Canfor Transforms its Business from a Legacy System to a Cloud-Hosted ERP Platform

Sid Arya, Senior Director Business Systems at Canfor, and Neil Muzumdar, Senior Business Analyst at Canfor, detailed the company’s ERP business transformation.

“We’re excited to have invested in a world-class enterprise resource planning system with our partners. The integration of Canfor’s two legacy systems for our lumber and pulp business has created one hub for real time planning, forecasting, data collection and reporting. On the cloud-based ERP platform we truly operate as a cross functional global team which has resulted in higher productivity, efficiencies through shared applications and significant improvements in project management.”

 

—Sid Arya, Senior Director of Business Systems at Canfor

 

“Managing a complex yet effective implementation is more of an art rather than a science. Success is more than the technical know-how, it is about the willingness to skate through the challenges, respond to changes quickly, and anticipate the unexpected, it also involves strong processes and highly skilled resources.”

 

—Carolyn Willick, General Manager Finance Transformation at Canfor

About Canfor

Canfor is one of the world’s largest producers of sustainable lumber, pulp and paper, and is a North American leader in green energy production. With operations in Western Canada, Southern United States and Sweden, and sales offices across the globe, you can find Canfor products throughout the world. We are proud to be a global leader demonstrating the power of our very own renewable resources.

Visit Canfor’s Website

Background

In 2012, Canfor undertook a multi-phase program that aimed to establish an integrated supply chain for the company’s lumber and pulp business by optimizing business processes and implementing a new, common IT platform. This led to the creation of Enterprise Design for Global Enterprise or Project EDGE.

Project EDGE is a company-wide integrated system that included JD Edwards, Oracle Transportation Management, Demantra, and other third-party solutions.

A project of this magnitude required a multi-phase approach with stages of go-live which included:

• EDGE PHASE 1: Canadian Lumber Division (2014)
• EDGE PHASE 2: American Lumber Division – Eastern Region (2015)
• EDGE PHASE 3: American Lumber Division – Southern Region (2017)
• EDGE PHASE 4: Finance Department (2018)
• EDGE PHASE 5: Canadian Pulp Division (2019)

After Phase 4, the on-premises applications were then hosted in the cloud on Amazon Web Services (AWS).

What Pulp EDGE Means for Canfor

The ERP transition for Phases 1 through 3 was focused on the company’s lumber business. Phase 5 involved Canfor’s pulp and paper business in Canada, which had different requirements and complexities than lumber. The company’s pulp products are shipped to a more geographically diverse customer base than lumber products and required a reassessment of the modules. After a long visioning and design phase, necessary adjustments were made to the EDGE architecture with support from the leadership team. The project team then embarked on a significant build and test cycle culminating in the successful go-live on May 6, 2019.

Some highlights from the project include:

• Nearly 350 development objects (integrations, conversions, reports, etc.) built, tested and deployed
• Conversation of all master and transactional data from the legacy system
• Real-time business interfaces built between the legacy manufacturing execution system, Oracle JD Edwards, and Oracle Transportation Management for seamless flow of inventory, production, sales, and transportation data
• Real-time geo-tracking implemented for internal and external shipments

What were the challenges in the pulp business?

The pulp business had a legacy system that involved spreadsheets and manual entry, which can be error-prone. Canfor started the pulp project with an evaluation phase where the company engaged key subject matter experts (SMEs) and detailed the pulp business processes—from planning to manufacturing to financials. SMEs were asked to identify processes that were working well and those that were not. The areas of improvement were researched to discover issues and identify possible solutions such as customer feedback management, sales order entry, transportation execution, and inventory management.

Can you elaborate on the issues and solutions on a few of these processes?

There were three core areas that required significant upgrades which included sales planning, inventory management, and transportation execution.

Sales Planning

The team identified sales planning as a key process experiencing issues. As an example, sales forecasting was tracked on spreadsheets manually with time lags and limited tracking of data entry.

The new solution was to load the data from the spreadsheet into the forecasting table and track the current position against sales orders in the system. We also built a front-end screen to retrieve, calculate, and display data in real-time. Since planning is the first step in the overall process, being able to do forecasting corrections upfront saves a lot of manual effort downstream.

Inventory Management

Inventory management was another key business process with several identified issues. In our business, we move product internally from the mills to the warehouses and then to the customer. One key inventory issue was related to modifying quantities if there was a problem with the transfer order from a mill to an internal warehouse. The process was typically done manually using off-system spreadsheets or other tools. We needed to make it easy for the warehouse to modify and track quantities in real-time and built a custom screen since the transfer orders are already in JDE. From this single screen, an authorized user can access and execute a series of standard and custom functions to view, edit, and receive transfer orders.

A second key inventory issue was with changing inventory, which is complicated due to the nature of the product. There were only a few people who knew the internal business rules for changing inventory and converted the critical knowledge a custom front end screen that would enforce these business-specific rules and if they were satisfied, pass the information to standard inventory functions to make appropriate inventory changes. This allowed a larger group of individuals to help manage inventory additions, disposals, and changes while adhering to the business rules.

Transportation Execution

The challenge with transportation execution was ensuring mill production dates lined up with availability of shipments by truck or rail cars. To help the business manage and track the global supply chain more effectively, the company adopted Oracle’s Transportation Management.

What else would you like to share?

The sheer size and complexity of Project EDGE required exceptional project management from team planning and communications, budgeting, testing to implementation. To stay on track key performance indicators were reviewed regularly for status updates and to track and manage all projects.

Here are some of the positive feedback stories from employees that we heard along the way:

• “The new system supports improved collaboration between our Canadian lumber operations and the pulp division. I enjoy lending a hand to other accounting groups, and look forward to identifying the synergies and efficiencies by working cross-functionally.”
• “I’m experiencing infinitely improved reporting and analytics capabilities.”
• “Searching can be tricky at first, but once you narrow down some filters and take advantage of custom queries you can perform very specific searches incredibly quickly.”
• “It was great to all be in one system!”

What is the biggest benefit from the implementation?

The Pulp EDGE phase of the project represents a major win for many of Canfor’s shared services teams who previously had to switch between platforms depending on the commodity. With the roll-out of Pulp EDGE, these teams can work in a single platform, regardless of the commodity.

Pulp EDGE also represents a step forward in Canfor’s ability to produce better reporting, control costs, reduce business risk, and build a platform for future growth as the company continues to expand its business.

To summarize, the key benefits achieved from the program are:

• Increased standardization of software to ease future upgrades and reduce service/maintenance risk
• Greater logistics and transportation planning capabilities and optimization
• Greater demand planning capability
• Demand forecast and production planning capabilities
• Improved inventory planning and management
• Availability and accuracy of financial net revenue projections and integration with existing financial history
• Wider breadth and depth of reporting with a business intelligence data layer across all applications
• Scalability to accommodate company growth and future acquisitions

How long have you been involved with Quest and how have you benefited from the community?

We have been associated with Quest for the past several years and it has enabled us to make better decisions faster, equip our team for transformation, and recognize opportunities for efficiency gains and cost savings. We are very grateful for all the content and knowledge sharing amongst the partner user groups.

Key Takeaways