The distribution process of SCA Hoogezand

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The distribution process

of SCA Hoogezand

Faculty of Management and Organization

Msc Operations and Supply Chain Management

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Preface

The research in this paper is performed in order to complete the master of the education of Management and Organization at the University of Groningen. The specialization for this master is Operations and Supply Chain Management. By performing this research my knowledge on logistics has increased. It was nice to be able to have a closer look at an international organization.

I want to thank my supervisor professor Wijngaard. He provided me with useful tips and information. He took also time to argue with me on several issues during my research and writing. I also want to thank Rogier Mensert for supporting me and inform me on all SCA issues.

Special thanks to my boyfriend, my dad and family Evers. They supported me during the writing of this thesis and took time to read my thesis over again.

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Index

OUTLINE ... 5

CHAPTER 1 INTRODUCTION ... 6

CHAPTER 2 COMPANY ... 9

2.1 SCA ... 9

2.2 SCA PERSONAL CARE EUROPE ... 10

2.3 SCA HOOGEZAND ... 10

2.4 LOGISTICSDEPARTMENT ... 12

2.4.1 Inbound logistics ... 13

2.4.2 Outbound logistics ... 13

2.4.3 Reining ... 14

CHAPTER 3 RESEARCH PLAN ... 15

CHAPTER 4 LOGISTICAL PROCESS ... 17

4.1 TYPEOFPRODUCTS ... 17 4.2 TYPEOFCUSTOMERS ... 19 4.3 TYPEOFORDERS ... 20 4.4 DISTRIBUTIONPROCESS ... 21 4.4.1 Transport lanes ... 21 4.4.2 Distribution centers ... 21 4.4.3 Organizational structure ... 21 4.4.4 Gennep ... 22 4.5 DISTRIBUTIONJARGON ... 22

CHAPTER 5 DISTRIBUTION NETWORK ... 24

5.1 REGION BENELUX ... 24 5.2 REGION NORDIC ... 26 5.3 REGION UK ... 29 5.4 REGION CENTRAL ... 31 5.5 REGION SOUTH ... 34 5.6 REGION EAST ... 38 5.7 REGION RUSSIA ... 41 CHAPTER 6 RESULTS ... 44 6.1 INEFFICIENCIES ... 44 6.1.1 Direct distribution ... 44 6.1.2 Number of DC’s ... 46 6.1.3 Conclusion ... 48 6.2 ORGANIZATIONALDESIGN ... 48 6.2.1 Responsibility ... 48 6.2.2 Fragmentation ... 49 6.2.3 Consolidation point ... 50 6.3 FURTHERRESEARCH ... 52

CHAPTER 7 RESEARCH AND RECOMMENDATIONS ... 53

7.1 ORGANIZATIONALDESIGN ... 53

7.1.1 Decentralization ... 53

7.1.2 Centralization ... 53

7.1.3 Decentralization vs centralization ... 54

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-Outline

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Chapter 1 Introduction

In today’s business world, companies experience a fast moving and rapidly changing environment. Customer requirements change quickly and they are more demanding. For companies it is important to react as accurately as possible if they want to stay in business. Not only product quality and innovations are of importance anymore, but also the quality of service and distribution activities. If a company wants to respond quickly to changes in the environment a well established distribution network is necessary. Nowadays right products have to be delivered in the right quantity and in the right condition, at the right place, at the right time, for the right customer and at the right cost (Coyle, 1988, p5) in order to fulfill the wishes of the customers. To accomplish this challenge companies need to focus on their distribution performance by stimulating the logistics department.

When dealing with distribution, according to Chopra (2003), this refers to ‘the steps taken to move and store a product from the supplier stage to a customer stage in the supply chain’. The distribution of products to the customer takes place in a distribution network or logistical network. This network consists of several parties, such as the manufacturer, distribution centers and customers. This is shown in figure 1.1. In this figure the physical product stream is shown, but another flow in a distribution network is the information flow that exists between the several players. This information flow becomes more and more important nowadays. The information flow will go hand in hand with the product flow from the manufacturer towards the customer, with for example information on products and lead times. There is also an information flow the other way round. This flow will contain information on the orders and specific needs of the customers.

The objectives of a distribution network are often bilateral. According to Chopra (2003) the distribution performance should be evaluated by two dimensions:

• Customer needs that are met;

• Cost of meeting customer needs.

This is similar to the objectives of distribution of Van Goor (1996; p84). He determines an external objective: To serve the customer on time and in a flexible manner. Next to the external objective there is an internal objective: A focus to perform well on the external

Figure 1.1: Distribution network

Customer Manufacturer

Distribution center

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the goals of a distribution network. In short two major objectives of distribution can be stated:

• The service level of distribution;

• The cost of distribution.

These two objectives are opposites from a traditional point of view. When focusing on cost it is difficult for a company to offer a brilliant service level as well. And vice versa, when performing at a high service level the distribution cost of the company will increase. This increase will occur because of more or better trained employees or because of more distribution centers. Most companies try to find a balance between these two objectives. Figure 1.1 indicates that a distribution network can consist of several players running from two till infinite. Transportation is the link between these network players. Because of the difference in number of players, transportation options are also diverse. In a distribution network some of the players are of the same organization, but a network can also be composed of a lot of different organizations. In general there are two options for linking the parties in the distribution network. The first option is direct distribution. In this case products are directly delivered from the factory to the customer. The second option is distribution using one or more chains in the network. In this case products are for example distributed from the factory to a distribution center, to a wholesaler and then to the final customer. The more players in a distribution network the more complex this network will be. This also means that the information flow is more difficult, but also more

important in order to keep an optimized distribution network1_.

The optimal distribution design for a company depends on the type of products as well as customer demand. An important factor for the choice of the distribution design is cost. Different kind of costs occurs in the distribution network. Chopra (2003) mentions costs for inventories, transportation, facilities and handling, and information. When changing the design of the distribution network also a modification in cost structure will occur. Regarding the evolution of distribution networks the past ten years, the tendency was a more regional distribution structure. Only a few years ago it was a tendency to move from a structure with local national distribution centers towards centralization with one big European distribution center. Nowadays companies often choose for regional distribution

centers2_{. The advantage is a better service, because the distribution center is located closer}

to the customer. Another trend in distribution is the outsourcing of the logistic part of a

company to a third party logistic provider (3PL)3_{. A 3PL can offer a complete logistic}

package which suits organizational wishes and is often more flexible and accurate, because it is its core business.

In this research the distribution network of a plant of the multinational SCA will be investigated. The focus is on the plant in Hoogezand, where SCA produces diapers and incontinence products.

1_{http://www.logistiek.nl/archief/id23300-Meer_schakels,_meer_cordinatie.html}

2_{http://www.logistiek.nl/dossierartikelen/id515-Dcs_in_Europa_trends_en_verwachtingen.html}

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Chapter 2 Company

This chapter presents the Swedish company SCA. The chapter starts with SCA on global level followed by SCA on European level, focused on one business area. After this general introduction of the company the focus moves towards the plant in Hoogezand, the Netherlands, and especially the logistics department.

2.1 SCA

SCA, Svenska Cellulosa Aktiebolaget, is a global player on the market for consumer goods and paper. Nowadays the company exists of four business areas. There are products developed, produced and marketed in the areas of personal care, tissue, packaging and forest products.

