In the pulp and paper industry across the Americas, a quiet but profound shift is rendering traditional business models obsolete.
From the sophisticated, value-driven markets of North America to the volatile, cost-sensitive economies of South America, a single, uncomfortable question is emerging: are your pricing strategies capable of navigating today’s turbulent reality?
For many, the answer is a resounding no. The era of static, cost-plus price lists is over. Survival and profitability in the next decade will depend on a radical pivot to a more intelligent, transparent, and dynamic approach to pricing in the pulp and paper industry.
The challenges are hemispheric, though their flavors differ. In North America, the market is defined by a pivot to value. While overall growth is modest, demand is surging in high-margin segments like sustainable packaging and sanitary products.
In South America, the challenge is managing extreme volatility. Fluctuating raw material costs, currency devaluations against the US dollar, and unpredictable supply chains create a chaotic operating environment. When pulp prices can spike over 40% in six months, a quarterly price list becomes a recipe for disaster, eroding margins before you can react.
Here, the failure lies in an inability to respond with speed and precision. Whether your challenge is capturing value or hedging against volatility, the root problem is the same: a pricing model built for a world that no longer exists.
Managing a volatile landscape of tariff uncertainty demands more than just reactive adjustments; it requires a proactive, strategic approach focused on building resilience and optimizing operations.
Relying on legacy price lists is the Achilles’ heel of profitability. This isn’t simply a software issue; it’s a fundamental business process and paradigm failure. The transition to a modern pricing model is an organizational transformation, shifting the company culture from one based on historical assumptions to one driven by real-time data.
Dynamic pricing, which adjusts to small market changes frequently, prevents the kind of drastic, delayed price shocks that damage long-term commercial relationships. It’s about achieving a price that is fair, defensible, and reflective of both the immense value you create and the current market realities.
This requires a new commercial nervous system, one built on a modern digital foundation.
Such a profound shift is impossible with outdated technology. Legacy ERP systems, with their siloed data and batch-processing limitations, cannot provide the clean, real-time information required for dynamic pricing.
SAP Business Suite creates a single source of truth, breaking down the data silos that have plagued operations for decades. Its in-memory computing power provides the real-time visibility into costs, inventory, and sales data that’s the non-negotiable prerequisite for any intelligent pricing strategy.
While SAP Business Suite serves as the central nervous system for core business processes, unlocking its full commercial value requires a comprehensive data strategy and a specialized intelligence engine. SAP Business Data Cloud provides a business data fabric, harmonizing data from SAP Business Suite and other enterprise sources.
On this unified data foundation, specialized solutions like Pricefx and Visitex can turn insights into profitable action. Integrated seamlessly via the SAP Business Technology Platform, these solutions use AI and machine learning to analyze the comprehensive data landscape, model scenarios, and deliver optimized, value-based prices directly into SAP Business Suite commercial processes.
The pulp and paper industry is experiencing profound transformation, driven by demands for greater sustainability, efficiency, and innovation. This makes an inefficient ERP a critical risk, while understanding core business processes and the underlying IT architecture is paramount.
This transformation is delivering tangible returns today. A leading North American wood manufacturer and distributor, facing the familiar challenges of margin leakage and slow reactions, implemented Pricefx on top of its SAP environment.
In another case, a global manufacturer struggled with a slow, inefficient quoting process that took several days and resulted in significant margin leakage. By implementing a Pricefx solution, the company was able to build machine learning models that provided country-specific price recommendations and anticipated margins for each quote.
Integrating this intelligence directly into their sales team’s quoting tool, they dramatically reduced the time-to-quote from days to just a few minutes, boosting pricing confidence and overall team efficiency.
These cases validate the two-part strategy: first, establish a clean data foundation; second, deploy an intelligence engine to unlock its value.
As a CIO, this kind of upgrade is a once-in-a-decade inflection point. It’s the moment to move beyond a technical-lift-and-shift and lead a strategic transformation of your company’s commercial capabilities.
By architecting a clean digital core and integrating an AI-powered pricing engine, you can build a business that’s not just resilient to market volatility, but is poised to master it.
Editor’s Note: This article first appeared in Paperitalo and is republished here with permission.
