Procurement Intelligence Saves $6M+ in Raw Material Costs
How comprehensive fiber market analysis and a deployed optimization system transformed raw material procurement for a paper board manufacturer
The Situation
Raw material procurement is the single largest cost driver in paper board manufacturing. This client's production process consumed two primary inputs: wood chips and secondary (recycled) fiber. The costs of both materials fluctuated with market conditions, seasonal availability, and regional supply dynamics — with freight costs adding further complexity, as the optimal supplier for a given material could change depending on transportation rates and distance.
The client's procurement team managed these decisions using established supplier relationships, historical pricing, and manual tracking. Without a systematic optimization framework, the team couldn't evaluate the full set of procurement options simultaneously across dozens of potential suppliers, each with different pricing structures, quality grades, and delivery capabilities. Costly inefficiencies accumulated over time.
What ADecTec Delivered
ADecTec conducted a comprehensive evaluation of the client's fiber procurement market basket, mapping every available supplier, price point, quality grade, delivery lead time, and freight cost across both wood chip and secondary fiber sourcing in all regions where the client's mills operated.
The analysis identified two strategic opportunities: restructuring supplier allocation to lower the delivered wood chip price, and increasing secondary fiber usage during winter months when wood chip supply tightened and prices spiked. To operationalize these strategies, ADecTec designed and implemented analytic dashboards and a planning optimizer that gave the procurement team real-time visibility into fiber market conditions, supplier performance, and purchase-plus-freight costs — automating calculations that had previously been done manually and enabling procurement decisions continuously optimized against current market data.