Supply chain management in forestry––case studies at Södra Cell AB

The use of supply chain management and optimisation is of increasing importance in the forest industry. The overall wood-flow starts with standing trees in forests and continues with harvesting, bucking, sorting, transportation to terminals, sawmills, pulp mills, paper mills and heating plants, conversion into products such as pulp, paper, lumber, and ends at different customers. Many planning problems arise along the chain and these cover different time horizons. Co-ordinating the wood-flow is a vital concern for many companies. We study Södra, one of the larger Swedish forest companies, which is involved in all stages of the wood-flow. We focus in particular on Södra Cell AB, a company within Södra, which is responsible for pulp production. We describe the operations at Södra Cell and the decision support tools used for supply chain planning. We describe five major projects or cases which focus on improving their supply chain management and optimisation. These cases include the introduction of new technologies for sales and orders, new distribution structures using terminals, and the development of integrated optimisation models and methods.     

Integrated Production and Distribution Planning for Södra Cell AB

In this paper we consider integrated planning of transportation of raw material, production and distribution of products of the supply chain at Södra Cell AB, a major European pulp mill company. The strategic planning period is one year. Decisions included in the planning are transportation of raw materials from harvest areas to pulp mills, production mix and contents at pulp mills, distribution of pulp products from mills to customer via terminals or directly and selection of potential orders and their levels at customers. Distribution is carried out by three different transportation modes; vessels, trains and trucks. We propose a mathematical model for the entire supply chain which includes a large number of continuous variables and a set of binary variables to reflect decisions about product mix and order selection at customers. Five different alternatives regarding production mix in a case study carried out at Södra Cell are analyzed and evaluated. Each alternative describes which products will be produced at which pulp mills.     

A combined terminal location and ship routing problem

In this paper, we consider a combined terminal location and ship routing problem at Södra Cell AB. The purpose is to supply the customers' annual demand for pulp products while minimizing the distribution costs. Customers are supplied with various pulp products from pulp mills in Scandinavia by ships, trains, or lorries. The ship routes go from the pulp mills to terminals in Europe. From each terminal, the products are transported to customers by lorry, train, or barge. Some customers can be supplied directly from the pulp mills by trains or lorries. We have developed a mathematical model to select which terminals to use and, at the same time, determine the shipping routes. The mixed integer programming model was solved directly using a commercial solver. When the number of routes generated is large, the time required to obtain an optimal solution is too long. Hence, we have developed heuristics in order to obtain an acceptable solution in reasonable time. In addition to the basic case, five different scenarios were tested. Our heuristics provide solutions that are within 0.12% of the optimal ones.     

Multi-commodity supply network planning in the forest supply chain

We consider in this paper a two echelon timber procurement system in which the first echelon consists of multiple harvesting blocks and the second echelon consists of multiple mills (e.g., sawmills), both distributed geographically. Demand is put forward by mills in the form of volumes of logs of specific length and species. Due to the impact of log handling and sorting on cut-to-length harvester and forwarder productivity [Gingras, J.-F., Favreau, J., 2002. Incidence du triage sur la productivité des systèmes par bois tronçonnés. Avantage 3], the harvesting cost per unit volume increases as the number of product variety harvested per block increases. The overall product allocation problem is a large scale mixed integer programming problem with the objective of minimizing combined harvesting and aggregated transportation costs, under demand satisfaction constraints. A heuristic is first introduced then, an algorithm based on the branch-and-price approach is proposed for larger scale problems. Experimentations compare solutions found with the heuristic with the corresponding optimal solutions obtained with both Cplex (using the branch-and-bound approach) and the branch-and-price approach. Results demonstrate the good performance level of the heuristic approach for small scale problems, and of the branch-and-price approach for large scale problems.     

TIMBER MARKETS AND FUEL TREATMENTS IN THE WESTERN U.S.

ABSTRACT. We developed a model of interrelated timber markets in the U.S. West to assess the impacts of large‐scale fuel reduction programs on these markets, and concomitant effects ofthe market on the fuel reduction programs. The linear programming spatial equilibrium model allows interstate and international trade with western Canada and the rest of the world, while accounting for price effects of introducing softwood logs to the market. The model maximizes area treated, given fire regime‐condition class priorities, maximum increases in softwood processing capacity, maximum rates of annual treatments, prohibitions on exports of U.S. and Canadian softwood logs from public lands and a fixed annual treatment budget. Results show that the loss to U.S. private timber producers is less than the gains for timber consumers (mills). States receiving more treatments when spending is not constrained by state proportions include Idaho, Montana, New Mexico and Oregon. When only the wildland‐urban interface is treated, California, Oregon and Washington receive more treatments. Utah and Colorado receive more treatments when low risk stands are included.     