SCA was founded in 1929 in Sweden and started as a forest company, producing mainly paper pulp. SCA was listed on the stock exchange in 1950 and in the 60’s its business extended by starting producing packaging materials. In 1975 SCA laid its foundations for personal care operations. With the acquisition of the Swedish personal care company Mölnlycke, SCA’s sales increased by 40%. Products, such as tissues, diapers, feminine care and incontinence products were added to the product portfolio. In the following years SCA extended its business through acquisitions and became an important market player in all the business areas.

Today SCA produces and sells its products in more than 90 countries worldwide. The main markets are Europe and North America, but there are also strong positions in parts of Latin America, Asia and Australia.

The four business areas produce different kind of products:

 Personal care consists of three product segments: incontinence care, baby diapers

and feminine care. Important consumer brands are Libero, Tena and Libresse.

 The Tissue area offers napkins, toilet paper and kitchen rolls. Typical brands are

Tork, Tempo and Edet.

 Packaging produces containerboard and packaging solutions, such as transport

and protective packaging.

 Forest products produce publication papers, pulp, solid-wood products and

timber.

By using the mission, vision and core values SCA tries to create a company in which employees share the same goals. The mission statement of SCA is:

‘To provide essential products that improve the quality of everyday life.’ The vision of SCA is:

‘To be recognized as the leading provider of value for customers, shareholders and employees in its field.’

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new levels of professionalism. The last core value is responsibility. SCA tries to empower every individual at every level in the organization.

SCA is trying to increase the value for its stakeholders through growth and profitability. The strategy that is involved, is to develop and launch products with high-value added content and to increase sales in emerging markets.

2.2 SCA Personal Care Europe

Because the plant in Hoogezand is part of the business area Personal Care Europe, the focus of the rest of this chapter will be on this division. Other business groups that are part of SCA Personal Care are Hygiene Americas and Asia Pacific. In Europe there are six plants. Figure 2.1 shows that

these plants are established in Hoogezand (NL), Gennep (NL), Falkenberg (SE), Olawa (PL), Linselles (FR) and Gemerská Hôrka (SK). Hoogezand and Gemerská Hôrka are the biggest plants and thus make the most products. Distributed all over Europe there are about one hundred distribution centers (DC’s). These DC’s take care of the distribution of the products in Europe. All plants in Europe are combined with an international distribution centre (IDC). In every country there is a SCA department called Customer Service. At

Customer Service the sales department of SCA Personal Care is located. At these locations contacts with the customers take place. As mentioned before, SCA’s main brands in Personal Care are Libresse, Libero and Tena. With Tena SCA is world leader on the market of incontinence products (26% market share). In 2007 Personal Care generated a net sales of about € 2,3 billion worldwide.

2.3 SCA Hoogezand

At the plant of SCA Hoogezand absorbent baby care and incontinence care products are produced. The vision of SCA Hoogezand is: ‘To be the world class manufacturing partner, where people are proud to create, innovate and participate in value chain solutions for SCA.’ At the plant there are 650 employees, complemented with 100-150 temporary employees. SCA Hoogezand is divided into 5 operational units. Three units are manufacturing products, Ucm Baby, Ucm Inco and Tena Lady. For the Baby and Inco units, SCA Hoogezand started cooperation with the company Uni-Charm (UcM) in Japan

Falkenberg Hoogezand Gennep Linselles Gemerská Hôrka

Europe

Olawa Incontinence Feminine care Diapers

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in 1993 to acquire more technology. The fourth operational unit is plant support and the fifth unit is logistics. The warehousing and IDC part of SCA Hoogezand is outsourced to Reining Warehousing. The organizational chart in figure 2.2 shows that the structure of SCA Hoogezand is a matrix-structure. Typical for the matrix-structure is the combination of two structures (Daft, 2004, p105). The matrix structure ‘formalizes horizontal teams along with the traditional vertical hierarchy and tries to give equal balance to both’ (p107). At SCA Hoogezand the vertical line organization starts at the top with a plant manager. Under the plant manager there are unit managers who have to report to the plant manager. Per unit there are several divisions. Besides the line organization, SCA Hoogezand expresses the horizontal organization in two ways. First there are several staff members, called the support group. Members of the support group are spread out on the several operational units, which is part of the horizontal organization. Besides the support group SCA Hoogezand works according to the principle of the team-based work system. This expresses itself in the organizational structure through the machine coaches and the resource support teams (RST’s), who are responsible for operation, problem-solving and results of the production lines. The intent is to shift the responsibilities for the results and output of the production as low as possible in the organization.

At the UcM Baby unit pant diapers are produced. There are seven production lines and the production volume is around 800 million products per year. At the moment two new production lines are established. At the UcM Inco unit incontinence pants are produced. For these products there are six production lines and 450 million products are made per year. Also for this unit two new production lines are established at the moment. At the Tena Lady unit female incontinence pads are produced. Here there are nine production lines and around 1.8 billion products are made per year.

Figure 2.2: Organizational chart SCA Hoogezand

MC’s RST USM Operational unit UcM Baby Support group MC’s RST MC’s RST MC’s RST MC’sRST Operational unit UcM Inco USM Support group MC’s RST MC’s RST MC’s RST MC’s RST MC’sRST Operational unit Plant Support USM Operational unit Tena Lady USM Support group MC’s RST MC’s RST MC’s RST MC’s RST MC’sRST Operational unit Logistics USM Support group Inbound Outbound Reining

Support group Projects &* Support. Purchase Utilities Facilities Plant Manager QESH Controlling HRM Support group Plant Support Operational unit UcM Baby Support group MC’s RST MC’s RST MC’s RST MC’sRST Operational unit UcM Inco USM Support group MC’s RST MC’s RST MC’s RST MC’s RST MC’sRST Operational unit Plant Support USM Operational unit Tena Lady USM Support group MC’s RST MC’s RST MC’s RST MC’s RST MC’sRST Operational unit Logistics USM Support group Inbound Outbound Reining

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The operational units are organized in accordance with a product layout. At a product layout ‘the transforming resources are entirely located for the convenience of the transformed resources. The transformed resources flow along a line of processes.’ (Slack et al, 2004, p212). So at the operational units every production line can be made suitable for a specific article and produces this article for a certain period of time. The production lines need a new setup when they need to produce an other article.

2.4 Logistics department

Since this thesis deals with the distribution of SCA Hoogezand, it is necessary to describe the logistics department in detail. The vision of the logistics unit is: ‘To have the optimal logistic setup internally and towards our customers and suppliers and to act as centre of supply chain excellence to Personal Care.’ The optimal logistic setup according to SCA is a trade-off between costs, customer service and working capital (see figure 2.3).

At the department of logistics there is also a matrix structure when looking at the organizational structure. This can be seen in figure 2.4. The vertical organization is expressed by the logistics manager and several managers lower in the department, which have to report to the logistics manager. The horizontal organization states itself by a support group, coaches and the RST’s.

