Business and Hospitality
Business Information Technology
Spring 2019
Takumi Aizawa 1801835
Chiranjivi Pathak 1801527
Bosri Hasan 1801743
CONTENTS
1.1 Mission
Our Biofore strategy guides us in this mission, with the UPM Code of Conduct as
the cornerstone of everything that they do. (UPM 2017)
1.2 Vision
Biomolecules business
Basic engineering study started regarding a potential industrial-scale biochemicals
refinery, Germany.
Exploring the next steps in biofuels.(UPM 2017)
The reason why we chose this product is that this UMP has great impact in forest
industries, and papers are one of the most used products in UPM. Besides,
Finland is famous for forest industries, so we think that it is great to learn what
Finland is proud of.
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UPM Jetset is created 1999 in China, one of the best-known copy paper brands in China. It
is an FSC certified environmentally friendly office paper that represents professionalism,
liability and consistency. (UPM, 2019). This product is used for correspondence,
documents, fax papers, high-quality documents, inserts, manuals, memos, office paper,
and routine communication. It is a FSC certificated product. FSC stands for Forest
Stewardship Council which is only given to products which are sourced in an
environmentally-friendly, socially responsible and economically viable manner.
Figure 1
2 PROCUREMENT
Chemical pulp is manufactured by treating the wood fibre. The chemical used to
make the chemical pulp are:
alkaline sodium sulphide with caustic soda (Kraft process)
alkaline caustic soda
acid Bisulfite
a. Wood handling: Taking wood, chipping the wood and chip piles, conveyors,
Debarking and Wood consumption.
b. Fibre processing: Cooking stage, Oxygen stage, Washing stage, Bleaching,
Chemical process, Fibre process and Odours.
c. Chemical recovery: Evaporators, recovery boiler, causticizing, mill stack and
calcination.
d. Drying and baling: Drying, Cutting and Baling.
e. Water treatment: Biological effluent treatment, Effluent treatment process,
Mechanical effluent treatment, Effluent quality and efficiency and water usage in
the process.
f. End of the product: Carton board, offices paper, books, magazines, viscose fabric,
tissues food packing, other product and paper bags.
One of the modern pulp mills in the world situated on bank of the River Uruguay.
The mills produce bleached hardwood eucalyptus pulp. Production: 1.3 million t/a.
200 employees. 8% share of energy generations. More than 800 people are
working on the mill site.
UPM Kaukas mill is located on the shore of the lake Saimaa in Lappeenranta in
south east Finland. Integrated Kaukas plant pulp mills for making the magazine
paper, a sawmill, a biorefinery producing wood-based diesel, and UPM’s research
centre. 1200 people working. Production 740,000 t/a. 260 employees. 80 Million
euros investment between the year 2014 – 2018 in the pulp mill.
Located along the River Kymi in Kouvola, in south East Finland. Pulp mills and
paper mill. Daily working worker in the Kymi are 600 people for different work-
oriented activities (Production area and maintenance to wood sourcing and
logistics). Productions 870,000 t/a. 230 employees and investment over 260
Million Euros between the years 2014 – 2018.
Located in the Gulf of Bothnia in western Finland. Areas are UPM’s Alholma
sawmill, Alholmens Kraft power plant and UPM’s procurement offices.
Productions: 800,000 t/a. 230 employees are working and more the 750 workers
are working at the mill site. 99% share of biofuels in energy generation.
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3 FORWARDING
Freight agency, some are middlemen is oneself do not have a ship or plane or
shipping company, airline company, it is freight forwarder duty is, the goods that
entrusts principal, pass appoint carriage way, from one place to freight forwarder
of another place, the company that receives carry goods, pull goods for carriage
company acting.
Refers to the transfer of distribution or refers to the batch of things to send. Freight
forwarders, or forwarding agents, also known as non-vessel common carriers, are
organizations to individuals or companies to obtain from manufacturers or means
of production of the market, customers or shippers or final distribution points of the
company.
UPM company has existed forwarding. Each year, UPM produces about 1.3
million products and raw materials worldwide. About two-thirds of all deliveries are
by rail or road and a third by sea. The ports of kotka and Helsinki, Finland, play a
key role in the export of UPM products from four sawmills around the world.
Customers need the right end-use sawn timber at the right time and in a reliable
manner. Long distance transportation requires good cooperation with logistics
suppliers. One of them, Steveco Oy, provides cargo, transportation and handling
services for UPM. (UPM 2019)
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4 TRANSPORTATION:
UPM: There are three ways of transportation that the company use for the supply
of raw material that is road transport, rail transport and sea transport. It supplies
the product my optimizing the favoring route by looking the distance, connection
and the delivery time. Each years the company receives tonnes of raw materials,
additives and operational supplies. UPM supply its raw materials approximately
1.2 Millions truckloads (25 tonnes each) every year in the world. It can also be
calculated that in every 27 second they carry one load. Most preferable
transportation are road transport and rail transport and least is by sea transport.
