October 17, 2000

Building a New Paper Business System

Nippon Paper Industries Co., Ltd.

Nippon Paper Industries has decided to build a new information system for the paper business. The total development budget is 3.5 billion yen, and the system is expected to become operational in October 2002.
Since February 1999, we have been reforming our paper business. Increasing our sales strength and competitiveness demands that we be able to rapidly respond to our customerç›´s needs, both at the sales department level and at the corporate level. In short, we must become a marketing company oriented towards the customer. To this end, we will rebuild our order reception, manufacturing, and sales system across the entire company. The system we are developing will support our new processes and new organization as a marketing company and extract maximum potential from such changes.
The business functions to be accomplished by this system are as follows:
1. Manage manufacturing, sales, and inventory by individual order specifics such as seasonal products from specific users and general-purpose products.
2. Carry out manufacturing efficiently based on more accurate sales forecasts and actual orders rather than focusing on manufacturing in volume.
3. Link ordering with manufacturing and inventory and conduct progress management.
4. Enable the exchange of data using Web software.
The expected effects of this system are as follows:
1. Improved customer and sales representative service by increased inventory information precision and utilization of order progress and production planning information.
2. Increased order reception capabilities by incorporating weekly production plans.
3. Appropriate manufacturing and inventory based on more accurate sales forecasts and actual orders.
4. Distribution cost reduction through managing inventory by individual order specifics.
These improvements will result in an expected cost reduction of some 1 billion yen annually, and reducing inventory should improve cash flow by about 2 billion yen. We expect that will dramatically enhance our business potential in the coming years.