Implementation of Supply Chain Management

1
Implementation of Supply Chain Management

• Rachel Butler
• Environmental Manager Finnforest UK

2
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
• Dont represent the end user sell through DIY,
  Merchant Construction customers

3
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.

4
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
  TTFs 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

5
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.

6
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.

7
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?

8
Supply Chain Management Policing

• Company self-policing, long term relationships
  with suppliers lack of credibility?
• Through external agencies such as TTFs 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 TTFs 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?

9

• THANK YOU
• rachel.butler_at_finnforest.com