June 2005 - The Logging and Sawmilling Journal
Outsourcing the Log Yard
Outsourced log yard management is succeeding at the Meadow Lake OSB operation in Saskatchewan , thanks to a focus on service by contractor CLC Logging and good communications between the plant and the contractor.
By Tony Kryzanowski
In an effort to focus as much as possible on their core business operations, many companies have chosen to outsource activities that are strictly an overhead cost. A good example of outsourcing in the forest industry is the Meadow Lake OSB Partnership’s decision to contract out its log yard management activities. This includes scaling, decking, delivering logs to the infeed, and general yard maintenance.
However, outsourcing only makes sense when a company achieves at least the same level of service as it would have received from its own sources at the same cost. Better service for less cost is where companies can really benefit.
When it comes to log yard management, there are three main issues as far as production is concerned: turnaround time to unload trucks; consistent flow of material to the plant infeed; and consistent log quality going into the infeed. If any of these activities are not done properly, it could end up costing the plant a lot of money, which explains why most mills still prefer to manage the yard themselves.
The Meadow Lake experience, however, shows that outsourcing yard management can work with the right contractor. Two years ago, CLC Logging parlayed its experience providing yard management services to other forestry companies into a long-term and renewable yard management contract with Meadow Lake OSB .
Company co-owner Wayne Cowan says CLC Logging has succeeded in rotating trucks in and out of the log yard in a half hour or less, which is quite an accomplishment considering that the yard receives as many as 220 trucks per day when the log haul is in full swing. “Very seldom do you see more than three or four trucks in the yard at one time,” says Cowan.
The company has one butt ’n top loader stationed at the plant infeed, and two more decking logs in the yard or loading log transport trailers used to deliver logs from the deck to the infeed. The loader operators are in radio contact with the arriving log truckers, and direct each arriving truck either to the deck or to the plant infeed for unloading.
“If a truck sits in the yard for an hour, that’s costing the OSB plant money,” says Cowan. “What they’d like to see is the trucks rotating out of the yard every half hour, and they tell us we are achieving that average. To this point, I think they are quite happy.”
CLC uses Komatsu 300HD butt 'n top carriers for its millyard fleet.
The company uses Komatsu 300HD butt ’n top carriers with forestry booms for its yard fleet. The forestry boom provides operators with the reach they need to deck the logs. The carriers are equipped with IMAC hybrid by-pass grapples, which allow operators the flexibility to pick up a few logs or a full grapple. By adding outriggers, the grapple can also work in a tree-length environment.
The biggest challenge to maintaining regular flow to the infeed occurs during spring break-up when the plant relies entirely on its decked logs. At that time, CLC Logging rotates log trailers from the log deck to the infeed.
The yard itself is organized in alphabetized cells. The OSB plant keeps a record of when each cell is filled so that it can keep track of how long the logs have been kept in storage. Plant employees conduct regular moisture content tests on stockpiled logs; delivering logs with a fairly uniform moisture content is important when manufacturing OSB. “If you get wet and dry wood going into the plant at the same time, it kind of raises havoc with the driers,” says Cowan. “So that’s why you want to keep an even flow, whether it’s all wet or all dry.”
Moisture content can also have an impact on yard management if logs in a cell slated for transport to the infeed are deemed too wet for use in its regular rotation. That cell is then bypassed and brought back into the rotation at a later time. This requires good communication and co-ordination between the plant and the contractor, which both Cowan and Holly Irwin, OSB plant area supervisor in charge of log yard operations, describe as excellent. “The yard employees understand the big picture, and that’s a real strength,” says Irwin. “They do their own problem solving and require very little supervision, which makes it easier for me. This is a very successful partnership, and Wayne is great to work with.”
With outsourcing this service, there is dedicated supervision of yard management, she says. Had it been handled internally, it may not have received the same level of attention if the person in charge was responsible for several other plant operations as well.
Irwin says the OSB plant decided to contract out its yard operations because management wanted to concentrate on plant start-up. Also, CLC Logging was available and had considerable experience in yard management. By contracting out this part of the operation, Meadow Lake OSB has rid itself of payroll and fleet costs in exchange for payment of a fixed price per tonne of logs decked in the yard, as well as tonnage delivered to the ponds. Irwin’s primary role is management, direction, and monitoring of the yard contractor’s performance. “It’s certainly a lot easier to predict our costs in this area,” says Irwin.
The current system is something the plant and CLC Logging built on their own, and is the only Tolko Industries operation where yard operations are contracted out. Tolko is the operating partner in the plant ownership structure, which includes several First Nations communities and a Crown corporation. Irwin says it is likely that any new Tolko facility will investigate and consider the model developed in Meadow Lake .
For CLC Logging the transition from seasonal logging to year-round log yard management, when it sold its logging fleet in 1998, was like making the transition from grain farming to dairy farming. The business now functions 24/7, 365 days a year, with all activity taking place in one location. That’s a lot like managing a dairy herd.
When the company still operated a logging operation, there was plenty of time during spring break-up for an extended holiday. However, unlike yard management, logging equipment was frequently moving from place to place.
“Now, from a business operations standpoint, Christmas Day is no different than July 20th,” says Cowan. “It’s always nice to have a job that is in one place all the time. One of the biggest challenges, however, is to have people working that regularly because if it is a statutory holiday, everybody thinks that everything should shut down. Companies in the OSB business don’t shut down. We’ve been lucky so far because we’ve had a lot of good people working for us.”
Cowan owns the company with wife Sherry. Their sons Clay and Wesley Jay are also involved in supervisory roles. Yard operations at the OSB plant function with a total of 20 employees. They are organized into four, five-member crews, working 12-hour shifts based on a 28-day schedule.
CLC Logging gained valuable experience in yard management from a similar contract it won in 1994 with the Millar Western pulp mill, also located near Meadow Lake . Today, it continues to provide log loading services to a variety of other key players involved in forestry near Meadow Lake .
Cowan says it was fortunate that they began as the OSB plant’s yard management contractor just at the time that the OSB plant was ramping up to full production. “Our experience at Millar Western was a help, but there is always a lot to learn,” says Cowan. “We didn’t really know anything about OSB operations, but the nice thing about it is that we started up when they did. So we kind of grew along with the operation itself.”
During the first month of operations, the company only managed to deliver 20,000 tonnes to the infeed. Now, it typically delivers 60,000 tonnes per month to the infeed and decks another 60,000 tonnes from log trucks.
“The biggest surprise we experienced was how quickly the mill ramped up,” says Cowan. “What they were expecting to do in the first 12 months, they were doing in the first three.” He adds that he was very pleased with this accomplishment because it had a significant impact on his company’s bottom line.
CLC Logging calculated its rate based on the OSB plant’s projected log throughput over a five-year period plus the logging company’s experience with how much wood each machine could handle. Cowan feels the rate he is being paid is fair and that the experience has been worth it. “They’re not trying to starve a person out,” he says. “They want to make sure you are making money working for them, and that way they are going to keep good contractors.”
CLC Logging is also responsible for general yard maintenance, such as grading internal roads, maintaining designed water drainage patterns, and cleaning up debris from empty cells. “If it happens in the yard, we’re responsible for it,” concludes Cowan.
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