Service Costs Logistics Stocks & WorkingCapital Service Costs Logistics Stocks & WorkingCapital Logistics Manager Logistics Manager IDC Controller

IDC Controller Logistics Support ManagerLogistics Support Manager

HR Advisor HR Advisor Manager Inbound Logistics Manager Inbound Logistics Manager Inbound Logistics Manager Outbound Logistics Manager Outbound Logistics Warehousing Reining B.V. -Baby Pants -Inco Pants -Tena Lady Supply Chain Coordination Supply Service

Supply Service Coach PDCoach PD coordination

Raw Mat. Supply coordination Raw Mat. Supply

coordination Raw Mat. Supply

planning Supply Chain planning Supply Chain planning Supply Chain

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The department consists of a logistics manager and a support group. The core of the department is divided into three sections, inbound logistics, outbound logistics and warehousing. In the next subsections these divisions are described.

2.4.1 Inbound logistics

The department inbound logistics takes care of all the raw materials arriving at the plant. The section of raw materials supply coordination supervises this work and the teams make sure that the raw materials are received and stored at the right place in the warehouse. An other section of inbound logistics is the supply chain planning. There are four persons responsible for the production planning ten weeks ahead. Every person at this section is responsible for an operational unit and its machines.

2.4.2 Outbound logistics

The department outbound logistics takes care of all the produced products that leave the plant. Outbound logistics receives orders and organizes the right products and the transport of these products. The main objective of the outbound logistics department is to achieve a high service level. The target service level for this department is determined by the top management of SCA Personal Care. For the products from Baby and Inco the determined target for the service level is noted at 97%. For Tena Lady this is 98%. These targets rose the last few years a few percent, because SCA want to improve its performance on logistics.

Outbound logistics consists of Supply service and the palletizing department. Supply

service takes care of the order handling and the transport planning. They also have the

responsibility to look after the stock levels in the warehouses of SCA, worldwide. The palletizing department makes sure that boxes are gathered and put onto pallets.

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2.4.3 Reining

The warehousing activities for SCA Hoogezand are outsourced to Reining Warehousing B.V. in 1999. In this case SCA Hoogezand has a third-party logistics (3PL) relationship with Reining Warehousing. According to Simchi-Levi (2008, p249) 3PL is ‘the use of an outside company to perform all or part of the firm’s materials management and product distribution functions’. This relationship is a strategic alliance. The warehouse of Reining is located one kilometer from the plant. The warehouse is supplied by the factory through

a shuttle 24/7. Reining has 40.000 m2_{available for finished goods and 10.000 m}2_available

for raw materials. Reining arranges everything regarding warehousing and information supply to truck drivers. The arrangement of the transport is done at the logistics department of SCA.

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Chapter 3 Research plan

As mentioned in chapter two several products in the field of SCA Personal Care are manufactured at the plant of SCA Hoogezand. The first types of product are made at the operational unit of Tena Lady (NLY6) and are incontinence pads. The second product is produced at UcM Inco (NLY8) and are incontinence pants. The third product is made at the operational unit UcM Baby (NLY9) and are diaper pants. Combined with the plant there is an international distribution center at Hoogezand (NL21). From this distribution centre (DC) the produced products are distributed to SCA distribution centers, the internal customer or directly to warehouses of customers, the external customer. Customers are located all over the world, but the focus is on Europe and North America. Problem statement

The management of the logistics department of SCA Hoogezand considers the distribution network of SCA Hoogezand not being organized in the most efficient way. SCA Hoogezand feels that there might be inefficiencies in the distribution network, e.g. too many unnecessary steps in the distribution to the final customer and too many SCA DC’s in the distribution flow. The difficulty is that SCA Hoogezand does not know exactly what the problem is. This happens due to change of management and turnover at the logistics department in the last few years. At the moment there is no time to analyze and there are no conditions to ensure that the distribution network has and keeps an optimal structure. It is important for SCA Hoogezand to keep up a good image in the SCA supply chain when it comes to logistics and to perform at costs as low as possible. Therefore it is interesting to aim at an optimal distribution network with no inefficiencies on direct deliveries and not too many DC’s. It is necessary to have more insight in the distribution network and flows and to find out where logistical responsibilities are inside SCA.

The area of this research is focused on the distribution flows in Europe. The research is defined at the volume delivered to customers in 2007. The research focuses on the internal customer, which means the flow to another SCA distribution center or factory. The main question of this paper is:

How is the distribution network of products made at SCA Hoogezand organized in Europe and what are causes of inefficiencies?

To visualize the focus of this research a conceptual framework is displayed in figure 3.1.

Figure 3.1: Conceptual framework Distribution flows

-Direct deliveries -Number of DC’s Cause

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In order to answer the research question more information in the following areas should be gathered:

• Objectives of the logistics department;

• Organizational structure in logistics of SCA;

• Facts on distribution process at SCA;

• Responsibility on distribution flows;

• Facts on DC’s per country in Europe where SCA Hoogezand delivers;

• Volume of products delivered in Europe per region and per country;

• Consolidation point in the distribution flow.

• Role of Hoogezand

Research method

The method followed in this research steps from De Leeuw (2003, p219). He proposes a research method consisting of several stages. This research method starts with a stage consisting of a problem statement followed by a preliminary investigation and a report in between. In the first stage a general research is performed in order to find out what the progress of the research will look like. In this stage a broad view of the subject is created. In the second stage the research is focused on an important issue coming up from the first stage. In this research the objective of the first stage is to map the distribution network. After stage one a short conclusion is drawn and the focus for stage will be revealed.

Gathering data

To start up the project and to gather general information on the distribution at SCA interviews with several employees of the logistic department were arranged. By these interviews an image was formed on the distribution processes. The following step was to collect data from desk research from several information systems, such as SAP. Another information database in this stage is the Supply Chain Handbook of SCA produced by the central logistics organization of SCA Personal Care and Tissue. This handbook is a guide for the logistics departments belonging to these areas and is available via the intranet. In the second stage of this research information is mainly collected from interviews with employees of SCA. Data from information systems were used to support the research. Thesis outline

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Chapter 4 Logistical process

In this chapter the process and organization at the logistics department of SCA Hoogezand are described in more detail. The goal of the outbound logistics department is to make sure that produced products ordered by customers arrive on time, at the right place and in the right quantity. Information for this chapter is gained from interviews with several employees and also from the Supply Chain Handbook. The first paragraph starts with a description of the three types of products manufactured at SCA Hoogezand. The second paragraph deals with the two types of customers of SCA. The third paragraph describes the type of orders SCA Hoogezand is dealing with. After these paragraphs more details are given on the distribution process and on the distribution jargon that is used at SCA.

4.1 Type of products

At SCA Hoogezand three types of products are manufactured. The first type of product is made at the operational unit of Tena Lady and are incontinence pads. The second product is made at UcM Inco and are incontinence pants. The third product is made at the operational unit UcM Baby and are pant diapers. At the moment the total volume of produced products at the operational units are equal. Van Goor et al (1996, p53) mention five product characteristics. It is interesting for the distribution to know what kind of product you have to deal with. In table 4.1 the five product characteristics are described for these three types of products.

Product

characteristic Description

Value density The value of a product per volume unit (m3_{). Here the products are voluminous,} so the value density is low.

Preservability The products are not perishable; their physical condition will not change over time, so the preservability is long.

Packaging

density The number of packaging unit per volume unit (m

3_{). Because of the great volume} of the products, the packaging density is low.

Appearance The physical condition of these products is solid. Volume/weight

relation The proportion between the volume and the weight of a product. This relation can be described around 3.3 in this situation. So 1 m3_{is related to 300 kg of the} product.

When considering the markets where products of Hoogezand are sold, the incontinence and Tena Lady products are sold in a lot of different countries. In this case Van Goor et al (1996, p77) talk in this case about a high country specificity. The baby diapers produced at Hoogezand are mainly private labels. These products are produced for a specific

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customer, e.g. a chain of supermarkets. In this situation the country specificity is low, because these products are not sold in many countries.

This same distinction between the products can be made for the customer order decoupling point (CODP), which is shown in figure 4.1.

The baby diapers are customized by the print on the diaper or a specific bag and box. The set-up of the machine necessary to manufacture these products is done at the beginning of the production process. This is the first CODP for the private labels. The products are produced on the base of a forecast of the customer. The products will then be sold on demand to the customer and the second CODP is therefore at the warehouse of SCA Hoogezand. This is a make-to-order situation (Simchi-Levi, 2008, p95). For the other types of products the customer decoupling point is at the end of the process, because all the products are equal and not customized. The customization that can take place is at Reining, where the palletizing is adjusted to the wishes of the customer. The products are made without already having an order in hand and are stored as finished goods inventory. This is a make-to-stock-situation. The CODP for these products is therefore at the warehouse of SCA Hoogezand. The different production situations are shown in figure 4.2.

Private label diapers

Customer Customer

Tena Lady & Incontinence Warehouse NL21 Production NLY6/Y8/Y9 CODP CODP CODP

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The producing units at SCA all have a code consisting of a country code and a number. The code for the operational unit of Tena Lady is NLY6, for UcM Inco is NLY8 and for UcM Baby is NLY9. The plant at Hoogezand is an international distribution centre with code NL21.

4.2 Type of customers

SCA Personal Care has divided its customers into two groups. The first group is the retail customer (CO) and the second group is Healthcare (IN). The retail customers are focused on the consumer and they are chains of supermarkets, such as Lidl or other store chains, such as Kruidvat. The healthcare customer requires products that are suitable for the professional service in hospitals and homes for the elderly, but also pharmacies are customers. At the moment all the products manufactured at the Baby unit are for the retailer. Tena Lady products are made for about 30% for the retail customer and for 70% for the healthcare customer. The healthcare customer obtains up to 95% of the produced incontinence diapers of the UcM Inco unit.

There is a difference between the two customer groups with regard to their focus. The retail customer will have more logistic knowledge, which means he will have an demanding look at the distribution structure and costs. Also as little stock as possible is wanted, because of its costs. The retail customer prefers to have products delivered when needed so that he can have a lower safety stock. Therefore the retail division is focused on the distribution cost and will try to optimize the distribution flows together with the customer. The objective service level is also important in order to have products delivered on time. For the healthcare customer it is most important to have products available when needed. In order to prevent stock out at any time, the healthcare customer wants to have more stock. For SCA this means that the focus towards the healthcare customer is mainly on service level and less on costs. Another reason for the difference in focus is the margin on the sales prices of the products. The margin at the healthcare division is much bigger than at retail. This means that distribution costs for retail are a relatively bigger percentage of the sales price than at healthcare, which results in a better focus on distribution costs at the retail division. The percentage of the distribution cost of the sales price at retail is between 6 and 8 percent. For healthcare this is around 2 or 3 percent.

Another difference between the two customer groups is the difference in drop size. The drop size measures the average delivered volume per shipment. Retail customers have a

much bigger drop size of 25 m3_{per delivery, compared to the final healthcare customer,}

who most of the time has a drop size around 3 m3_{per delivery. For the retail customer}

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SCA customers are organized in regions. The regions and the corresponding countries in Europe are shown in table 4.2. In most countries there are depots for both types of customers. In chapter five the distribution centers, or depots, are discussed in more detail. All SCA DC’s are marked as internal customers.

4.3 Type of orders

At SCA Hoogezand there are two types of ordering processes. The first type is the process of sales orders. These orders start at customer service, the sales department of SCA. The customer service of SCA Hoogezand and the rest of the Benelux is located at Zeist. Customer service is the party dealing with customers on price, product, lead times, etcetera. In this situation when all specifications are set the customer service places an order in SAP. In the following night this order is converted into an order to deliver to the customer. For these orders most of the time a direct delivery exists.

The second type is the replenishment order. This type of order originates at a SCA DC and is automatically generated by the information system SAP in the night for this DC’s. Such an order is generated on the base of the stock levels at the DC’s, the lead time to that DC and the forecast for an article. According to the Supply Chain Handbook the replenishment principle means that the sender is responsible for the maintenance of the receiver’s stock on agreed target days of stock, whereby the sender ‘starts’ the action. A part of the replenishment orders exists of container shipping. Outside Europe, the rest of the world, these orders differ slightly from replenishment orders because the orders are processed by a different or other version of the information system.

Thirty percent of the orders are sales orders and the other two third are replenishment orders. All orders will be converted in the night into an order to deliver only when there is enough stock of the ordered article, otherwise it will be turned into a backorder. This check is automatically done by the information system.

Region Countries Region Countries

Benelux Belgium

The Netherlands South FranceItaly

Portugal Spain Nordic Denmark Finland Norway Sweden East Czechia Greece Hungary Poland Slovakia UK Ireland

United Kingdom Russia (Healthcare)Other East

Central Austria

Germany Switzerland

Russia (Retail) Russia Other Russia

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For the plant in Hoogezand it is possible to combine products of the three operational units into one transport. So there is no need to make a distinction between different articles or between retail and healthcare customers.

4.4 Distribution process

The distribution process at SCA covers several issues. In this paragraph important issues for this research are mentioned.

4.4.1 Transport lanes

The distribution network of SCA consists of several transport lanes. A transport lane is a route between two SCA DC’s. The majority of the transport at SCA in Europe exists of transport by road. A transport lane is entered into the information system, SAP. Decisions such as the lead time, number of days, and the transport profile, the volume of a full truckload, are added by the logistics department.

4.4.2 Distribution centers

Sometimes products are directly delivered to the customer; this mainly takes place for the retail customer. Simchi-Levi (2008, p230) defines direct distribution as delivering goods directly to the end customer from a manufacturer or supplier. According to the SCA Supply Chain Handbook direct delivery is when a delivery goes from a factory to a final customer through maximum one SCA warehouse. It is also possible that products are delivered via one or more SCA warehouses. Simchi-Levi (p231) calls this the traditional warehousing. In this case stock inventory is held at the SCA DC’s.

In the healthcare division there are a lot of DC’s in Europe. This differs significantly from the number of retail DC’s as showed on the map of Europe in appendix 1. The large number of DC’s results in a lot of transport lanes where products are distributed at. A possible reason could be that products for the retail customer are often customized and thus dedicated, especially when it comes to private labels. These products will therefore not be transported to a SCA warehouse at random nor will they end up as stock in a SCA warehouse for a long time. Healthcare division products are universal, for example the Tena Lady products. Therefore it is not necessary for the healthcare division to worry about the location and storage of products. This large number of DC’s means that in Europe a lot of stock of the universal products is held.