Molecular conformation of n-alkanes using terrain/funneling methods

Understanding molecular conformation is a first step in understanding the waxing (or formation of crystals) of petroleum fuels. In this work, we study the molecular conformation of typical fuel oils modeled as pure n-alkanes. A multi-scale global optimization methodology based on terrain methods and funneling algorithms is used to find minimum energy molecular conformations of united atom n-alkane models for diesel, home heating, and residual fuel oils. The terrain method is used to gather average gradient and average Hessian matrix information at the small length scale while funneling is used to generate conformational changes at the large length scale that drive iterates to a global minimum on the potential energy surface. In addition, the funneling method uses a mixture of average and point-wise derivative information to produce a monotonically decreasing sequence of objective function values and to avoid getting trapped at local minima on the potential energy surface. Computational results clearly show that the calculated united atom molecular conformations are comprised of zigzag structure with considerable wrapping at the ends of the molecule and that planar zigzag conformations usually correspond to saddle points. Furthermore, the numerical results clearly demonstrate that our terrain/funneling approach is robust and fast.     

Combined primary and secondary log breakdown optimisation

At sawmills logs are converted into boards by a series of cutting operations. Primary cuts reduce logs into slabs of wood, secondary cuts produce boards. Boards incorporating natural defects such as knots (branch sections) are inferior to clear boards. The aim of the sawmill is to cut logs to produce boards of greatest value. However, when logs are pruned, knots are only exposed after primary cutting. This complicates the conversion problem.To effectively convert logs into boards the interrelated effects of the cutting phases must be recognized. In this paper linked dynamic programming formulations are developed. The inner (secondary) formulation determines the optimal sequence for cutting a slab into boards. The result is passed to the master (primary) formulation that determines the optimal sequence for cutting the log into slabs. The objective functions can be modified to maximise either total value of boards (incorporating quality) or total volume. Results from simulations indicate that significant increases in value are possible when quality is considered.     

Energy Measurement and Control in Paper-Making

This paper reports the study of a mill turning logs into paper by the sulphite process. The study concerns an attempt to link energy usage with materials flow through the production process. Provisions for monitoring and recording energy and materials flow were examined in respect of the accuracy and adequacy of available information, and the use to which it was, and could be, put. Limited evidence about reliability of data was obtained from the level of consistency in cross-checks. Difficulties of comparing energy measured by weight of fuel, as electrical energy and by physical states of steam were explored. Problems arose in aggregating quantities of different products passing through parts of the process. Some recommendations are made.     

Supply network planning in the forest supply chain with bucking decisions anticipation

We consider a two-echelon timber supply chain in which the first echelon consists of several stands to be harvested and the second echelon consists of mills to be supplied with logs of different length. This problem aims at minimizing harvesting and transportation costs for one production period, while satisfying demand expressed as a mix of volumes of specific log types. Harvesting cost, which includes felling, bucking and hauling to roadside, depends upon the number of log type to be produced and sorted. Each stand to be harvested is modeled individually with a limited number of trees of various classes of diameter and total length, which affects the productivity factors of the bucking patterns to be used. To take these characteristics into account, we propose heuristics based on columns generation to solve the supply network problem at the forest level with an anticipation of bucking operations at the stand level.     

A tabu search approach for solving a difficult forest harvesting machine location problem

This paper deals with two main problems in forest harvesting. The first is that of selecting the locations for the machinery to haul logs from the points where they are felled to the roadside. The second consists in designing the access road network connecting the existing road network with the points where machinery is installed. Their combination induces a very important and difficult problem to solve in forest harvesting. It can be formulated as a combination of two difficult optimization problems: a plant location problem and a fixed charge network flow problem. In this paper, we propose a solution approach based on tabu search. The proposed heuristic includes several enhancements of the basic tabu search framework. The main difficulty lies in evaluating neighboring solutions, which involves decisions related to location of machinery and to road network arcs. Hence, the neighborhood is more complex than in typical applications of metaheuristics. Minimum spanning tree algorithms and Steiner tree heuristics are used to deal with this problem. Numerical results indicate that the heuristic approach is very attractive and leads to better solutions than those provided by state-of-the-art integer programming codes in limited computation times, with solution times significantly smaller. The numerical results do not vary too much when typical parameters such as the tabu tenure are modified, except for the dimension of neighborhood.     