Finland have got 75% of land area covered by jungle. UPM is considered as the
biggest private land owner in Finland. The wood required for the UPM factories are
harvested from the private land of UPM.
Transport chain in UPM have got the different area of proceeding their product
from the supplier to the company. They also receive the wood from the other
suppliers also. The important part of the UPM is their supplier and the chain
value. The supplier is responsible for the raw material supply to the company
which ensures the efficiency, transparency and responsibility of the whole supply
chain. The company UPM love to have their supply for the long-term cooperation.
So that they company (UPM) can finalized the cost, quality, sustainability and
innovations. The leading principle of the UPM is that they never compromise the
standards of integrity under any circumstances and they expect the same
approach from the suppliers and the Third-party intermediaries if involved in the
supply (UPM 2019). This requirement is valid for internal and external parties of
UPM for all kinds of product of UPM.
After all this basic requirement and the basic procedure of the product the raw
material is finally delivered to the company through the favoring route. Lastly the
manufacturing process starts.
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5 PACKAGING
Packaging has traditionally been seen as an important part of the physical product
(Brown 1950). The change of client desires be that as it may, as clients ended up
more requesting, implies that the part of bundling gets to be more critical because
it can be utilized to supply data and capacities. This may cruel that certain
capacities of the bundle are adjusted or heightens, compared to the package’s
past work of just securing the stock, and encouraging capacity and transportation.
This expansion of modern administrations or capacities to the bundle of the
products can be seen as a move of a item on the goods-to-services continuum.
Since clients see products and administrations in several ways, such a move
makes it imperative for organizations to reconsider what quality implies and how it
is related to client fulfillment. Companies subsequently got to create, plan, and
give bundles with tall customer-experienced quality.
UPM is very aware of the packaging process of their process. Each box contains
500 sheets and each of the carton contains 5 boxes. Each paper’s weight is
85g.There are two sizes of jet set presentation, A3 and A4. There are different
types of certificates and labels printed on the packet like, China Green Label |
EMAS | FSC Chain-of-Custody | ISO 14001 | ISO 9001 | OHSAS 18001 | PEFC
Chain-of-Custody | Permanent Paper ISO 9706.
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6 WAREHOUSING
The warehouse floor is kept dry (no leakages), cleaning the sand, stones and
other debris to avoid end damages. Special attention is paid to keep birds out of
warehouses. “Bird in distress” -signals and other means of prevention should be
used. Smoking is strictly prohibited inside the warehouses. Lights without
protective covers should not be used. No rubbish etc. combustible materials/fire
load is left in and around the warehouse. No parking allowed inside the
warehouses. Pulp bales can be stacked maximum four units high (depending on
the quality of the bales). Anyway, stacks should be kept as low as possible.
Handling “cap” is left between the units in order to avoid violent clamp push
between the units. During winter season and in moist conditions protective paper
is used under the units (UPM cargo handling manual paper 2019, 25).
Warehousing are done according to UPM manuals to keep products safe, clean,
no-damage, and satisfying. UPM’s clear objective is zero fatal and serious
accidents. They are trying to decrease and get rid of accidents. Workers in UPM
are skilled and knowledgeable about their work so that work can be done with
minimum accidents and waste of materials and products. (UPM cargo handling
manual paper 2019)
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7 WHAT IS SUPPLY CHAIN?
Supply chain refers to the network structure composed of raw material suppliers,
manufacturers, distributors, retailers and final consumers who are connected
with upstream and downstream members in the production and circulation of
products.
According to the concept of supply chain, it covers every business activity related
to the formation and delivery of final products or services from the supplier of raw
materials to the development, processing, production, batch distribution, retail and
finally to the user. The main activities of the supply chain include: Develop and
manufacture commodity, distribute commodity in logistics, sell commodity.
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Wood is the most important raw material in UPM paper. All wood used in UPM
products comes from sustainably managed forests and legal sources. All UPM's
timber supply is covered by a third-party verified chain of custody. UPM has its
own manufacturers in various countries. UPM uses road, rail or sea transport,
depending on distance, connection and delivery time. Of all UPM deliveries, 64
percent are by rail and road and 36 percent by sea. Most of UPM's transportation
is handled by contract partners, including cargo handling, storage, and
transportation. (UPM 2018)
Then UPM's products are shipped to other countries for sale, with its own sellers in
each country, and eventually reach consumers.
The Supply chain management of the the upm are discribe as the following below :
Supply chain management = Supplyh chain in cloud = SCM cloud Apps = Logistics and
fulfillment = PLM and Innovation management = Supply chain planning =
Manufacturing cloud = Order Management
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Finland, UPM have six business areas with the significant production and as well as in
research and development operations. UPM deliver its renewable and responsible
soltuions to their consumer according to the demands across the six business areas. Due
to this records done, UPM is considered as the biggest tax payers in Finland. As consider
as the leader of the bio-based forest industry, (UPM aim to have the solution to the global
changes and at the same time crating value to their stakeholders. UPM have got its own
unique position to develop customers business and environmental performance which
helps to reduce the world’s reliance on fossil- based materials (UPM- The Biofore
Company 2018.). UPM as the forest-based bio industry leads to the sustainable,
innovation and exciting future beyond fossil
Margin improvement and top-line growth for the long term earning.
