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Dispelling the Myths About Buying Paper

Just as global markets and shifting consumer demands continue to change the printing industry, the pulp and paper industry is also experiencing the impact of globalization. Once the leading producer of magazine-grade paper, North American paper mills capacity is on the decline, with European and Asian producers now wielding greater influence on the market. Last year, more than 5 million tons of North American capacity was lost, and the situation has been aggravated by several recent mill closures. Consequently, the market has tightened in some grades, and the pricing and supply of paper in North America has become less predictable. This is especially true in the uncoated freesheet and coated freesheet grades.

Since paper costs generally comprise more than half of a manufacturing budget, it’s more critical than ever to participate in a well-managed paper purchasing and management program. Those who don’t could end up over paying for their paper, compromising on quality, or worse yet … with no paper at all.

There are three basic ways to source paper: buying directly from a paper mill, going through a paper broker or purchasing it from your printer. Managing a paper program can require a great deal of time and resources, from administrative and customer service, purchasing, inventory management and supply chain management. Many catalogers and publishers choose Quad/Paper Services to manage their paper program and benefit from our extensive paper industry knowledge, competitive pricing and onsite inventory management.

The medium is the paper
The paper your magazine or catalog prints on is an integral part of your overall brand image, and has an immediate impact on your reader’s perception of you or product offerings. Selecting the right paper for your project is one of the ways Quad’s paper services group can positively influence the outcome of your project. “Our paper sales consultants are industry veterans that know not only the paper industry, but also the printing industry, says Chris Grond, Director of Quad/Paper Services. “So if a client is looking for a way to change the image of the printed piece, increase the quality, or change the look and feel of the piece, we provide that expertise.”

And when it comes to knowing how a particular paper will run on press, who is in a better position to have that knowledge than your printer? We know the runability of each paper, and look at a number of variables to develop a cost of acquisition, which is the real cost to run any paper through our system.

Buying with power
Most catalogers and publishers simply do not have enough volume to purchase their paper directly from the mill. We furnish paper to 75 percent of our clients, which translated to more than 500,000 tons in 2006. With this volume, we can offer competitive pricing and unlimited availability in virtually any market condition.

We stay on top of all of the variables and dynamics that affect paper pricing and availability. Quad/Paper Services monitors global currencies, supply, demand, mill and printer inventories and ongoing capacity fluctuations. “We keep our eyes open for strikes, closings, lockouts, new products, and products being discontinued. These factors can create real havoc for our customers in specific grades,” explains Sales Consultant Jay Lecher.

Our paper sourcing model also encourages ongoing communication with our customers concerning “our” sourcing strategy. We listen to what factors are important to our clients and tailor our strategy accordingly. “Some customers are more agreeable to moving with the market, whereas others are more long-term, budget-sensitive,” Jay says. “We believe the ongoing dialogue with our customers helps demystify the volatility of the paper market.”

And as market conditions change, relationships with the paper mills become more important. “In the North American paper industry, more than 5 percent of the coated volume was permanently shut down within the last two years,” states Chris. “If this trend continues, the markets will firm, and our relationships with the right paper suppliers become more crucial.”

We carefully manage our supply chain, providing performance feedback to our suppliers on a quarterly basis. We base our feedback on an analysis of on-time delivery, web breaks, the actual basis weight of the paper, and the capital cost associated with receiving paper too early in the process.

You buy it … you own it
One of the real joys of having your printer source and manage your paper is the elimination of the billing, shipping and inventory considerations that come with ownership. We handle all the logistics of the purchase order and take full responsibility for all facets of the paper and for all its performance issues.

One mistake paper buyers can make is buying too much inventory, and ending up owning obsolete paper they will never use. When you work with Quad/Paper Services, you do not have to worry about storage charges, scrapping paper or carrying inventory.

If additional paper is needed for a job, we have an inventory of paper on hand as well as the ability to get it quickly in a pinch. “Based on the location of the plant producing a particular job, we can quickly determine which mill will provide the best solution,” Jay explains.

Many times customers have the best intentions when they supply their own paper. However, last-minute changes — trim, page count, quantity drop-date — especially those that occur after the LDC (last date for change), can result in excess or insufficient inventory. “The cost of owning too much paper or not having enough paper for a job can be compounded by pricing fluctuations in the market,” notes Jay. “For example, if you bought excess paper at $40 per hundredweight, and the price drops to $38, not only do you have inventory and obsolescence problems to explain to your CFO, you must also deal with the fact the paper has lost value. The Quad Paper/Services platform minimizes this potential risk.”

Additionally, printing on Quad’s state-of-the-art platform of wide-web presses requires careful layout planning to ensure that the right rolls are ordered. If a job is running on different size presses, each form has to be coordinated with each roll width. Quad/Paper Services ensures there’s enough paper to complete the run, without excessive overages.

Knowledge leaders
Many factors affect the amount of paper required to run a particular job — with yield variations a leading troublemaker. When the paper shipped from the mill is heavier than specified, or even a sixteenth of an inch wider, it can negatively affect the yield on press. Our processes for purchasing and measuring paper are designed to minimize surprises and problems in the pressroom.

As the paper industry slowly moves away from a basic grading system to a more purely specification-driven description, understanding these grades and how they translate to specific job requirements becomes critical. And because many mills are adding optical brighteners to make the paper whiter, reproducing images on this paper requires expert graphic arts, imaging and proofing device knowledge, which Quad’s paper services pressroom advocates provide.

In addition to a staff of sales consultants, the paper services group includes a team of experienced buyers, organized by both major accounts and paper grade. “Because of the volume of paper we purchase, we can offer our clients very competitive pricing as well as an unmatched number of choices in all grades of web paper,” says Chris. “We supply paper for a wide range of customers, from small publishers to some very large catalogers, and they place a lot of value in our customer service, our knowledge, and the relationships we have with our suppliers.”

How Quad/Paper Services can make your life easier

• Knowledgeable experts help select the right paper for your project.
• Our volume purchasing offers the best pricing, choices and availability in virtually any market condition.
• One-stop buying convenience eliminates billing, shipping and inventory concerns of ownership.
• No worries about having too much or too little paper for a job.
• No need for annual paper reconciliation, accruals and/or excess storage costs.
• Minimize surprises in the pressroom.
• Unmatched customer service.

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