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Pinnacle Systems Corporation

251-342-0713

http://pinnaclesystems.us

PaperPLAN

PaperPLAN is a demand-fulfillment modeling solution for the complex containerboard packaging logistics network of large paper manufacturers. PaperPLAN identifies areas of opportunity for the paper manufacturer to realign supply and demand, thus optimizing the contribution of their overall operations. Developed exclusively for the paper industry, PaperPLAN will pay for itself within the first month of operation.

Roll of Paper

Why PaperPLAN?


The containerboard-packaging logistics network is complex, with many hidden costs that are masked by numerous factors, including conventional wisdom, past practices and incomplete modeling techniques. The complexity of these operations often results in a lack of total system knowledge, or visibility, and can produce large cost variability on the order of $50 to $80 per ton when the wrong product is produced in the wrong place.

Linear programming (LP) has been used to model logistics networks in the paper industry for decades, but trim has been ignored and the box plants have been treated as just another point of demand.  The results of the traditional models have provided some insight into the problem, but a comparison of theoretical to actual results leaves a gap of millions annually.  The challenge is to model trim at both the paper mill and box plant levels, allowing this gap to be closed.  PaperPLAN is an LP model that can run many demand-supply scenarios within a reasonable amount of time, making it possible to determine the most efficient production strategy.

A Breakthrough in Optimization


Developed by a team with more than 60 years of experience in the paper industry, PaperPLAN is considered a breakthrough in logistics optimization because it has the ability to trim at both the mills [paper machines] and the box plants [corrugators] in a program that is very fast and easy-to-use.  PaperPLAN considers all costs simultaneously and makes tradeoffs based on minimizing the total cost of satisfying the demand that is subject to the real-world constraints placed on the supply system.  The interface between the box plants [demand] and the mills [supply] is the size of the roll of paper ordered by the box plant.  With PaperPLAN, the size of that roll of paper can be determined by considering the needs of the box plants and the needs of the mills in a way that optimizes the entire logistics network. 

The Importance of Trim

 

A one percent loss in trim efficiency can be worth up to three dollars per ton, which can result in millions of dollars in lost opportunity.  Typically, a plant will optimize for either freight, or trim. PaperPLAN’s ability to optimize pulp, freight, machine costs and trim that is subject to customer constraints, distinguishes it from traditional LP models.  PaperPLAN trims individual orders for each grade on every paper machine to determine the optimal sourcing.  The ability to actually trim the paper machines allows paper companies to create sourcing plans that will improve the trim efficiency of their mills, while reducing additional costs.  Because PaperPLAN is so fast, the model can be run as often as necessary with live data.  Thus, the sourcing plan can be based on actual, not forecasted orders.    

 

Get Measurable Results


PaperPLAN does not provide answers to questions.  PaperPLAN is a tool that gives management the ability to compare the financial impact of different production scenarios within minutes.  Within a month, a company can evaluate more situations than it could actually experience in decades, if ever.  Results that can be obtained using PaperPLAN are dependent on how the application is used to set up and evaluate situations.  Many discoveries have been made by companies that are using PaperPLAN, including:

  • PaperPLAN models suggested moving demand to more effective supply points, yielding opportunities to: reduce capacity, while maintaining demand; to fulfill increased demand; or to fulfill increased demand without new capacity.
  • PaperPLAN models supported changing the grade and customer assignments to machines, yielding millions in freight and other cost savings.
  • PaperPLAN models that changed only the selling prices yielded results that maximized throughput when prices were high.  With marginal prices, the assignments of the same orders were to mills that would minimize freight and fiber costs, thus reducing throughput by 2.5 percent.
  • PaperPLAN’s approach to defining grade costs challenged the costs that were provided previously.  A careful analysis of costs redefined how the costs actually behaved through the operational segments. Thus, the mills found they could throttle back production and significantly reduce costs per ton.  This has redefined the operating strategy dependent on market conditions.
  • PaperPLAN models are used to increase throughput in box plants, using higher cost equipment and sister plant capacity. 
  • PaperPLAN is used to define the roll sizes that plants should carry.  This has resulted in increased mill and box plant throughput as well as reduced inventories.


The Bottom Line

 

PaperPLAN is a tool that provides results that were previously unavailable to paper companies.  Upon the implementation of the model, which has been in service for more than nine years, it is possible for paper companies to experience a $10 million to $50 million improvement in the first year of operation.  PaperPLAN typically pays for itself within the first few months of operation, which provides the paper companies that implement the model with a significant return on the investment. 


PaperPLAN is a trademark pending solution developed by Paperscience, LLC and distributed exclusively by Pinnacle Systems Corporation.

 

  

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