Services
We are ready to support our clients with their most pressing business challenges. Our service portfolio covers the key processes across the whole supply chain.
Today’s environment for companies in the paper and forest value chain is characterized by a number of challenges: increasing competition for raw material access, continuing market pressure and price competition, increasing order complexity with reduced lead time, continuing overcapacity in nearly all market segments, requirement to reduce volatility of energy costs, consideration of sustainability and “green” requirements, attraction and retention of new talent and many other.
Although most companies have defined their strategies or are undergoing a strategic review, they struggle with execution, often maintaining a broad focus with diverse assets and services.
Looking at the more successful companies (in terms of financial returns) in the industry, the following key success factors can be identified:
- Upstream integration with low-cost access to raw materials, combined with operational excellence and asset focus to allow for low-cost production
- Superior product, product quality or service offerings to help lock in customers
- Marketing excellence and real differentiation with respect to customer requirements and needs
- Supply Chain Leadership to support a just-in-time supply chain at the customer’s side and help reduce supply chain costs
- Leading geographic market position or dominance with respect to specific market segment
Based on these success factors, different strategy options exist depending on integration level, customer product and geographical focus of the company. StepChange Consulting can help you assess your current approach and tailor your future strategy to enable greater future success.
Aligning daily operations with business strategy and vision is a significant challenge. Many performance management approaches fail to bridge the gap between individual actions and overall strategy.
To achieve alignment, personal and departmental goals must stem from company objectives, with performance measured and feedback structured. Goals should be meaningful, measurable through KPIs, and traceable to operational and strategic aims. This requires both top-down goal-setting and bottom-up validation to ensure clarity and realism.
A successful performance management system is tailored to each organization’s goals and culture, involving all levels in understanding and adoption. Employees need to grasp their KPIs and see their relevance to their performance.
StepChange can help develop a customized performance management system that aligns with your company’s vision and goals.
Innovation management is the catalyst for thriving in today’s dynamic market. Our tailored projects in innovation management fuse cutting-edge strategies with adaptable frameworks, guiding businesses to embrace change as an opportunity. We empower teams to ideate, prototype, and implement groundbreaking solutions, fostering a culture of continuous innovation. Leveraging our expertise, we navigate complexities, identifying untapped potential and maximizing value creation.
From ideation to execution, our projects drive transformative change, positioning businesses at the forefront of their industries. Join us on this journey of innovation, where every project unlocks new pathways to sustainable growth and success.
In the last years the industry has been very active with regards to M&A activity across the globe. Major deals have taken place reshaping and consolidating the landscape. Especially the packaging segment has been much sought after with respect to strategic acquisitions while in the graphic and publishing sector M&A activity has focused on consolidation and reduction of capacity. North America has now reached a very high level of consolidation in the containerboard and folding board markets and in the associated converting segments. All big companies are now much more focused in the segments they operate in. In Europe some consolidation has taken place and the big multi segment companies have tried to clean up their portfolios. Much consolidation still remains necessary especially in the graphic paper segment and some of the large companies still need to follow through on the focused strategies announced. In Asia the originally focused strategy now seems to be moving into the direction of diversification duplicating to some degree the strategy of western companies from the 1980s and 1990s. Additionally excess local capacity now exists in some segments that will eventually look for a release in the global market. Eventually this could also spark some M&A activity.
With recently low interest rates it has been easy for companies with the appropriate credit rating to receive the necessary funding. Additionally, the industry has received increased interest from financial investors and debt and equity stakeholders driving some of the structural changes over the last years. With a much more focused strategy and stricter discipline in the M&A approach companies seem to have become a lot more educated about which sectors of the industry to invest in. On the other side the improved focus on sustainable returns is leading companies to define very similar strategies which creates competition for potential takeover targets leading to overpriced M&A and difficulties to earn the necessary return on capital in the long run. With this increased competition it has become even more important to identify real synergies and capture these synergies according to the promises made.
Due diligence is critical in M&A, serving as the foundation for informed decision-making. Its success is only validated in hindsight, meaning that even if a deal is not completed, thorough evaluation ensures that risks are identified and managed.
Effective due diligence provides assurance to management and stakeholders by highlighting potential risks and opportunities. Often, it leads to a “no-go” decision, as a robust process should scrutinize and challenge assumptions.
