AT A GLANCE
- Remedy the risk of managing fibre credits with a complicated spreadsheet
- Design and implement a fully auditable system compliant with Forest Stewardship Council standards
- Provide for managing additional forest certifications (future proofing)
- A modelling solution to manage fibre credits was developed with SAP BPC
- Replace existing fibre credit model with new SAP BPC process
- A fully auditable solution that simplifies audit duties for forest management certification scheme officers.
- User involvement in design of new fibre credit process ensures solution is well understood by sales and marketing staff.
- Links back into sales and operation planning process enables improved sales forecasting and certified product fulfillment.
- A range of reports available to clearly detail raw material purchases, certified product and product yield.
- Maintenance of new system fully covered by CHH’s SAP BPC administration and support processes
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An innovative use of SAP’s BPC software by Oxygen has delivered Carter Holt Harvey’s (CHH) wood products business a more transparent and user friendly process for complying with the Forest Stewardship Council (FSC) Chain of Custody credit system. The new process links the quantity of FSC certified product available for sale to the quantity of FSC certified material entering the production process.
The FSC’s Standard for Chain of Custody Certification ensures that forest based materials that are grown using environmentally appropriate, socially beneficial and economically viable forest management, can be visibly tracked from one certified manufacturing process to the next. CHH accrues FSC credits when it buys logs and saw mill chips from FSC certified vendors which are then able to be passed on to their customers with the sale of FSC certified products.
CHH project manager for the implementation, Arthur Brockway, says that forest management certification schemes like FSC enable the increasing demand for certified wood-based fibre materials from manufacturers and consumers to be met.
“We have been collecting the credits for a number of years, but were doing it using a very complex spreadsheet. Our sales and marketing team felt it posed a business risk because it was difficult to support and users didn’t really understand what the model was doing to incorporate required changes and updates.”
To rectify the issue, CHH asked Oxygen, which had recently completed a trans-Tasman SAP BPC implementation for the business, to design a forestry credit management solution that addressed the following issues:
- Integration with SAP transaction data
- Solution auditability
- Processing and reconciling forestry credits
- Data visibility and duplication
- Model scalability
“We wanted to minimise risk to the business by transferring it into a robust business system. SAP BPC provided the perfect vehicle for that,” says Brockway.
Oxygen seamlessly integrated the master data used in BPC to avoid duplication of data between disparate systems, implemented the new model and created a number of reports for fibre credits showing the purchases broken down by raw material and vendor.
“The system shows us the total amount of product that comes across the weighbridge in one column and in another it records the certified product. It has built-in checks to ensure we don’t claim more credits than we receive,” says Brockway.
Credits go into one bucket when the raw material is purchased and are used up (consumption is calculated via Bill of Material yield factors) once the finished products are sold. As each credit has a limited life (expiring after 12 months), the new system lets CHH track a full history of credit allocation and consumption ensuring the oldest credits are used up first.
“The solution shows how, with some innovative design and thinking, existing software can be repurposed to meet new ‘green’ business challenges, specific to the pulp and paper industry,” says Brockway. “The sales and marketing team was nicely surprised at how quickly and efficiently the project was completed.”
He says CHH now has a key marketing process contained within a robust business solution which is fully auditable. “The credit management system is now properly supported through the support and administration processes we have established for SAP BPC. But, the real benefit is that users were involved in the project right through from design to user acceptance testing.
This means they understand what it does and how it’s being done. The business knowledge of the whole process is now very well understood.”