SAP Innovation Awards 2024 - 4460 - Louisiana Pacific Corporation
By using advanced algorithms, LP is optimizing its cost to serve and ability to meet customer demands. The planners are empowered to make decisions of highest profitability for exceptions that the machine is not able to allocate. Download the DocumentPUBLIC
Entry Pitch Deck
Louisiana-Pacific Corporation
Mill products
Optimizing the cost to serve for sales
through a next-generation planning experience
Entry Pitch Deck
Louisiana-Pacific Corporation
Mill products
Optimizing the cost to serve for sales
through a next-generation planning experience
COMPANY NAME:
HEADQUARTERS:
INDUSTRY:
WEBSITE:
NUMBER OF EMPLOYEES:
Company Information
© 2024 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC 2
Louisiana-Pacific Corporation (LP)
Nashville, Tennessee
Mill products
https://lpcorp.com
4,100
Louisiana-Pacific Corporation (LP) has been a pioneering force in engineered wood
siding and value-added oriented strand board solutions since 1972. Headquartered in
Nashville, Tennessee, LP has earned a reputation for providing world-class products,
including its flagship siding product LP® SmartSide® Trim & Siding.
LP’s expertise spans various sectors, catering to new residential construction and the
intricate demands of repair and remodel projects. However, the company is about more
than just innovation. It is also committed to conscientious environmental stewardship
and optimizing natural resources. LP’s workforce of 4,100 employees and network of
22 mills across the United States, Canada, Chile, and Brazil all play a vital role in
fulfilling that mission.
Moreover, the entire business is undergoing an evolution – a strategic shift from a
commodity-focused business to becoming a specialty-centric brand. The foundation of
LP’s success lies in maintaining a healthy balance sheet and a capital allocation strategy
focused on shareholders to help ensure mutual growth and prosperity.
HEADQUARTERS:
INDUSTRY:
WEBSITE:
NUMBER OF EMPLOYEES:
Company Information
© 2024 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC 2
Louisiana-Pacific Corporation (LP)
Nashville, Tennessee
Mill products
https://lpcorp.com
4,100
Louisiana-Pacific Corporation (LP) has been a pioneering force in engineered wood
siding and value-added oriented strand board solutions since 1972. Headquartered in
Nashville, Tennessee, LP has earned a reputation for providing world-class products,
including its flagship siding product LP® SmartSide® Trim & Siding.
LP’s expertise spans various sectors, catering to new residential construction and the
intricate demands of repair and remodel projects. However, the company is about more
than just innovation. It is also committed to conscientious environmental stewardship
and optimizing natural resources. LP’s workforce of 4,100 employees and network of
22 mills across the United States, Canada, Chile, and Brazil all play a vital role in
fulfilling that mission.
Moreover, the entire business is undergoing an evolution – a strategic shift from a
commodity-focused business to becoming a specialty-centric brand. The foundation of
LP’s success lies in maintaining a healthy balance sheet and a capital allocation strategy
focused on shareholders to help ensure mutual growth and prosperity.
CHALLENGE: SOLUTION: OUTCOME:
Boosting Sales with a Connected Approach to Planning
© 2024 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC 3
Increase in profit for the siding division after
optimizing the sales order process
Faster order-entry time overall Visibility of profitability at a tactical level,
empowering resources to make decisions
with analysis by customer, mill, and region
~1.7%
Louisiana-Pacific Corporation
60% Greater
LP’s supply chain strategy is sharply focused on
meeting customer demands while optimizing the
cost to serve and minimizing lead times. Achieving
this supply chain goal in the mill products industry
poses significant challenges. For instance, LP ships
more than 1,000 rail cars and trucks of finished
products weekly. The challenge lies in fulfilling these
orders punctually, meeting specifications, and
helping ensure satisfaction without any customer
disappointment.
SAP Business Technology Platform (SAP BTP) is
integrated with LP’s execution system, drawing daily
data to optimize cost to serve and meet sales order
demand. After an order fulfillment associate creates
an order, the system efficiently channels the order
back into SAP BTP and optimizes it in a batch for
highest profitability. The system then prompts
planners to address any unallocated orders with
immediate access to data on warehouse inventory,
cost of fulfillment, and the production capacity of
each mill.
By using advanced algorithms, LP is optimizing its
cost to serve and ability to meet customer demands.
The planners are empowered to make decisions of
highest profitability for exceptions that the machine
is not able to allocate. Planners can also engage in
more-informed decision-making to optimize
allocations, maximize efficiency across production
and transportation processes, scale production
faster during sales peaks, and help ensure precise
order fulfillment and resource utilization.
Boosting Sales with a Connected Approach to Planning
© 2024 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC 3
Increase in profit for the siding division after
optimizing the sales order process
Faster order-entry time overall Visibility of profitability at a tactical level,
empowering resources to make decisions
with analysis by customer, mill, and region
~1.7%
Louisiana-Pacific Corporation
60% Greater
LP’s supply chain strategy is sharply focused on
meeting customer demands while optimizing the
cost to serve and minimizing lead times. Achieving
this supply chain goal in the mill products industry
poses significant challenges. For instance, LP ships
more than 1,000 rail cars and trucks of finished
products weekly. The challenge lies in fulfilling these
orders punctually, meeting specifications, and
helping ensure satisfaction without any customer
disappointment.
