Planning and guiding wood procurement
Timber is normally procured based on species and quantity and reflecting the sawmill’s sales forecast. The success of the procurement is monitored through quantities in storage.
More advanced sawmills are able to use sales as the basis for ordering logs from the forestry department so that the order includes details not only on the species but also on the grade, length and diameter.
Cutting is guided through bucking and by monitoring the harvesting grade/length/diameter accumulation carefully.
The structure of a forest system
Advanced forest systems support all the stages of the process which includes:
- Forestry management plan
- Quote
- Agreement
- Harvest and transport plan
- Monitoring cutting, forest haulage and long distance haul
- Order management, incl. log orders from sawmills
- Device terminals for mobile users
- Maps and integration with geographic information
- Payments and invoicing
- Subcontractor tariffs
- Timber deliveries and profitability calculations
- Electronic interfaces to the electronic services by the Finnish Forest Centre, Luke (Natural Resources Institute Finland) and other operators
Progressive procurement companies guide the sawmill’s raw material procurement based on their sales forecast so that the entire timber procurement operation is monitored as demonstrated in this chart.
© PiiMega Oy
Deliveries to a sawmill or the sale of timber guide transportation based on quantity and quality. Sales and transportation plans generate the need for cutting.
Sales forecasts guide the purchasing of timber by grade so that, when the forecast changes into a plan for a specific period, the stores have the correct grades and quantities.
Profitability for each load is monitored so that profitability for each delivery is known at all times.
By-product flows are guided using the same profitability monitoring tools. An advanced forestry system supports the above process seamlessly.
Planning sales
As new algorithms have been developed, the predicted log congestions can be cleared and divided between sawing patterns that produce the financial global optimum. The algorithms do this by using predicted data on raw material prices and production-related costs for each sawing pattern.
The algorithms also make it possible to change the end product distribution so that the financial impact is constantly visible. Due to these algorithms, raw material procurement can be managed so that raw material flows are distributed into the desired log grades based on sales and productionrelated factors.
In order for sales management to work in an optimal way, lengths should be processed in the ERP system so that the relevant information is available from sales to the forest. It is not enough that sales are guided by the grading/ diameter distribution alone but all calculations should also consider lengths so that, in the planning stage, the customer is allocated with timber and processed products that comply with the relevant length requirements.
In the future, the sales plan will be used to calculate the sawing patterns that produce the global maximum, considering the log grade and length requirements. Then, the forestry department is directed to the stands that best produce the raw material to comply with the sales plan.
Various stem banks and laser scanning data are used in raw material procurement. The purpose of this is to ensure that cutting will produce the raw material distribution that best serves the sawmill.
Planning production
Production planning is carried out in a similar fashion to sales planning. Orders generate the need for certain log grades and optimum sawing patterns as determined by the sawline operator. This way, log grades and sawing patterns are determined for the order at the ordering stage.
This log grade and sawing pattern combination is compared to the predicted quantity of logs. If the predicted number of logs exist, the order can be delivered. Otherwise, the sales department will assign a new delivery date.
When more advanced algorithms are used, the software will suggest which log grade and pattern to use and determine whether the order can be delivered using the optimal pattern or optimal raw material. If the suggested optimum log grade or raw material has already been allocated to another order, the software will suggest the next best log grade or raw material and clearly determine whether it is still financially sensible to deliver the order.
Production planning is based on the available/needed list. This list shows the sales, production and storage situation.
Raw material congestions are usually managed using software that uses algorithms to predict future raw material flows.
Production planning is usually divided into cycles that help plan, for example, quarterly production and sales. Weekly plans create a solid production programme for the upcoming week or weeks.
