Resilience by Design: How Mercer Transformed Its Global Supply Chain for the Future

At Mercer International, procurement isn’t a back-office function—it’s operational infrastructure. It keeps mills running, capital projects moving, and risk under control in a world where none of those are guaranteed.

“Our job is to ensure that our operations continue—regardless of what’s happening outside our gates,” says Stefan Duda, Mercer’s Vice President of Procurement. “Whether it’s price spikes, regulatory shifts, labour shortages, or global logistics disruptions, the question is always the same: can we keep going? And if so, how cost-efficiently?”

Over the past two and a half years, Mercer has restructured its entire approach to procurement. What began as a response to crisis: post-pandemic shortages, geopolitical sanctions, and energy shocks—has evolved into a long-term redesign of how materials, partnerships, and systems are managed.

Today, Mercer’s procurement organization manages 700 million CAD in annual spend across pulp, solid wood, and mass timber operations. More than 120,000 purchases are made with global business partners from about 30 different countries each year, supporting ten operational sites with raw materials, services and over 100,000 different spare parts. But the numbers only tell part of the story.

From Transaction to Strategy

“Historically, procurement was measured on cost, service, and quality. That model is outdated,” says Duda. “What’s equally important now is resilience, agility, and transparency. You can’t run a business on unit price alone when your supplier can’t deliver, or when a contract lacks visibility, or when inflation wipes out the savings.”

The transformation began with structure. Mercer centralized its procurement function, moving away from independent, site-specific teams to a coordinated model with category leads and enhanced cross-site collaboration. This allowed the team to identify where spend could be leveraged, where suppliers overlapped, and where operational gaps existed.

“We had to ask some hard questions,” says Duda. “Do we understand our total exposure to vendor risk? Do we have visibility across systems? Are we prepared to shift sourcing when a critical supplier fails to deliver? In many cases, the answer was no—or not yet.”

What followed was a deliberate, system-wide redesign:

• Consolidating ERP systems with a global SAP rollout
• Optimizing our spare parts inventory by taking a criticality-based approach, which considers lead time, usage, and operational impact.
• Introducing AI-based tools and machine learning for automation of repetitive tasks, contract analysis and vendor monitoring.
• Deploying vendor management platforms like Osapiens, ISNetworld and PayShepherd to manage risk, ESG compliance and cost anomalies.

“We’re not just automating workflows. We’re embedding intelligence into decision-making,” Duda explains. “The goal isn’t speed—it’s foresight.”

Building Capability Through People

One of the less visible—but most important—shifts has been in talent development. Mercer’s procurement team comprises 40 professional Purchasers and an equal number of Stores technicians. But the structure isn’t flat: each role is strategically aligned by category, location, and skill.

“We built the team around strengths. For example, if someone has deep experience in technical procurement or inventory management, that’s where they lead,” says Duda. “Procurement isn’t just administrative work. It’s cost management, vendor relationships, risk navigation, and problem solving. You need people who think that way and act proactively.”

Cross-site knowledge sharing is now routine. Technical skill-building and cultural cohesion are supported through regular coordination meetings, shared benchmarks and KPIs, digital platforms, strategic workshops, and continuous improvement sessions. Mercer has also implemented formal succession planning and personal development plans to ensure future continuity.

Duda adds, “Just as we invest in systems, we are investing in our people, fostering a stronger, more unified team.”

Managing Risk, Not Just Reacting to It

The team’s ability to anticipate disruption has become a core strength. Mercer’s strong vendor relationships and shift toward scenario-based planning have helped the company avoid costly shutdowns, even during critical disruptions caused by natural disasters, labour strikes or geopolitical tensions.

For example, in 2024, a Canadian rail strike threatened the flow of key chemicals. Within hours, the procurement team rerouted shipments to truck carriers, adjusted on-site storage thresholds, and redistributed supplies across mills. “We don’t wait for the bottleneck. We plan for it,” Duda says.

Mercer also evaluates vendor risk meticulously. Through Osapiens’ cloud-based due diligence platform, the team now monitors sustainability and supports Mercer’s compliance in the supply chain for over 6,500 partners. “We’re not just checking boxes—we’re reducing real exposure. This proactive approach has been critical in navigating the evolving landscape of global regulations, including successfully meeting the increased reporting requirements under acts like the Canadian Modern Slavery Act and the German Supply Chain Due Diligence Act over the past 18 months. Our diligent vendor risk assessments and robust reporting mechanisms ensure we remain ahead of these critical compliance demands,” says Duda.

Technology as an Enabler, Not a Shortcut

Technology underpins Mercer’s procurement transformation; it is a critical necessity for efficiency and transparency, but Duda is quick to clarify: “Tools don’t solve problems. People using the right tools do.”

SAP is the backbone, with full integration across all Mercer locations expected to be completed by the beginning of 2026. It provides a single source of truth for ensuring accurate inventory control, efficient material flow, and real-time data visibility across the supply chain. Complementary tools at some of our locations include, for example:

• AFI, used for the efficient processing and approval of invoices.
• FIS, used for seamless material master data management.
• PayShepherd, which helps us to verify contractor costs.
• ISNetworld, which allows us to manage risk and contractor safety compliance.
• ASANA, which we use for our team collaboration and project management.

Artificial Intelligence and machine learning are increasingly finding their way into our daily procurement activities, such as contract reviews, compliance monitoring, vendor management, and cost analysis. “We’re not chasing a hype. We’re applying AI and automation through machine learning, where it saves time, increases accuracy, or adds strategic insight.”

Resilience in Numbers:

• CAD 700M annual spend
• CAD 150M managed spares inventory
• 120,000+ purchases per year
• >5% in annual cost reductions
• 30+ countries we source from
• ESG risk scores for 6,500+ suppliers

What’s Ahead

Mercer’s roadmap includes finalizing the SAP rollout at some of our locations, strengthening the supplier risk monitoring, and accelerating regional sourcing strategies. “Our environment is changing fast,” Duda says. “Supply and demand, regulations, and technologies are constantly changing. Geopolitical disruptions and natural disasters are also increasing in frequency. We have to be prepared and stay ahead of these evolving challenges.” The biggest challenge, he notes, is maintaining visibility. “You can’t manage what you can’t see. That’s why collaboration between our teams and with our business partners is so important and why system alignment and data transparency matter.”