4.4.3 Organizational structure

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dealing with the same transport. At the moment there is less control and communication between the buying and the selling party on the transport lanes, especially when dealing with internal customers. And according to several people inside SCA the distribution flows have been arranged in the same way for a long time. Besides the responsibility for the customer service in the country where the products are ordered, there is also a Regional Business Logistics manager (RBL) per region and a department Central Business Logistics (CBL) for Europe. The RBL manages the logistic processes in a region. This person should also control the optimization of the distribution network. The CBL is the group of people inside SCA keeping track of the overall logistics processes. They initiate projects regarding the optimization of the distribution flows in cooperation with the regions. They do not deal with daily operational logistics, but only with the headlines in Europe.

4.4.4 Gennep

The location of the other factory in the Netherlands for Personal Care is Gennep. The products that are manufactured in this factory are made for the healthcare division. For emerging customers in Europe it is interesting to combine products from Hoogezand and Gennep to make sure full truck loads are heading to the customers. Due to the favourable geographical location of Gennep regarding the customers in Europe this factory functions as a consolidation point, a gateway for distribution to Europe.

4.5 Distribution jargon

At SCA specific jargon is used at the logistics department. The first important

measuring-instrument at SCA is volume (m3_{). In Hoogezand they try to load every truck with a}

maximum number of pallets. The second term is an abbreviation, called a TRP. This is a box with a number of bags with products. The number of bags per TRP differs per article. Another abbreviation is a ULV, a unit load variant. According to the Supply Chain Handbook this is the SCA way of describing pallets. A ULV consists of a letter defining the pallet type and two digits defining the height class. For example an E for Euro pallet and 12 for 1 meter 20, makes an E12. At SCA Hoogezand there is no standard ULV. It is possible for the customer to tell what type of ULV fits best to his wishes and almost anything is possible. No attention will be given to these different ULV’s in this research. Inside Europe SCA uses trucks with different volumes. Every DC has its own truck volume it can handle. This depends on the size, location, routing, etcetera of a DC. This is called the transport profile.

Another important indicator used at SCA is service level. According to Simchi-Levi (2008; p380) service level is ‘the measure used to quantify a company’s market conformance and is related to the ability to satisfy a customer’s delivery date’. This corresponds with the description in the Supply Chain Handbook of SCA. SCA states that the service level (SL) measures the ability to deliver the right products on time. It is made ready for use by: SL (%) = delivered value (€) / ordered value (€) * 100.

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Chapter 5 Distribution network

In this chapter data are shown on how many products, produced by NLY6, NLY8 and NLY9, are distributed to countries in Europe. Like all the production units, the SCA distribution centers (DC’s) do have a code. This code consists of a country abbreviation and two digits. The codes of DC’s will be mentioned and used.

This chapter focuses mainly on the internal customer, the flow to another SCA DC. The data for are collected from an information system of SCA, BI. BI retracts its information from SAP and generates reports. To generate the right information several commands are given. Per country and per DC it is possible to see where they had their products delivered from. The number of TRP’s and the volume are key figures displayed and used. The first data needed to give a good overview of the distribution network of SCA Hoogezand are some general facts on how many products are distributed. In table 5.1 the manufactured products at SCA Hoogezand that are distributed to all countries in the world in the year 2007 are listed.

Volume (M3₎ _TRP’s _Pallets

SCA Hoogezand 1.745.292,5 44.930.707 1.057.803

The products that are made at Hoogezand are distributed to a lot of different customers and countries. In table 5.2 is shown how much is distributed to customers, internal and external in Europe in 2007. Table 5.3 shows how much is distributed only to internal customers at countries in Europe in 2007.

SCA Hoogezand 1.569.905,4 40.871.696 996.379

SCA Hoogezand 724.560,1 19.052.018 391.431

The rest of this chapter consists of detailed data concerning product flows to countries in Europe. This is organized according to the region classification of SCA mentioned in chapter four. Inefficiencies in distribution flows will be mentioned per country.

5.1 Region Benelux

The countries in the Benelux, where SCAHoogezand is distributing its products to, are the Netherlands and Belgium. The internal customers of SCA Hoogezand are listed in a table per country. This table describes which type of customer the depot is, retail (CO) or

Table 5.1: products produced at NLY6, NLY8 and NLY9

Table 5.2: products distributed in Europe

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indirectly and what the source of the distribution is. The last two columns show extra information on the determined lead time and the transport profile in m3, which means the volume of products filling one truck to a specific location. Some DC’s used in 2007 have since been closed.

The Netherlands

In table 5.4 the DC’s in the Netherlands are shown.

In figure 5.1 the distribution network of the Netherlands is pictured. It shows what was distributed from SCA Hoogezand to internal customers in 2007. Table 5.5 encloses volumes of the distribution flows from figure 5.1.

The figure and table above indicate that the distribution network in the Netherlands is not very complicated. The DC’s for the healthcare customer are recently reorganized. Therefore only one DC at Nieuwegein exists anymore, besides the factory and IDC in Gennep. NL13 and BE12 were closed since fall 2007. For the retail customer there is one DC in the south of The Netherlands.

The flow from Hoogezand to Gennep is a big one. Gennep is in the healthcare distribution network used as a warehouse where products are gathered and shipped in combination with products from other factories.

Belgium

Location Code Type of customer

Type of distribution

Source Lead time (days)

Transport profile (m3)

Hoogezand NL21 IN/CO various

Breda NL10 CO Direct NL21 1 62

Gennep NL12 IN Direct NL21 1 82

Nieuwegein NL13 IN Direct NL21 CLOSED CLOSED in 2007

Nieuwegein NL36 IN Direct NL21 1 72 From To Number of months Volume per year (m3) BE02 NL10 1 0.7 SK21 NL10 2 12 BE12 NL36 3 123 NL21 NL10 12 3.906 NL21 NL36 4 18.080 NL21 NL13 9 28.523 NL21 NL12 12 60.484

Table 5.5: Details distribution the Netherlands Figure 5.1: Distribution network the Netherlands

Table 5.4: Internal customers the Netherlands

NL21

NL10 NL12

Incidentally

Very small volume: <100 M3 Small volume: 100-1.000 M3 Medium volume: 1000-10.000 M3

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In table 5.6 the DC’s in Belgium are shown.

In figure 5.2 the distribution network of Belgium is pictured. It shows distribution from SCA Hoogezand to internal customers in 2007. Table 5.7 encloses the volumes of distribution flows from figure 5.2.

The figure and table above show that the internal distribution network of Belgium is uncomplicated. Nowadays it is even more uncomplicated, because of the rearranging of the healthcare DC’s in the Benelux, as already mentioned at the Netherlands. So in fall 2007 the DC in Grimbergen was closed and there is only one DC for the retail customer left in Belgium, at Stembert.

5.2 Region Nordic

The countries in the Nordic region where Hoogezand is distributing its products to are Denmark, Sweden, Finland and Norway.

Denmark

In Denmark there are two internal customers, one for retail and one for healthcare. Both depots are in the middle of Denmark, but are located a hundred kilometers from each other. In table 5.8 the DC’s in Denmark are shown.

