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Comparing Direct Statutory System For The Pulp And Paper Industry

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On February 9th, 2017, I was assigned to discuss and compare a direct procurement system with a wood supplier system. A wood supplier system is also known as a wood dealer, which supplies the mill with wood that is known as gatewood at the scale. While I am discussing and comparing the two systems, I will also choose which system works best for the pulp and paper industry. Before I decide which system will work best for the pulp and paper industry, I will discuss the difference between the direct procurement system and a wood dealer system, while explaining how it works. The wood dealer system is designed in which the mill buys timber from a wood dealer at the scales, also called gatewood, and not from a landowner. The direct procurement system is designed in which the mill has their own procurement team that goes out and buys stumpage timber directly from the landowner. In some cases, you will see a mixture of the two at some mills, which is hybrid …show more content…

In the Southeast United States most timber is own by non-industrial private landowners. Wood dealers are usually well known within these communities and have relationships with these landowners. Many landowners are susceptible to deal with the mills because they think they are trying to low-ball them and don't have the relationship that a wood dealer in the community does. Landowners usually want to deal with wood dealers because they either known and trust them or they known somebody that has dealt with that wood dealer before. When looking for placement of a pulp and paper mill, location is one of the most important factors. You want to take into account access to timber basket, quality workforce, competitors, and a superior transportation infrastructure. You also want to take into account whether there is a good network of wood dealers or if you will have to procure the timber yourself with a procurement

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