In reality, few companies, even those long established, can unequivocally tackle all supply chain related concerns affirmatively. That’s no slight towards the professional capabilities of their leaders. Developing a best-in-class supply chain is no easy task, and it takes time. Prashant Bhatmule, Head- Outsourcing, JK Paper Ltd informs Upamanyu Borah why supply chain must be at the centre of management attention and how they are continuously and actively seeking supply chain service improvements.
JK Paper Ltd is a leading paper manufacturing company of India. We have two large integrated paper manufacturing units – JK Paper Mills at Rayagada, Odisha and Central Pulp Mills at Songadh of Gujarat, with a combined capacity of 4,55,000 TPA. We are the market leaders in India in Branded Copier paper segment with exports to 35 countries, and among the top two players in Coated Paper and high-end Packaging Boards.
Our products are sold through extensive distribution network of 188 wholesalers, 14 depots and 4 regional marketing offices, covering nearly 4,000 dealers. Additionally, JK paper has started the focussed distribution through retail network in various cities to expand the reach to customers.
JK Paper has recently invested substantially (about Rs 1775 cr) in expanding and modernising its capacity at JK Paper Mills, Rayagada. It involved installing state-of-the-art machines with 1,65,000 TPA of paper capacity and a pulp mill with 2,15,000 TPA. This has significantly reduced water and energy usage.
Adopting unique strategies
JK Paper has been working in the sphere of paper manufacturing and distribution for over 50 years, and thus we were destined to lead all areas of business, with supporting services of supply chain to meet the overall requirements.
Paper needs to be handled carefully, and hence we have got all special process at place for its efficient handling. Packaging is automated, boosted by technology, and the speed of all allied activities is used to ensure paper is produced rigorously.
The reels weigh around 800 kg and needs to be handled through pallets for ensuring ease of handling. Since storage becomes a big challenge, we use vertical heights to ensure maximum advantage. The reams are specially packed online, after cutting to size and are wrapped online to deliver the ready-to-sell product. The storage of reams on pallet is automated, along with reel handling too. There are different brands/different GSM/different sizes –standard/nonstandard making the supply chain much difficult with the scale of volumes.
JK Paper has a majority of automatic lines for production, keeping ‘agility’ as the main motto. Transportation surely is a complex process, but the same and all the related matters to be captured are automated through systems applications and products (SAP) to ensure turnaround time (TAT). The various modules used include entry to exit of all materials, offering visibility to the sales team for right update to the customer. The vendor relationship is being treated as the most centric process to make the operations smooth. Besides, we organise an Annual Transporter meet additionally to understand the issues, resolve the same and take suggestions from them. We strongly believe that transporters or any business partner are the most important link in the supply chain. The relationship with transport unions in some of the units has now become integral to the business itself because of speciality in treatment.
Volatility of demand and tight inventory management is a critical factor in supply chain management of our products. Added to this, the very volatile price trends of paper in import market make it too complicated and difficult to manage the complex situations at times. Usage of information technology on various operations and processes enables a flexible and agile management of inventories. With additional support by LSPs on various requirements like transport management, flexible volumes in warehousing management, etc. is the key to success.
Innovation is key to success. In order to be ready for tomorrow, it is essential to be updated on current trends and to have future anticipations at place.
Taking the leads from Uber/Ola, etc., we have tried to deploy digitisation to an extent. Recently, we have employed the next-generation, intelligent ERP business suite ERP SAP Hana. The technology helps to have the clarity for tomorrow, and the different analytics and AI it uses for trends and movements. We also deployed digital systems and best practices for warehouse management.
In an aggressive market as India, where the order to compete on the import prices from China is evident in any sector (due to harmless government policies on imports from China), it is essential to tighten the belts and use the discrimination of usage of the imports to an extent. A risky but useful proposition is to bridge the gap in demand and supply through outsourcing of goods. It is being used widely and successfully uses the strategies for flexible trends.
Transportation is an evolving area of business, leading to new ventures at all times. Economisation of transport cost is very essential from time to time, and thus we are trying to work upon different mode of transport like Rail/Waterways, etc. Rail is extensively used for coal transport to mill and also for paper transport to other cities including export loading.
Besides, today’s digital age enables visibility which is essential, with big data analytics helping find economic routes. Various tools like Vehicle tracking/Jio tracking, etc. are used to get the data collected and accordingly the route evaluation is done which helps to economise the freight and helps ensure on time deliveries.
Outsourcing of services
Outsourcing is the need of hour, to have overall control and for economic support to the organisation. JK Paper also believes strongly in outsourcing, not only in logistics but also in production wherein certain activities are outsourced. Logistic partners are used for the services of warehousing, transportation, custom clearance, etc. to the maximum extent. We strongly believe that if we have to succeed, outsourcing of the services is essential, helping us to freely focus on core activities and follow the path of continued improvements.
Importance of logistics
Logistics has changed the scenario in any industry as seen across the length and breadth of supply chain. Today, logistics has also been seen as a profit centre in many organisations, making it a focal point in the industry.
In this era of uberisation, customers would like to know the delivery of the goods before the order is confirmed. JK Paper is no exception this expectation, and therefore logistics has been taken as priority by the management. JK Paper’s overall spent for logistics varies from 3 per cent to 8 per cent of the cost depending on distance from mill to customer location.
The efficiency of the mill is decided by the logistics, due to the voluminous product. The speed of logistics is critical to our business to avoid excess of stocking in absence of proper time management which may lead to the most in appropriate and most expensive ‘Mill stoppage’ which is beyond acceptability.
Partnering with LSPs
We are dealing in volumes and thus financial strength is must to have business partnerships, in addition to the technology savvy team and platforms used by LSPs. Collaboration is very important for mutual growth, and hence inputs are also taken from LSPs to share on mutual gains for the same. Creativity and value addition is also considered for selection of LSPs in order to be more agile and competitive for tomorrow. It helps us to grow together as flexible and competitive.
Managing and handling voluminous products are critical to an evolving supply chain in any industry. As process industry is space driven, buying storage space gets too costly. Thus, we have a very narrow margin to play on the inventory. In order to meet all varied demands in the market with limited space management option, we need to vitally use new trends and tactics from time-to-time. Warehousing is used outside the mill on flexible management basis, and yields the necessary results. The output needs to be consistent with regard to the manner of handling and hence the need to train supporting business partners to handle the materials safely, becomes imperative. It also calls for a digitised inventory management within the mill backed by barcoding/RFID, and the ARS systems are used in depth for such voluminous products wherein a variety of SKUs need to be handled. Besides, we are using different softwares for day-to-day planning and optimisation of wastage, etc. Further, software systems are used to monitor logistics, be it TAT of vehicles or prioritisation of vehicles for loading, along with the volume of trucks required to be handled in a day for incoming and outgoing materials.