Tailoring due diligence to the transaction’s specifics and assessing post-merger impacts are essential. It should focus on the key factors affecting value and integration.
StepChange has extensive experience in market and operational due diligence for the forestry, pulp, paper, packaging, and tissue industries.
Successful acquisitions hinge on effective integration, yet many mergers fall short of financial goals. Common issues include cultural misalignment, excessive internal focus, deferred tough decisions, inadequate pre-merger planning, and poor communication.
Half-hearted integration can lead to culture clashes, market share loss, customer cannibalization, and costly redundancies.
Cultural misalignment is often cited as the top reason for failure. Insufficient sensitivity and premature staffing can hinder the integration of the best aspects of both companies. An internal focus should not overshadow supplier and customer needs. These risks can be mitigated through comprehensive pre-merger planning, including cultural and external assessments.
Success starts with a detailed 100-day plan, including value targets, timelines, milestones, and clear roles. Communicate tough decisions openly, stick to the plan, and implement quick-win projects to build morale and credibility. Effective communication and high-level sponsorship are crucial for buy-in and success.
Strong management support is essential for monitoring progress and making necessary decisions. Proper planning and execution of integration are key to realizing business value and outperforming industry norms.
Many companies in the sector have operations with low or no profitability. In many cases there are structural reasons in others there are opportunities to reduce costs, improve revenues and return to profitability. In case of structural reasons for lack of profitability it is essential to analytically and strategically assess the situation to reach a conclusion quickly about investment, closure or divestment of operations.
Many companies have avoided tough decisions, prolonging the life of barely profitable operations. Often, a turnaround is not feasible due to issues like poor raw material access, high energy costs, or outdated technology.
When preliminary analysis shows potential for a turnaround, it’s crucial to focus quickly on key areas using a comprehensive approach. Initial steps include value analytics, process benchmarking, and physical observations to identify performance gaps. A detailed diagnostic will highlight improvement areas in logistics, inventory management, purchasing, production, sales, and financial management. The strategy and organizational structure should also be assessed, resulting in a prioritized list of improvement opportunities.
A management-sponsored project structure supports solution development and implementation. Quick wins are implemented immediately, while resources are aligned to high-value projects. Organizational restructuring may be considered through benchmarking and analysis.
Solutions with significant turnaround potential are signed off by management and tracked through reporting mechanisms. Successful turnarounds require clear management commitment, focused execution, and motivated resources.
StepChange leverages extensive experience in turnaround management and profit improvement, engaging client employees in a structured, fast-paced process to lead projects and return companies to profitability.
We have the experience to support the identification of capability gaps, prepare and conduct trainings and develop performance measurement systems, elements that are essential to the success of the change journey.
Many pulp and paper companies have restructured to streamline operations, focus on core activities, and reduce headcount. Aligning processes, functions, and resources into a cohesive system is crucial.
Typically, companies are organized into business units or market segments, with top functions like Finance, Sustainability, Communications, and HR. While this structure helps with profit ownership, it often impedes cross-divisional integration and synergies, especially in Supply Chain Management.
Effective Supply Chain Management requires overcoming silo thinking to improve supply and demand balances and reduce inventories across business units.
To build an effective organization, align with company goals and performance targets through benchmarking and process analysis. Define business processes based on performance gaps and explore various organizational models.
Implementation is challenging. Involve employees early to ensure buy-in and set up a performance management framework with clear targets.
StepChange Consulting can assess your organization, identify improvement opportunities, and guide a successful transformation.
Optimizing People Performance is pivotal for organizational success. Our projects in this realm are crafted to elevate workforce capabilities, fostering a culture of excellence and collaboration. Through tailored strategies and comprehensive assessments, we empower teams to reach their full potential, driving productivity and satisfaction.
Our approach integrates cutting-edge methodologies and personalized development plans, aligning individual goals with organizational objectives. From leadership enhancement to skill development, we navigate the intricacies of human capital, enabling businesses to cultivate engaged, high-performing teams.
Partner with us to unlock the true potential of your workforce, where each project elevates not just performance but also organizational resilience and success.
Change Management isn’t just a checkbox; it’s the fuel that powers successful projects. Our approach to Change Management is all about making things happen. We roll up our sleeves, diving into the nitty-gritty of your project to craft strategies that actually work. We’re not here to sell you buzzwords; we’re here to get results. Our team specializes in navigating the choppy waters of change, ensuring your project sails smoothly.
