In a manufacturing process where over 75 percent of the cost of the finished product can be attributed to raw material costs, constant attention to the details involved in procuring those raw materials is imperative. For a modern wood products operation, this raw material cost comes in the form of harvested timber that has been delimbed and transported to the mill facility as logs on logging trucks. Since these truck deliveries keep the mill’s equipment busy—while representing an enormous investment—procurement and supply chain operations can make or break a facility’s profitability.
For instance, in a streamlined sawmill operation, the key to managing the high cost of raw materials while maximizing output is buying the right sized log at the right price. Each mill has an ideal log size, which is a specific diameter and length, and is ideally-suited for the mill’s unique processing setup and the market conditions. When the mill saws this log size, it runs at maximum efficiency. Going one step further, minimizing variability in the ideal log size is also vital to maximizing outputs and profits.