20 years ago, the sawmill industry saw an increasing difficulty in maintaining production and quality control with manual labor. The actions some companies took revolutionized the whole industry. In 2021, the same trends are arising in other industries today.
The Evolution of the Sawmill Industry and How it Became One of the World’s Most Digitally Advanced Businesses
Disclaimer: This story is based on actual events. In certain incidents, characters and timelines have been changed for dramatic purposes. Certain characters may be composites, or entirely fictitious.
Have you checked out our free eBook yet? “A Tale of Two Sawmills.” is a story that takes you through the journey of a sawmill looking to start Digital Transformation. Plus the BONUS content – a practical checklist for planning any automation projects.
Twenty years ago, faced with labor shortage and quality and throughput bottlenecks, a daring sawmill decided to invest in automation technologies. Though deemed risky by many of their peers at the time, their transformation journey eventually revolutionized the entire industry.
The Early Days: 1990 – 2000
Sage Woods and The Brown Brothers were two sawmills founded near the Pacific Northwest’s lush forests. Separated by Highway I5, the two sawmills had been there for generations, employing many families living in the region. With steady market demand, these two companies had similar sales revenue and profit margins for many decades. When the market slowed down in the early 1990s, The Brown Brothers decided to furlough some employees and operate at 60% of full capacity. They planned to wait for the market to correct itself as it always had many times before.
During this time, Sage Woods decided to seek opportunities in the global market. Japan, at the time, was riding its economic boom. Their demand for construction lumber skyrocketed. Sage Woods quickly jumped on the opportunity hoping to make up for the lost revenue. However, they soon discovered that the dimension and quality requirements varied substantially from the standard dimension lumber they were used to cutting. This posed a significant obstacle for the Head Sawyer, whose job was to estimate how many dimension boards can be extracted from a log. Without prior experience to base their decisions, the crew resorted to trial and error to fulfill orders. before long, the sawmill realized how much precious raw material they were wasting by eyeballing the maximum yield.
Compounding the situation further was that Japanese customers required measurement accuracy down to fractions of a millimeter as well as high-quality consistency, both of which were difficult to achieve as operators could only manually inspect the finished products in samples. Sage Woods suffered significant financial setbacks when their customer rejected shipments of off-sized products that did not meet their criteria. The sawmill’s reputation and future were on the line.
While The Brown Brothers felt fortunate that they did not make the same mistake, Sage Woods’ business leaders decided to use this as a lesson for learning. They could not control external factors such as a recessive economy and rising environmentalism in the Pacific Northwest, so they focused inward and outlined two main pain points the company needed to overcome to achieve a sustainable future.
Manual processes are not scientific/repeatable
Even the most seasoned Graders are still susceptible to making errors. The inconsistent and incorrect viewing angle of the markings on a tape measure, gauge, or caliper frequently caused parallax error, making the measurement extremely unreliable. Transcription error was also persistent in that operators simply logged the wrong data (often transposing digits), causing off-sized boards to pass through quality control (QC).
QC also relied on Graders doing visual inspections for any external defects on selected boards, meaning not all finished products were examined. Overlooking defective products was common. More financially devastating was the conservative approach Graders took in an effort to deliver “high-quality” products. Grade 1 lumber often ended up in the Grade 2 sorting lot, Grade 2 in a lesser-grade lot, and so on. In the early 1990s, salvaging under-graded lumber was a lucrative business that many smaller yards relied on. Finally, different Graders interpreted wood characteristics differently, and each might have a different tolerance level to these characteristics. Product quality could and did vary from shift to shift.
Similarly, determining the best way to cut a log at the head rig also relied on the human experience. Visually examining the logs’ dimensions, taper, curve, and grade, the Sawyer would make a judgment call and select a sawing pattern solely based on his/her knowledge. This assessment was a subjective and imprecise process that also varied from shift to shift. Natural resources like trees can take up to decades to renew. Management needed an objective method to recover the maximum capacity of usable material, starting at the primary sawing process.
Humans are the throughput bottleneck
In trying to improve their product quality and make up for the returned goods, the managers hired more experienced workers. Soon they realized that production volume did not translate linearly to the number of new hires. Limited facilities and resources meant that workers could not perform their job as effectively and efficiently. Not to mention that the uneven workload between the new hires and existing employees was causing low morale and friction in the workplace.
