A typical paper mill might produce 1200 tons of paper per day to fill orders from 250 customers. Sending 100 truckload shipments per day would not be unusual for a mill served by 20 motor carriers. The carriers will generally accept shipments to any destination that they serve, subject to daily volume commitments and equipment availability. Each carrier has a different and somewhat complex rate struc-ture. Given a pool of orders that must be shipped on a given day, the mill’s problem is to assign truckloads to carriers to minimize its total shipping cost_Westvaco Company Overview Each year, Westvaco sells more than $2 billion worth of manufactured paper, paperboard, and specialty chemicals. Production occurs at five domestic paper mills and four chemical plants. In addition, Westvaco has many converting locations, which manufacture liquid packaging, envelopes, folding cartons, and corrugated boxes. Some of Westvaco’s products include the following; ■ Fine papers, often used in printing applications (magazines and annual reports) • Bleached paperboard, used in packaging (milk and juice cartons, freezer to oven entrees, and so forth) • Kraft paper, used for corrugated boxes and decorative laminates (such as Formica) ■ Chemicals, including activated carbon printing ink resinsTransportation Function The corporate transportation function has a dual role at Westvaco. It supports the operating locations by negotiating freight rates and service commitments with rail, truck, and ocean carriers. In addition, it serves as an internal consulting group for reviewing operations in the field and making recommendations on streamlining tasks, making organizational changes to support changing customer requirements, and supporting the implementation of new technology.274 Chapter 5 Network ModelsLocal traffic departments are responsible for day-to-day operations of mills and plants, including carrier assignments, dispatching. and switching lists for the railroads. Production Overview The production cycle is summarized in Figure 5.45, Figure 5.45 Production Cycle OverviewCustomer Ser% ice: Orders receivedScheduling: Orders scheduled to meet delivery dateManufacturing: Orders produced on papermaking machinesI Dei••ery: order dchkered to cumorrierD!,tribution 1 (ads assigned to truck carner, r.1.1 ird ocean reelsLoad Planning. quantities :on.c..oltdatedOrders The majority of paper orders are for rolls, where customers request a specific grade and size of paper (diameter and width), amount (pounds, or linear or square feet), and delivery date. The orders typically range in width from 8 to 70 inches. With greater emphasis on lust-in-time production by Westvaco’s customers, delivery dates are some-times specified in half-hour time windows. Orders that arrive before or after the time window are not accepted. Scheduling After orders are received, they are scheduled on paper machines up to 200 inches wide. The paper business is heavily capital intensive: new machines can cost more than $400 million each. Machines usually run 24 hours a day and scheduling is done to minimize waste while meeting shipping date requirements. After production of a “parent” roll, the orders are cut on a rewinder into the exact order size.
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