We’ll equip your team with practical tools and support, turning potential roadblocks into stepping stones for success. Let’s make your project not just happen, but thrive.
Benchmarking your company’s performance is the compass guiding strategic growth. It offers a roadmap for improvement by analyzing industry standards, identifying strengths, and uncovering opportunities. It’s not just about where you stand; it’s about leveraging insights to propel your company towards excellence and competitive advantage.
We focus on the root causes of performance gaps, establish and set targets based on clear business cases and drive solutions engineering and implementation forward. The process is supported by stringent methodology, structured roles & responsibilities and achieving defined milestones.
Operational excellence provides the single largest lever to improve bottom-line profits in a production environment.
Despite significant investment in control and quality systems, many companies fail to fully leverage their data. While documenting productivity and consumption is common, key opportunities for improvement, such as standardizing production processes and making data-driven decisions, are often missed.
Reducing process variability is crucial for boosting productivity and cutting costs. This involves:
- Analyzing variability, trends, and efficiency losses
- Benchmarking and standardizing data processing
- Implementing best practices and developing standard procedures
- Fostering group-wide acceptance through training and workshops
To ensure lasting improvements, establish a management cycle for monitoring, controlling, and rewarding performance. StepChange Consulting’s approach typically results in productivity gains of 2-8%.
Maintenance costs are a major driver of operating expenses but often remain unchallenged due to fears of production downtime. Despite advancements in technology, core maintenance processes and organizations have seen little change.
Key issues include poor coordination between production, engineering, and maintenance, leading to inefficiencies and increased reactive maintenance. Costs escalate from outdated practices, standalone maintenance operations, costly external services, and informal procurement.
To improve effectiveness and cut costs, consider:
- Defining a maintenance strategy
- Prioritizing equipment service levels
- Managing spare parts and outsourcing options
- Standardizing service and spares management
- Reviewing roles, responsibilities, and performance metrics
- Evaluating resource needs and shift patterns
A shift in budget responsibility to asset managers can drive efficiency by creating a checks-and-balances system. Training and workshops are crucial for implementing these changes effectively.
StepChange Consulting offers a holistic approach to maintenance transformation, typically achieving a 5-15% reduction in maintenance spend.
Supply Chains drive operational efficiency, cost savings, and enhanced agility, ensuring businesses adapt and thrive in dynamic market landscapes.
Supply chain management balances supply and demand while offering differentiated customer service. Significant value lies in integrating all parts of the value chain, particularly in multi-divisional corporations. Many companies haven’t yet harnessed the advantages of integrated supply chain management.
Internal supply chain opportunities are often overlooked, causing inefficiencies and high inventories. Additionally, the industry sometimes fails to apply effective supply chain concepts from other sectors.
High inventories typically result from information gaps within the supply chain. Advanced demand planning and forecasting are crucial for capturing value, including:
- Optimized production planning cycles and reduced lead times
- Improved sales planning and capacity management
- Enhanced transport planning and cost reduction
- Lowered inventory and costs
- Reduced waste
StepChange helps clients enhance their supply chain capabilities. We conduct assessments to identify potential improvements and develop plans for achieving supply chain excellence, improving performance, and reducing costs.
Market leaders are redesigning their planning processes, while market laggards face rising inventory levels and declining machine efficiencies. In the current commodity environment, low production costs, shorter lead times, smaller order sizes, and high reliability are essential for survival. Achieving market leadership requires integrating demand planning, raw material management, production planning, scheduling, and logistics.
Successful planning projects need a holistic approach on three levels:
- Strategic Level: Reliable demand forecasts allocate products and markets to available capacity, balancing demand and supply, optimizing costs, and informing sourcing processes.
- Tactical Level: Orders are allocated to machines based on raw material availability and inventory. This balances demand and supply at individual sites, reduces losses, and optimizes inventory and transport planning.
- Operational Level: Final production schedules align with transport capacity and raw material replenishment to meet delivery dates and enhance reliability.
Effective supply chain management requires information transparency, process integration at all planning levels, and automated system support. Connecting sales, logistics, production, and sourcing functions creates value.
StepChange Consulting supports companies in developing and implementing supply chain transformation strategies, improving performance, and reducing costs.
