Profit optimization is particularly valuable during times of change. A West Coast lumber producer recently related how its Optware System has shown that rising chip prices should influence cutting strategy more substantially than it has traditionally.
Their Optware System works like a compass always pointing out the collection of activities that result in the highest profit. The technology makes it practical to model complex multi-facility forest business environments and bring millions of dollars of additional profit to the bottom line by using all resources more effectively. Optware offers much more value than spreadsheet tools.
Their “compass” indicated that recovery is less valuable in the current market indicating that they should cut more square edge lumber out of selected logs even though the result is lower recovery. The change, when implemented, turned red ink to black. The “sweet spot” as to how to run a mill often varies with changing lumber prices, log costs and manufacturing options.
To maximize company-wide profits it is necessary to use a tool that considers all of the tradeoffs on a continuous basis in a comprehensive and objective manner.