Citation: Markovi´c, G.V.; Mihi´c, M.M.
Strategic Turnaround in the Paper
Industry: A New Model for the
Procurement of Recycled Paper.
Sustainability 2022, 14, 1475.
https://doi.org/10.3390/su14031475
Academic Editors: João Carlos de
Oliveira Matias and Paolo Renna
Received: 13 December 2021
Accepted: 25 January 2022
Published: 27 January 2022
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Article
Strategic Turnaround in the Paper Industry: A New Model for
the Procurement of Recycled Paper
Golub V. Markovi´c
1,
* and Marko M. Mihi´c
2,
*
1
Bunzl & Biach Gesellschaft m.b.H., Steinheilgasse 5, 1210 Vienna, Austria
2
Faculty of Organizational Sciences, University of Belgrade, 154 Jove Ili´ca, 11000 Belgrade, Serbia
* Correspondence: markovic@bunzl-biach.at (G.V.M.); marko.mihic@fon.bg.ac.rs (M.M.M.)
Abstract:
In recent decades, the paper industry has undergone many changes, making this industry
more lucrative, “greener”, and thus more attractive. Today, recycled paper is a key raw material for
paper production. However, this intense growth has also increased the number of market players,
making competition more intense and dynamic and causing frequent turmoil. In such an environment,
planning procurement and forecasting the price of recycled paper is a big challenge, even for highly
experienced procurement managers. In addition, paper production itself is a dynamic process that
requires all key grades of recycled paper to be available at all times. Accordingly, managing the
optimal level of recycled paper stocks is also a difficult task faced by the procurement unit. The
goal of this paper is to address these challenges by developing a new model for the sustainable
procurement of recycled paper in the paper industry with the help of the principles of strategic
management. Specifically, we aim to enhance our understanding of the factors driving the complexity
of recycled paper procurement management. To this end, we conducted a comparative case study in
four European companies. To build cases, we collected secondary data on the sampled companies
as well as primary data from interviews with top executives at these companies. On the basis
of the results from the comparative case study, we propose a new model for the procurement of
recycled paper that helps increase the accuracy of forecasting price trends and by extension overall
procurement performance. In a nutshell, this paper seeks to improve procurement processes by
reducing the complexity of the enterprise procurement unit as well as by offering guidelines for the
maintenance of optimal stock levels of recycled paper.
Keywords:
recycled paper procurement model; strategic management; organization; paper industry
1. Introduction
1.1. The Importance of Procurement Management in the Paper Industry
Procurement management is a vital management function. In transactions between
firms, procurement is important for both buyers and sellers because it represents the in-
tersection of supply and demand. Accordingly, the scope of the procurement function
includes both internal and external elements of a firm’s supply chain. A well-performing
procurement method is thus necessary for both buyers and suppliers as they must effec-
tively negotiate in the market and agree on the prices that are acceptable to both parties.
This is particularly important for firms in the paper industry, which must combine dynamic
market information with knowledge about raw materials (i.e., recycled paper) in order to
make informed procurement decisions and perform well.
The procurement function creates a critical link between the short term profit ori-
entation of a firm and its core business strategy as it relates to firm sustainability [
1
].
Procurement plays a key role in sustainability as it encompasses practices beyond organiza-
tions’ boundaries, incorporating their entire supply chains [
2
,
3
]. Sustainable procurement
is therefore increasingly on the agenda of top executives seeking to demonstrate corporate
Sustainability 2022, 14, 1475. https://doi.org/10.3390/su14031475 https://www.mdpi.com/journal/sustainability