Strategic sourcing, from StepChange’s vantage point, represents the cornerstone of resilient and high-performing supply chains. It transcends traditional procurement, embodying a holistic approach that integrates data-driven insights, market intelligence, and collaborative supplier relationships. StepChange’s strategic sourcing framework goes beyond cost reduction, focusing on value creation by optimizing supplier ecosystems, mitigating risks, and fostering innovation.
By leveraging advanced analytics and digital tools, StepChange enables clients to navigate complexities, streamline operations, and unearth untapped opportunities across global supply networks. This approach not only fortifies competitiveness but also instills adaptability, ensuring businesses are well-positioned to navigate evolving market dynamics while driving sustained growth and operational excellence.
Tactical procurement, forms the agile foundation supporting day-to-day operations and short-term objectives. It involves executing procurement activities efficiently, ensuring compliance, and optimizing transactional processes. StepChange’s approach to tactical procurement emphasizes leveraging market insights, implementing streamlined workflows, and deploying technology to enhance purchasing efficiency. By focusing on tactical procurement, we help clients to achieve immediate cost savings, streamline supplier relationships, and optimize inventory management. This methodology enables organizations to meet short-term goals swiftly while maintaining flexibility to adapt to market changes.
StepChange’s tactical procurement strategies serve as a vital component in achieving operational effectiveness, empowering businesses to navigate daily procurement challenges and drive incremental improvements in their supply chain operations.
In an asset intense industry, volume is one of the key drivers to profitability. Contracting global customer demand is putting sales managers in the spotlight. In turbulent times providing visibility and control is especially important with respect to customer management. In order to succeed, accurate and up-to-date customer insight is required to retain customers, manage economic risk and improve margins.
Creating customer loyalty requires a customer-centric strategy and a deep understanding of customer needs. During a recession, retaining customers becomes even more critical as volumes decrease and additional losses must be avoided. To succeed long-term, maintaining and expanding market share with a focus on profitability is essential.
StepChange offers a two-phase revenue retention and margin improvement program. The first phase targets immediate actions to prevent customer loss and stop margin leakages. The second phase focuses on sustainable practices to build structures, processes, and offerings that enhance long-term customer loyalty.
Our projects have helped clients recapture 0.5%-1.5% in margins and reduce risks of bad debt and customer churn.
The “Achilles Heel” for many pulp and paper companies is not fully understanding the true profitability of individual customers and failing to quickly adjust the service packages they pay for. Effective customer segmentation and service level management are key.
Customer segmentation involves identifying subsets of buyers with similar needs and behaviors, allowing sellers to tailor their approach and services accordingly. However, many companies lack objective criteria for segmentation, leading to inconsistent service differentiation left to individual salespeople. This results in some customers being over-serviced or undercharged, causing financial losses.
StepChange Consulting helps companies establish clear segmentation criteria to determine customer value and profitability. Based on these segments, we define standard services and offer additional services with appropriate charges, ensuring consistency and maximizing profitability.
In every industry, including pulp and paper, increasing customer demands lead to a growing range of products and services, impacting the supply chain from demand planning to operations. It’s crucial to avoid over-servicing, which can lead to spiraling service costs not covered by customers.
A streamlined portfolio offers multiple benefits: reduced inventory levels and write-offs, improved lead times, higher transport utilization, and simpler supply chain and order handling processes.
Maintaining a balanced product portfolio requires understanding product profitability, cross-selling potential, and regularly consolidating the product catalog. However, streamlining efforts often stall due to the complexity of managing thousands of SKUs and the tendency to introduce new products.
The solution is a continuous product assessment process, similar to retail practices where shelf products are regularly evaluated for profitability. This involves identifying high-margin products, assessing low-profit items for potential or cost reassessment, and managing product lifecycle strategically.
StepChange helps companies streamline portfolios, resulting in higher service levels, improved margins, and reduced supply chain complexity.
Paper and packaging companies often struggle with situational pricing, typically setting prices based on “the market” rather than customer-specific data. Sales teams may hesitate to use differentiated pricing due to a lack of analytical information about client cost drivers, leading to weak negotiation positions.
This results in an inconsistent pricing approach with minimal differentiation, causing margin loss and posing risks during economic downturns. Transparent pricing means that a low price for one customer can affect others, so consistency is essential.
