Paper Industry - Operational Excellence in Storage and Dispatch
Posted in Operations & IT Articles, Total Reads: 401
, Published on 01 June 2016
Paper is still one of the important medium for communication as well as for its use as a packing material. Demand of paper is directly related to the functioning of an economy, if economy flourishes then the paper industry will flourish along with the economy and same in the downturn of the economy it affects the paper demand. Paper always enjoyed the healthy demand because of certain reasons. Lifecycle of a paper from manufacture to consumption is very short. It is normally used as a consumption good not as a durable. There is no low cost substitute for paper available, and its nature of usage, from an individual to a company making it an only choice in utilization.
If paper consumption in India analyzed, then the figure which comes out is really on lower side of what expected. India accounts for about 17 percent of total world population but it consumes only 3 percent of the global paper production. If comparison done on the per capita paper consumption, then these figure also comes out to be on lower side. In India per capita paper consumption is only 10 kgs, while in Indonesia it is around 27 kgs, in China it accounts for 76 kgs and the global average of around 55 kgs. So there is huge scope of growth in India for paper Industry to flourish.
Operational Excellence in Storage and Dispatch
In paper industry, players operates either in paper, paperboard or newsprint business. In which paperboard section accounts for the largest share of market in volume terms. The paper industry is highly fragmented.
There are number of different department in a paper industry. From Raw material storage department to the manufacturing department. Storage and dispatch section is one of such department of paper industry and it is one of the important area. Storage and dispatch section here refers to the place where finished goods like paper reels, paper sheets and paper ream bundles are stocked and finally dispatched either to the wholesaler or end-users. Storage and dispatch involves the following processes;
• Receipt of finished goods (FG)
• Finding place and keeping stock in desired designated place
• Planning for dispatch
• Logistics Planning
• Movement of FG from the storage area to the loading bay
• Loading operation
• Finally dispatch to the Wholesaler/end-users
If we closely analyze the paper industry then what we observe is that the paper is manufactured based on make to order (MTO). So operational excellence in storage and dispatch section plays a vital role in maintaining the good customer relationship. Because any delay in dispatch of order will result in higher lead time and higher lead time directly related to the customer dissatisfaction. Every customer wants their order to be received on time, any delay on such front will always make a customer unhappy which might affect the business. Proper planning and operational excellence in such specific area is having its prime importance, so that such delays can be avoided must be taken into consideration.
Suggestions on maintaining the operational excellence in the storage and dispatch section are as follows;
• As soon as the product is received, use automatic data collection system to give identity to it. So that it helps in maintaining the inventory details as well as helps in retrieving the goods easily. It really helps in speeding the dispatch process. Because retrieving the goods always a tedious task to perform if identity is not given properly.
• For such entry, Barcode system or Radio Frequency Identification Device (RFID) system should be used.
• Critical flow of information must be given importance because it helps in decreasing the cycle time of an operation.
• Suppose if a paper industry is having different stock keeping units (SKUs), then each SKU should have proper designated storage place. Never mix different SKUs. It will not only break the pattern of storing but also complicate the dispatch process, which will lead to higher operation time as expected.
• Establish advance shipping notification, so that prior planning can be done in dispatching the items and on the logistics front. It will certainly leads to better operation time as well ease the process of dispatch. No haphazard will ever happen.
• Storage area and aisles for storage area must always remain free from obstructions. As soon as the product received it should be properly placed. Delay in placing the product in desired location must be avoided at any cost, it will not only make storage area looks unmanaged but it will results in raising the alarming unsafe working condition. Aisle free from obstruction will lead to free movement of goods.
• Store the most picking items close to the loading area. This can be planned based on the monthly dispatched report or customer order details.
• Shop floor communication amongst the workers is an important tool to organize the work properly and promptly. So it should be given prime importance in improving the communication amongst the co-workers.
• Use proper tools or management system in sequencing orders and organizing the work flow.
• Safe working environment always results in higher employee satisfaction. So safety should be given prime importance. It will automatically improves the efficiency.
• Each and every series of process always have standard operating process/procedures in place (SOP). SOPs should be followed religiously so that there is no overlapping in the flow of operation.
Operational excellence in the field of storage and dispatch will always bring business excellence, customer satisfaction and as well as state of the art working condition. It is directly related to the bottom line of the company. It will not only increase the earning but it also helps in maintaining the customer loyalty by providing excellent service. It will help in reducing the leading time and also provides customer satisfaction, which is an important parameter for an industry which has a CAGR of 0.2 percent for the next five years i.e. up to 2020. So on concluding note, every paper industry must give importance to these factors so that competitive edge can be maintained in today’s cutthroat market share competition.
This article has been authored by Rahul Burman from IIM Kashipur
2. Summer Internship experience at Paper Industry
3. Crisil Report
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