Lower your paper (raw material) costs
Paper often represents a significant area of expenditure for many of our clients, and almost without exception, receives close attention before calling on ERA to assist.
The absolute demands for consistency of product and service, coupled with this “close attention” can present difficulties in ensuring that competitive advantage is maintained. It is with this experience and knowledge, however, that ERA provides clients with a fresh approach and different dimensions, in the drive to deliver improvements across all areas.
As paper buyers will know, paper is an unusual example of a “commodity market” in that there are no recognised indices in which to measure price positioning. Considering that these raw material costs are usually a significant proportion of the end sales price to the consumer, it is clear that the need to ensure competitive advantage on paper is fundamental and significant focus is a consistent requirement. Indeed, most of our clients who engage ERA to review this area are very active, but still face challenges from competitors utilising faster running machinery, which exerts increasing demands on the quality of paper being utilised. Something of a paradox, it might be said.
The UK market for “Fine Papers” has changed considerably over the past two decades, with reductions in the number of manufacturers, as well as the number of UK distributors. This in itself presents challenges for clients when trying to benchmark their current position, and remain competitive.
Cost Areas Include
• General Paper
• Industrial Paper
• Paper Cut Size
• Paper Raw Material
• Reels for Conversion/Envelopes
• Reels for Print
Our experience to date has seen ERA improve value for a number of the UK’s largest paper consumers, as well as many with rather less expenditure in this area. Often, operational efficiencies are identified, as the comprehensive review programme is designed to forensically establish the true value being enjoyed across all paper costs. (Not just the top percentage.)
In respect of environmental credentials; in the UK, there remains great focus on any industry using wood fibre, and paper being a predominantly cellulose based material, has been in the spotlight for many years. We have seen examples where uplifts for environmental credential have not been truly representative, and have helped clients establish clarity from such confusion.
ERA’s programme uses expertise from within the Paper Industry, providing an empathetic approach to suppliers, which helps them clearly recognise where their best opportunities exist.
When reviewing paper expenditure, we ensure comprehensive due diligence is completed, capturing the experiences of both stakeholders and incumbent suppliers in every detail. This helps both the client and suppliers to understand the current status, and therefore ensures that any subsequent negotiations are completed without fear of compromise on quality of service or material. Other factors, such as stock and cash management, are included in this review, with often surprising benefits presented. It is encouraging to hear clients comment that these opportunities would not have been identified as part of their traditional approach in paper negotiations.
The last ten, perhaps fifteen years has been challenging for the global paper industry, for a variety of reasons – many well documented. This changing dynamic can present opportunities for value improvement, when proactively reviewed. Equally, a lack of appreciation of the wider supply chain can adversely affect these opportunities, with limiting scope for value improvement.