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Implementation of Supply Chain Management. Rachel Butler Environmental Manager Finnforest UK. Who are we? . Finnish owned company,Metsaliitto, importing over 1.2 million cubic metres annually

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implementation of supply chain management

Implementation of Supply Chain Management

Rachel Butler

Environmental Manager Finnforest UK

who are we
Who are we?
  • Finnish owned company,Metsaliitto, importing over 1.2 million cubic metres annually
  • Over 80% of volume is certified to either FSC or PEFC; the remainder are mainly in, certification or chain of custody process, meeting Controlled Wood Standard, TFT process
  • Don’t represent the end user; sell through DIY, Merchant & Construction customers
how timber policy works in practice
How Timber Policy works in practice
  • Introduction of a Procurement Policy five years ago was easy……
    • Implementation of policy more difficult!
  • Buyers are judged on their performance i.e. stock turn, quality and competitive prices.
    • In merchant/retail outlets buyers are mainly judged on commercial considerations & whether they meet budgets/cost reductions
  • Commercial realities of running a company can sometimes be in conflict with a Responsible Timber Policy.
  • However, competitive price does not necessarily always mean non-certified V certified.
ffuk policy actions self policing
FFUK Policy Actions & Self Policing
  • Risk assess all suppliers for products & rate
    • More likely to get information from suppliers using one format hence why FFUK signs up to the TTF’s Responsible Purchasing Policy
  • New suppliers from certified or low risk countries – documentation checked out, confirmation of sourcing areas is asked for.
  • Policy all new suppliers from risky countries have to be signed off
    • Safeguards if this does not happen; SAP report every month notifies of new suppliers!
  • Suppliers who become de-listed for environmental or quality reasons – vendor blocked on SAP - so no orders can be placed
policy boycott v engagement
Policy: Boycott v Engagement
  • Policy for Indonesia – suspended until the mill(s) committed either working towards legality & sustainability or gained it – now supplying FSC Hardwood Ply into the market place through Tjipta
    • Was this the right decision to suspend?
  • Brazil – FF have supported the State of Acre and now importing the first Hardwood Plywood from the region. The project is a visionary & been personally pioneered by Governor Jorge Viana.
policy boycott v engagement1
Policy: Boycott v Engagement
  • China – stayed out due to environmental & social concerns. Commercially we lost business but are in discussions with some potential suppliers; no business unless commitment to improve is gained.
  • Generally engagement is preferred over boycott;
    • Need to engage to maintain some leverage over suppliers
    • Boycott can simply mean companies will sell to other markets or change land use.
  • Certain countries such as Burma, Liberia; boycott in view of international or national guidance.
supply chain management
Supply Chain Management
  • Timber trade is part of a supply chain & we know that the public is not generally interested.
  • UK Government as demand-led policy is increasing awareness for legal & sustainable timber – but more awareness needs to be done
  • All elements of supply chain need educating; recent WWF report stated 65% of London Local Authorities do not assess their timber/paper purchases.
    • Estimated that anywhere between 20 – 40% timber is purchased by public sector, what does a typical LA consume – the need for a footprint?
  • The larger companies are pretty much aware of the issues & commercially have been hit by environmental campaigning! What can be done to educate the other players?
supply chain management policing
Supply Chain Management: Policing
  • Company self-policing, long term relationships with suppliers; lack of credibility?
  • Through external agencies such as TTF’s RPP & GFTN who offer company auditing to prove the claims made; therefore greater credibility
  • External auditing through civil society
    • Environmental campaigns undoubtedly have an impact – discrimination?
    • Strengthening TTF’s Code of Conduct & make it easy for those outside the trade to report issues
    • If it works extend to other organisations in the supply chain e.g. Builders Merchants & Retail
  • Legislation
    • To level playing field & base the market on actual prices rather than alleged illegal logging for some products
    • How practical & feasible?