HB: HEIDI BROCK
DS: DEVIN STOCKFISH
CF: CHRISTIAN FISCHER
SV: STEVE VOORHEES
MR: MILES ROBERTS

HB: I’d like to welcome Christian Fischer, President and CEO of Georgia-Pacific; Miles Roberts, Executive Director and Group Chief Executive of DS Smith; Devin Stockfish, President and CEO of Weyerhaeuser; and Steve Voorhees, CEO of WestRock. I’d like to ask you to reflect on your companies and how they’ve been impacted by COVID-19. 

DS: This is unlike anything that we’ve seen in a long time. When the pandemic really started kicking off in that March/April timeframe, we saw a pretty dramatic drop-off in demand for wood products that lessened the demand for logs as well. We saw a significant drop-off in housing activity in the March, April and early May timeframe as well.

We did take some early actions. We kicked off our crisis management team right away, really to help put safety protocols in across our organization. That was a key focus for us. Help our organization and our businesses deal with the bevy of regulations and guidance coming from the safety folks and professionals at the state, federal and local level. We did take some production downtime at the early stages of the pandemic to really kind of keep our inventory levels in check, given what was going on in the broader market. Certainly a lot of communication really across the supply chain from contractors, suppliers, employees, customers, really just trying to stay on top of the entire supply chain and manage issues as they arose and really try to stay out in front of it as much as possible.

CF: It impacted every business that we have. We saw this sudden stop of the housing market, but a renaissance of the R&R — repair and remodel — market, on our wood products side. We saw, you know, a strong ecommerce sector for corrugated packaging, but we also are feeling the slowing economy and the demands for corrugated packaging. And on the consumer side, obviously, we had a big stop in anything that is food service-related and away from home as a lot of people shifted their work and their time spent to a home environment and therefore a big surge on our consumer side from the at-home sector.

First, we needed to learn how to work differently very, very quickly. And of course, avail ourselves of technology and all that, but that is not really at a leadership level. We had to come together in different ways, communicating, making decisions, and also knowing what we were actually going to focus on.

Second, more than ever, really, we needed to rely [on] and enable our employees in the factories, in the markets, working from home, to make decisions faster, better, on their own.

And last but not least, we needed to refocus even more on staying in touch with our customers and what was changing on their side. That has packaging implications, supply chain implications, SKU (stock-keeping unit) implications and how you [manage] a surge of demand of 40/50 percent versus a year ago.

SV: We got the first experience with this in China in our operations. So fortunately that gave us something of a head start. Demand changed very rapidly. And fortunately, in corrugated packaging, ecommerce has been very strong. We also make folding cartons, and healthcare packaging has been very strong for us. We’ve had other areas that haven’t been so strong, so an example of that, with the reduced travel, purchases of alcohol in duty-free stores are not what they were several months ago.

One thing that we use for virtually everything we make is fiber, and fortunately the virgin fiber stream has been very consistent for us. We procure more than 42 mined tons of virgin fiber in North America each year and 3.3 million of that fiber is purchased from Georgia landowners. So I appreciate the relationships we have with Georgia landowners. We’re also one of the largest recyclers in the world, and so we operate a number of plants, including four in Georgia, where we recycle more than 200,000 tons each year.

And it’s been interesting to see what the pattern is because we operate single-stream facilities and that, those volumes have actually gone up, as you can imagine, with people consuming more at home, and then resources of recycled fiber from more industrial users has been down.

MR: At DS Smith, we are predominantly a European business. We’ve got about 30,000 employees and our business is really focused on corrugated packaging. Our business is focused on ecommerce. The mix of business has changed hugely. And the ecommerce has exploded in Europe. You know, we’ve seen volumes double. Yet, on the industrial side, we’ve seen demand really fall off. We’ve been very pleased and have had to work quite hard to get the essential business space in all of our countries.

HB: As we all adapt to this new world, it feels like one of the most important things we can all do is really be intentional about how we are continuously improving. And I wonder if you could share what you’ve learned from this pandemic and what you would suggest we build on to build an even more resilient industry for the future.

CF: We actually saw progress being made, including in the factory, manufacturing environment in terms of, again, what people work on. Reduce cost, get more output and all those good things. We’ve seen more progress being made in these six months that are behind us in 2020 than we’ve seen in years combined. And really, that’s pretty telling.

We need to reimagine how we do work. We think [about] how work is getting done and, you know, apply those lessons learned. Some of which we are still digesting. To have the courage to transform how we do business, whether it’s in a corporate environment or in manufacturing, how we serve customers.

