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MARKET WATCH

Adapt to Survive: Optimizing the Wood Supply Chain

Posted by Jay Engle on March 24, 2015

Like all forests, all wood supply chains are different. Some are longer and more complex than others, but one thing they all have in common is that they nearly always have at least one weak link. Some of these weaknesses are inherent and systematic in ways that seem beyond control. Others might not have been weaknesses originally, but develop into issues over time as inevitable changes occur. Some, in fact, might have been strengths initially. Javonmeasuringlogs

The most sound and sustainable mills have a survival instinct. They persevere because they are aware of the idiosyncrasies of their supply chains and are agile when it comes to adaptation. Take, for example, a mill that selected a location in the 1930s near the southeast coast on the edge of a major port city. Initially, the site provided the advantage of easy access for shipping end products. Since the mill was located on the outskirts of the city, wood resources were readily available at a reasonable cost and transport to the mill was unimpeded.

Nothing stays constant forever, however, and the city experienced strong growth in a positive economic climate that started to accelerate in the 1950s. Both the city and mill production grew and, over time, the mill became encompassed by development. Trucking wood to the mill became difficult due to higher mill demand and new traffic restrictions.

While the mill being located on the coast was an advantage from a product shipping aspect, it came with an inherent weakness. Wood fiber availability was disadvantaged because the mill’s procurement zone was limited to an 180ᵒ arc (instead of the standard 360ᵒ arc), and this already reduced supply area was gradually being nibbled away at by suburban encroachment.

In response, mill management made modifications over time, both in anticipation of and in reaction to the changes occurring around it. Rail service was available close to the mill, for instance, so the company was able to extend the line to the mill and put it to good use alleviating some of its transportation issues. The company was also proactive with local and regional government agencies and participated in the planning processes to improve the highway and road system. Those efforts paid a huge dividend by eliminating a potentially crippling weakness and turning it into a stronger link in the supply chain as truck turn-around at the mill was minimized.

Mill management also realized that other changes to the supply system would be needed due to the mill’s increasing demand for wood and fiber at a time when the resource was migrating further away. They were able to strategically locate remote woodyards in outlying areas to take advantage of very productive pine plantations that had been established under intensive management regimes in the 1980s and 1990s. In addition, the mill is currently analyzing the possibility of taking one of the mill’s initial strengths, the port, and adding it to the wood and fiber supply chain.

The management of this mill demonstrates the importance of systematically and continuously analyzing the current situation using the best information available, making good decisions and plans based on this information, and then translating them into positive action. While the supply chain for this mill changed over time, its weak links were addressed and overcome by a continuous improvement process that supported the mill’s ability to stay competitive and survive.

Optimize your supply chain

Topics: supply chain

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