Optimization Models for Forest Road Upgrade Planning

Road blocking due to thawing or heavy rains annually contribute to a considerable loss in Swedish forestry. Companies are forced to build up large stocks of raw material (saw and pulp logs) in order to secure a continuous supply when access to the road network is uncertain. Storage outdoors leads to quality deterioration and monetary losses. Other related costs due to road blocking are road damage and longer haulage distances. One approach to reduce the losses due to road blocks is to upgrade the road network to a standard that guarantees accessibility. We consider the road upgrade problem from the perspective of Swedish forest companies with a planning horizon of about one decade. The objective is to minimize the combined upgrade and transportation costs. We present two mixed integer programming models, which are uncapacitated fixed charge network flow problems including multiple assortments, several time periods and a set of road classes. One model is based on arc flows and one on route flows. For a typical planning instance, the models become large and we propose how to improve solution performance through model strengthening. The models are tested in a case study for a major Swedish forest company.      

Optimization of production allocation and transportation of customer orders for a leading forest products company

A leading manufacturer of forest products with several production facilities located in geographical proximity to each other has recently acquired a number of new production plants in other regions/countries to increase its production capacity and expand its national and international markets. With the addition of this new capacity, the company wanted to know how to best allocate customer orders to its various mills to minimize the total cost of production and transportation. We developed mixed-integer programming models to jointly optimize production allocation and transportation of customer orders on a weekly basis. The models were run with real order files and the test results indicated the potential for significant cost savings over the company’s current practices. The company further customized the models, integrated them into their IT system and implemented them successfully. Besides the actual cost savings for the company, the whole process from the initial step of analyzing the problem, to developing, testing, customizing, integrating and finally implementing the models provided enhanced intelligence to sales staff.     

Modelling and optimisation of electricity,steam and district heating production for a local Swedish utility

District heating may help reduce environmental impact and energy costs, but policy instruments and waste management may influence operations. The energy system optimisation model MODEST has been used for 50 towns, regions and a nation. Investments and operation that satisfy energy demand at minimum cost are found through linear programming. This paper describes the application of MODEST to a municipal utility, which uses several fuels and cogeneration plants. The model reflects diurnal and monthly demand fluctuations.Several studies of the Linköping utility are reviewed. These indicate that the marginal heat cost is lower in summer; a new waste or wood fired cogeneration plant is more profitable than a natural-gas-fired combined cycle; material recycling of paper and hard plastics is preferable to waste incineration from an energy-efficiency viewpoint; and considering external costs enhances wood fuel use. Here, an emission limit is used to show how fossil-fuel cogeneration displaces CO₂ from coal-condensing plants.     

A system for the design of short term harvesting strategy

Short term harvesting requires decisions on which stands to harvest, what timber volume to cut, what bucking patterns (how to cut up the logs) to apply to logs in order to obtain products that satisfy demand and which harvesting machinery to use. This is an important problem in forest management and difficult to solve well in satisfying demand, while maximizing net profits. Traditionally, foresters have used manual approaches to find adequate solutions, which has shortcomings both in time spent by analysts and the quality of solutions. Since demand for timber products is defined by length, diameter and quality of each piece, this leads to a complex combinatorial problem in matching supply (standing trees) and demand. We developed one of the few reported approaches for solving the short term harvesting problem based on a computerized system, using a linear programming approach. Determining adequate bucking patterns is not trivial. We develop a column generation approach to generate such patterns. The subproblem is a specially designed branch and bound scheme. The generation of bucking patterns implemented within the LP formulation led to a significant improvement of solutions. We believe this is the first system implemented with this level of detail. This system has been advantageously implemented in several forest companies. The results obtained show improvements obtained by the firms of 5–8% in net revenues over traditional manual approaches.     