Location Code Type of

customer Type of distribution Source Lead time(days) Transport profile (m3)

Stembert BE02 CO Direct NL21 1 74

Grimbergen BE12 IN Direct NL21 CLOSED CLOSED in 2007

From To Number

of months Volume per year (m3)

NL36 BE02 4 260

NL21 BE02 12 7.227

NL21 BE12 12 8.113

Location Code Type of

customer Type of distribution Source Lead time(days) Transport profile (m3)

Horsens DK11 IN Direct NL21 1 100

Grenaa DK21 CO Direct NL21 1 74

Table 5.8: Internal customers Denmark Table 5.7: Details distribution Belgium

Figure 5.2: Distribution network Belgium

Table 5.6: Internal customers Belgium

NL21

BE12 BE02

Incidentally

Very high volume: >50.000 M3 High volume: 10.000-50.000 M3

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In figure 5.3 the distribution network of Denmark is pictured. It shows what was distributed from SCA Hoogezand to internal customers in 2007. Table 5.9 encloses volumes of the distribution flows from figure 5.3. In this table also the flow from NL21 to NL12 and to SE21 are displayed to complete the view on the distribution flows. The flows from NL21 to NL12 will be mentioned in all countries when NL12 is part of the flows.

The figure and table above show that the distribution network of Denmark is relatively uncomplicated. There are two big streams of products going from Hoogezand to DK11 and DK21. The flow from Gennep to DK11 is incidental as can be seen from the number of months when products are distributed. A remarkable issue is to find out how the flow from SE21 to DK21 develops. The data in appendix 2 indicate that not a lot of products are distributed on this route until May 2008, which means that this stream is incidental.

Sweden

In Sweden there is only one SCA depot in Falkenberg. At Falkenberg there is also a plant, where mainly diapers and a few incontinence products are produced. In table 5.10 the details of the DC in Sweden is shown.

In figure 5.4 the distribution network of Sweden is pictured. It shows what was distributed from SCA Hoogezand to internal customers in 2007. Table 5.11 encloses volumes of the distribution flows from figure 5.4.

From To Number

NL12 DK11 1 2 SE21 DK21 8 332 NL21 DK21 12 6.151 NL21 DK11 12 12.666 NL21 SE21 12 89.220 NL21 NL12 12 60.484

Falkenberg SE21 CO/IN Direct NL21 1 86

Table .5.9 Details distribution Denmark

Figure .5.3 Distribution network Denmark

Table 5.10: Internal customers Sweden

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From the figure and table above can be inferred that the internal distribution network to Sweden is easy. The only flow from Hoogezand is a very big volume to SE21. SE21 distributes to the rest of the Nordic region, mainly Norway and external customers. In this case SE21 functions as a regional warehouse.

Finland

In Finland there are two SCA depots, one for retail and one for healthcare. They are located in the same city. In table 5.12 the details of the DC’s in Finland are shown.

In figure 5.5 the distribution network of Finland is pictured. It shows distribution from SCA Hoogezand to internal customers in 2007. Table 5.13 encloses volumes of the distribution flows from figure 5.5.

The figure and table above show that the internal distribution network of Finland is uncomplicated. The retail customer flow is a small one compared to the much bigger stream to the healthcare customer. The flow from SE21 is incidental.

Norway

There are no internal customers in Norway being served from Hoogezand.

From To Number

NL21 SE21 12 89.220

Raisio FI21 CO Direct NL21 7 72

Raisio FI11 IN Direct NL21 7 72

From To Number of months Volume per year (m3) SE21 FI21 1 9 NL21 FI21 12 521 NL21 FI11 12 12.457

Table .5.11 Details distribution Sweden Figure 5.4: Distribution network Sweden

Table 5.13: Details distribution Finland Figure 5.5: Distribution network Finland

Table 5.12: Internal customers Finland

NL21

FI11 Incidentally

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5.3 Region UK

The countries in region UK where Hoogezand is distributing its products to are Great Britain and Ireland.

Great Britain

The number of DC’s in Great Britain is substantial as deduced in table 5.14. To some DC’s there is direct distribution, but there is also a lot of indirect distribution to Great Britain.

In figure 5.6 the distribution network of Great Britain is pictured. It shows what was distributed from SCA Hoogezand to internal customers. Table 5.15 encloses volumes of the distribution flows from figure 5.6. In Great Britain there are also a lot of small and unique flows. These flows did not take place very often in 2007 or have a really small volume. These are pictured in figure 5.7 with details on the flows in table 5.16.

customer Type of distribution Source Lead time (days) Transport profile (m3)

Prudhoe GB31 CO Direct NL21 GB11 5 1 62 70

Prudhoe CLOSED GB32 CO Indirect CLOSED CLOSED

Antrim GB34 CO Indirect GB31 2 Skelmersdale GB36 CO Direct NL21 Ravenhead GB38 CO Indirect GB31 1 70 Leicester / Redditch IDC GB11 IN Direct NL21 2 75 Lisburn GB16 IN Indirect GB11 1 65 Just Wales,

Cross hands GB30 IN Indirect NL12 2 75

NHS West Midlands, Kingswinford GB12 IN Indirect NL12GB11 21 7575 NHS Lancashire GB50 IN Indirect NL12 GB11 21 7590 NHS Essex GB51 IN Indirect GB11 1 75 Countrywide Healthcare GB53 IN Indirect NL12 2 75 DHL Tilbury GB54 IN Indirect Norfolk GB57 IN Indirect NL57

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From To Number

GB11 GB16 6 94 GB11 GB30 6 54 GB11 GB12 8 236 GB11 GB31 12 340 GB11 GB50 8 141 GB31 GB38 7 311 GB31 GB36 5 626 GB31 GB34 12 189 GB31 GB32 12 101 NL12 GB50 7 311 GB11 GB51 8 142 NL12 GB53 2 195 NL12 GB57 2 220 GB11 GB57 3 189 NL12 GB30 12 1.118 NL12 GB12 12 1.021 GB31 GB31 12 3.659 NL21 GB31 12 26.133 NL21 GB11 12 13.841 NL21 NL12 12 60.484 From To Number

GB16 GB11 1 3,5 GB30 GB11 1 25 GB31 GB11 2 4.7 GB11 GB54 2 42 GB11 GB53 5 11 NL12 GB11 3 19 NL21 GB32 GB12 GB30 GB57 GB31 GB11 GB16 NL12 GB34 GB54 GB53 _GB51 _GB50 _GB38 GB36 NL21 GB32 GB12 GB30 GB57 GB31 GB11 GB16 NL12 GB34 GB54 GB53 _GB51 _GB50 _GB38 GB36 Incidentally

Very small volume: <100 M3 Small volume: 100-1.000 M3 Medium volume: 1000-10.000 M3 Very high volume: >50.000 M3 High volume: 10.000-50.000 M3

Figure 5.7: Distribution network Great Britain incidentally

Figure 5.6: Distribution network Great Britain

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The figures and tables above indicate that there are a lot of product streams in and to Great Britain. Some of them are significant, because of the big volume, but most of them are smaller. There is no kind of logic in the network at the moment. Also the amount of incidental streams is substantial. The organization of the many DC’s in Great Britain is complex. The majority of the DC’s are healthcare DC’s. For UK healthcare GB11 is a national DC, which can supply the regional DC’s, GB 16, GV30 and GB57. The other healthcare warehouses are local warehouses of a customer of SCA UK, the local government. The inventory in these warehouses is managed by SCA. An obvious role in the distribution to Great Britain is performed by Gennep. There are a lot of flows to Great Britain going via Gennep, such as GB12 and GB30. These streams occur every month and have a substantial volume, but are not distributed directly.

Ireland

The internal customer in Ireland consists of just one DC for retail as shown in table 5.17.