SAP Business Technology Platform (SAP BTP) is
integrated with LP’s execution system, drawing daily
data to optimize cost to serve and meet sales order
demand. After an order fulfillment associate creates
an order, the system efficiently channels the order
back into SAP BTP and optimizes it in a batch for
highest profitability. The system then prompts
planners to address any unallocated orders with
immediate access to data on warehouse inventory,
cost of fulfillment, and the production capacity of
each mill.
By using advanced algorithms, LP is optimizing its
cost to serve and ability to meet customer demands.
The planners are empowered to make decisions of
highest profitability for exceptions that the machine
is not able to allocate. Planners can also engage in
more-informed decision-making to optimize
allocations, maximize efficiency across production
and transportation processes, scale production
faster during sales peaks, and help ensure precise
order fulfillment and resource utilization.
4
SAP provides agile and integrated
solutions for various business
processes. With advanced technologies
such as SAP BTP, we have a platform for
building sophisticated solutions on top
of a robust and comprehensive
execution foundation.
Virender Thakur
Director of Digital Supply Chain, Louisiana-Pacific Corporation
© 2024 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC
SAP provides agile and integrated
solutions for various business
processes. With advanced technologies
such as SAP BTP, we have a platform for
building sophisticated solutions on top
of a robust and comprehensive
execution foundation.
Virender Thakur
Director of Digital Supply Chain, Louisiana-Pacific Corporation
© 2024 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC
COMPANY NAME:
Participating Partner Information
We praise EY for its exceptional
contributions, which led to an efficient
project execution experience. EY’s
involvement helped us ensure a
successful project landing and
smooth, issue-free operations.
Virender Thakur
Director of Digital Supply Chain, Louisiana-
Pacific Corporation
© 2024 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC 5
EY
EY played a pivotal role in LP’s project, chosen for its previous strategic work
and expertise in SAP BTP. Collaborating with internal teams, the multinational
professional services partnership helped LP navigate complexities by clarifying
requirements and refining strategies for optimal profit and cost considerations.
EY consultants addressed nuanced decisions – for example, minimizing costs,
maximizing profits, and choosing between standard or actual production costs.
Participating Partner Information
We praise EY for its exceptional
contributions, which led to an efficient
project execution experience. EY’s
involvement helped us ensure a
successful project landing and
smooth, issue-free operations.
Virender Thakur
Director of Digital Supply Chain, Louisiana-
Pacific Corporation
© 2024 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC 5
EY
EY played a pivotal role in LP’s project, chosen for its previous strategic work
and expertise in SAP BTP. Collaborating with internal teams, the multinational
professional services partnership helped LP navigate complexities by clarifying
requirements and refining strategies for optimal profit and cost considerations.
EY consultants addressed nuanced decisions – for example, minimizing costs,
maximizing profits, and choosing between standard or actual production costs.
GLOBAL CHALLENGES BUSINESS CHALLENGES
Challenges and Objectives 1 of 2
6
• Supply chain disruptions causing delivery delays and increased
costs, impacting customers’ timelines and budgets
• Pricing fluctuations, economic factors, and raw material
shortages of essential construction materials – such as lumber,
steel, and cement – driving up costs and posing sourcing
challenges
• Increasing pressure to adopt sustainable building practices and
meet stringent environmental regulations, including energy-
efficient designs, waste reduction, and eco-friendly materials
• Noncompliance with complex, ever-evolving regulatory
requirements at the local, state, and federal levels, leading to
costly delays and penalties
• Need to strengthen understanding of and skills in supply chain
concepts as an organization to help ensure its supply chain
strategy can support future growth
• Inefficient and complex purchase and sales order management,
challenging the management of delayed and escalated orders
and keeping up with sales spikes
• Disjointed systems and tools, impeding cross-team visibility and
creating duplicate work
© 2024 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC
Challenges and Objectives 1 of 2
6
• Supply chain disruptions causing delivery delays and increased
costs, impacting customers’ timelines and budgets
• Pricing fluctuations, economic factors, and raw material
shortages of essential construction materials – such as lumber,
steel, and cement – driving up costs and posing sourcing
challenges
• Increasing pressure to adopt sustainable building practices and
meet stringent environmental regulations, including energy-
efficient designs, waste reduction, and eco-friendly materials
• Noncompliance with complex, ever-evolving regulatory
requirements at the local, state, and federal levels, leading to
costly delays and penalties
• Need to strengthen understanding of and skills in supply chain
concepts as an organization to help ensure its supply chain
strategy can support future growth
• Inefficient and complex purchase and sales order management,
challenging the management of delayed and escalated orders
and keeping up with sales spikes
• Disjointed systems and tools, impeding cross-team visibility and
creating duplicate work
© 2024 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC