Pan Pac Forest Products 2024 Best Run Award: Modernising legacy tech with a private cloud based ERP system
Pan Pac Forest Products modernized its legacy technology with SAP's private cloud-based ERP system to streamline processes, reduce costs, and improve reporting. Despite challenges from Cyclone Gabrielle and COVID-19, the implementation led to enhanced efficiency, better business insights, and improved employee experience. Download the DocumentSAP Australia and New Zealand
Best Run Awards 2024
Best Run Awards 2024
Best Run SAP
Industry WebsiteProduct and Services Featured SAP Solutions
Forestry and
Manufacturing
https://www.panpac.co.nz/Lumber, Pulp, Logs RISE S/4HANA Private Cloud Edition
For 50 years, Pan Pac Forest Products Ltd (Pan Pac) has been growing, processing and delivering quality radiata pine products to international markets. Today, it
exports a full range of pulp and kiln dried lumber products to Australia, Europe, India, USA, China and Southeast Asia. Owned by major Japanese pulp and paper
manufacturer Oji Group, Pan Pac is focused on integrating sustainability, safety and quality into every facet of its operations, which include sawmills, a pulp mill,
chip mill and forestry operations.
Pan Pac employs over 450 staff and over 400 contractors at its Whirinaki site and operations across Hawkes Bay, and runs a sawmill with 35 staff at Milburn,
Otago. Pan Pac is a major Hawke’s Bay employer and is responsible for producing 6% of local GDP. Pan Pac has 36,000 hectares of forests under management,
the Pulp mill produces 270,000air dried tonnes of Pulp annually and its sawmills produce 530,000m3 of lumber annually.
Recognising the need to replace ageing technology, improve business processes and enhance efficiency across its operations, Pan Pac identified an urgent need
for a modern, integrated ERP system. This new system would enable the company to streamline processes, reduce costs, improve reporting, integrate data and
support further technological advancements, positioning it for sustained growth and innovation.
Modernising legacy tech with a private cloud-
based ERP system
Pan Pac Forest Products Ltd
Intelligent Enterprise ERP
Industry WebsiteProduct and Services Featured SAP Solutions
Forestry and
Manufacturing
https://www.panpac.co.nz/Lumber, Pulp, Logs RISE S/4HANA Private Cloud Edition
For 50 years, Pan Pac Forest Products Ltd (Pan Pac) has been growing, processing and delivering quality radiata pine products to international markets. Today, it
exports a full range of pulp and kiln dried lumber products to Australia, Europe, India, USA, China and Southeast Asia. Owned by major Japanese pulp and paper
manufacturer Oji Group, Pan Pac is focused on integrating sustainability, safety and quality into every facet of its operations, which include sawmills, a pulp mill,
chip mill and forestry operations.
Pan Pac employs over 450 staff and over 400 contractors at its Whirinaki site and operations across Hawkes Bay, and runs a sawmill with 35 staff at Milburn,
Otago. Pan Pac is a major Hawke’s Bay employer and is responsible for producing 6% of local GDP. Pan Pac has 36,000 hectares of forests under management,
the Pulp mill produces 270,000air dried tonnes of Pulp annually and its sawmills produce 530,000m3 of lumber annually.
Recognising the need to replace ageing technology, improve business processes and enhance efficiency across its operations, Pan Pac identified an urgent need
for a modern, integrated ERP system. This new system would enable the company to streamline processes, reduce costs, improve reporting, integrate data and
support further technological advancements, positioning it for sustained growth and innovation.
Modernising legacy tech with a private cloud-
based ERP system
Pan Pac Forest Products Ltd
Intelligent Enterprise ERP
Challenges
Before implementing the new ERP system, Pan Pac was living with outdated technology products that were
hindering operational efficiency and performance. It relied on disparate line-of-business applications, using custom
integrations to transfer and consolidate data into a data warehouse for reporting purposes. Consequently, there
was no single source of truth, resulting in inefficiencies and analytical challenges, with five separate system
landscapes to manage and reconcile.
The procurement processes were heavily manual, with purchase orders (POs) not automated and inefficient
reporting due to data consolidation through Excel spreadsheets. Manual handling in some data interfaces not only
consumed valuable time but also increased the risk of errors and data inconsistencies.
