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Owner, Lee Miller, says that doing things the way you've always done them may feel safe, but it leads to stagnation.
Miller Timber Services tests new grounds and ideas to find profitable solutions
By Bob Bruce
For some time now, the timber industry has been debating and experimenting with various approaches to creating and maintaining a sustainable yield as well as a stable market environment. The big challenge, of course, is that not all the factors that contribute to instability in the industry can be easily controlled.
Determining a Plan
Since there is no guaranteed blueprint for success in this business, each logging company has to look at their own needs and plans in their search to come up with a solution that fits. For Lee Miller of Miller Timber Services out of Philomath, Ore., that has meant focusing on how to create a sustainable business management model for a modern-day logging company as well as how to provide his employees with the kind of stable work environment where they can excel at their jobs without getting burned out.
Miller began by looking at other companies of similar size to see how they organized their management structure. He found that almost every successful company beyond the mom-and-pop stage had been forced to evolve beyond the "one guy does everything" model. Looking at his own company, he understood why.
A Management Solution
"We used to have one manager in charge of all four yarder sides," he says. "He was on the phone until 8:00 p.m. every night. No man can survive that -- you can't get up at four in the morning and be on the phone for 16 hours. It leaves no time for a family or anything. We needed to find a way to take this great guy, make the job meaningful for him, and make it so he can lead and have time to think and do what he needs to do, without getting burned out."
Miller's solution was to create a top-level layer of Division Managers -- one each for reforestation, yarder, and cut-to-length -- and then promote from within the Project Managers to oversee their own areas of responsibility and report up to the Division Managers. The Division Managers still work out in the field instead of sitting in an office, but they now have a support structure under them that handles a lot of the day-to-day operational details.
Of course it only works because Lee has good people. "It's a new chain of command for us, and the guys are kind of learning on the job right now, but the guys we chose all have great potential."
Learning as You Go
Lee is the first to admit that he doesn't have all the answers, but just like playing baseball -- if you want your batters to hit a lot of home runs, you have to be prepared for a higher percentage of strikes as well. "We all make mistakes, and I've made more than enough for everybody here, but when mistakes are made, we use them as a learning experience and go on."
In other words, doing the same old thing -- following the same path as before -- may feel like the "safe" route, but chances are it will only lead to stagnation. Part of the problem, he suggests, is that a lot of loggers have this built-in inclination to say, "Well, it worked for my dad so it will work for me."
"Maybe that's where I'm a little bit blessed," he continues. "I have been able to make that transition from what my dad did into what I think is more appropriate under present circumstances. For example, my dad said, 'Never buy log trucks.' Well, I've got six log trucks. My family was Cat loggers only, no yarders. I've got yarders. We didn't have debt. I have a bunch of debt."
"There isn't one company out there that hasn't been dying over the last two years a little bit at a time," he says. "So I finally decided the heck with it, we're not going to do that anymore. Either we do what it takes to succeed, or you can put a bullet in us and we're done."
Stop Dying and Start Growing
For a start, Lee decided that even in a down economy and a soft market, now was the time to invest in new equipment.
"I don't want to end up here in two years and have a bunch of junk equipment and not be able to buy newer equipment," he says. "Right now we're working with only three mechanics, but I could see the writing on the wall that if we didn't start replacing some of our equipment, within a year we'd have five mechanics, a lot of downtime, and the cost of repair and maintenance would exceed the cost of purchasing new equipment."
Even so, it's a risky choice and Lee knows it. "There's always the risk that I may be bankrupt in six months," he says, "but we can't go back to the old days of buying equipment with no money down and deferred payments. We're not doing that, and we don't do that -- that's a line we draw. Our goal is to put at least 20 percent down and make a good purchase."
Purchasing New Equipment
One of his recent good purchases is a Ponsse 8-wheel Ergo. "That machine is a story all by itself," he says. "It has balance bogies so it can do steep ground -- we have pictures of it doing 65 percent slopes, although harvesters of this type typically max out at 45 percent."
While most loggers would probably opt for a yarder with slopes like that, Lee points out that "we're using it to do cut-to-length thinning on some steep ground, and it fits perfectly. Plus, it has Ponsse's H7 harvester head, which gives us very high productivity."
Lee's other big new piece of iron actually represents what could be his company's first step in a whole new direction. Not long ago, Lee decided he needed another yarder in order to stay competitive. The problem of course is that no new yarders have been built domestically for some time, and even repair parts for existing equipment are becoming scarce as the parts pipeline has slowly gone dry.
Lee Miller believes in "go big or go home". He contracted Koller to design and build the largest yarder yet -- the K702.
Designing a New Yarder
Lee's solution is another example of "go big or go home." Unable to get what he wanted domestically, he contracted with Austrian manufacturer Koller to design and build the largest Koller yarder yet, the K702 (a process that took over a year and a half), and then ship the superstructure here to the United States where Brenton Gibson, a relatively new hire at Miller Timber, was put in charge of designing and fabricating the track-driven undercarriage and mating the two modules together.
It was not a simple task, says Brenton. "We started with a set of Hitachi tracks, and then we had to design and build the car body to attach the two track frames together. There was also all the hydraulic design work to power the track frames, the control system, the pumps, hydraulic tanks, etc."
"The biggest challenge was how to power the tracks," he says. "We couldn't power them off the front gear box PTO because we needed more power than it could provide. We ended up coming off the front of the engine and having to make a port in the radiator for the drive lines for the pumps to come through."
He also designed the undercarriage with a hydraulically-controlled pivot so that the entire machine is self-leveling. Additional design features include a right angle gearbox, driven by a three speed forward-three speed reverse John Deere powershift transmission that drives the main line and haul back drums.
The Koller 702 debuted at the recent Oregon Logging Conference to considerable interest. With Miller Timber Services also serving as U.S. Distributor for Koller, under the name Koller North America, the machine puts Lee's company in a strong position for continued growth once the timber market picks up again, as it surely will.
Miller Timber Services hopefully hit the ball out of the park.