Identification of Value-adding Strategies in the Swedish Sawn Wood Industry

Swedish sawmills are increasing their application of value-adding processes in sawn wood production. This study identified the most common value-adding combinations used by the Swedish sawmills. Data were obtained from a survey of Swedish sawmills in 1995 and from industry statistics. Nine different groupings of sawmills with regard to the level and types of value-adding technologies were identified by cluster analysis. The largest group added value only to marginal quantities of their production. Eight other groups that applied different combinations of value-adding processes were identified. Drying and planing were important elements in several strategies. Adding value to the sawn wood is not a homogeneous strategy; instead it includes several ways to focus production on different products and customer groups. Advanced value-adding processes often generated a higher unit profit margin than the production of commodity sawn wood.     

Integrated production of semi-finished components in sawmills,part II: Management of internal operations

Recently, several Swedish sawmills have taken over production of components from customers in the furniture, joinery and house-manufacturing industries. The purpose of this study was to identify key factors in management of internal operations for sawmills with this strategy. A multiple case study design, based on face-to-face interviews with Swedish sawmill practitioners and on various forms of secondary data, produced comprehensive research information. Starting integrated production of components is a demanding strategy for sawmills. It requires deep knowledge about the customer and qualified skills in advanced further-processing of sawn wood. The complexity of quality management, production planning and cost calculation increases, and investments in processing equipment and customer relations reduce strategic flexibility. The diverging material flow complicates sawmills' possibilities to economize on scale, and they must instead economize on other factors, such as scope, combined operations and internal control. New tools for production follow-up and control, for production planning, for analysis of product profitability and for strategic partnership analysis are requested by practitioners. But, even if new analysis tools would facilitate better analysis and management of operations, the willingness and ability to innovate and learn among the personnel emerges as a key factor for success.     

Value-added strategies and forward integration in the Swedish sawmill industry: positioning and profitability in the high-volume segment

Abstract

The changing market conditions for the Swedish sawmill industry place a focus on a better understanding of the pros and cons of value-added and forward integration strategies. The purpose of this article is to describe and explain recent value-added strategies in the Swedish sawmill industry. The study includes strategies from 13 of the 15 largest sawmill companies for the period between 2002 and 2005, describing a differentiation between value added in primary sawmill production and forward integration into secondary production. It also aims to relate some basic conditions, such as company size, company growth and corporate strategy, to value added and forward integration to profitability. The results show strong positive and significant correlations between forward integration, value added in primary production (somewhat weaker) and unit revenue, and profitability measured as return on investment. There were no strong or significant correlations between size and profitability, playing down the importance of economies of scale (among these already large companies). An interesting result is the much higher profitability of the buying sawmill companies compared with the forest corporations, stressing the importance of both a long-term strategy when investing in value-added activities and ultimately the priorities of ownership.     

不同下锯法锯解的分析评价

本文就制材生产中通常使用的三种下锯法,采用计算机进行模拟锯解,然后进行分析评价,找出三种下锯法对主产锯材宽度、原木出材率和经济效果的影响。为合理利用原木、选择适当的下锯法,提供了理论依据。     

Community Forestry Enterprises in Mexico: Sustainability and Competitiveness

Community-based forest management, such as Community Forest Enterprises (CFEs), has the potential to generate positive socioenvironmental and economic outcomes. We performed a detailed survey of financial and production parameters for 30 of the approximately 992 CFEs in Mexico in order to estimate costs, income, profits, and sustainability of harvest levels for forest management, harvest, and sawmilling. Fourteen of the 30 CFEs harvested more timber than they grew in 2011, suggesting issues with sustainability, but only two of these had harvest far above annual growth, and five of those were only a fraction more than annual growth. All of the 30 CFEs except one made profits in forest management and timber growing. For timber harvesting, 22 of 30 CFEs made profits, but the losses were small for the other CFEs. For the 23 CFEs with sawmills, 18 made profits and five had losses; the greatest returns for the CFEs accrued to those with sawmills for lumber production. On average, the CFEs surveyed had high costs of production relative to other countries, but the CFEs were still profitable in national lumber markets. If Mexico were to begin importing large amounts of lumber from lower cost countries, this could pose a threat to CFE profitability.     