Additionally, the reliance on old technology limited Pan Pac's ability to adopt innovative technologies. The
company was unable to leverage advanced solutions like OCR, Blockchain and other emerging tech, which could
offer substantial enhancements in efficiency, accuracy, and overall capability.
The Design phase of the project was completed during COVID lockdown, which made common activities like
whiteboarding (processes, issues, etc) difficult.
Being in regional NZ, there was limited colocation time for key activities (like testing) with increased challenges
and less face-to-face time than traditional implementation projects.
Adding to these challenges, on 14 February 2023, Pan Pac’s Whirinaki site experienced a severe setback when
Cyclone Gabrielle struck. The cyclone caused extensive flooding, with silt inundating the buildings and inflicting
significant damage to the plants which were out of action until early 2024. Amid this crisis, Pan Pac had to initiate
a comprehensive business recovery plan to restore its lumber and pulp facilities to full operational capacity. This
recovery effort coincided with the ongoing ERP implementation, compounding the complexity and urgency of the
task.
Before implementing the new ERP system, Pan Pac was living with outdated technology products that were
hindering operational efficiency and performance. It relied on disparate line-of-business applications, using custom
integrations to transfer and consolidate data into a data warehouse for reporting purposes. Consequently, there
was no single source of truth, resulting in inefficiencies and analytical challenges, with five separate system
landscapes to manage and reconcile.
The procurement processes were heavily manual, with purchase orders (POs) not automated and inefficient
reporting due to data consolidation through Excel spreadsheets. Manual handling in some data interfaces not only
consumed valuable time but also increased the risk of errors and data inconsistencies.
Additionally, the reliance on old technology limited Pan Pac's ability to adopt innovative technologies. The
company was unable to leverage advanced solutions like OCR, Blockchain and other emerging tech, which could
offer substantial enhancements in efficiency, accuracy, and overall capability.
The Design phase of the project was completed during COVID lockdown, which made common activities like
whiteboarding (processes, issues, etc) difficult.
Being in regional NZ, there was limited colocation time for key activities (like testing) with increased challenges
and less face-to-face time than traditional implementation projects.
Adding to these challenges, on 14 February 2023, Pan Pac’s Whirinaki site experienced a severe setback when
Cyclone Gabrielle struck. The cyclone caused extensive flooding, with silt inundating the buildings and inflicting
significant damage to the plants which were out of action until early 2024. Amid this crisis, Pan Pac had to initiate
a comprehensive business recovery plan to restore its lumber and pulp facilities to full operational capacity. This
recovery effort coincided with the ongoing ERP implementation, compounding the complexity and urgency of the
task.
Solution
Pan Pac is currently using S/4 Core; eWM, Icon (RF scanner); SAC; Datasphere and BTP.
Pan Pac chose SAP after careful consideration of several critical factors. One of the primary reasons was SAP’s
powerful asset maintenance module, which aligned well with the company’s operational needs. The decision was
also influenced by the insights and positive experiences of other companies within the Oji group, which already
used SAP and a sister pulp company successfully operating on S/4HANA.
SAP’s strong reputation in the forestry and wood processing industry also reinforced the choice and gave Pan
Pac confidence.
The success of Pan Pac’s ERP implementation project can be attributed to several key factors:
- A dedicated team of employees helped to oversee and manage the transformation, which created a positive
and collaborative environment.
- The project timeline was extended due to Covid and Cyclone Gabrielle, allowing more time for organisational
change and for users to learn and adapt to the new system.
- Having a Project Manager with a background in the pulp industry and manufacturing supply chain proved
instrumental and brought invaluable solution knowledge and a deep understanding of business processes and
challenges.
- A structured learning program was established to provide comprehensive training and preparedness across the
organisation.
- The asset maintenance team dedicated two years to studying SAP before the implementation began, visiting
live sites operated by Oji to learn firsthand from its experiences.
Pan Pac is currently using S/4 Core; eWM, Icon (RF scanner); SAC; Datasphere and BTP.
Pan Pac chose SAP after careful consideration of several critical factors. One of the primary reasons was SAP’s
powerful asset maintenance module, which aligned well with the company’s operational needs. The decision was
also influenced by the insights and positive experiences of other companies within the Oji group, which already
used SAP and a sister pulp company successfully operating on S/4HANA.
SAP’s strong reputation in the forestry and wood processing industry also reinforced the choice and gave Pan
Pac confidence.