I know that sounds relatively high level, and it is, but I mean, if I just take a quick anecdote or examples of what I’m talking about. For example, we were able to start up new equipment in our factories and that’s both hardware and software. The OEM (original equipment manufacturer) specialist may have been locked in a different county and couldn’t come, [or] they were locked down the road in a hotel room because they couldn’t access the factory. And still we started up the equipment by working with them remotely and utilizing what everybody could contribute. We deployed ERP (enterprise resource planning) systems completely and in a virtual, remote way, whereas before that, we may have sent eight, 10, 15 people for weeks to a certain location. It worked, and not just barely; it worked sometimes even better. We conducted M&A (mergers and acquisitions) processes without anybody actually coming to visit.

​SV: I think you’d have to start with the essential nature of our industry, and so we really can’t fail, because people count on us. The lesson is resiliency. So we think, what is resiliency, and it’s the capacity to recover quickly from difficulties and change circumstances. I start with the nature of our physical assets. We have a sizable system of paper mills and a sizeable, flexible system of converting assets, and we’ve been able to move and adapt our assets to meet the changing needs of our customers. More important is the resiliency of our teammates that I work with every day. 

And talk about mindset, there’s a book called Mindset [that] I’d recommend for anybody. But Dr. Dweck says you can have a growth mindset or a fixed mindset. [With] a fixed mindset, you’re pretty much stuck. So if you have a difficult situation, you’re stuck. Everybody is better off having a growth mindset, so when you have a challenge, you adapt to it. The lesson is that we are a lot more resilient maybe than we thought we were, and that’s great for our industry and our company, because we’ll be nimble and because we need to be nimble going forward. And that ends up being just a terrific strength.

HB: What changes to supply chains and markets do you expect to remain in place in the near future?

CF: If I look back at some of the takeaways from the pandemic, it’s really the importance of the supply chain. And especially now, when you narrow it down to what we might call essential products. Whoever gives them that label. Essentially, in the sense that consumers, people really need it, no matter what happens. So toilet paper is one of those items, obviously.

The availability of that in a supply chain in a very, very volatile, unknowable set of circumstances — that is actually getting a lot of people, companies, consumers, behaving and thinking differently. Where we come out is hard to tell, but I’ve heard some people refer to it or contrast it as “just in time,” which has been the business practice pretty broadly for a long, long time, to “just in case.” The “just in time” that we’re all familiar with, versus “just in case” that something happens. Now, can I rely on your supply and availability of product? If something bad happens, do you have the resilience? Do you have the flexibility to pivot quickly as the circumstances warrant? Do you have surge capacity or flexibility to meet unprecedented surges in demand?

Those are all shifts in discussion, in behavior that I see. Where we come out, I don’t know yet. I’ll pair this with one more thing, and that’s probably not strictly supply chain but also market trends. Inside our firm, but also with our partners, one thing [is] pretty clear. Everyone’s been more open to experiment and try something. Try it fast and fail fast. And if it doesn’t work, let’s correct this as fast as possible. We’ll be better able to serve customers, consumers, society by keeping it up even when the pandemic subsides, and I’m sure one day it will.

SV: I like the “just in case” descriptor. We’ve certainly been living that. And the supply chains overall will have to be much more nimble and resilient in order to meet the needs of our customers. Delivery is an important aspect of our business we’ve seen in ecommerce. There’s a strong desire to have things delivered in different ways. That’s a strength of our business. There is a large, significant trend over the past couple [of] years, an even greater catalyst towards sustainability. I could see that gaining additional momentum, particularly as a result of recent events. And I’ll mention the word “circularity,” because our supply chains will become more circular and our industry is in a remarkable position to be able to take advantage of that. And a lot of people think of recycling as being an important aspect of sustainability and circularity for our business. And that’s absolutely true. Forests are a significant aspect of circularity because we have the ability to regenerate our product over time. I feel very positive about our industry because of the combination of using both virgin fiber and recycled fiber from sustainable forests for the long term.

CF: We are all keenly aware that, at least for now, hygiene is spelled out and written in capital letters all over the board. And if you can do it with a one-touch or completely touchless [process], that’s even better. And when you take all these things together, it will be quite interesting to see what happens next, including which of these habits — for example, [wiping] your kitchen counter more often and [wiping] it with a product that then you can dispose of with the germs — will that be a habit that will stick around? It’s hard to tell. We’re trying to figure that out and position ourselves accordingly.

