A Tale of Two Sawmills: The Industry 4.0 Way

7 min read

For many decades, Sage Woods and the Brown Brothers were two family-owned sawmills in the Pacific Northwest. When the domestic lumber price took a nosedive in the early 1990s, Sage Woods’ management decided to automate the operations and collect digitized data. The Brown Brothers, on the other hand, took a passive approach to ride out the economic downturn. Though the process was long, Sage Woods found the integration partner that shared their values and goals. In the early 2000s, Sage Woods acquired the neighboring Brown Brothers and became one of the most advanced sawmills in North America. Read more about the stories of these two sawmills in A Tale of Two Sawmills: The Early Days and The Transformation.

Many of Sage Woods’ lessons can be recontextualized to help modern companies evaluate automation as manufacturing faces dwindling labor supply and uncertain economic outlooks.

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.

Digital transformation is for all sizes of manufacturer

During adverse times, Sage Woods’ decision to make changes and embrace technologies set the firm apart from other sawmills. Fast forward 20 years later, McKinsey’s 2017 survey revealed that 60% of the manufacturing jobs can still be digitally transformed. Labor-intensive production processes urgently need to be digitally redesigned to facilitate growth as a labor shortage is quick-approaching and a growing problem. Firstly, baby boomers, the largest working demographic in manufacturing, are retiring at an alarming rate of 10,000 a day. Secondly, amid a global pandemic, job seekers have become wary of working in labor-intensive environments, such as agriculture, food processing, or mining.

Digital transformation (DX) is also an ideal strategy for small and medium-sized plants. Big corporations traditionally enjoyed producing standardized products in mass quantity, but they often take a long time to approve major capital investments. Their facilities can be equipped with legacy systems and workers accustomed to existing cultures and working models. On the contrary, a small or mid-sized manufacturer leveraging digital technologies sees at least 60% gains in quality and speed in meeting customers’ changing demands. Moreover, digitally-aided manufacturing enables production flexibility and agility, making these up-and-coming firms critical in fulfilling the exploding post-pandemic customer demand.

How to automate right in the Industry 4.0 era
Automation in the Industry 4.0 era is a must. A success strategy rests on managing these three aspects well: the DX initiatives, change management, and value creation.

A growth plan with employees’ well-being in mind

Sage Woods’ willingness to learn from mistakes and become an industry disruptor was the driving force that differentiated them from the Brown Brothers. It is not uncommon for companies to adopt a “wait and see” mentality. However, in a world of increasing competition, remaining passive to changes can soon make a business irrelevant and cause financial loss.

Modern manufacturing firms should understand that digital transformation does not mean swapping out human talents with automation capital. Humans remain critical in the new manufacturing landscape where creative thinking, decision-making, and social flexibility are unmatched by the most advanced technology. Facilitating smooth collaboration between these two parties should be administered through a comprehensive change plan that helps employees use the technologies they were affected by.

Introducing technologies to a traditionally labor-intensive workplace without proper change management can be highly destructive. To minimize employee resistance and maximize user adoption, Sage Woods focused on redesigning the production process with the workers’ well-being in mind. The following two initiatives were the major contributing factors to their successful adoption.

Make progress incremental

Segmenting the automation project into stages helped minimize the impact and resolve the hesitation from departments that are skeptical about the results. For example, when the Primary Optimizer proved to be a reliable solution that improved lumber yield and cut quality, the department heads unanimously agreed that Edger and Trimmer should be automated next for optimal performances.

Winning support and commitment from stakeholders can be difficult, especially for major capital investments that involve a large-scale process change. A staggered rollout plan can help the System Integrator and the project owner manage their risks should they run into any unforeseeable roadblocks. It is also easier for the system engineers to troubleshoot as problems are contained in one process. Most of the time, it can prevent shutting down the whole plant, minimizing any adverse effects on production. Finally, success in each stage can garner even more confidence and support from all parties involved, reducing resistance on every level. 

Develop workers professionally

The training helped Sage Woods’ operators transition to digital machine operators, who also possessed valuable knowledge of the sawmill’s process flow. The company provided learning resources to develop workers professionally, creating a talent pool in reserve. The newly trained operators were ready for deployment as Sage Woods’ business expanded.

