Wood procurement using harvest measurment
Sweden is a world-leading actor in the global forest sector and remains in the top league of trading, research, and business operations. Despite being ahead of its competitors, several forest actors struggle with low profitability levels. The profitability index for private wood suppliers decreased...
| Autor principal: | |
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| Formato: | Second cycle, A2E |
| Lenguaje: | sueco Inglés |
| Publicado: |
2021
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| Materias: | |
| Acceso en línea: | https://stud.epsilon.slu.se/17308/ |
| _version_ | 1855572879864758272 |
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| author | Eriksson, Per |
| author_browse | Eriksson, Per |
| author_facet | Eriksson, Per |
| author_sort | Eriksson, Per |
| collection | Epsilon Archive for Student Projects |
| description | Sweden is a world-leading actor in the global forest sector and remains in the top league of trading, research, and business operations. Despite being ahead of its competitors, several forest actors struggle with low profitability levels. The profitability index for private wood suppliers decreased by 0.45 units between 2000 – 2020, and sawmills' profitability levels are still low despite investments being record high in 2018 (financial performance due to COVID-19 are not considered). Wood procurement is a decisive process for several forest actor's profitabilities. For forest owners since selling wood is the primary income from their forest, and for sawmills because a large proportion of their costs are due to the procurement. Wood procurement is a complex process, including several participants and steps to complete. Process improvements could increase profitabilities for several actors and motivate further sustainability initiatives.
Studies have shown that the process along the wood supply chain can be improved with harvest measurement instead of industry measurement as payment basis. Potential in terms of reduction of lead times and improved supplier relationship are some of the findings. However, no studies have analysed whether waste can be removed and if costs can decrease by applying harvest measurement.
This study identified activities, information flows, lead times, and cost drivers within the wood procurement processes of both harvest and industry measurement. It demonstrated how waste, supplier relationship, and total costs are affected by the harvest measurement and identified non-value adding activities. Furthermore, the study explored opportunities for further improvements in the process.
A single case study was performed using qualitative methods. Interviews were conducted to perform a value stream map of the process, followed by an activity-based cost analysis to determine cost differences. Lastly, further process improvements were explored by combining the empirical findings with the latest research and development within wood procurement.
The result showed that harvest measurement as payment basis enable more flexible management of the logistics and bucking instructions. Overprocessing waste during contracting and making of the final invoicing is reduced. The supplier takes less risk and the cash flow is improved. On the other hand, the buyer takes a higher risk and gets a weakened cash flow. Measurement at the industry becomes non-value-adding. Lastly, lead time from harvest to supplier’recives his payment is reduced by half from eight to four weeks when harvest replaces industry measurement as payment basis. the main reasons for the differences are the change of ownership in the value chain, and the push flow becoming a pull flow in the end of the process when harvest measurement is applied as payment basis.
The activity-cost analysis indicates that the supplier’s sales costs increase by 1.7 kr/m3ub, and the acquisition cost for the buyer is reduced by 7.5 kr/m3ub. Moreover, applying a digital contracting and planning process could reduce the acquisition cost further since a lot of the cost originates from time spent on these activities. |
| format | Second cycle, A2E |
| id | RepoSLU17308 |
| institution | Swedish University of Agricultural Sciences |
| language | Swedish Inglés |
| publishDate | 2021 |
| publishDateSort | 2021 |
| record_format | eprints |
| spelling | RepoSLU173082022-09-14T07:20:45Z https://stud.epsilon.slu.se/17308/ Wood procurement using harvest measurment Eriksson, Per Production economics Forestry production Processing of forest products Sweden is a world-leading actor in the global forest sector and remains in the top league of trading, research, and business operations. Despite being ahead of its competitors, several forest actors struggle with low profitability levels. The profitability index for private wood suppliers decreased by 0.45 units between 2000 – 2020, and sawmills' profitability levels are still low despite investments being record high in 2018 (financial performance due to COVID-19 are not considered). Wood procurement is a decisive process for several forest actor's profitabilities. For forest owners since selling wood is the primary income from their forest, and for sawmills because a large proportion of their costs are due to the procurement. Wood procurement is a complex process, including several participants and steps to complete. Process improvements could increase profitabilities for several actors and motivate further sustainability initiatives. Studies have shown that the process along the wood supply chain can be improved with harvest measurement instead of industry measurement as payment basis. Potential in terms of reduction of lead times and improved supplier relationship are some of the findings. However, no studies have analysed whether waste can be removed and if costs can decrease by applying harvest measurement. This study identified activities, information flows, lead times, and cost drivers within the wood procurement processes of both harvest