The success of Pan Pac’s ERP implementation project can be attributed to several key factors:
- A dedicated team of employees helped to oversee and manage the transformation, which created a positive
and collaborative environment.
- The project timeline was extended due to Covid and Cyclone Gabrielle, allowing more time for organisational
change and for users to learn and adapt to the new system.
- Having a Project Manager with a background in the pulp industry and manufacturing supply chain proved
instrumental and brought invaluable solution knowledge and a deep understanding of business processes and
challenges.
- A structured learning program was established to provide comprehensive training and preparedness across the
organisation.
- The asset maintenance team dedicated two years to studying SAP before the implementation began, visiting
live sites operated by Oji to learn firsthand from its experiences.
Impact
Despite the extended scope, Cyclone Gabrielle, and the challenges posed by the COVID pandemic, Pan Pac successfully achieved a minimal
disruptive launch, ensuring that significant operations weren’t impeded, even as it navigated through hypercare for the Finance team and
prepared for the go-live of numerous enhancements. In the two months prior and during Go Live, the business was also finalising the rebuild of its
key pulp and lumber plants that added to the challenge and complexity of implementation.
Several tangible benefits have markedly improved efficiency and operations:
Month-end success: Pan Pac has successfully closed month-end processes (2 days late) since going live, demonstrating the system's reliability
and efficiency.
Process automation and speed: Early feedback highlights the automation of various processes, leading to quicker and more efficient
operations.
Single source of truth: Consolidating data into a single source of truth has shown the potential enhanced reporting and analytics, providing
accurate and reliable business insights once the SAP solution is fully understood by users.
Enhanced business insights: The improved business insights facilitated by SAP are expected to ultimately lead to better customer experiences.
Better employee experience: Although the journey has just begun, improvements in processes and system functionalities will, over time, foster a
better overall employee experience and increased job satisfaction.
Despite the extended scope, Cyclone Gabrielle, and the challenges posed by the COVID pandemic, Pan Pac successfully achieved a minimal
disruptive launch, ensuring that significant operations weren’t impeded, even as it navigated through hypercare for the Finance team and
prepared for the go-live of numerous enhancements. In the two months prior and during Go Live, the business was also finalising the rebuild of its
key pulp and lumber plants that added to the challenge and complexity of implementation.
Several tangible benefits have markedly improved efficiency and operations:
Month-end success: Pan Pac has successfully closed month-end processes (2 days late) since going live, demonstrating the system's reliability
and efficiency.
Process automation and speed: Early feedback highlights the automation of various processes, leading to quicker and more efficient
operations.
Single source of truth: Consolidating data into a single source of truth has shown the potential enhanced reporting and analytics, providing
accurate and reliable business insights once the SAP solution is fully understood by users.
Enhanced business insights: The improved business insights facilitated by SAP are expected to ultimately lead to better customer experiences.
Better employee experience: Although the journey has just begun, improvements in processes and system functionalities will, over time, foster a
better overall employee experience and increased job satisfaction.
“”“We're hearing feedback from the team that the automation of certain processes is
enhancing speed and efficiency. The consolidation of information from a single
source, and the ability to perform different analytical tasks, will help to improve
our reporting capabilities as people learn to use the system. Overall, it’s been a
positive change and we’re keen to realise the full benefits a fully integrated ERP
will bring.”
Ross McMillan, CFO, Pan Pac Forest Products.
"Unlike many IT implementations, this project has been about understanding
business processes and problems and leading from a functional perspective,
rather than just imposing an IT system on the business. This differentiation has
been crucial in addressing end-user pain points, providing a smooth transition and
ensuring that the system aligns with future business needs."
Lisa Jury, Project Manager.
enhancing speed and efficiency. The consolidation of information from a single
source, and the ability to perform different analytical tasks, will help to improve
our reporting capabilities as people learn to use the system. Overall, it’s been a
positive change and we’re keen to realise the full benefits a fully integrated ERP
will bring.”
Ross McMillan, CFO, Pan Pac Forest Products.
"Unlike many IT implementations, this project has been about understanding
business processes and problems and leading from a functional perspective,
rather than just imposing an IT system on the business. This differentiation has
been crucial in addressing end-user pain points, providing a smooth transition and
ensuring that the system aligns with future business needs."
Lisa Jury, Project Manager.