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Exploring alternative production strategies for a British Columbia coastal forest products supply chain

University of British Columbia

The BC Coastal forest industry has high production costs and the focus for improving efficiency has been to maximize capacity utilization. However, uncertainty in timber-grades and demand results in failure to meet client needs and excessive inventories. This research explores three major topics for improving forest supply chain performance: 1) how the error in timber grades negatively impacts customer demand fulfillment; 2) when lean and agile manufacturing environments, plus lumber demand patterns yield profit opportunities, and 3) how a planning-scheduling model can reduce order backlogs. The dissertation has three chapters that describe improvement to lumber planning through the application of firm-level case studies and mixed integer programming models. These supply chain models are guided by policies for over-under production control and policies for chase and level capacity usage control. Case studies provide the data for forest inventory yields, harvesting costs, log-to-lumber yields, manufacturing costs, lumber prices and sales orders. The first chapter shows that the level of error contained in timber volume and grades inventories underestimates profit with respect to perfect information and reduces the ability to fulfill customer orders. This drawback is not relevant for the current market, but it could compromise the industry’s ability to participate in other cut-to-order low value lumber markets. The second chapter identifies when lean and agile manufacturing should be adopted based on changes in lumber demand. The third chapter presents methodology to reduce backlogs and logistics costs by solving the lumber planning problem with a planning-scheduling model which imposes heuristics sequences to process orders. This planning tool can be advantageous for competing in cut-to-order lumber business scenarios. It would also provide lumber cost, log-lumber inventory levels, and backlogs levels as planning benchmarks for the current BC forest supply chain. The improvements to lumber planning decision making in this dissertation identify the benefits of moving BC Coastal forest industry firms to lean, agile or cut-to-order manufacturing environments, especially in the context of participating in new lumber product portfolios. Forest inventory, manufacturing and economic data were extracted from publicly available reports, thus metrics calculated may be inaccurate and limit the general validity of some results.

Text

2015-08-28

Attribution-NonCommercial-NoDerivs 2.5 Canada

http://hdl.handle.net/2429/54685

Forestry

University of British Columbia

UBCV

http://creativecommons.org/licenses/by-nc-nd/2.5/ca/