and industry measurement. It demonstrated how waste, supplier relationship, and total costs are affected by the harvest measurement and identified non-value adding activities. Furthermore, the study explored opportunities for further improvements in the process. A single case study was performed using qualitative methods. Interviews were conducted to perform a value stream map of the process, followed by an activity-based cost analysis to determine cost differences. Lastly, further process improvements were explored by combining the empirical findings with the latest research and development within wood procurement. The result showed that harvest measurement as payment basis enable more flexible management of the logistics and bucking instructions. Overprocessing waste during contracting and making of the final invoicing is reduced. The supplier takes less risk and the cash flow is improved. On the other hand, the buyer takes a higher risk and gets a weakened cash flow. Measurement at the industry becomes non-value-adding. Lastly, lead time from harvest to supplier’recives his payment is reduced by half from eight to four weeks when harvest replaces industry measurement as payment basis. the main reasons for the differences are the change of ownership in the value chain, and the push flow becoming a pull flow in the end of the process when harvest measurement is applied as payment basis. The activity-cost analysis indicates that the supplier’s sales costs increase by 1.7 kr/m3ub, and the acquisition cost for the buyer is reduced by 7.5 kr/m3ub. Moreover, applying a digital contracting and planning process could reduce the acquisition cost further since a lot of the cost originates from time spent on these activities. Sverige är en världsledande aktör inom den globala skogsindustrin och återfinns bland världens främsta inom handel, affärsverksamheter och forskning. Trots en välutvecklande skogsindustri så är lönsamheten låg för flera aktörer. Skogsbruksindexet sjönk med 0.45 enheter mellan 2000 och 2020 för privata skogsägare, samtidigt som sågverks lönsamhet förblir låga trots rekordhöga investeringar under 2018 (finansiellt resultat till följd av COVID-19 ej medräknat). Virkesanskaffning är en avgörande process för flera skogsaktörers lönsamhet. Dels för att virkesförsäljning är skogsägares främsta intäkt från skogen, dels för att virkesanskaffning är en av de främsta utgifterna för sågverk. Virkesanskaffning är en komplex process och förbättringar inom processen skulle kunna leda till ökad lönsamhet för flera aktörer och motivera för ytterliga hållbarhetsarbete. Studier har visat att virkesanskaffning kan förbättras genom att tillämpa skördarmätning som betalningsunderlag i stället för industrimätning. Inga studier undersökt skillnaderna i processen för att avgöra om slöseri kan minskas och hur de totala kostnaderna påverkas genom att tillämpa skördarmätning. Denna studie identifierade aktiviteter, informationsflöden, ledtider och kostnadsdrivare inom virkesanskaffningsprocessen med skördar- respektive industrimätning. Studien demonstrerade hur slöseri, leverantörsrelationer och totala kostnader påverkas när skördarmätning tillämpas som betalningsunderlag, samt aktiviteter som blir icke värdeskapande. Därtill utforskade studien hur virkesanskaffningsprocessen kan förbättras ytterligare. En fallstudie baserat på kvalitativa data genomfördes för att uppfylla syftet, med stöd av teorier kring verksamhetsstyrning. Intervjuer genomfördes för kartläggningen av värdeflödet inom processen, följt av en aktivitetsbaserad kostnadskalkyl för att identifiera kostnadsskillnader. Slutligen utforskades möjliga förbättringar av processen med hjälp av studiens empiriska fynd tillsammans med senaste forskningen och utvecklingen kring virkesanskaffning. Resultaten visade att skördarmätning möjliggör en flexiblare styrning av virkeslogistiken, samt att apteringen kan bättre styras för att möta industrins efterfrågan. Skördarmätning leder till minskat överbearbetnings slöseri under kontrakteringen och slutredovisningen. Leverantören tar en mindre risk och får ett bättre kassaflöde medan köparen tar högre risk och får ett sämre kassaflöde när skördarmäning används som betalningsunderlag. Mätning vid industrin tillför heller inget värde för affärsledet mellan leverantör och inköpsorganisationen när skördarmätning används som betalningsunderlag. Skördarmätning leder även till halverad ledtid från avverkning till utbetalning, reducerad från åtta till fyra veckor. Den aktivitetsbaserade kostnadskalkylen tyder på att leverantörens försäljningskostnader ökar med 1,7 kr/m3 fub och köparens anskaffningskostnader reduceras med 7,5 kr/m3 fub när skördarmätning tillämpas. Att applicera en digital plattform för kontrakteringsprocessen, och en digitaliserad traktplaneringsprocess skulle kunna reducera anskaffningskostnaderna ytterligare då en stor del av kostnaden härstammar från tiden spenderat på dessa aktiviteter. 2021-10-06 Second cycle, A2E NonPeerReviewed application/pdf sv https://stud.epsilon.slu.se/17308/3/eriksson_p_211007.pdf Eriksson, Per, 2021. Wood procurement using harvest measurment : for improved management of forest operations. Second cycle, A2E. Uppsala: (S) > Dept. of Forest Economics <https://stud.epsilon.slu.se/view/divisions/OID-300.html> urn:nbn:se:slu:epsilon-s-17308 eng |
| spellingShingle | Production economics Forestry production Processing of forest products Eriksson, Per Wood procurement using harvest measurment |
| title | Wood procurement using harvest measurment |
| title_full | Wood procurement using harvest measurment |
| title_fullStr | Wood procurement using harvest measurment |
| title_full_unstemmed | Wood procurement using harvest measurment |
| title_short | Wood procurement using harvest measurment |
| title_sort | wood procurement using harvest measurment |
| topic | Production economics Forestry production Processing of forest products |
| url | https://stud.epsilon.slu.se/17308/ https://stud.epsilon.slu.se/17308/ |