MR: If you look at the end markets, there’s obviously been an explosion in ecommerce. And it’s quite clear that when the lockdown ends, these high rates of ecommerce use are there to stay. So the economy is just this whole ecommerce [boom], and how we can really help [companies] adapt their business models to where it’s going to be a very different end market in the future.

We’ve seen a lot of this whole digital, people wanting to communicate, to work with us differently. You know, people not coming back to work, [in] our supply chains, customers, even our own staff. So again, we’re giving a lot of thought to that and there’s some really positive things, but there’s also some negative ones.

We think it’s great people work at home, but I’m concerned there could be some negative consequences further along. People getting isolated away from their colleagues and things like that. So we’ve got some work to do right there. But then sustainability, if we talked today with COVID, we’ve talked customers, we’re actually talking more about other things and a pending recession. They’re all talking about sustainability. It’s like it’s come up, the agenda, because of COVID. It’s like they think we’re going to have to live differently, and environments are going to be more important to end consumers in the future. Customers are giving us responsibility they haven’t given us before. This is a great opportunity for all of us to become more of that sort of partner working with many of our customers or even our supply chain. They’re [relationships] built on trust and common values or facing a bit of a crisis. It does help build relationships, and it’s an opportunity for us to do that.

HB: We’re in a period of rapid social, political and economic change. What actions can we take now to ensure that the forest products industry is even stronger a year from now and five years from now?

DS: I’d highlight three things. It starts with people. At the end of the day, you’re not going to be successful as a company or an industry if you don’t have the right people working for you. There’s a lot we can do and a lot we need to do to make sure that this is an attractive industry for people to come and build a career.

There is a more intentional effort that can be had around bringing more diversity into our industry and really across the board, but particularly into leadership roles. There’s still a lot we can do on helping all of the different players throughout the supply chain, you know, build up their people, whether that’s contractors, truck drivers, really across the entirety of the supply chain. And certainly once we get people into the industry, we all individually as companies and as an industry need to make sure that we’re continuing to invest in their development so that they can stay and build careers in the forest products industry.

The second thing is for all of us, we have to have strong end markets. Whether that’s more wood and building or more opportunities for fiber-based products, really across the gamut, that’s at the end of the day something we’re going to need to continue to develop to make sure our industry stays strong.

The last thing is, it’s important to have a smart regulatory regime. And that really cuts across all facets, whether that’s trade policy, immigration policy, environmental policy, tax policy, all of those things are important if we want to continue to have a competitive industry both domestically and, for most of us, on the global stage as well.

SV: The other [thing] that comes to mind is innovation is going to be even more important as the world changes. We have the opportunity to grow demand for our business by bringing very innovative, creative people into the industry and innovating to meet our customers’ needs.

CF: Education is one, learning is another one, and empowering is a third one. And of course they overlap. Educating people, including legislators, about our industry and the potential pitfalls and unintended consequences of what might sometimes be just well-intended kind of legislation. Product bans, recycling mandate — rather let the markets take care of it.

Also, how important for the success of this industry is free access to raw materials, the free access to markets? The free access to, call it labor, the human capital, and really having good discussions around that.

Learning is staying really close and really understanding what the customers really want, not just what they say, but really how they behave. And servicing them and being the preferred alternative in our industry.

With all these new technology trends coming, automation and so on and so forth, many of our people, especially in factories, are afraid about, what does this mean to me in the future? We have to empower them. We have to enable them. We have to continue working and gain the trust that if they’re willing to learn and they have the capability to learn, which really most people do, then there is a future for them, including in our industry.

MR: You’ve heard about the whole importance of customer basis, essential nature, etc., and we can come out of this with stronger relationships and a greater understanding of the value that we can provide. But we do have to work with our communities, and our communities include the legislators.

And here we are seeing, again, it’s an opportunity for us to demonstrate the value, and we’ve done a lot of good work, but we’re going to have to do a lot more… to get the support of that community and the NGOs and the government behind our industry, and there’s more we have to do there. More about marketing ourselves, but also some of the way we work. More inclusion, more [ability] to demonstrate how we’re solving the problems that are faced by society, not just in the product, but just generally. But that’s where we are; we’re putting more effort [behind that]. We are no different than other industries, but we’ve just got to earn that right every day in the eyes of the communities. We’ve got to earn the right to carry on the success that we’ve enjoyed, carry on developing, growing the business. And we can do it. We’ve got some great, great, great stories to tell, and some people in the industry, we can do that and we need to do it. ■

---

---