Seeking the fourth way out in the exploration of t

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Carton industry: seeking a way out in exploration (4)

Speaker: the rising price of base paper by foreign carton enterprises is a problem that the whole industry needs to face and solve, and the foreign carton industry is no exception. Its positive and negative measures are worth learning from domestic carton enterprises

one: international paper responds to rising costs with reform

International Paper (IP, international paper) recently said that it will start a three-part reform plan to reduce production costs, improve profits, strengthen balance of payments management, and increase shareholder income. The plan includes reducing the company's production projects and focusing on two key projects - uncoated paper products and industrial/consumer packaging products. Develop the production and sales of new projects without affecting the original projects

Mr. John Faraci, chairman and CEO of the company, said, "adjusting the project structure will help us better focus our funds on these two core businesses and strengthen management. The sales revenue of these two businesses accounts for more than 70% of the total revenue, and we can obtain the investment return of capital cost and the growth of profit income."

streamlining management organization

part of the international paper reform plan includes streamlining management organization. International paper plans to relocate its global headquarters from Stamford, Connecticut, to Memphis, Tennessee. The company hopes to complete the relocation before August 1, 2006

this decision is part of the international paper industry reform plan and was made in July this year after 30 days of evaluation. Mr. John Faraci said, "according to the company's plan, the operation process will be simplified to a great extent. We believe that it is time to move the operation headquarters to Memphis now. Because the leading members of the company will be concentrated in one office, which will help to lift the horizontal axis of the swing bar, and there is a long adjustable pressure bar to load the pedal with high efficiency."

the CPC Central Committee and the State Council decided that the reform plan will be based on more centralized capital operation to comprehensively improve the profitability of the international paper industry. Even in the face of the rising cost of the carton production industry, we can still get a higher return on investment by concentrating a small amount of capital investment. The company plans to vigorously save costs through a series of measures in the next few years, The main measures include:

continue to improve production efficiency throughout the company

continue to strengthen supply chain management

cooperate with small capital to restructure institutions and production departments

attach importance to the production of high-profit products

recombine American factories

Mr. Faraci said: "Even in the face of today's production environment of rising raw materials and increasing costs, this plan can ensure that we can obtain higher return on investment and profit income.

adjust the production structure

international paper also plans to readjust the structure of American factories, improve production and operation efficiency, and transfer capital to the most profitable production areas. This requires a good combination of production and market demand according to customer needs, while reducing Production of less high cost production projects. The person in charge of the company pointed out that the purpose of the reform is to increase the output of low-cost and high profit products without increasing the total output

Mr. Faraci said, "according to this plan, international paper will concentrate its funds on factories that can generate the most profits and have low operating costs."

Second: helpless choice

Swedish SCA plans to reduce production

SCA in Stockholm, Sweden has decided to implement a project to improve production efficiency. Part of the project is to reduce the output of 350000 tons of all waste paper vermicelli cartons, which is equivalent to 17% of its output in Europe. The project involves all business areas of SCA and will affect 3600 employees of the company. It is expected to save us $204000 per year

the signal control department plans to implement the project before the end of the first quarter of 2007. In view of the current market situation of serious oversupply of cartons and its negative impact on prices and profits, the company said it would implement the project step by step. According to SCA, some processing units in the corrugated box department will be closed and will be used for units that are more commercially competitive in the field of sporting goods. The number of employees in this department will be reduced by 2000. Mr. Jan STR m, CEO of the company, said, "in the whole action plan, SCA is taking further decisive measures to strengthen the ability to obtain more profits and improve the balance of vermicelli in the market."

Third: actively respond to the rise in paper prices

large carton factories

in order to reduce costs, large carton factories must reduce the number of regular employees in the transportation and maintenance department and outsource this part of their business to other companies or equipment suppliers. At the same time, due to the improvement of machine automation and the lack of regular practice, carton factories need more effective technical and operational support and training from suppliers

sometimes, some large-scale carton factories are essentially the combination of paper mills and corrugated carton factories of corresponding scale. The number of such mills is very small and the scope is very small. The main reason for their existence is that the original paper mills have not been dismantled. The products of the paper mill are not market-oriented, and only meet the raw material needs of the carton factory nearby. Naturally, transportation is not a problem. As for whether this operation is cost-effective, we have to check different projects

small and medium-sized carton factories

most of the carton factories now are of this type, and most of the orders they undertake are medium-sized orders or small orders with a long stream, with a wide range of products and complete categories. Because they often accept orders with special requirements and high added value, the equipment requirements of these carton factories are not low

such carton factories need to have a strict base paper roll management system and an automatic base paper conveying system. Its profit margin is slightly higher than that of large carton factories, and the level of machine operation and maintenance personnel is also relatively high. If the management is strict, marketable, and the human and material resources invested are compensated and rewarded in the short term, they will succeed in the market. Due to the lack of its own raw material supply enterprises, medium-sized carton factories can only purchase raw materials externally, and special attention should be paid to the short-term and long-term procurement strategic planning. It is precisely because of this that the supply of base paper has brought great trouble to private medium-sized carton factories, even a "fatal disaster". How to open up supply channels in regions rich in raw materials such as the Far East is very important for their survival and development

fourth: find another way

the carton production industry, and even the entire manufacturing industry, follow such an operation rule - "40, 20, 40". That is, 40% of the competitiveness comes from the long-term production and product structure adjustment (including the adjustment of output, scale and production location) and the way of obtaining raw materials. 40% comes from changing equipment and production technology. Only the remaining 20% of competitiveness depends on traditional cost cutting methods

layoffs and making employees work harder are "conventional weapons" to cut costs, but the effect is limited. A serious problem caused by cost cutting is that it will hinder employees' ability to innovate. Enterprises often restrict the development of new products by cutting costs. Under the pressure of "cost saving", managers are often unable to implement innovative technologies and management methods, which is not conducive to the long-term development planning of enterprises

in fact, successful enterprises should implement a set of scientific and complete business strategies, not just blindly adopt the way of lowering costs to survive in the face of market downturn. We should focus on adjusting the product structure and updating equipment and technology

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