Adopting a demand-driven planning approach at Peterson

October 13, 2017

 Adopting a demand-driven planning approach

The Norwegian packaging company Peterson struggled with high stock levels and lots of rush orders. OMP allowed the company to adopt a more proactive demand-driven planning approach. As a result, contractual obligations can now be fulfilled with lower stock levels, thus avoiding costly rush orders. In addition, production planning of both Peterson sites, which are mutually dependent, is now fully integrated, leading to major profitability improvements.

The planning context

Peterson provides highly-customized paper-based packaging solutions. The production process entails multiple steps on different machines:

  • The corrugator transforms multiple paper reels into corrugated board (“sheets”) of different sizes and board grades. These sheets are either sold or further converted internally.
  • Conversion machines further process the sheets into the final packaging material (printing, die-cutting, folding, gluing and more).

The challenges

Peterson operates in a multi-site environment, in which the Sarpsborg and Sykkylven plants frequently exchange orders. Since the Sykkylven plant has no corrugator, it needs to receive the required sheets from the Sarpsborg plant. As both plants didn’t have any visibility of each other’s production schedule, it was very challenging to ensure timely supply of sheets that consistently takes into account all schedule changes in both plants.

Due to several reasons (fierce competition, market pressure, customer requests, etc.), Peterson has made quite a lot of agreements with some of its most important customers. These agreements are reflected internally in a multitude of obligations that Peterson was having serious difficulties in fulfilling, especially in the high season. These obligations can be subdivided into three categories, namely:

  • keeping minimum volumes of consignment stock
  • 100% on-time delivery with short lead times (for which Peterson also kept stock)
  • Relatively short lead times all throughout the year

About VPK Peterson

Peterson Packaging is the leading supplier of corrugated and solid board packaging in Scandinavia. Production facilities located across Norway, Sweden and Denmark deliver all types of fiber-based packaging and display material. Peterson Packaging’s head office is located in Sarpsborg, Norway. The company’s Packaging Group generated a turnover of approx. NOK 185 million (20 million EUR) in 2016 with 244 employees when it was acquired by VPK Packaging Group.

This case focuses on the planning challenges of Sarpsborg and Sykkylven plants operated by Peterson Packaging Norway.

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