Upgrowing businesses of UPM have higher margins then other mature
businesses.
The UPM target policy for the growth are earning growth and attractive returns.
The ways that the company are on their way for follows:
Focus on the project which maintain the growth and can increase the
earnings.
Transformative prospects for growth earning.
Creating the sustainable and safe solution according to the consumer
demand for growing the business globally.
Technological development.
Partnerships and networking.
Main focus on sustainability and circular economy.
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UPM specialty papers market have been rising in the global market with the
release liners, label paper and fine paper in Asia and in Europe with flexible
packaging.
At the beginning of 2019, pulp prices are expected to be lower and graphic paper
prices in Europe are expected to be higher than in the fourth quarter of 2018.
(UPM financial statement bulletin 2019).
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9 RISK MANAGEMENT:
Risk:
1. Global economic cycles which shows impact on the demand and sales
prices and input sales product of various UPM product and mainly the
exchanges rates.
2. Growing demand and competition.
3. Change in the demand and supply due to the overcapacity of product.
4. International trade barriers like antidumping duties which adversely effects
on trade flows and short-term market balances which later on influences
the sales price and the delivery of UPM’s product.
5. Change in the taxation, regulation flow of product and subsidies.
Examples: climate policies.
6. Malware, availability and security of information system which affect the
UPM’s business due to the loss of business data that results damage in the
reputation and loss of business (Risks and opportunities of UPM 2017.).
9.1 Management
UPM is the world largest user of recovered paper for the production. Company
consumes 2.8 millions tones of recovered paper in 2017. The main target of UPM
is to promote material efficiency and circular economy. Circular economy means
reuse, reduce and recycle. Circular economy helps to increase the efficiency and
bring the competitive benefits to the company. Development of business portfolio
for continuous improvement in competitiveness, resource efficiency and fulfilling
the customer and user demands. Monitoring for the rules and the regulation
change properly. Studying the policies on employment and value added properly.
Sustainable forest management and UPM biodiversity programs. Anyalsing the
process and technology for improvement and to avoid the security risk (UPM
management 2017.). Reuse and recycle for the waste produced and management
of the by-product properly. Identifying the solution for the future needs with
sustainable and innovative new businesses. Focusing the business strategy for
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the the future year 2030 where as to conclude no process of waste to landfills.
Recycle is the one of the part of circular economy where UPM have developed its
own waste and resides reduces innovation.
Some activity done by the UPM for improving the performance and transformation
continued in 2017(Strategic action for future growth UPM 2017.) .
BMC module
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REFERENCES
Philip, K. & Gary, A. 2010. Principles of Marketing. Thirteenth Edition. United States:
Upper Saddle River: Pearson.
Philip, K. & Gary, A. 2014. Principles of Marketing. Global Edition. England, Essex:
Pearson Education Ltd.
Rogers, S.A. 2011. What is FSC-certified paper. Narrative content group. [Referenced
14.2.2019]. Available at https://www.mnn.com/money/green-workplace/stories/what-is-fsc-
certified-paper
Upmpulp. 2019. These mills produce your pulp. UPMBIFORE BEYOND FOSSILS.
[Referenced 15.2.2019]. Available at https://www.upmpulp.com/about-upm-pulp/pulp-
mills/
Upmpulp. 2019. Learn how pulp is made. UPMBIFORE BEYOND FOSSILS. [Referenced
15.2.2019]. Available at http://www.upmpulpmill.com/en/index.html
UPM-Kymmene Oyj. 2017. Aiming higher with biofore. [Referenced 14.2.2019]. Available at
https://www.upm.com/about-us/for-media/releases/?page=1
UPM. 2019. Focus on logistics optimisation UPM. [Referenced 22.02.2019]. Available at:
https://www.upm.com/responsibility/supply-chain/logistics/
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UPM. 2019. UPM Cargo handling manual paper. [Referenced 24.2.2019]. Available at
https://www.upmcargohandling.com/siteassets/documents/cargo-handling-manual-paper-
20122018.pdf
UPM 2019. Risk and opportunities. Aiming Higher With Biofore [Referenced
23.03.2019]. Available at:
https://www.upm.com/siteassets/asset/investors/2017/upm_annual-
report_2017.pdf
UPM.fi 2019. UPM Biofore Beyond Fossils. UPM's Financial Statements Bulletin.
[Referenced 23.03.2019]. Available at: https://www.upm.com/fi/tietoa-
meista/medialle/tiedotteet/2019/01/upmn-tilinpaatostiedote-2018-upm-teki-
ennatystuloksen-2018-hyvat-lahtokohdat-vuodelle-2019/
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APPENDICES