A hybrid constraint programming approach to?the?log-truck scheduling problem

Scheduling problems in the forest industry have received significant attention in the recent years and have contributed many challenging applications for optimization technologies. This paper proposes a solution method based on constraint programming and mathematical programming for a log-truck scheduling problem. The problem consists of scheduling the transportation of logs between forest areas and woodmills, as well as routing the fleet of vehicles to satisfy these transportation requests. The objective is to minimize the total cost of the non-productive activities such as the waiting time of trucks and forest log-loaders and the empty driven distance of vehicles. We propose a constraint programming model to address the combined scheduling and routing problem and an integer programming model to deal with the optimization of deadheads. Both of these models are combined through the exchange of global constraints. Finally the whole approach is validated on real industrial data.     

The impact of environmental constraints on short term harvesting: Use of planning tools and mathematical models

Both in New Zealand and Chile there exist important forest industries based mostly on pine plantations. The management of harvesting requires a series of activities such as building access roads, harvesting with skidders on flat terrain and cable logging for steep terrain, transportation from forest origins to destinations, such as a port, pulp plant and sawmills.These harvesting activities imply some potentially harmful environmental impacts such as water sedimentation, erosion and loss of scenic beauty. This has led to the proposal of several mitigating actions, such as creating riparian strips along rivers, avoiding the use of heavy machinery on fragile soils and minimizing road building.The degree of implementation of these mitigating actions differs in Chile and New Zealand. In New Zealand, the 1991 Resource Management Act regulated the implementation of environmental protection measures. In Chile a series of such measures have been implemented, but a set of definite regulations has not been defined yet and there is a need to develop an economic evaluation of the implementation of environmental measures in terms of reduced timber production and high harvesting costs, together with the benefits to the environment. To support decisions at tactical and operational levels, mathematical models have been developed both in Chile and New Zealand and are being used successfully by the timber industries. These models can be modified to consider diverse environmental protection measures. We analyze the implementation of these modifications and how the new models can help evaluate the economic impact of the protection measures. We show some preliminary results.     

Usage of 3D geometry descriptions and transformation techniques in log bucking and curve sawing

Detailed three dimensional models are nowadays frequently used in cross-cutting (bucking) tree stems into logs and in breakdown processes of logs into boards and flitches. Such models require increasingly sophisticated optimization models to assist planners (or automated decision support systems) in decision making. In this paper we develop two techniques that are linked to each other. The first is concerned with establishing high quality analytic approximations of full trees that are needed in full stem bucking applications. One important aspect is that inaccuracies due to measurement error can be reduced. The second is a transformation technique that makes it possible to apply curve sawing on logs in a standard straight sawing system. Numerical results based on real data are presented that support the usefulness of the techniques.     

Dynamic efficiency analysis of primary wood producers in British Columbia

Primary wood manufacturing is one of the key sectors in Canada’s wood industry. The sector has gone through significant changes during the last decade. These changes were caused by a variety of factors, such as technological advancement, market restructuring, and policy and regulation shifts. One of the most affected provincial sectors due to these circumstances was the primary wood products in British Columbia (BC). In order to capture these effects, we studied the efficiency and productivity of BC primary wood producers using Data Envelopment Analysis and Malmquist total factor productivity from 1990 to 2002. The results showed that BC sawmills were highly scale efficient and the major cause for their inefficiency was technical capability rather than scale of operations. The productivity of BC sawmills improved in 2002 compared to that of 1990. This was the result of slight improvement in efficiency of sawmills, but more due to the frontier shift.     

Physical mechanisms for the propagation of surface fires

The various physical processes which affect the rate-of-spread of fires on surface fuel beds are discussed. Specifically, these include conduction, radiation from the flame and burning fuel bed, and convective heating influenced by wind. A new interpretation of a laboratory experiment is given, and from this a balance between radiative heating from the flame and convective cooling of the fuel bed is established. The ratio between these two effects may be expressed as a new dimensionless number, P (defined by equation 5.12 or 5.16). If P < 1, radiation from the flame of the fire alone is not capable of causing the fire to spread, whereas if P #> 1, generally it is. Many laboratory experiments have P < 1, whereas P #> 1 for moderate to large fires in the field. The most significant factor affecting fire propagation is wind, which increases both radiative and convective heating. Much of this process is turbulent and involves large eddies in the boundary layer and fuel canopy, and their interaction with fires is currently poorly understood.