{"id":134,"date":"2019-05-21T23:29:01","date_gmt":"2019-05-21T23:29:01","guid":{"rendered":"https:\/\/www.optware.com\/?page_id=134"},"modified":"2019-05-30T01:12:26","modified_gmt":"2019-05-30T01:12:26","slug":"sawmill","status":"publish","type":"page","link":"https:\/\/www.optware.com\/industry-applications\/sawmill\/","title":{"rendered":"Sawmill"},"content":{"rendered":"\t\t
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Profit Optimization helped an Oregon lumber producer to greatly improve their production planning process. \u00a0Optware Enterprise provided the insight for the company to optimize its mix of cutting patterns and product allocations at its two sawmills. \u00a0The mills cut a mix of Hemlock and Douglas-fir.<\/p>

The Problem<\/strong><\/p>

The forestry staff is actively involved in buying logs across Oregon and Washington and even into Canada. \u00a0Various scaling and grade specifications are involved making the decision process more difficult.<\/p>

The two mills use sawing optimization within the mill to improve recovery. \u00a0However, they still see the need for a more comprehensive tool to maximize overall profitability. \u00a0There are just too many trade-offs.<\/p>

The vast majority of production is sold to traditional west coast markets including big box stores.<\/p>

Planners formerly used spreadsheets to evaluate production alternatives. \u00a0Determining the mix of profiles and product requirements that will best satisfy market demand is a complicated process. \u00a0After the data entry, planners worked for weeks evaluating various combinations based on experience, instinct and calculations. \u00a0They never had enough time to look at more than a small fraction of the choices available. \u00a0Decision-makers were forced to settle for a reasonable alternative rather than seeking an optimum decision.<\/p>

The Solution<\/strong><\/p>

Facing these challenges, management looked to profit optimization to improve the quality and timeliness of the decision process. \u00a0This technology uses mathematical tools to consider impacts of raw materials, product mix and production efficiencies on manufacturing schedules, product prices and market opportunities. \u00a0Forest products companies benefit from this technology because their supply chains are quite complex, from forest-to-mill-to-market.<\/p>

The client company remains firmly committed to investing in data and data systems.\u00a0 \u00a0A core set of log tests at all sawmills were conducted early-on to establish recoveries and product mixes. \u00a0Portions of these tests were \u201crefreshed\u201d from time-to-time as mill capabilities changed, and selective tests conducted as needed to explore new cutting options, product line changes, or other ideas that look good on paper but need hard data to back them up.\u00a0<\/p>

Optware Solutions worked with the client to use existing company data to build the business model. \u00a0The customized model describes the mill\u2019s operations in considerable detail. \u00a0The model incorporates sawing options for each diameter-length sort.\u00a0 It also includes raw materials options and prices, finished product options and prices, labor rates and other variable and fixed costs. \u00a0The client runs the model with limited constraints that reflect forecasted market demand. \u00a0The model\u2019s solution optimizes mill profitability based on current prices. \u00a0Planners and sales staff then decide whether it really is possible to sell the optimum product mix.<\/p>

There is a sound working relationship between the company\u2019s annual budget\/plan and the optimization model. \u00a0Much of the information developed for the budget, including hourly sawmill costs, operating hours, product volumes by major category, log volumes and prices, and product outsourcing volumes and prices are used as initial inputs to the model and for comparisons to model runs as the year unfolds. \u00a0As events occur during the year, the model is run to assess the broad-brush impacts and to evaluate alternatives.\u00a0<\/p>

The model estimates the\u00a0cash<\/em>\u00a0impacts of the alternatives, and provides a dynamic, and detailed picture of how each alternative affects operations than the budget is designed to do. \u00a0The budget, for it\u2019s part, provides a baseline for measuring company results and ties into the company\u2019s financial reporting system. \u00a0By sharing some data and by covering different levels of detail, the annual budget and the model together provide a better compass for managing operations than either one by itself.<\/p>

The Results<\/strong><\/p>

This Oregon lumber business now has much greater insight into product mix and the impact on profitability. \u00a0This knowledge has lead to an improved procurement strategy, improved product allocations between plants and a significant increase in profitability!<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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\n\t\t\t\t\t\n\t\t\t\t\t\tContact Optware today to schedule a consultation\t\t\t\t\t<\/a>\n\t\t\t\t<\/h3>\n\t\t\t\t\t\t\t\t\t

\n\t\t\t\t\t\t503-645-2390 |\u00a0info@optware.com\t\t\t\t\t<\/p>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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\n\t\t\t\t\t\t\u201cWe documented wood cost savings of just under $1,000,000 in the first year of using the software.\u201d\t\t\t\t\t<\/div>\n\t\t\t\t\tRichard Dutchak<\/span>Engineering Manager, Loewen<\/span><\/cite>\t\t\t\t<\/div>\n\t\t\t\t\t\t
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\n\t\t\t\t\t\t\u201cWe saved 1.5-2% of total fiber costs in transportation savings alone using Optware.\u201d\t\t\t\t\t<\/div>\n\t\t\t\t\tMichael McCollum<\/span>President Procurement, Georgia-Pacific Corporation<\/span><\/cite>\t\t\t\t<\/div>\n\t\t\t\t\t\t
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\n\t\t\t\t\t\t\"Michael\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t
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\n\t\t\t\t\t\t\u201cWe picked up well over 35% savings in our manufacturing costs in a one year period.\u201d\t\t\t\t\t<\/div>\n\t\t\t\t\tSteve Killgore<\/span>Vice President Solid Wood, Roseburg Forest Products<\/span><\/cite>\t\t\t\t<\/div>\n\t\t\t\t\t\t
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\n\t\t\t\t\t\t\"Steve\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t
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\n\t\t\t\t\t\t\u201cOptimization allowed us to substantially improve our paper machine utilization across the Division\u201d\t\t\t\t\t<\/div>\n\t\t\t\t\tRosie Steenson<\/span>Manager, Containerboard Division, Weyerhaeuser Company<\/span><\/cite>\t\t\t\t<\/div>\n\t\t\t\t\t\t
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Profit Optimization helped an Oregon lumber producer to greatly improve their production planning process.  Optware Enterprise provided the insight for the company to optimize its mix of cutting patterns and product allocations at its two sawmills.  The mills cut a mix of Hemlock and Douglas-fir. The Problem The forestry staff is actively involved in buying […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":25,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"yoast_head":"\nSawmill | Operations Management | Optware<\/title>\n<meta name=\"description\" content=\""Profit Optimization helped an Oregon lumber producer to greatly improve their planning process. 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