A sawmill’s daily throughput is directly related to the decision-making ability of the Head Sawyer and the Graders. On days when either of them was absent, the production could be reduced or halted as a result. Moreover, it takes years of resources to train crew members to become qualified Sawyers or Graders. Companies incur increased operating costs over the years and risk losing significant operational assets should these highly trained and skilled individuals decide to switch careers.
Embracing the changes with a growth mindset
With the popularity of digitally aided automation in other manufacturing sectors growing, Sage Woods looked for modern technologies in line with their objectives. 3D machine vision (log scanning) was relatively new in those days, but it was showing promise amongst early adopters. 3D machine vision captures the three-dimensional properties of any object digitally. Algorithms and software programs are developed to process the data regardless of the size or shape of the target object, in this instance, raw lumber.
By setting their sights on investing in the right tool, Sage Woods debated whether to lead the capital investment with an in-house team or contract it out to a system integrator. Carefully not to waste precious meeting time, Sage Woods conducted structured internal discussions and concluded these top advantages of these two models:
Benefits of working with an in-house team are:
- The system can be highly customized to Sage Woods’ needs, and
- There is control over proprietary algorithms or software programs the system uses.
Advantages of working with a system integrator are:
- They are a dedicated project team, whereas an internal team may have trouble removing themselves from their daily tasks,
- As an expert in hardware and software integration, the system integrator will be able to propose a professional solution in the timeliest manner, and
- It does not increase the sawmill’s operating expenses, as they would not have to hire engineers just for this project.
The roadmap to success
Once they decided to move ahead with working with an integration partner, Sage Woods selected several stakeholders to form a project committee, which would also serve as the point of contact in the future. Firstly, they set out these criteria for selecting a suitable system integration firm:
- Solid engineering capabilities: In the early 1990s, automation in the sawmill industry was still in its infancy. The integrator must have the ability to take an analytical approach to the problem, have technical proficiencies to explore new technologies, and be a creative problem solver.
- Proven competencies in hardware integration and software programming: The integration firm is confident in bringing the appropriate pieces of hardware together and devising software algorithms to facilitate smooth communications between each component. They are also responsible for designing an intuitive user interface that performs the automation tasks according to Sage Woods’ requirements.
- A repertoire of reputable technology suppliers: An automation system is only as good as the components/subsystems it comprises. The integration firm should select vendors that meet the client’s requirements and evaluate these suppliers based on their product’s durability, reliability, and performance rather than just cost.
- Must have proven successes in automation: Choosing an integration partner is a long-term decision. A firm that maintains multiple clients over the years is an indication that they are dedicated to long-term planning, and they value an enduring collaboration. Having a rich history of project portfolio can also minimize the chances of a system becoming orphaned, causing maintenance difficulty and potential downtime in the future. Specifically, Sage Woods wanted to partner with a system integrator (SI) whose portfolio spans no less than five years.
- Knowledgeable in the industry: A sawmill encompasses many sub-processes that raw timber goes through before it is ready for sale. By having firsthand knowledge of these processes, the system integrator can optimize each step with technology that positively contributes to the sawmill’s bottom line.
- A comprehensive rollout plan: Major capital investments such as a plant-wide system implementation requires methodical testing, active monitoring, personnel training, and change management. Having executed multiple projects allows the integration firm to outline a systematic rollout plan that avoids many common pitfalls.
- The integration partner should preferably be in the same time zone. Once the system is up and running, there will be a transitional period when the lumber production falls before the operators familiarize themselves with the new technologies. Onsite training and standby from the System Integrator will be desirable during this period.
- Having an ally close by also means a shorter emergency response time.
- Finally, Sage Woods foresees this as an opportunity for expansion. Business plans can be more effectively and efficiently rolled out when the System Integrator’s support is easily accessible.
After months of meeting potential collaboration partners, Sage Woods settled on an integration firm from Vancouver, British Columbia, Canada. Founded in the mid-1970s, they had been engineering solutions for the wood product industry since day one. Their portfolio included many established sawmill companies in the Pacific Northwest. Not only did they have solid software programming capabilities, but they had also started incorporating 3D machine vision in log scanning and process optimization. The firm’s technical sophistication level matched Sage Woods’ requirements. It also had a growing clientele to indicate its business health. Sage Woods was cautiously confident that they had found the right integration partner.
A Tale of Two Sawmills continues. Read more about the digital transformation initiatives in the next chapter.