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Clear Communications and Strong Relationships Strengthen the Wood Supply Chain

This week in Jacksonville, Florida, the Wood Supply Research Institute (WSRI) held its annual meeting.  WSRI is a non-profit organization that funds research to improve efficiencies in wood supply systems in the U.S. forest products industry. Amanda Lang, Senior Consultant at Forisk and Managing Editor of Wood Bioenergy US, attended the meeting and contributed the following post:

How valuable are good working relationships in forestry?  Or, from the other side, what are measurable impacts on loggers and wood-using mills from poor communications or strained relationships?  At the WSRI annual meeting, Don Taylor with Sustainable Resource Systems LLC presented the findings of a supplier-consumer relations project. The project interviewed over 220 wood suppliers and wood consumers (procurement foresters) in the U.S. to evaluate the working relationships between the two groups. The study findings are timely and relevant as the U.S. forest products industry emerges from the recession, and as new and announced wood bioenergy projects develop their wood procurement strategies.

The study found that logging contractors reduced investments in their businesses during the recession, by closing, downsizing, or foregoing normal equipment replacement and maintenance to reduce costs. More frequent equipment break-downs resulted in lost production.

Poor relations between mill procurement personnel and logging contractors also resulted in lost production. Examples include frequent variable quotas, truck delays due to poor woodyard management, poor communications and poor planning. The study found that, on average, 7% of annual production in the U.S. is lost due to poor relationship management. In addition, some consumer-supplier relationships deteriorated as the recession hit. For example, some wood-consumers cancelled pre-recession commitments and put orders on a week-by-week basis with no firm commitment for volume or delivered pricing.  The demise of these relationships contributed to reduced investment in logging capacity.

The WSRI study highlights the importance of clear communications and relationships in the wood supply chain. Many procurement organizations are concerned about future logging capacity as wood demand returns to pre-recession levels. Strong relationships, communication, and support between procurement teams and wood suppliers will be critical as the industry moves forward.

For more information about WSRI or the Supplier-Consumer Relationship Study, click here or contact Jim Fendig.

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