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Paradigm Shift

How do you make decisions around to issues such as log procurement and product mix? Many companies are not as refined as they should be in their approach. Some may answer that they “know their costs” and it is these numbers that drive decision-making. Others may focus on indicators such as recovery or productivity. Others may have a strong marketing focus with sales realization acting as a major driver. For some businesses, tradition is the strongest force. Experience can be a very valuable tool; however, the problem with this approach is that no two business scenarios (just like snowflakes) are exactly alike. In a commodity industry with slim margins the intuitive answer is not often the optimum answer. Resource allocation decisions are often more complex than people realize. The complexity increases exponentially when the number of interactions between variables increases.

I recently was involved in a consulting project in South America. It was an eye-opening experience. My experience would challenge anyone’s paradigm with regard to which products are “good” (profitable) versus which products are “bad” (unprofitable). The cost of wood, the cost of labor, and the efficiency of machinery were totally different than North American norms. Not only were the costs different in absolute terms, but the operating parameters varied in proportion to each other. A North American mill manager placed in a South American mill would be forced to completely rethink his/her preconceived notions in order to be successful.

This entry was posted by Stephen Griffith.
Stephen Griffith

About Stephen Griffith

Stephen Griffith was born and raised in the State of Oregon. He worked his way through college laboring in local sawmills. His education includes a B.S. in Forest Products and an MBA from Oregon State University. Stephen formerly served as director of technology at Decision Dynamics (DDI) for 12 years. His work history also includes mill floor experience in lumber and plywood manufacturing with Stimson Lumber, Fort Hill Lumber Company and Columbia Forest Products. Stephen has published various articles in wood industry magazines and is an active speaker at industry events. Mr. Griffith currently serves as president of Optware Solutions, a company that specializes in modeling business decisions. Stephen has applied his modeling expertise to scores of forest products operations over the past twenty five years. He has worked with operations throughout the United States, Canada and South America and has built systems used in the management of forest operations, sawmills, plywood mills, OSB mills, pulp and paper mills and other types of manufacturing operations. Optware models are designed to consider full-context decision making and to address a variety of questions including fiber procurement and allocation, logistics, scheduling, process options, and product mix.

About Optware

Optware Solutions LLC was founded in 1991 (under the name Optware Consulting) as a company dedicated to the application of linear programming technology to the forest products industry. The first system installation was in a plywood plant in France. Optware Solutions has been a pioneer in the integration of relational database technology with linear programming.

Today, Optware Solutions offers a variety of state-of-the-art linear programming-related products and services. Optware Solutions believes that service is our business and we pledge to: place customer needs above our own, to protect confidential information, and to act in a professional manner.

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