Abitibi rolls out its inventory

One newsprint manufacturer says the implementation of a supply chain management solution has helped it address customer concerns about paper inventory.

Abitibi-Consolidated Inc., headquartered in Montreal, employs about 15,000 people. It owns paper mills across North America, one in the U.K., and co-owns four mills in South Korea, China and Thailand. It also manufactures dimensional lumber and is one of the world’s largest paper recyclers.

According to Stephane Binette, project manager at Abitibi, the company began tracking its inventory several years ago with a homegrown system based on the mainframe.

“The system evolved over the years, but some parts were 30 years old,” he said. By 2001, Abitibi was finding it too costly to support the application. In addition, the software was not flexible enough to meet the needs of customers.

One problem was that the system couldn’t track Abitibi’s products to the level of detail customers wanted, Binette said. “We were getting customer requests for more information. They wanted to keep track of their inventory at the roll level.”

Abitibi assigns each paper roll an ID number. Customers needed to track their inventory by that number for several reasons, said Binette. “If they have a few damaged ones, they want to track which ones and why. They need to know exactly how old [the rolls] are because aging is an issue — after six months the paper starts to get yellowish.”

By that time, some customers had invested in tracking systems of their own that allowed them to manage their inventory by roll number once it was in their hands, and they wanted the information in the same format from Abitibi so they could track which rolls were being delivered.

“But we were unable to do this,” Binette said. “We produce millions of rolls a year and it was too much information. We were managing the inventory at a summary level by product with the system we had. The customer was looking for that extra level of detail — but we were not able to carry that into the system.”

By the end of 2001 Abitibi finished evaluating products from two vendors, and chose a solution from what was then known as J.D. Edwards. The products it selected, EnterpriseOne Customer Order Management and EnterpriseOne Advanced Planning, now fall under the PeopleSoft Inc. umbrella, following PeopleSoft’s acqusition of J.D. Edwards last year.

“The big advantage is that we had implemented J.D. Edwards for HR, payroll and finance at a lot of our mills, so it was a good choice to continue with these products,” Binette said. Abitibi handled the project in stages spread out over several years, initially setting aside 2002 for development. “There were a lot of major enhancements we had to do to manage inventory at a roll level,” Binette explained. “We did have lot of bugs — we managed something over 2,000 bugs over the period of the project, but we have good processes to first test the software, report bugs and track the fixes.”

In February and June 2003 Abitibi implemented the solution in two of its mills as pilots and fixed some of the remaining bugs. In September of that year the firm began installing the software in one of its mills every week until it completed its 21st mill in January 2004.

Besides supplying order details in the format customers want, the software also enables a much quicker transfer of information. “[The data] is now easy to access — we just select it and download it into Excel, and send it to the customer.” Before, Abitibi had to build the whole report for the customer, “but now it is done on the fly and in a few minutes we can forward it to customers,” he said.