You would never let treasury ignore a 20% swing in your largest expense category. You hedge currency exposure, actively manage fuel costs, and continuously monitor interest rate risk.
But when it comes to resin—often the single largest variable cost for plastics manufacturers—most finance teams treat it as an operational detail beneath their attention level. Procurement handles it. The variance report summarizes what happened. And that’s usually the end of the finance team’s engagement.
That approach is a missed opportunity, and understanding why requires looking at how the “raw material” framing shapes organizational responses in ways that cost real money.
Resin is usually classified as a “raw material,” which automatically places it in operations’ domain. Procurement handles purchasing. Finance sees results in variance reports, attributes swings to “market conditions” as if they were weather events, and moves on to other priorities.
But resin doesn’t actually behave like a stable input that only varies in volume. It behaves like a commodity: volatile, influenced by macro factors, and requiring active management. Prices can swing 15–20% within a quarter due to feedstock costs, supply disruptions, producer behavior, and trade dynamics.
Movements of that magnitude affecting your largest cost category aren’t mere operational details. They’re material financial exposures that deserve the same rigor as currency or interest rate risk.
The framing problem runs deeper than organizational placement, though. How you categorize something determines how you respond to it. Classify resin as an operational detail, and the response becomes passive acceptance—variance explanations rather than variance prevention. Reframe it as a financial position that requires active management, and you unlock entirely different tools and outcomes.
Companies strategically managing resin don’t just track what prices did last month. They maintain genuine forward visibility into where prices are heading—watching feedstock trends, inventory builds, export shifts, and production outages as leading indicators. That lets them position proactively rather than scramble after the fact.
This visibility changes how they buy. Rather than simply purchasing what they need when they need it, they make explicit decisions about how much volume to lock versus leave floating based on their market direction read. It’s the same way treasury thinks about currency exposure—something to actively manage, not passively accept.
The real difference, though, is in response speed. The most effective teams establish trigger-based responses ahead of time:
No waiting for monthly meetings while opportunities close. The responses are predefined, so execution happens fast.
Underpinning all of this is genuine scenario planning—not as an annual budgeting exercise, but as an ongoing foundation for decision-making. What’s the exposure if prices move 10% in either direction? What actions make sense in each case? These questions get revisited regularly as market conditions evolve.
Budget variances from resin volatility are ultimately finance’s problem, regardless of where procurement reports. When your largest expense swings unpredictably, P&L accuracy suffers and margin commitments become harder to keep. Finance bears the consequences even when they’ve delegated the cause.
Margin protection is explicitly a finance objective, not an operations objective. Cash flow timing around inventory counts requires treasury coordination. Accurate accruals depend on understanding where prices are heading, not just where they’ve been.
When procurement operates in isolation from financial planning, everyone loses. Finance gets surprised by cost swings they couldn’t anticipate. Procurement makes purchasing decisions without understanding P&L implications. The monthly index report becomes the end of the conversation rather than the beginning of a strategic discussion about positioning.
Top-performing companies bring procurement into financial planning as genuine partners rather than treating them as a cost center to manage. They give finance direct visibility into the market intelligence procurement uses—the same data, same dashboards, same context. When both functions see identical information, they naturally align and accelerate decision-making.
In practice, that looks like:
These organizations have stopped treating their largest cost category as someone else’s problem. They manage it like the significant financial position it actually is—and the margin protection they achieve reflects that commitment.
Ready to bring resin into your financial planning process? Request a ResinSmart demo and see how real-time market intelligence can transform procurement from a cost center into a strategic advantage.