a lean logistic framework: applications in the wood fiber

April 2018

Paula Fallas ValverdeMS Candidate, Forest Products, Virginia TechHenry Quesada Pineda Associate Professor, Virginia TechBrian BondProfessor, Virginia Tech

A Lean Logistic Framework: Applications in the Wood Fiber Supply Process

Questions

Conclusions

Case Study 1 (Current and Future State)

Project Introduction and Project Scope

WhatisLean?WhatroledoesLeanThinkingplayinasupplychain?

LeanThinking- SupplyChain- Logistics-VSMMapping

Agenda

LeanThinkingGoal

LeanThinking

Overproduction Transportation Inventory

Motion

01 02

04

Waiting Over-processing

Defects

05 06

07

03

ContinuousWasteReductiontoMaximize

Flow

Lean supply chain management is forbusinesses who want to streamlinetheir processes by eliminating wasteand non-value added activities.

Companies have a number of areas in theirsupply chain where waste can be identifiedas time, costs, or inventory. To create aleaner supply chain companies mustexamine each area of the supply chain.

LeanSupplyChainManagement

WhichAreas?

LeanThinking- SupplyChain- Logistics

Shipping,receivingandprocurement

Suppliercollaborations

InboundLogistics

OutboundLogistics

CustomerCollaborations

ResearchScope

Logistics

“Logistics are the activities required in order to comply effectively withthe quantity need of products in the place and time it is need by thecustomer. It is the link between manufacture and consumption of aproduct or between suppliers and production, all separated by distanceand time" (Kazandijan & Norton, 1999).

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$

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$

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WhatisValueStreamMapping?

Avaluestreamisalltheactions(bothvalue-addedandnon-valueadded)currentlyrequiredtobringaproductthroughthemainflowsessentialtoeveryproduct:Theprojectfocusedonlogisticactivities.

Whatisavaluestreammap?Specialtypeofflowchartthatusessymbolsandmetricstodepicttheflowofinventoryandinformation.

Whatisavaluestream?

Whatisthevaluestreammap?

Objectives

Goal:Todevelopalean logistic frameworkfortheWoodFiberSupplyChainSpecificobjectives:1.Tomapanddetermine leanmetrics forthewoodfibersupplychainprocesses fromstumpage tologyardsatselected processing sites2.Toimplement valuestreammapping(VSM)forthewoodfibersupplychainincluding costfulfillment, operational,andfulfillment-stream performance indicators.3.Todisseminate thelean logistic frameworktotheindustryrelatedtothewoodfibersupplychain.

Logistics andSupplyChainAnalyzedfromStumpage toLogYard

Supplier’sInventoryStumpage

OutboundLogisticsTransportation

CustomerLogYard

IndustryCaseStudies

StandingTimber/InventoryPoint

Inventory(ADOH)

ValueofInventoryCarryingCost

OutboundLogistics/Transportation

TransitTimeInventory(ADOH)

ValueofInventoryCarryingCostDelivery frequencyPlannedorderfrequency

Customer/ReceivingOperations

OrderingProcessingTime

ValueofInventoryCarryingCostLotSizeDelivery frequencyPlannedorderfrequency

Demand

CaseStudy1:APaperMill

CaseStudy2:ALumberMill

Supplier/Logger(Gatewood)

LeadTimeInventory(ADOH)

ValueInventoryCarryingCost

InboundLogistics/Transportation



Receiving Operations/LogYard

TransitTime (YardtoLine)Inventory(ADOH)

ValueofInventoryCarryingCost Dem

and

PerformanceMetricsRightQuantityRightQuality(%ofCull)

StandingTimber/InventoryPoint

Inventory(ADOH)


OutboundLogistics/Transportation



Customer/ReceivingOperations

OrderingProcessingTime

ValueofInventoryCarryingCostLotSizeDelivery frequencyPlannedorderfrequency

Demand

CaseStudy3:LoggerCompany

KeyFindingsbyCaseStudyCompany

CaseStudy1:APaperMill

Supplier/Logger

OrdertoShipmentInventory(ADOH)

ValueInventoryCarryingCost

TruckPayloadMOQ

PerformanceMetrics

InboundLogistics/Transportation



PlannedOrderFrequencyPlanned Delivery frequency

PerformanceMetrics

Receiving Operations/LogYard

Inventory(ADOH)


PerformanceMetrics

Waste Identified inCaseStudy1:PaperMill

CaseStudy1.PaperMill

FutureVSM LowerScopeGain inPercentageWoodFlowPlanning:Mill

ManagementTractAllocation: Procurement

Communication :MillManagement, Procurement and

Supplier

InventoryCarrying Costs 21%

TruckSchedulingCoordination:MillManagement

TractAllocation: Procurement

Inbound/OutboundLogistics 10%

Source:Rodgers,B.,Visser,R.,Shaffer,R.,&Gallagher,T.(2002).PlanningandCommunication:StateoftheForestIndustryandOpportunitiesforImprovementintheWoodSupplyChain.

Logistics andSupplyChainAnalyzedfromStumpage toWoodYard

Supplier’sInventoryStumpage

OutboundLogisticsTransportation

CustomerLogYard

-21%ofInventory

-21%ofInventory

-21%ofInventory

-10%ofTransportationcosts

FutureVSM&TotalCostofFulfillment

GapMatrixforCaseStudy1

• Mostofperfect-orderexecution metricssuchas:quality,product,customerservice, location,andquantity,arenottracked inthethreecasestudyfirms.

• Themaincausesforwasteinclude: lackofcommunication amongsupplychainpartners,weaksuppliercollaborations, demandvariability,quotamanagement,andpoorinventorymanagement.

• Thecompletion ofsuchtoolsaid inidentifyingcommunication gapsanddisjunctions between differentelements ofthesupplychain.

• Theapplication ofVSMtothewoodfibersupplychainopensthepossibility ofimprovingcollaboration andinformationsharingpracticesbetween thesupplychainpartners.

MainConclusions

• Theresultscouldbeimproved ifthe implementing partyiscloserandmorefamiliarwiththecompany’sprocesses.

• Similar issues relatedtocommunication andcollaborationhavebeenreportedinpreviousWSRIreports.

• Consumer companies should implement the idea of core suppliers. Thiscategorization could reduce inventory, reduce inefficiencies, and improve theinformation flow between different elements to enhance productivity.

Main Conclusions

• Acknowledgement: Research funded through a grant fromthe Wood Supply Research Institute (WSRI) and by theDepartment of Sustainable Biomaterials at Virginia Tech

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a lean logistic framework: applications in the wood fiber

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