|
|
|
|
The “new normal” in supply chain management
CEO Foreword
Dear Reader,
Almost immediately after the COVID-19 outbreak, people across the world spoke about adjusting to the “new normal”. Not least in the field of supply chain management. Many companies are rethinking the design of traditional supply chains to prepare for future crises. In this newsletter, you can read more about the key role that flexibility plays in post-COVID supply chain management.
Maintaining flexibility in supply chain management is also crucial for our customer Metsä Board. In addition to the impact of the COVID-19 crisis, the consequences of Brexit also have an influence. We recently had an interview with Dirk van Roeyen, Logistics Director Western Europe and UK at Metsä Board. We asked him, among other things, why flexibility is so important today to ensure an efficient supply chain.
This time our recurring feature “The world around us” is about the different ways in which countries tackle COVID-19. This also requires a high degree of flexibility in supply chain management. For example, China is the last major country that continues to pursue a zero-COVID policy. As a result, China can decide at any time to close major ports or factories. This consequently leads to disruptions in supply chains that include deliveries from China.
 |
Finally, on November 10, Oldenburger|Fritom will celebrate its 105th anniversary. Tangible evidence that flexibility is and always has been anchored in our business operations. You can read in our newsletters this year how we have shaped our adaptability since 1917. In this edition an insight into 105 years of transportation solutions.
I wish you much reading pleasure.
Sincerely,
René Dale |
Flexibility plays a key role in the post-COVID era
The COVID-19 pandemic led to severe shortages of raw materials. This is still the case today, causing a steep increase in raw material prices. In addition, the problems in international container shipping seem to continue for the time being. The resulting supply and demand imbalance is forcing many companies to rethink the design of traditional supply chains. In order to cope with future crises, a high degree of flexibility is now demanded from all chain partners.
Just-in-Time or Just-in-Case?
The just-in-time strategy was frequently applied in supply chain management before COVID-19. Just-in-time, abbreviated as JIT, is a term that comes from lean manufacturing. In this strategy, the raw materials are only received if they are needed for the manufacturing process. This minimizes inventory and increases efficiency. Customers and chain partners are also supplied just in time, at the lowest possible cost. JIT has proved to be an effective strategy for more than 40 years. Until COVID-19 broke out.
It suddenly became clear that the just-in-time strategy is vulnerable to imbalances between supply and demand. That is why many companies are now choosing to increase their inventories just-in-case, JIC. By working closely together with all chain partners, these companies increase their flexibility: they can also guarantee short lead times in future crises. In addition, business opportunities can be responded to more flexibly in the post-COVID era.
Digital infrastructure and sustainability
A solid digital infrastructure is indispensable in this development in supply chain management. Using this digital infrastructure, it is up to chain directors such as Oldenburger|Fritom to present customers with various logistics scenarios. This allows to quickly select the desired option. Because this option can differ per situation and final destination, flexibility also plays a key role in the actual execution. This is further reinforced by the increasing objectives regarding sustainability and circular entrepreneurship
“Finding solutions together by going the extra mile”
In 2012, Metsä Board and Oldenburger|Fritom entered into a partnership. Within this partnership, Oldenburger|Fritom works closely with Dirk van Roeyen, who has worked at Metsä Board in Mechelen (Belgium) for over twenty years. Since 2017, he holds the position of Logistics Director Western Europe and UK. We recently asked him how he experiences our partnership and what role flexibility plays in this.
 Metsä Board was established in 1986 by the merger between Metsäliiton Teollisuus Oy and G.A. Serlachius Oy, called Metsä-Serla. In 2022, Metsä Board is a leading European producer of fresh fibre paperboards including folding boxboards and white kraftliners. The paperboards are used for, among other things, healthcare packaging, food service packaging and high-tech packaging.
Metsä Board is part of Metsä Group in Finland, one of the largest forestry companies in the world. The pure fresh fibres Metsä Board uses are a renewable resource, traceable to origin in sustainably managed forests. In doing so, Metsä Board is a forerunner in the field of sustainability: the company aims for completely fossil free mills and raw materials by 2030.
Oldenburger|Fritom provides road transportation solutions for Metsä Board to countries including Germany, Austria, Italy and the United Kingdom. Last year, our partnership was extended by 2 years. Which factors have been decisive in this?
“The most important factors for extending our partnership are the professionalism of the Oldenburger|Fritom organization and the pleasant cooperation within the partnership. In addition, the problem-solving mentality and correct pricing were also decisive factors.”
Brexit has been playing a role in managing shipments to the United Kingdom for a few years now. As of January 1, 2022, border controls have become stricter. This requires a flexible approach. How does Metsä Board deal with this?
“We have had little trouble with this. In any case, we had already chosen to immediately clear the goods on departure from the Netherlands, Finland and Sweden. Together with Oldenburger|Fritom, and an excellent local agent in the UK, we have experienced few problems due to Brexit so far. This is partly because we have our own operations well under control. At the same time, of course, this does not alter the fact that we do face challenges in regards to the general context of Brexit.”
Dirk van Roeyen
A lot has changed since COVID-19 broke out. The “new normal” is also discussed within supply chain management. What are the biggest changes for Metsä Board?
“Looking at our organization, our teams and our people, we have been working from home since March 13, 2020. We had to reorganize ourselves within a time frame of one week. Fortunately, we were already working digitally for 95 percent and only minimal adjustments were needed. We are currently working paperless for 99 percent.