Integrated production of semi-finished components in sawmills,part I: External interactions

Abstract

In a changing business landscape, where globalization and new customer requirements create new business opportunities, some Swedish sawmills have taken over the production of components from their industrial customers. In light of the emerging network-centric perspective on business, sawmill managers' perceptions about component customers' operational requirements, customer interaction processes, and their sawmills' offerings are researched and discussed in this article. A multiple case study design, based on face-to-face interviews with Swedish sawmill managers and on various forms of secondary data, produced comprehensive information about sawmills' interaction processes with component purchasing customers. Thematic data coding facilitated the assessment of the research information in relation to the conceptual and empirical findings of previous research. The findings of the study indicate that more process orientation in housing-, joinery-, and furniture-manufacturing implies an opportunity for sawmills to make service-based offerings including not only physical goods, but also administrative services, logistics, and expert advice. The results of the study confirm the network-centric perspective on business where value is created through the interaction between firms. However, noteworthy barriers in the form of process-, culture-, as well as socially related factors at customer firms must be considered.     

The Swedish hardwood sawmill industry: Structure,present status and development potential

Abstract

This study describes the Swedish hardwood sawmill industry with respect to its structure, raw material, production and market conditions in order to seek ways of increasing the competitiveness of the industry. Fifteen sawmills were studied through observations and interviews. The Swedish hardwood sawmill industry creates job opportunities in sparsely populated areas and uses a biological raw material which is important for environmental biological diversity. Any decrease in the use of this material will mean a drop in the incentive for forest owners to cultivate deciduous forests. Today, the hardwood sawmill industry is experiencing problems in securing the supply of raw material of the desired quality, i.e. without knots and discoloured heartwood (red-heart or brown-heart). To increase the competitiveness of the Swedish hardwood sawmill industry, the raw material supply must be secured. Production should be geared towards products demanded by the market, and new markets need to be entered.     

A multinational analysis of competitive strategies of softwood sawmills

The primary objectives of this study were to describe and compare the competitive strategies of softwood sawmills in five major softwood producing regions of the world, and to discuss the limitations of the well‐known Porter model. Data was collected via personal interviews from 102 companies in Finland; coastal and inland western USA; coastal and inland British Columbia, Canada. Results suggest that “pure”; focus and differentiation strategies are the competitive strategies most commonly followed by sawmills in Finland and inland British Columbia. In the coastal and inland western USA regions “pure”; differentiation and “pure”; cost leadership strategies are dominant in these two geographical regions, respectively. In coastal British Columbia a “pure”; cost leadership strategy and the combination of all strategy types were the two strategies most frequently followed. The competitive strategy followed was found to be related to company size. Large companies more often applied cost leadership strategies and differentiation and focus strategies were typical of small and medium‐sized companies. In general, sawmills in all five regions had difficulties identifying exclusively with one strategy type.     

A simulation model for economic analysis of timber/forage production alternatives in rocky mountain aspen stands

A simulation model was developed to analyze possibilities for timber and forage joint production in Rocky Mountain aspen stands. Given harvest possibilities from timber yield tables and information concerning site characteristics, the model calculates the physical production levels for timber and forage, and then uses these figures to make an economic analysis based on present net worth and financial maturity criteria. The model was applied to different sets of sites, harvest possibilities, and costs and revenues. The results indicated that the optimal joint production strategy varies with the economic criterion, the discount rate and harvest strategy.     

Improved ecoeffectiveness of interior hardwood products in the house-building industry as a way to promote sustainable forestry

Sawn hardwood is required by the market to be homogeneous, even in texture and colour, but the products produced by Swedish hardwood sawmills exhibit a wide variation in characteristics. This makes it difficult for hardwood sawmills to find profitable markets for all their products. By developing new products with other properties for the building industry it may be possible to utilize hardwood more efficiently and increase the prices. This would result in higher ecoeffectiveness (defined as value in relation to environmental impact) of the forest-related business system by giving an incentive to grow deciduous forests, which leads to richer biological diversity. Diversity is fundamental to achieving sustainable forestry. At the same time, other less ecoefficient materials in buildings may be replaced. Exploring the requirements of the customers is essential before developing new products, in order to maximize the value of a product. In this study, the requirements of interior hardwood products in the Swedish house-building industry were studied in interviews and through questionnaires. The most important requirements, ranked higher than price, are delivery on time, shape stability, packaged products, rapid delivery and accurate moisture content. The results make it possible to focus on critical factors to gain market shares for hardwood as an ecoeffective building material.     

An Economic Analysis to Aid the Marginal Decision on Rotation Length: II Development of the Technique

The economic principle, which was presented in an earlier paper(Forestry, 37, 161), is developed into a flexible techniqueof economic analysis for use in forest management. The techniqueprovides a rapid method for analysis of the marginal decisionon financial rotation length; whether to fell now, or in fiveyears or so. The developments include incorporation of a price-sizegradient, different product prices, various costs of operation,reductions in volume yield, and various establishment and maintenancecosts. Now in its final form, it can incorporate these changesin stand conditions without any laborious calculation. The techniqueis used to analyse the effect of financial factors on the marginaldecision, i.e. prices, costs, and productivity. It is suggestedthat financial rotations are fundamentally dependent on therelation between physical production and the interest rate.Second, establishment and annual maintenance costs have no effecton the decision. Third, prices, or more specifically the ratioof pulpwood price:sawtimber price, are not of major importance,because they influence the decision within the limits alreadyimposed by production and interest rates. The justificationfor pulpwood rotations is also examined. This paper has developeda basic technique for projects of forest economics. It is partof the research work into the economics of timber production,which is being undertaken by the author at the Forestry Department,University College of North Wales, Bangor.     