In figure 5.8 the distribution network of Ireland is pictured. It shows what was distributed from SCA Hoogezand to internal customers in 2007. Table 5.18 encloses volumes of the distribution flows from figure 5.8.

From the above figure and table can be seen that there is just one internal customer in Ireland. There is only one small retail flow to Clonmel and the products move via Great Britain.

5.4 Region Central

The countries in region Central Europe where Hoogezand is distributing its products to are Austria, Germany and Switzerland.

Austria

In Austria there are two depots, one for retail and one for healthcare, as shown in table 5.19.

Location Code Type of

customer Typedistribution of Source Lead time(days) Transport profile (m3)

Clonmel IE32 CO Indirect GB31 2

From To Number of months Volume per year (m3) GB31 IE32 11 50 NL21 GB31 12 13.841 Table 5.17: Internal customers Ireland

NL21 GB31 IE32

Incidentally

Figure 5.8: Distribution network Ireland

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In figure 5.9 the distribution network of Austria is pictured. It shows distribution from SCA Hoogezand to internal customers in 2007. Table 5.20 encloses volumes of the distribution flows from figure 5.9.

The figure and table above show that the depots in Austria are served directly from Hoogezand. There is also a small flow due to special products or stock outs between DE02 to AT02. This happens about six times a year.

Germany

In table 5.21 the details of the DC’s in Germany are shown.

Location Code Type of

customer Typedistribution of Source Lead time(days) Transport profile (m3)

Pernitz AT02 CO Direct NL21 2 93

Wals-Siezenheim AT22 IN Direct NL21 2 93

From To Number

DE02 AT02 6 91

NL21 AT02 11 1.031 NL21 AT22 12 7.828

customer Type of distribution Source Lead time (days) Transport profile (m3)

Mannheim DE02 CO Direct NL21 1 52

Koln DE11 IN Direct NL21 1 74

Hamburg DE20 IN Direct NL21 1 90

Ronnenberg DE30 IN Direct NL21 1 90

Osnabruck DE31 IN Direct NL21 1 90

Polch DE60 IN Direct NL21 1 90

Wurzburg DE61 IN Direct NL21

DE11 1 1

90 65

Spreenhagen DE62 IN Direct NL21

DE11 11 9065

Langenbernsdorf DE63 IN Direct NL21

DE11 11 9065

Bad Wildbad DE70 IN Direct NL21

DE11 11 9065

Karlsfeld DE08 IN Direct NL21 1 90

Nurnberg DE09 IN Direct NL21 1 90

Table 5.21: Internal customers Germany Table 5.19: Internal customers Austria

Table 5.20: Details distribution Austria

Figure 5.9: Distribution network Austria

NL21

AT02 DE02

AT22

Incidentally

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In figure 5.10 the distribution network of Germany is pictured. It shows what was distributed from SCA Hoogezand to internal customers in 2007. Table 5.22 encloses volumes of the distribution flows from figure 5.10.

The figure and table above indicate that there is a complex distribution network in Germany. There are a lot of depots that are directly delivered to. In Germany a hub-system is used for the healthcare distribution network. This means that only the DC’s DE02 and DE11 are normal warehouses, the rest are ‘no stock’ warehouses. The orders are gathered centrally at DE02 and sent through the information system SAP to Hoogezand every day. As a complement from DE11 late or missing products are distributed to the several hubs. With this hub system products are transported to several DC’s all over

From To Number

AT02 DE02 1 0.2 NL12 DE11 1 11 NL21 DE21 1 1.032 DE11 DE21 1 4 DE11 DE08 9 30 DE11 DE09 9 9 DE11 DE20 9 22 DE11 DE30 10 16 DE11 DE31 8 20 DE11 DE60 10 30 DE11 DE61 9 14 DE11 DE62 9 12 DE11 DE63 10 24 DE11 DE70 10 30 From To Number of

months Volume per year (m3)

NL21 DE70 12 4.102 NL21 DE63 12 3.730 NL21 DE62 12 2.400 NL21 DE61 12 1.725 NL21 DE60 12 6.041 NL21 DE31 12 3.983 NL21 DE30 12 3.063 NL21 DE20 12 4.102 NL21 DE11 12 11.527 NL21 DE09 12 2.890 NL21 DE08 12 3.259 NL21 DE02 12 14.466 NL21 NL12 12 60.484

Table 5.22: Details distribution Germany Figure 5.10: Distribution network Germany

NL21 DE21 DE20 DE09 AT02 DE11 DE08 DE02 NL12 DE30 DE70 DE63

DE62 DE61 DE60

DE31 Incidentally Very small volume: <100 M3 Small volume: 100-1.000 M3 Medium volume: 1000-10.000 M3

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Germany, but there is only one order for all the hubs, which is an advantage for Hoogezand. For retail there is just one central DC for Germany at Mannheim.

Switzerland

In table 5.23 the details of the DC’s in Switzerland are shown.

In figure 5.11 the distribution network of Switzerland is pictured. It shows what is distributed from SCA Hoogezand to internal customers in 2007. Table 5.24 encloses the volumes of the distribution flows from figure 5.11.

From the above figure and table show that from Hoogezand there is only one significant healthcare distribution flow to Switzerland. CH19 only exists for repack.

5.5 Region South

The countries in the South of Europe where Hoogezand is distributing its products to are France, Italy, Portugal and Spain.

France

In table 5.25 the details of the DC’s in France are shown.

Dintikon CH11 IN Direct NL21 1 82 Genève CH19 CO Direct NL21 1 88 From To Number of months Volume per year (m3) CH11 CH19 12 10 NL21 CH11 12 9.460

Linselles FR27 CO Direct NL21 1 70

Santes FR26 CO Direct NL21 1 80

Macon FR11 IN Direct NL21 2 82

Mitry-Mori FR32 IN Direct NL21 3 82

Paris la Courneuve FR10 IN Indirect NL12 1 100

Nantes FR14 IN Indirect FR11 NL12 1 2 90 92 Lesquin FR15 IN Indirect FR11 NL12 11 65100

Schenker Joyau FR19 IN Indirect FR11 1 40

Table 5.23: Internal customers Switzerland

Table 5.24: Details distribution Switzerland

Figure 5.11: Distribution network Switzerland

NL21

CH19 CH11

Incidentally

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In figure 5.12 the distribution network of France is pictured. It shows distribution from SCA Hoogezand to internal customers in 2007. Table 5.26 encloses volumes of the distribution flows from figure 5.12.

The figure and table above indicate that there is a substantial amount of healthcare DC’s in France. FR10, FR14, FR15 and FR19 are part of a hub-system that is used in France. These hubs are delivered to from Gennep. When the volume of one order is big enough it might be interesting to deliver directly from Hoogezand. At Linselles there is a plant where diapers and some incontinence products are made. At this plant the focus is on retail. For retail there is a big direct product stream to Santes and a smaller stream to Linselles. Santes is the DC nearby Linselles and will replace the DC at Linselles.

Italy

In table 5.27 the details of the DC’s are shown.

In figure 5.13 the distribution network of Italy is pictured. It shows what was distributed from SCA Hoogezand to internal customers in 2007. Table 5.28 encloses volumes of the distribution flows from figure 5.13.

