There was a time when the term "market intelligence" was limited to the sales and marketing departments or "C" level executives. These days, though, procurement departments are finding value in having access to market intelligence, realizing that it allows them to respond much better to changes in the marketplace.

One company making the most of this opportunity is paper products maker MeadWestvaco in Glen Allen, Va. As the company's procurement organization began to outline its 2008–2010 strategy, it began to review some of its sourcing initiatives, especially as they related to supplier innovation, total cost management, demand management and market intelligence. "We felt that there were important enablers that could help us differentiate ourselves in sourcing," says Daniel McNally, senior director of raw materials and energy sourcing.

When the procurement department looked at market intelligence in more detail, it looked at the kind of data it was currently receiving, how useful it was, and how much time it took for sourcing managers to sift through the information to get to the data that they really needed. "They were spending an inordinate amount of time trying to collect information to do their jobs more efficiently," says McNally.

The department set some criteria for market intelligence information. It needed to be specifically applicable to their business, and it needed to be accurate, useful, timely, concise, and actionable. Applicability was particularly important. "We looked for a provider offered customization," he says. "It is easy to get 'canned' reports. Customization in how it applies to our specific business was critical."

In its search, MeadWestvaco came across Beroe, a market intelligence provider with offices in the U.S. and analysts based in India. Since MeadWestvaco is getting more involved in low-cost country sourcing, having access to global market intelligence information was critical. Beroe also specializes in customizing useful data, which MeadWestvaco's sourcing managers can use to create better strategies and to engage in better negotiations.

"Beroe has access to information on the 17 raw materials that represent about 60% of our total spend," states McNally.

The two companies began working to make the market information even more relevant. Training is two-way: Beroe's analysts have trained MeadWestvaco's sourcing managers on how to access and make the most of the data. Conversely, MeadWestvaco makes sure that Beroe understands its business well, so it can continue to provide more pertinent information. "We have gone to India to meet with their organization to provide top-line overviews and details of what we do," he adds.

Beroe provides information not only on global markets, but also on Tier 1 and Tier 2 reactions to the market. For example, information on petrochemical products includes data on the product as well as supply and demand and pricing trends.

MeadWestvaco even has access to indirect correlations. With chlorine, for example, pricing is based partly on housing starts due to PVC piping. This information provides MeadWestvaco with the opportunity to get involved in more proactive sourcing strategies. "If we see housing starts move up or down through the relational database, we can be proactive in our sourcing strategy with chlorine, as opposed to waiting for the chlorine market to move, and then having to respond reactively," McNally explains.

For example, recently MeadWestvaco was negotiating with an incumbent printing supplier and Beroe provided detailed information on that supplier's manufacturing costs at the specific plant where MeadWestvaco was purchasing, allowing it to engage in cost-based negotiation. "This not only prevented a price increase, but provided us with a little bit of price relief," he recalls.

One of the company's goals was to increase payment days in order to improve working capital. Beroe's financial analysis provided the company with data that it could take to one of its key suppliers, then leveraged that with the supplier to extend their payment date.

MeadWestvaco was also investigating new technology on film extrusion. Beroe was able to conduct some global research on this new technology, which provided MeadWestvaco with enough information to make the decision to move forward with the new technology.