Times are tough. Could your mill be performing better?

by Steve Courtney, Vice President, The Beck Group

Many mills have been manufacturing wood products for decades. Some have changed company names over the years, while others have always been in the same family or company. The fact that these companies are still operating through all the ups and downs in the industry illustrates that these businesses are well run—but their continued existence doesn’t mean there is not room for improvement.

Operating in the same environment for many years can lead personnel to accept subpar performance or conditions. “It has always been that way” can create complacent attitudes that might even push back against looking for ways to improve. Sometimes there is a very established, key person who stifles all change. Add a few profitable years and complacency can grow, but good markets do not mean that a business is a top performer. In a business such as wood products, which grows more competitive all the time, those who don’t optimize will fall behind – especially when belts start to tighten and prices drop.

A professional operational assessment by experts with strong theoretical and practical understanding of the business from forest to distribution can help identify production issues and earn more profit per dollar invested. An operational assessment – essentially an audit – is the process of evaluating all key profit-sensitive aspects of an operation from raw material to finished product. Knowledgeable evaluators identify areas for improving performance and reducing costs.

The Beck Group has used our expertise to audit several operations in recent years to assess:

• Efficiency of operations

  • Condition of current facility: is it sound?

  • Organizational structure: is it clear and efficient?

  • Key performance indicators and analytics: is it doing better or worse than the competition?

  • Head count: enough people? Too many? Not enough?

  • Bottlenecks: what’s the holdup? Transportation? Finicky floor chains?

• Safety standards

  • Safety policy and culture: is there too much lost time? Who monitors safety?

  • Adherence to policies: are people cooperating even when the foreperson isn’t watching?

• Maintenance practices

  • Preventive maintenance: is it carried out or deferred? Why?

  • Reactive maintenance: how much maintenance time is reactive vs. preventive?

• Log procurement procedures

  • Understanding return-to-log: one of the industry’s core metrics for profit

  • Log yard efficiency: does it flow? Are logs handled efficiently?

  • Log quality: do logs create issues for the mill that can be solved in the woods?

• Support for operations

  • Human resources: do you have the right people? If not, how can you get them?

  • Accounting: is the information provided to those who need it?

  • Purchasing: is this done efficiently? Is inventory tracked?

The results of these friendly visits from the BECK experts include a full suite of recommendations to improve profits. These range from minor modifications to improve flow and production to recommending changes in machine centers. Enhanced maintenance practices are a common recommendation, as a small percentage gain in uptime can generate a large gain in financial results (see BECK’s maintenance workshop https://www.beckgroupconsulting.com/mmregistration).

Aligning production with log supply seems like common sense, but it’s impossible to work in the timber world without realizing that log suppliers and types have changed over the last 30 years. BECK can help by evaluating current and future log supply to help align production with supply. We can model various scenarios to illustrate financial results. Combined with information from BECK’s benchmarking studies, mill audits provide insights to reduce costs and/or increase timber revenues. They can also help identify capital projects, with planning assistance from BECK, that can vault mill operations to far greater profitability.

The BECK team’s combined expertise is available to audit your mill’s operations. If you think our enthusiastic team can help you improve your operations and outcomes, please contact us at info@beckgroupconsulting.com. Even our office manager used to feed a planer. We love this industry, and we take great satisfaction in helping timber businesses move past surviving and rise to the level of thriving.

The Beck Group, Inc.

Forest Products Planning and Consulting Services

Telephone (503) 684-3406

Email: info@beckgroupconsulting.com