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How Valmet’s supply chain delivers value for customers and partners

How Valmet’s supply chain delivers value for customers and partners

With a lean, sustainable approach, Valmet has become a global leader in the industry for putting its customers first

At Valmet, one value underpins everything the company does – its desire to go above and beyond when serving its customers.

As a leading developer and supplier of technologies, automation, and services for the pulp, paper and energy industries, the Finnish company has gained a name in the sector for its customer-orientated, value-driven approach.

Manish Sharma, Director of Supply Chain, Asia-Pacific, believes that it is the company’s promise to deliver exceptional customer performance which is key to its success.

“It's a question of coming together, collaborating, developing new technologies and new ways of doing things so that we are continually improving and creating more value for our customers”

“We are very customer-oriented,” explains Sharma. “When our customers are successful, then we are successful, and if we are successful then our suppliers are also successful – it’s a win-win situation for us.”

Working closely with suppliers

Valmet’s services cover everything from spare parts and consumables to maintenance outsourcing and plant improvements. Valmet also offers remote service solutions. However, regardless of the technology, all of the company’s work is driven by its promise to deliver value-added services.

As a result, by collaborating closely with its suppliers, Valmet strategically develops its partners to ensure they are the right fit in terms of cost and value. 

“We work very closely with the suppliers because we are committed to giving value both to our customers and back to our partners,” Sharma says.

“Some of the products we are manufacturing are being supplied globally and they are being customised to meet the specific needs of each of our customers. Therefore, we always need to know whether the needs and the requirements of our customer will be met and understood by our suppliers.”

Technological innovation

With 220 years of industrial history, Valmet garnered a rich wealth of expertise but, despite its current knowledge, it is also keen to promote continuous improvement and innovation.

Driven by its customers’ needs, Valmet has invested heavily in R&D, working on products that enhance raw material, water and energy efficiency and promote the use of renewable materials.

With over 400 R&D professionals around the globe and about 1,400 protected inventions, technological know-how is the backbone of Valmet’s value creation, says Sharma.

“For Valmet, technological innovation means that we can create added value for the customer,” he explains. “There have been lot of new solutions launched into the market which can be more efficient, more reliable and more beneficial for the customer.

“We are sharing the knowledge we have gained also with our suppliers who are mastering their own technologies. It's a question of coming together, collaborating, developing new technologies and new ways of doing things so that we are continually improving and creating more value for our customers.”

Lean operation

By harnessing its technological prowess, Valmet is not only trying to drive efficiency and reliability, it is also trying to adopt a lean approach.

“We also have to innovate our operations to see what costs we can lower,” explains Sharma. “So, for example, we are trying to see if we can bring in some alternative raw materials into use which are more flexible, leaner and which take less time to manufacture or deliver to the customers.”

Design-to-cost is an increasing focus for the company, and it strives for this through its supplier relationship management and its lean approach. Valmet believes in right first time approach which helps to increase cost-efficiency and drive value.

Boasting an extensive supply chain with around 10,000 active suppliers in over 50 countries, Valmet also focuses on procurement savings to enhance profitability. By increasingly sourcing from cost-competitive countries, sub-contracting more and consolidating its shipment and warehouse network, the Finnish company is striving to improve its profitability and value.  

Championing sustainability

With its technological ingenuity, Valmet is also keen to promote responsible business practices that champion sustainability. Whether it’s environmental concerns or health and safety, it seems that sustainability is an integral component of Valmet’s DNA. Valmet is recognized as one of the world’s sustainability leaders, and was included into the Dow Jones Sustainability Index for the fourth consecutive year in 2017.

“We are trying to add value to our innovations by improving their efficiency, optimising quality and in turn maximising customer satisfaction. We can’t do without championing sustainable practices,” notes Sharma.

“Some of the things we’re doing include bringing in energy efficient solutions based on biomass and waste solutions. We’re also talking about energy, efficiency, cost efficiency and looking into where we source our materials.

“We also have to make sure that we comply with all the compliance rules of safe materials, sustainable techniques, and safety standards. This is all part of sustainability and we aim to continue to develop sustainable practices globally.”

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Continuous improvement

With operations now in about 30 countries and 160 locations, Valmet is, by all means, a global company. But Sharma doesn’t underestimate the work that a global company demands. 

“We are a global company and so I’d say the main challenge that we face today is adapting to local customers’ needs,” reflects Sharma.

“There are cultural challenges. There are language challenges. These are things we need to consider when doing business in a new country. You have to be flexible. You have to be a global company with a local adaptation so that we continue to deliver whatever is being asked of us by our customers. This is one challenge for us. We need to continuously look at and review ourselves, and we always need to adapt."

Customer-focused

At the heart of Valmet is its commitment to moving its customers’ performance forward and becoming a global champion in serving them.

Thanks to its sustainable ethos and technological prowess, the company has seen both fiscal and brand success and is looking forward. Sharma is optimistic that this success will continue as Valmet positions itself to target high-growth trends and sectors in the industry.

“We’ve also seen that the demand for tissue is growing because, as people’s living standards improve, then there will always be a linked growth in tissue and hygiene,” notes Sharma. “In the next five years, I believe this is going to be one of the leading areas in the sector and so these are key areas of focus for us.

“On the energy side, there has been a lot of focus on biofuels in countries like Japan and Korea because people have seen that other energy resources such as nuclear are not as human-friendly,” he adds. “They are also looking into alternative ways of producing energy and so, as a company with technology that can use biomass, waste or multiple fuels, in our portfolio, we predict that this will be another area where we will see a lot of opportunities.”

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How Valmet’s supply chain delivers value for customers and partners

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