带锯制材长、短工艺技术经济指标的分析比较

本文是对国内制材厂(车间)带锯制材长、短工艺的分析比较,可供新建或改建制材工艺设计作参考。从实践和理论分析都证明短工艺流水线中工艺和运输设备互不干扰,各锯机负荷均衡,流程短,工人数少,充分发挥了跑车大带锯的优越性,提高了主要技术经济指标。     

The Fingerprint Method: Using Over-bark and Under-bark Log Measurement Data Generated by Three-dimensional Log Scanners in Combination with Radiofrequency Identification Tags to Achieve Traceability in the Log Yard at the Sawmill

In the forestry–wood chain the concept and the technologies of traceability are in a mature development phase. Important advances in marking and reading techniques have been made in different parts along the forestry–wood chain. For Swedish sawmills the most critical information gap is located between the log sorting station and the saw intake, where the forest log batch identity disappears and the logs are mixed according to different sorting criteria. This study utilizes radiofrequency identification tags for automatic log marking/reading to develop a traceability system for logs, which is free of marking/reading, between the log sorting station and the saw intake, i.e. the fingerprint method. The originality of the fingerprint approach rests on the hypothesis that logs are separate entities with individual features. The results show that the log parameters and the search algorithm developed, combined with the negative influence of the measurement uncertainty due to bark thickness and bark damage, made it possible to achieve an individual separation for 57% of the tested logs.     

Productivity and cost analysis of semi-mechanised and mechanised systems on the Viphya forest plantations in Malawi

At least 200 000 m³ of timber is harvested annually using semi-mechanised harvesting systems on the Viphya forest plantations in Malawi. Although these systems have long been used on the Viphya, no investigation on their productivity has so far been reported. Additionally, the absence of localised productivity analyses in Malawi has created a paucity of information on appropriate timber harvesting systems for production maximisation and cost minimisation. The objective of this study was to compare the production rates and operational costs of chainsaw/grapple skidder (semi-mechanised) and feller-buncher/grapple skidder (mechanised) harvesting systems in order to determine the economic feasibility of mechanised systems in the Viphya forest plantations. The study was conducted in Pinus kesiya compartments at the Kalungulu and Champhoyo forest stations of the Viphya forest plantations. A work study approach was followed to capture harvesting time and volume data for the semi-mechanised system. Secondary work study data were used to simulate productivity of the mechanised system on similar compartment conditions. A timber-harvesting costing model was used to analyse the results. The study showed that the simulated mechanised system was associated with lower operating costs and inventories with higher production rates than the semi-mechanised system. The cost marginal difference was US$0.89 m^–3. It was therefore established that migration to mechanised systems could optimise timber harvesting productivity on the Viphya in future, if optimal volumes are available to ensure the efficient application of the mechanised harvesting system.     

毛竹低产林分不同经营措施的试验研究

竹林生产受自然、经济规律支配，研究如何以较少的投入，提高竹林生产力，取得较高的经济效益和最佳效果，是当前竹林经营的核心内容之一。研究结果表明，不同的经营措施对毛竹低产林产生不同的效果，其经济效益是不相同的。     

Combined production of sawn timber and firewood billets at a birch sawmill in Finland: A simulation approach

Abstract

Growing markets for chopped firewood have created alternative uses for the by-products of sawmills. Based on empirical data and simulated results, the potential of birch (Betula pendula Roth, Betula pubescens Ehrh.) from commercial thinnings for combined industrial production of sawn timber and firewood billets was investigated. In the simulations, different sawing patterns were used for logs intended to combine production of sawn timber and billets for chopped firewood (‘sawlogs’), and for logs intended only to firewood production (‘firewood logs’). Finally, economical feasibility analysis was done concerning the differences between the sawmills’ traditional business concept and the novel concept combining sawn wood and firewood production. The bucking results for the volume yield of different timber assortments varied only slightly between the different bucking options, i.e. the combinations of timber assortments. The main differences in the volumes of timber assortments were due to the stand type where the birch trees were sampled (planted, naturally regenerated, mixed birch–spruce). In the sawing procedure, the output of sawn timber varied between 24% and 42% of the log volume in the sawlogs, depending on the log diameter class. As the volume yield of sawn timber and firewood billets was counted together in the case of sawlogs, the log consumption was c. 1.75 m³ of roundwood per 1 m³ of sawn timber and firewood billets. In the case of the firewood logs, the log consumption rate was considerably lower, only c. 1.35. The economic calculations showed that using the firewood approach in sawing may increase the net added value of products by €1.9–5.4 m^?3 of logs, depending on their diameter class. As a conclusion, parallel production of sawn timber and firewood from logs from the first and second commercial thinning of birch-dominated stands is a concept that could work as an alliance between a sawmiller and a firewood entrepreneur. The concept could be competitive compared with both traditional sawmilling and production of chopped firewood.     