Nowadays, even in companies that do not have expansion in the pipeline, workers coexisting and coworking with technologies are inevitable. Therefore, companies need to have a development program in place to increase workers’ digital fluency. By proactively removing the fear of the unknown towards technology, management can more easily and readily usher in new technologies.

Furthermore, skilled mid-range positions are the most challenging to fulfill for manufacturing companies, as they require both technical skills and industry know-how. A career program can help companies hire for these critical roles internally. Such a program allows employees to build on their existing skillsets and have a steady career path, simultaneously promoting the company’s talent retention rate. Finally, by 2030, it is expected that 2.1 manufacturing million jobs will be left unfilled. A forward-looking training plan can help companies mitigate the impact of a shrinking labor market.

To develop a comprehensive change management strategy for manufacturing, read about How to Formulate a Future-ready, Long-term Industry 4.0 Strategy

Manufacturers must have a win-win-win mentality with their technology partners, employees, and customers.

Price is not the same as value

Sage Woods’ commitment to quality over costs was their guiding principle in making many business decisions. For example, they prioritized the system’s potential performance and reliability over costs when evaluating to implement the Primary Optimizer. The result is that excellent system performance helped Sage Woods redeem their brand with high-quality dimension lumber. Choosing industrial-grade system components meant that the plant experience negligible downtime due to failures, ensuring they met daily production goals and delivered products on time.

Simon Jacobson, the VP Analyst of Gartner, warned that many modern manufacturers still lack this vital mindset. In his 2020 presentation on Smart Manufacturing, he urged companies to —

“look beyond the financial ROI (of a capital investment) because it will come, maybe sooner than you think.”

By investing in cutting-edge technologies, Sage Woods’ product accuracy was precise and consistent. Since the digitization, their customers would spend very little or no time inspecting their shipments because of the underlying trust in Sage Woods’ quality and reliability. Employees also benefited from a safer workplace as many of the dangerous sawing tasks were now automated. Working to meet a big order or sudden increase of demand can be planned better within the Optimizing team. Improved work-life balance among the workers boosted their morale, which assured the company’s steady growth.

Creating values for the customers and employees through quality products shaped Sage Woods into a brand that its clients and stakeholders trusted. A reputable brand name also hedged them from the impacts of fluctuating lumber prices. While other sawmills struggled to recruit, potential job seekers saw them as a desirable place to work. System Integrators and vendors that worked with them focused on innovations that would improve production and quality rather than cutting corners to save cost. Having the right mindset creates a win-win-win ecosystem that benefited their customers, technology partners, and employees.

The tale continues

Digital transformation in manufacturing can be a daunting endeavor. Thankfully, the Internet has made the search for the right integration partner more accessible and transparent with resources such as the Control System Integrators Association, Rockwell Automation’s PartnerNetwork, or the Association for Advancing Automation.

Hermary is part of Rockwell Automation’s Technology Partner and a proud member of A3 – Association for Advancing Automation.

With automation technologies continuing to advance over the past three decades, the forestry/timber industry is now collectively the largest user of 3D machine vision. According to Vision Systems Design’s 2020 survey, 90% reported using machine vision to automate, and the remaining 10% plan on using it in the future.

Digital transformation will work for companies like Sage Woods because they fundamentally understand that there is no growth without change: a successful future depends on how their team members perceive the change. Though A Tale of Two Sawmills documents the sawmill industry’s technological evolution, it serves as an inspiring roadmap to all manufacturers standing at the crossroads of digital transformation.

If you have any questions on automation or how machine vision can work for you, feel free to contact us!

Automation projects are major capital expenditures. They are important investment decisions that can impact operations in the long run. In our next series, “The Hidden Numbers in Automation projects“, we share tried-and-true experiences from industry veterans on how to uncover hidden costs in automation projects using the Total Cost of Ownership framework. We also provide practical advice and guidelines specifically on successfully managing automation projects. Read more here.

About The Author - Terry Hermary

Co-founder of Hermary.

Terry is the customer-facing machine vision expert at Hermary with over 30 years of experience. With a background in electrical engineering, he specializes in developing 3D vision applications with system integrators and machine builders. He is passionate about solving unique automation challenges using 3D vision technologies. Over the past three decades, Terry and his team have established Hermary as the leading innovative 3D machine vision provider, revolutionizing industries from sawmilling to meat processing.


  • Co-founded Hermary Machine Vision in 1991
  • Patent holder of many 3D machine vision inventions