We do our utmost to avoid social isolation, including through daily calls in Microsoft Teams. The major challenges in this set-up are maintaining the team spirit, developing ourselves as an organization and training new colleagues. We hope to quickly switch to a system of working part-time in the office and part-time from home.”
How does Metsä Board deal with customer demand in this challenging time?
“The demand for paperboard is currently increasing. This is mainly due to the explosive growth of e-commerce since COVID-19 broke out. In addition, it is noticeable that sustainability and ecological management are becoming increasingly important themes for many of our customers. Plastic packaging is more and more being replaced by paperboard packaging.
Furthermore, just as Oldenburger|Fritom, we communicate openly and constructively with our customers in regards to their demands and requirements. We find solutions together by going the extra mile.”
What are the future expectations? And what role does Oldenburger|Fritom play in this?
“With the increasing focus on sustainable packaging, the demand for our products will remain strong. In addition, we will continue to count on Oldenburger|Fritom as a strong partner in the Northern Netherlands. On behalf of Metsä Board, I would like to thank all employees of the Oldenburger|Fritom organization for their excellent support.”
 The world around us
Impact of China’s zero-COVID policy
Despite or because of the high infection rate of the less pathogenic Omicron variant, many countries lift most of their coronavirus measures. This, however, is different in China. As the last major country in the world, China continues to pursue a zero-COVID policy. China is expected to continue this policy after the Olympic Games, which were recently concluded.
In practice, this means that major ports or factories in China can be closed at any time. While this results in low contamination rates in China itself, it could negatively impact global supply chains. For this reason, flexibility in supply chain management is becoming increasingly important.
All the more so because the exports of China barely suffered from the zero-COVID policy. In addition, China receives more foreign direct investment than before the COVID-19 pandemic. It is therefore important, together with chain partners, to apply flexibility in supply chains that include deliveries from China.
105 years of transportation solutions
Transportation forms the foundation on which Oldenburger|Fritom is built. What started with a horse-drawn vehicle in 1917, has now evolved into solutions for road transportation, air freight, sea freight and intermodal transportation. Over the past 105 years, Oldenburger|Fritom has developed in line with fundamental changes in the field of transportation. Above all, however, it has been customer demand that has led our company to continuously strive for flexibility and innovation.
At the end of World War I, the then 37-year-old farmhand Jan Oldenburger decided to start his own transportation company in Veendam. His first customer was brick factory W. Everts & Co., also located in Veendam. Over time, Oldenburger noticed that in addition to bricks, there was also a great demand among construction companies for sand. In order to efficiently meet this demand, Oldenburger started his second line of business transporting sand. That is also why he purchased his first truck in 1929. Three more trucks followed in the 1930s.
World War II was the first real crisis for Jan Oldenburger. Although he managed to secure the valuable tires, the occupier confiscated his trucks. Meanwhile, Oldenburger's sons were also working within the company. In 1945 he registered them as partners at the Chamber of Commerce. Together they continued as Oldenburger & Sons (Oldenburger & Zonen). They mainly transported sand, gravel, manure and flour. In short, products with high demand in those post-war years.
Expansion in the 70s, 80s and 90s
At the age of 17, Jurjen Oldenburger started working in the company of his father, founder Jan Oldenburger. Jurjen's sons, Jan, Willy and Simon, continued the company in 1968 under the name Oldenburger Brothers (Gebroeders Oldenburger). It was they who signed for the expansion in the 1970s, 1980s and 1990s. They built a fleet of trucks and in 1975 about ten drivers were employed. In those years, the foundation was also laid for our current partnership with Avebe, a main manufacturer of potato starch.
Logistics services
When there are no successors in the family in 1999, there is no Oldenburger descendant at the helm for the first time in more than 80 years. However, our company remains a real family business: the Fritom Logistic Solutions Group is taking over our company. It is the same period in which the concept of ‘logistics service provision’ is becoming more widely known. Transportation is no longer the only solution for customers. The market demands a total package of logistic solutions.
This development is reinforced as the years go by in the 21st century. For Oldenburger|Fritom, this starts in 2005 with the demand of customers in the high-tech sector. In addition to their manufacturing premises in the Netherlands, they also choose to be located in Eastern European countries such as the Czech Republic, Slovakia and Poland. That is why Oldenburger|Fritom decides to set up an innovative distribution network. Within this network, shipments are sent directly from the (Eastern European) factory locations to the end customers.
But it didn’t stop there. The suppliers of our customers are also often located in overseas countries. The same applies to various end customers. That is why Oldenburger|Fritom opened an office at Schiphol Airport in 2016. For the same reason we are a Regulated Agent and IATA member and have the AEO-C and AEO-S permits.
Sustainability commitment
Also, in the 21st century there is an increasing focus on sustainability and circular entrepreneurship. In relation to our road transportation, we therefore focus on the reduction of CO2 emissions. Among other things, by the use of Euro 6-engines and liquefied natural gas (LNG) trucks. By cooperating within the Fritom Group, we can increase the average load factor of our trucks and reduce empty kilometers.
Partly because of this, we have been able to add the Lean and Green Star Award to our extensive list of certifications. In 2022 we also focus on the 17 Sustainable Development Goals and Agenda 2030. Combined with our sustainable innovations, we try to respond flexibly to the supply chain challenges that our customers are now confronted with.
In the next edition of our newsletter, you will read more about our flexibility and innovative solutions in regards to warehousing. Customer demand also played an influencing role here.
|
|
|
|
|