实木椅零部件的相似性与成组技术

以实木椅为研究对象,根据零部件的相似性,将其分类成组,形成零件族。测量和统计零件族中各零部件的规格尺寸,并根据时间研究法测定和统计各零部件的加工时间。按照成组技术来组织生产,分析成组加工前后的时间差异,进而估算成组加工前后的成本差异。结果表明:实木椅零部件之间在加工工艺、几何形状、尺寸规格等方面存在一定的相似性,符合成组技术实施的条件;利用相似性特征将零部件分类形成零件族后实施成组加工,可以有效提升生产效率,显著降低生产成本。     

Multiple-use forest management in consideration of climate change and the interests of stakeholder groups

In this study, the overall utility of forest management alternatives at the forest management unit level is evaluated with regard to multi-purpose and multi-user settings by a multi-criteria analysis (MCA) method. The MCA is based on an additive utility model. The relative importance of partial objectives of forest management (carbon sequestration, ground water recharge, biodiversity, and timber production) is defined in cooperation with stakeholders. The forest growth model 4C (Forest Ecosystems in a Changing Environment) is used to simulate the impact of six forest management strategies and climate on forest functions. Two climate change scenarios represent uncertainties with regard to future climatic conditions. The study is based on actual forest conditions in the Kleinsee management unit in east Germany, which is dominated by Scots pine (Pinus sylvestris L.) and oak (Quercus robur L. and Quercus petraea Liebl.) stands. First, there is an analysis of the impact of climate and forest management on forest functions. Climate change increases carbon sequestration and income from timber production due to increased stand productivity. Secondly, the overall utility of the management strategies is compared under the priority settings of different stakeholder groups. From an ecological perspective, a conservation strategy would be preferable under all climate scenarios, but the business as usual management would also fit the expectations under the current climate due to high biodiversity and carbon sequestration in the forest ecosystem. In contrast, a forest manager in public-owned forests or a private forest owner would prefer a management strategy with an intermediate thinning intensity and a high share of pine stands to enhance income from timber production while maintaining the other forest functions.     

Improved ecoeffectiveness of interior hardwood products in the house-building industry as a way to promote sustainable forestry

Abstract

Sawn hardwood is required by the market to be homogeneous, even in texture and colour, but the products produced by Swedish hardwood sawmills exhibit a wide variation in characteristics. This makes it difficult for hardwood sawmills to find profitable markets for all their products. By developing new products with other properties for the building industry it may be possible to utilize hardwood more efficiently and increase the prices. This would result in higher ecoeffectiveness (defined as value in relation to environmental impact) of the forest-related business system by giving an incentive to grow deciduous forests, which leads to richer biological diversity. Diversity is fundamental to achieving sustainable forestry. At the same time, other less ecoefficient materials in buildings may be replaced. Exploring the requirements of the customers is essential before developing new products, in order to maximize the value of a product. In this study, the requirements of interior hardwood products in the Swedish house-building industry were studied in interviews and through questionnaires. The most important requirements, ranked higher than price, are delivery on time, shape stability, packaged products, rapid delivery and accurate moisture content. The results make it possible to focus on critical factors to gain market shares for hardwood as an ecoeffective building material.     

Use of traditional inputs and advanced industrial technology in value-added within the pulp and paper industry in india

This paper exploits the information obtained in Annual Survey of Industries during 1999–2010 to gauge the degree of value-added owing to the use of traditional inputs (capital, labor, energy, indigenous materials, and imported materials) and advanced industrial production technology (services, information and communications technology, and pollution control equipment) in two main sub-sectors of the Pulp and Paper (P&P) industry in India categorized according to use of different types of raw material. The panel data econometric exercise confirms that the use of traditional inputs and advanced industrial technologies, and industry level determinants of the two sub-sectors have varied effects on value-added within them. These findings are important for promoting higher value-added production in different sectors within the resource-based industry.