From To Number

NL12 FR32 1 37 FR27 FR26 2 33 FR11 FR15 3 24 FR11 FR10 5 22 NL12 FR11 10 157 NL12 FR10 12 4.303 NL12 FR14 12 1.373 NL12 FR15 12 5.080 NL12 FR19 12 1.149 NL21 FR32 10 9.532 NL21 FR11 12 12.161 NL21 FR27 12 20.755 NL21 FR26 12 85.669 NL21 NL12 12 60.484

Source Lead Time (days)

Varese IT12 IN Direct NL21 2 93

Tigliole Asti IT13 IN Direct NL21 2 93

Grisignano di Zocco IT14 IN Direct NL21 2 93

Bastiglia IT15 IN Direct NL21 2 93

Varese IT22 CO Direct NL21 2 93

Carraia IT32 CO Direct NL21 2 93

Pratovecchio IT41 CO Direct NL21 2 60

NL21 FR15 FR14 FR10 FR32 FR27 FR26 FR11 NL12 _FR19

Incidentally: <4 times per year Very small volume: <100 m3 Small volume: 100-1.000 m3 Medium volume: 1000-10.000 m3 High volume: 10.000-50.000 m3 Very high volume: >50.000 m3

Table 5.26: Details distribution France Figure 5.12: Distribution network France

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From the figure and table above deduce that the retail distribution flows in Italy are well organized. There are three DC’s for retail, but there is only one, IT22, where products from Hoogezand are distributed to. For both healthcare and retail the streams to the depots in Italy are structured and take place every month. For healthcare there are more depots, located nearby each other in the north of Italy. To all the four DC’s a substantial volume is distributed. There is a small flow that goes via Gennep, but this seems an occasional flow. The flows between the depots in Italy are marked as incidental (repack or stock outs), because they are small and do not happen very often.

Portugal

In table 5.29 the details of the retail DC in Portugal are shown.

In figure 5.14 the distribution network of Portugal is pictured. It shows what was distributed from SCA Hoogezand to internal customers in 2007. Table 5.30 encloses volumes of the distribution flows from figure 5.14.

From To Number of

months Volume per year (m3)

IT12 IT13 3 58 IT13 IT12 3 18 IT13 IT14 2 8 IT14 IT13 6 37 IT14 IT15 2 8 IT15 IT14 2 7 IT12 IT14 2 11 IT14 IT12 1 3 IT12 IT15 1 4 IT15 IT12 2 6 IT13 IT15 2 15 IT15 IT13 6 23 NL12 IT12 4 70 IT12 IT12 11 156 IT13 IT13 12 823 NL21 IT13 12 5.082 NL21 IT14 12 3.745 NL21 IT15 12 4.290 NL21 IT22 12 2.141 NL21 IT12 12 14.562 NL21 NL12 12 60.484

Benavente PT21 CO Indirect NL21 4 90

Table 5.28: Details distribution Italy Figure 5.13: Distribution network Italy

NL21 IT15 IT13 IT12 IT14 NL12 IT22 Incidentally

Very small volume: <100 M3 Small volume: 100-1.000 M3 Medium volume: 1000-10.000 M3 High volume: 10.000-50.000 M3 Very high volume: >50.000 M3

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The figure and table above show that the internal distribution network of Portugal is very simple. There is only one retail depot. Products for this depot are distributed via Gennep, whereas the volume might be big enough to distribute directly to Portugal.

Spain

In Spain there are three depots for retail, located in the mainland, but also at Mallorca and at Tenerife. For healthcare there are more depots inside Spain. In table 5.31 the details of the DC’s in Spain are shown.

In figure 5.15 the distribution network of Spain is pictured. It shows distribution from SCA Hoogezand to internal customers in 2007. Table 5.32 encloses volumes of the distribution flows from figure 5.15.

From To Number of months Volume per year (m3) NL12 PT22 12 5.775 NL21 NL12 12 60.484

Puigpelat ES05 CO Direct NL21 2 61

Azuqueca ES11 IN Direct NL21 3 70

Montmelo ES12 IN Direct NL21 3 70

Alcala ES24 IN Direct NL21 3 70

Tenerife –

Domingo ES10 CO Indirect ES05 7 65

Servtrans –

Las Palmas ES26 CO Indirect ES05 7 65

Extebarri ES18 IN Indirect NL12 3 100

La Coruna ES20 IN Indirect NL12 3 68

Table 5.30: Details distribution Portugal

Figure 5.14: Distribution network Portugal

NL21

PT22

NL12

Incidentally: <4 times per year Very small volume: <100 m3 Small volume: 100-1.000 m3 Medium volume: 1000-10.000 m3 High volume: 10.000-50.000 m3 Very high volume: >50.000 m3

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From the figure and table above deduces that the distribution for retail in Spain is well organized. There are a lot of DC’s for healthcare. All DC’s for healthcare are located in the mainland, some even close to each other. There are also some incidental flows in Spain, but these are marginal.

5.6 Region East

The countries in the East of Europe where Hoogezand is distributing its products to are Czechia, Greece, Hungary, Poland and Slovakia.

Czechia

In table 5.33 the details of the DC’s in Czechia are shown.

In figure 5.16 the distribution network of Czechia is pictured. It shows what was distributed from SCA Hoogezand to internal customers in 2007. Table 5.34 encloses volumes of the distribution flows from figure 5.16.

From To Number

ES24 ES12 1 9 ES24 ES11 4 33 ES11 ES24 2 22 NL12 ES24 1 6 ES05 ES10 9 79 ES05 ES26 9 86 NL12 ES18 12 601 NL12 ES10 12 500 NL12 ES11 12 1567 NL12 ES12 12 2.155 NL21 ES24 10 2.617 NL21 ES05 12 11.825 NL21 NL12 12 60.484

Sardice CZ06 CO Direct NL21 1 72

Prague CZ11 IN Direct NL21 2 72

Table 5.33: Internal customers Czechia Table 5.32: Details distribution Spain Figure 5.15: Distribution network Spain

NL21 ES20 ES18 ES10 ES24 ES11 ES05 ES12 NL12 ES26

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The figure and table above show that there are two product streams to Prague. The main distribution flow to Czechia is for the healthcare customer and is going directly from Hoogezand to Prague. There is also a smaller stream going from Olawa to Prague. This is incidental.

Greece

In table 5.35 the details of the DC in Greece are shown.

In figure 5.17 the distribution network of Greece is pictured. It shows distribution from SCA Hoogezand to internal customers in 2007. Table 5.36 encloses volumes of the distribution flows from figure 5.17.

From the figure and table above can be seen that the distribution network of Greece is very simple. There is only one flow for the retail customer, going mostly via rail. At GR21 there is a lot of repack done for the rest of Greece.

From To Number of months Volume per year (m3) PL22 CZ11 3 207 NL21 PL22 12 5.795 NL21 CZ11 12 10.435

Source Lead time (days) Transport profile (m3) Avlon GR21 CO Direct NL21 12 70 From To Number of months Volume per year (m3) NL21 GR21 12 32.002 Table 5.34: Details distribution Czechia Figure 5.16: Distribution network Czechia

Table 5.36: Details distribution Greece

Figure 5.17: Distribution network Greece

Table 5.35: Internal customers Greece

NL21 GR21

Incidentally

Very small volume: <100 M3 Small volume: 100-1.000 M3 Medium volume: 1000-10.000 M3 Very high volume: >50.000 M3 High volume: 10.000-50.000 M3 NL21

CZ11

Incidentally