May 2005 - The Logging and Sawmilling Journal
The right timber to the right mill
A new software system from New Burnswick’s Remsoft Inc—that is currently being put through the paces at J D Irving—helps forest companies to best allocate timber to different mills and markets.
By George Fullerton
Woodlands managers and harvesting supervisors have an array of powerful and highly developed management tools to plan silviculture and harvesting many decades into the future. They rely on these management tools to track stand development, schedule the optimum time to harvest, and determine what products and volumes will be produced from individual stands. Logging supervisors can gather harvesting information to get accurate data from individual harvest blocks, broken down into species and log size. But despite the tools available for managing wood from seedling to roadside, there have not been effective management tools to take the process one step further: help manage the allocation of that roadside wood to different mills and markets.
In today’s complex world, woodlands managers deal with multiple products derived from individual trees, diverse species mixes in stands, and a variety of destination mills—each with its individual specifications, volume demands and delivery scheduling. With the myriad of wood allocation options, managers are faced with the increasingly complicated task of ensuring wood is harvested to specifications and gets to the correct mill in a timely manner. Operations that harvest for a single mill, or relatively few mills with only narrow specification challenges, may face a less onerous allocation task.
On the other hand, woodlands operations that supply multiple mills and markets from a variety of tenures—and even carry out wood trade deals with other companies—can have a very complex juggling act to make sure the right logs get to the correct mills. With the forest industry’s drive to just-in-time delivery, maintaining minimum volumes in yard inventory and the demand for green wood to improve processing technologies, managers are looking for ways to help make those complicated decisions. Remsoft, the Fredericton, New Brunswick-based developers of Woodstock and Stanley forest management software products, has developed a new timber allocation tool called Allocation Optimizer. Doug Jones, Remsoft’s manager of forest and business development, says that the development of the Allocation Optimizer software program came about through feedback from customers that have been using other Remsoft products, and were looking for a management tool that would allow them to optimize the harvesting and shipment of their timber.
“Initially, it was our customers in New Zealand and Australia that requested a wood allocation tool,” explains Jones. “The forest industry in New Zealand is quite different from North America. They are essentially dealing with tree farms, rows and rows of planted trees, grown on a short rotation similar to the way we grow corn. In addition to intensive management, they are practising such activities as pruning that adds value in high value markets. “The New Zealand and Australian forest industries are serving a variety of domestic and export markets. In addition to sawmill, pulp and paper and chip markets in their own countries, they are also shipping raw logs and chips to outside markets, primarily in Southeast Asia. Just about every aspect of their forest industry, from establishing plantations to overseas shipping, is highly optimized in order to gain every possible efficiency that will increase their profitability in a globally competitive marketplace.”
One of the first overseas sales of the Allocation Optimizer came this year, to a Brazilian company. “Brazil is a relatively new market for us. We were careful going in, because we wanted to make sure we would be able to support our products for the customer,” says Jones. “Remsoft is dedicated to providing customer support and training to ensure our products perform to potential. One major concern with the Brazilian customer was a possible communication problem. No one in our Fredericton office is fluent in Portuguese. We visited the customer and were happy to learn that they have a highly educated and dynamic workforce, and many of the personnel are fluent in English, to a level where product support would be no problem.” Development of the Allocation Optimizer program was also the right path for Remsoft.
It is a tool that is applicable in all jurisdictions that are currently using the company’s Woodstock family of products. The Allocation Optimizer uses the timber resource data from Woodstock files, and adds information on mill specifications and delivery parameters, to generate the best solution for allocating wood to mills. Optimization provides the best solution to a situation where managers are dealing with a large number of choices, and similarly, a large number of constraints. Jones says that most of the North American forest industry has developed to the point where optimization is considered a necessary tool in timber harvesting, where computers give harvester operators information on the best bucking options for trees. At the lumber production level, it is common to have integrated optimization controls, from debarking through to the trim saws. Wood allocation and transport is one of the few remaining facets of the forest industry that has not adopted optimization technology.
The Remsoft Allocation Optimizer applies mathematical optimization to complex problems within the strategic and tactical management planning process. It assists managers by providing the best decisions for allocation, after having considered a multitude of product and destination choices. Woodstock and Stanley management planning tools provide a very clear picture of what will be produced from individual harvest blocks. “It is a logical and practical step to use that available and valuable data to optimize or help direct logs to the best end market,” explains Jones. It has taken Remsoft about two years to develop the Allocation Optimizer, Jones continues, adding that most of that time was dedicated to developing the concept, with only about six months to do the actual programming. “We put a lot of effort into determining exactly what our customers needed in an allocation tool. We focused on listening to their requirements and discussing details with many of our Woodstock customers before we sat down to do the programming.”
The Allocation tool is directly linked to, and becomes an extension of, Woodstock. Users are required to input their own unique data on the products they will potentially produce and all of the possible destinations—including costs and prices related to each product and other key parameters—together with information around delivery capacity and schedules. The Allocation Optimizer is designed so that users can easily make changes to transportation costs, destination information and any other parameters that are subject to short-term adjustments. Jones points out that the program has the potential to be used effectively as a strategic planning tool, allowing managers to test any combination of wood delivery scenarios and determine their cost effectiveness. It even allows managers to look at wood allocation options in relation to mill changes, including expanding or reducing capacity, or even shutting a mill down and allocating current fibre to other mills. “The option to look at ‘what-if scenarios’ is virtually open ended,” explains Jones. “We see a lot of potential for the Allocation Optimizer and we are confident that the users will come to work very comfortably with it.”
After Allocation Optimizer was developed, there was a requirement for detailed testing and assessment. “As it turned out, we were fortunate that J D Irving was looking for a tool to allow them to streamline their wood allocation challenges,” says Jones. Irving has both timber harvesting and milling operations in New Brunswick, Nova Scotia, Prince Edward Island, Quebec and the State of Maine. With a variety of milling capacity from veneer, hard and softwood lumber to pulp and paper manufacturing, Irving has a complex challenge to manage the shipping of timber and wood chips and hog fuel to various destinations. In addition to managing the allocation of wood harvested from freehold and Crown land allocation, Irving also sources as much as 40 per cent of the wood supply for some mills from private woodlots and other companies’ freehold and Crown operations. “J D Irving was very interested in the development of the Allocation Optimizer, and agreed to test it. They have been using Stanley and Woodstock for many years and were keen to give the Allocation Optimizer a test.” Irving’s Ian Taviss says that they were excited by the opportunity that the system presented. “One of its strengths is that it provides connectivity between growing fibre and manufacturing. We do both and we have an integrated operation, so it has the potential to provide some competitive advantages.”
Taviss cautions that the product also presents a number of additional challenges. “We are still at the front of the learning curve with it, but it does offer some exciting opportunities. It remains to be seen, exactly how effective it can be.” Jones says there is lots of room for further development of the Allocation tool. Remsoft relies on users to identify potential improvements because they are using the product day-to-day, in diverse applications, and they tend to identify options for development that could broaden the usefulness of the product. “Remsoft is dedicated to continual improvement and we regularly ask users for input to drive development. We see a bright future and great potential for the Allocation Optimizer.”
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