Article: article from journal or magazin.
Order penetration point in paper supply chains
Paper and Timber
The order penetration point (OPP) of a material flow is the place where a product is assigned to a particular customer. I Before this point the material flow is controlled by forecasts and plans, and afterwards as deliveries according to customer orders. This article studies how different OPPs affect the capital bound up in the supply chain. The underlying sample is based on a quantitative study of the OPPs and supply chain inventories at three fine paper mills located in Europe. The general conclusion is that the control principles applied and the order types used are generating more capitol-tied-in-inventories in the various stocks and buffers of the supply chain than one would expect if simpler principles and fewer order types were used. One of the cases supports this finding. Unlike the design-to-order industry and many consumer goods industries, in which the OPP is strictly defined by the nature of the process, the paper industry uses several OPPs right from the paper machine throughout each echelon of the supply chain up to the market depots. This article provides guidelines and suggestions as to how OPPs should be managed to improve the flow of materials.
Web of science
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