Production Efficiency and Size in Norwegian Sawmilling

Nyrud, Anders Q.; Bergseng, Even

doi:10.1080/02827580260417224

Cited by 38 publications

(34 citation statements)

References 21 publications

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“…However, there is still a significant gap in research concerning the interplay between woodworking companies' resources and their strategic choices, as well as in regard to the interaction between the selected strategies and financial performance. In assessing performance, in most cases instead of looking at the financial measures, the focus has been on production efficiency (e.g., Campbell and Jennings 1990, Puttock and Prescott 1992, Baardsen 2000, Nyrud and Bergseng 2002, Nyrud and Baardsen 2003, Salehirad and Sowlati 2005. As important as efficiency is in successful business practices, it does not indicate firm business success, since the capability to create value-added strongly impacts on profits.…”

Section: Discussionmentioning

confidence: 99%

Linking resource-based view with business economics of woodworking industry: earlier findings and future insights

Lähtinen¹

2007

Silva Fenn.

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The business environment and sources of competitiveness in the woodworking industry have changed notably since the 1990s. Wood products are traded globally, and with the increase of trade, abundant forest resources are no longer the main source of sustainable competitiveness. Competition within the woodworking industry is increasing both between European and non-European enterprises, as well as within the EU. Capability to create value-added, making rational strategic choices, and creative usage of intangible and tangible resources have been emphasized as crucial for sustaining woodworking industry competitiveness in higher cost-level countries. Resource-based view (RBV) defines the availability of intangible assets, capabilities and tangible resources, and their heterogeneous combination to form the basis for company success. The objective of this review is to examine the possibilities to employ the RBV to the study of the woodworking industry by combining existing empirical results of the factors of companies' competitiveness with assessment of the RBV. In the existing literature, strategies implemented in woodworking companies have been approached rather widely, while the role of intangible and tangible resources in building firm-level success has received less focus. In addition, a significant gap exists in linking firms' financial accounting information with empirical data on their resource-usage and business strategies. In future studies, more information of the effects of these strategic elements on the actual business success of the firms would be needed.

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Section: Discussionmentioning

confidence: 99%

Linking resource-based view with business economics of woodworking industry: earlier findings and future insights

Lähtinen¹

2007

Silva Fenn.

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“…However, value added strategies and in general increased market orientation are not the only aspects of profitable strategy development. Being at the forefront in technology development and investing in large-scale operations have also been of importance (Sinclair & Cohen, 1992;Nyrud & Bergseng, 2002;Mårtensson, 2003). Lee et al (1999), especially, emphasise the important relationship between product innovation and process innovation.…”

Section: Introductionmentioning

confidence: 99%

Value-added strategies and forward integration in the Swedish sawmill industry: positioning and profitability in the high-volume segment

Brege

Nord

Sjöström

et al. 2010

Scandinavian Journal of Forest Research

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This is an electronic version of an article published in:Staffan Brege, Tomas Nord, Roland Sjöström and Lars Stehn, Value-added strategies and forward integration in the Swedish sawmill industry: positioning and profitability in the highvolume segment, 2010, SCANDINAVIAN JOURNAL OF FOREST RESEARCH, (25) primary sawmill production and forward integration into secondary production. It also aims to relate some basic conditions, such as company size, company growth and corporate strategy, to value added and forward integration to profitability. The results show strong positive and significant correlations between forward integration, value added in primary production (somewhat weaker) and unit revenue, and profitability measured as return on investment.There were no strong or significant correlations between size and profitability, playing down the importance of economies of scale (among these already large companies). An interesting result is the much higher profitability of the buying sawmill companies compared to the forest corporations, stressing the importance of both a long-term strategy when investing in value added activities and ultimately the priorities of ownership.

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“…For example, using Data Envelopment Analysis (DEA) the proportion of sawmills operating efficiently in the Canadian province of British Columbia in 2002 was found to be only 7 % (Salehirad and Sowlati 2005). A similar study in Norway determined that around 30 % of sawmills were efficient between 1974 and 1991 (Nyrud and Baardsen 2003). Different operations research tools have been proposed to improve the performance of individual sawmills, mainly falling in one of two categories: (i) tools, mainly simulation models that estimate the amount of lumber products obtained when different cutting patterns are applied to different log classes (Pnevmaticos et al 1974, Occeña andTanchoco 1996), and (ii) tools, mainly mathematical programming models that help selecting the cutting patterns that optimize the process under production and resource constraints.…”

Section: Introductionmentioning

confidence: 99%

A comparison of optimization models for lumber production planning

Vergara¹,

Palma

Sepúlveda³

2015

Bosque (Valdivia)

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SUMMARYThe performance of sawmills is strongly dependent on how logs are sawn into lumber in order to satisfy the customer demands. To do this, sawmill managers have to decide which cutting patterns have to be applied to logs of different dimensions. Optimization models have been proposed to assist decision makers in this process, but only the profit maximization and the cost minimization of the decisions have been considered as the models objective. In this paper, a linear optimization model was formulated to address lumber production planning and applied to a real problem. The current decisions at sawmills were compared with five different objective functions: the two previously mentioned plus waste minimization, log number minimization and production time minimization. Only profit maximization and waste minimization models reported positive economic returns. Although the current decision at sawmills also reported a positive economic return, the same economic result was obtained with significantly fewer resources using the waste minimization model. The effects of the different objectives on the production indicators were discussed.Key words: linear programming, cutting patterns, sawmill production. RESUMENEl desempeño de un aserradero depende principalmente de cómo las trozas son aserradas para producir las piezas de madera demandas por los clientes. Para hacer esto, el planificador de la producción debe decidir qué patrones de corte deben ser aplicados a trozas de distintos tamaños. Los modelos de optimización han ayudado a tomar estas decisiones, pero solo se han considerado como objetivo de estos modelos la maximización de beneficios y la minimización de costos. En este artículo se formula un modelo de planificación de la producción de aserraderos, se aplica a un problema real, y se comparan las decisiones del planificador con las decisiones generadas por distintas funciones objetivo usadas en el proceso de optimización: las dos ya mencionadas además de la minimización de excedentes, minimización del número de trozas y minimización del tiempo de producción. Sólo los modelos de maximización de beneficio y minimización de excedentes mostraron retornos positivos. Aunque la solución actual del aserradero también mostró un retorno económico positivo, el mismo retorno fue obtenido con significativamente menos recursos, usando el modelo de minimización de excedentes. El efecto de diferentes funciones objetivo en los indicadores de producción es discutido.Palabras clave: programación lineal, patrones de corte, producción en aserraderos.

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Production Efficiency and Size in Norwegian Sawmilling

Cited by 38 publications

References 21 publications

Linking resource-based view with business economics of woodworking industry: earlier findings and future insights

Linking resource-based view with business economics of woodworking industry: earlier findings and future insights

Value-added strategies and forward integration in the Swedish sawmill industry: positioning and profitability in the high-volume segment

A comparison of optimization models for lumber production planning

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