SUPPLY CHAIN REDESIGN AT FINNFOREST CORPORATION

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SUPPLY CHAIN REDESIGN AT FINNFOREST CORPORATION http://researcharticlebase.blogspot.pt/2011/11/supply-chain-redesign-at-finnforest.html INTRODUCTION Business organizations today operate in a turbulent and dynamic business environment. The contemporary business environment is undergoing a metamorphosis as rapid technological innovations, competitive markets, diverse customer preferences, and extensive global operations prevail in it. To ensure continuous operation and survival in today’s rigid business environment, a business firm has to be open to change and improvement. Business processes, services, products and operations should be consistently subject to evaluation and refinement. The norm is to deliver quality products and…show more content…
The distance between the two locations may pose certain inconsistencies in communication of orders and demands which make the first phase of supply chain long and tedious. Secondly, Finnforest suffers high inventory because of the need for storing the products before they are transported to the actual market which is in another country. Finnforest’s supply chain generally consists of 161 days of inventory which is more than the 20 days of actual activity time for each step in the supply chain process to be undertaken. The high inventory will cause problems with the financial status of the company because products in inventory do not generate income and the binding capital in those inventories prohibits the company from investing in other projects that would gain actual return (1997). Finally, the company has long lead time of exactly 50 days with each step of the supply chain process contributing to the total lead time except warehousing. The primary cause of the lead time is the complex arrangement of suppliers, distributors, manufacturers and retailers involved in the company’s supply chain. Different entities handle the harvesting of logs, processing them into timber, and transporting them to the second location which add conflicts to the entire process as these various entities

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