Customers are often over-serviced, either receiving more than the standard service or additional unpaid services, leading to margin losses. This issue stems from a lack of integrated supply chain information, transparency in transactional costs, customer strategy, and sales force incentives.
Managing prices and margins with comprehensive supply chain data is key to generating value. Understanding transactional cost drivers enables better decision-making and stronger customer negotiations.
StepChange specializes in identifying and addressing key value levers in pricing, helping companies capture untapped value efficiently.
Selling profitably in a commodity industry is challenging due to shifting volumes and increased transparency in the value chain. Declining merchant channel volumes have led to a concentration of merchants, while supply chain integration has become key to success in other areas. Increased information availability requires redefining sales channels to maintain profitability. Additionally, service requirements are being pushed back in the supply chain, with mills and suppliers taking on roles traditionally held by merchants and end-customers.
Redefining roles in the value chain requires thorough analysis and scenario modeling to anticipate future developments and craft a competitive strategy. Effective sales channels target specific customer segments, maximize sales, minimize costs, and provide appropriate service levels.
Channel selection should be based on customer needs, costs, benefits, and strategic goals. Customer segmentation based on profitability and requirements makes it easier to serve the customer base effectively and efficiently. Each segment’s needs should be matched with value propositions that meet profitability constraints and specific process requirements.
StepChange Consulting can help assess and improve the effectiveness and profitability of your sales channels. We design a mix of channels to serve target customers and develop scenarios to support strategic decision-making and future readiness.
Pragmatic and focused approach on strengthening your financials allows to harvest competitive advantage before competitors
Managing payables and receivables might seem basic, but in today’s competitive market, it’s crucial to delve deeper. While many companies claim to focus on this area, true value is found in the details.
Common industry beliefs include the reluctance to press customers for earlier payments or the concern that tougher payment terms could raise prices. While these concerns are valid, effective working capital management requires a detailed breakdown of the processes driving these levels. Often, efforts are misplaced on adjusting payment terms or pursuing overdue accounts too late.
Potential improvements lie in internal processes, data quality, and clear responsibilities. Many ERP systems are designed with limited business rules, missing opportunities in dunning frequencies and overdue calculations. Additionally, leaving too much responsibility to the sales team can lead to suboptimal outcomes.
Using a structured approach with distinct roles for back-office and finance functions can better enforce terms and conditions without compromising sales negotiations. Aligning incentive systems with working capital goals is also crucial, as misaligned incentives can negatively impact cash flow.
At StepChange Consulting, we specialize in enhancing cash flow and achieving substantial working capital reductions of 20-30% through operational improvements.
Zero-Based approach can unveil significant optimization and savings opportunities, and helps to avoid over-budgeting, “gold-plating”, and sandbagging. Principles of Zero-Based Budgeting:
- All expenses have to be justified for each new period
- ZBB allocates funding based on real requirements and prioritized initiatives
- Budget is based on what is really needed for the upcoming period, regardless of the budget of the previous period
StepChange follows its own ZBB framework that is sustainable and pragmatic, as well as avoids over-complication and over-academization.
Industry players have limited insight to benchmark their performance against peers. A structured benchmarking by StepChange as independent partner allows for a consistent comparison across companies and mills.
StepChange B3NCH provides you with comprehensive financial benchmarks, covering seven peer groups – Packaging, Graphic Paper, Pulp, Tissue, Flexibles, Wood and Merchants.
Operational benchmarking offers much more than just a comparison to other players – it also serves as the continuously changing target for internal operations to achieve their best sustainable performance. It pinpoints operational efficiencies, revealing industry best practices and performance gaps. It’s a tool that drives actions, empowering your team to optimize processes and stay ahead in the competitive landscape.
Benchmarking your company’s performance is the compass guiding strategic growth. It offers a roadmap for improvement by analyzing industry standards, identifying strengths, and uncovering opportunities.
It’s not just about where you stand; it’s about leveraging insights to propel your company towards excellence and competitive advantage.
StepChange is an industry thought leader in digital strategy. We are on the forefront to bring digital transformation to the fiber value chain. Digital opportunities are endless and StepChange has the industry knowledge to pinpoint digital value capture.
StepChange helps you go digital in:
> Strategy
> Value Identification
> Process automation
> Organizational implications
> Transformation efforts
