Nexfor, which employs more than 600 people at its factories in Stirlingshire and Inverness, has recently led a comprehensive e-business project in co-operation with 14 of its main business partners. And, according to David McElroy, Nexfor’s deputy managing director, working closely with the latter has been crucial to the success of the initiative. It is, he says, ‘essential that the industry as a whole adopts 21st century technology and business practices in order to battle increased competition and safeguard the thousands of UK jobs in the forestry sector’.
An important opportunity offered by e-business is the ability to keep customers informed about the progress of their orders. Nexfor has introduced an on-line tracking system in conjunction with three major customers, which is currently being piloted. Following the success of this project, Nexfor plans to introduce on-line ordering facilities. It’s a good example of how e-business can provide a better service for the customer while, at the same time, reducing transaction costs for both parties.
This e-business initiative is being funded by Scottish Enterprise and is facilitated through Parallel 56, a Glasgow-based consultancy. According to the latter’s Zach Watt, ‘harnessing the benefits of e-business requires two main ingredients: collaboration and information exchange with key business partners’. A good example of this, which Nexfor is exploring, involves sharing the use of weighbridge data with its suppliers. Shared use of this data will result in a simplification of invoicing procedures and a reduction in time-consuming checking and reconciliation work. It will also provide the sort of readily auditable chain of custody system demanded by certification.
Themia Hastie, Nexfor’s group IT manager, says the benefits of e-business are enormous for the forestry industry. ‘It will pull the industry forward by making our business more cost-effective and our suppliers more efficient,’ she says.
The standardising of invoicing and dispatch data and procedures is one such area where e-business can offer increased efficiency. ‘In purchasing and procurement we are working towards developing a common invoicing strategy, perhaps by e-mail. This will save time and money on pulling together different invoices for different suppliers and clients,’ says Ms Hastie.
One of the most exciting possibilities offered by e-business is the control of stock levels. By giving suppliers access to data from their order books, companies can update their supply requirements in real time. Nexfor is investigating how this technology might allow it and its customers to reduce their stock levels, cutting the cost of depreciation and freeing up capital for investment elsewhere in their businesses.
The innovative project has been supported by the Scottish Forest Industries Cluster with funding from Scottish Enterprise. Under the guidance of Parallel 56, Nexfor and 14 of its business partners have each been assisted to develop their own e-business strategies. The project has been so successful that Scottish Enterprise is to support a second phase. With Nexfor continuing to act as a key ‘hub’ company, phase II will focus on e-enabling up to 15 of its main roundwood suppliers. The day is not far off when an electronic chain will link the tree in the forest to the final product in the showroom.
