To better serve its customers in areas of order accuracy and delivery predictability, LP has set some of the industry’s most aspirational supply chain goals. Senior leaders meet regularly with experts at Gartner, arguably the nation’s best consulting firm in the realm of supply chain optimization. The aim is to apply best practices in procurement, logistics and working capital across more than $1 billion of addressable spend.
LP has made major investments in SAP supply chain technology, including SAP’s Advanced Planning Optimization (APO) and Integrated Business Planning (IBP) tools.
“As we roll out new technology tools and processes, one of our main jobs is to communicate to other departments why these initiatives are so important,” says Will Jackson, LP’s Sales & Operations Planning Manager for the siding business. “Over the past few years, in addition to implementing new tools, we have spent a lot of time focusing on structure, developing our people and strengthening our understanding of supply chain concepts as an organization in order to ensure that our go-forward supply chain strategy is capable of supporting future growth.”
“Optimizing the supply chain in our industry presents some real challenges,” says Allan Burk, LP’s OSB/EWP Sales & Operations Planning Manager. “For example, we ship over 1,500 rail cars and trucks of OSB products each week. With commodity products, there’s very little time between when an order is finalized and when it’s expected to ship. The challenge is to fill these orders on time – in spec, in full – and not disappoint our customers. These SAP tools and streamlined processes are helping us do that.”
LP’s supply chain strategy has the clearly defined goal of meeting both customer needs and loading the mills with production mix requirements that support another key operational initiative: improving Overall Equipment Effectiveness (OEE).
“Before the trucks or rail cars show up, we need to confidently know that our mills will have the product ready on that day,” adds Burk. “If something happens at the mill and it’s not ready, the whole system breaks.”
Twenty years ago, most colleges didn’t offer specialized degrees in supply chain management. Now there are many top universities with excellent programs, including Penn State, Arizona State and the University of Tennessee Knoxville. “Three people on my team received degrees in supply chain management from the University of Tennessee – and they’ve added some real-world experience since then,” says Jackson.
Shipping large orders of LP® SmartSide® siding or LP Legacy® sub-flooring is much more complicated than shipping a book through Amazon. But LP’s goal is to one day reach Amazon’s level of supply chain precision. “Imagine how great it will be when we can say ‘We’ll ship you this product and you’ll get it on Thursday,’” says Burk. “That is our aspiration.”
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