Time was when furniture manufacturers
could take advantage of a bountiful and relatively inexpensive supply of No. 1 common and
better lumber. As long as their products were selling and lumber was cheap, they thought
they could afford not to be selective about the grade mix of wood that went into their
furniture.
Rising lumber costs coupled with
environmental issues, however, have prompted manufacturers to be more concerned about the
cut-off remnants that are burned or hauled to the dump. They have learned to get more
usable lumber from less expensive material through optimization. In particular, the trend
toward greater use of No. 2 common hardwoods has seen more rough mills adopt
"rip-first" cutting strategies to boost lumber yields.
American Drew of North Wilkesboro NC is
a fitting example of the new era of conservation and economy that is making a profound
impression on the furniture industry. Each year, the well-known member of the LADD
Furniture family spends about $8 million on lumber including ash, oak, hickory and cherry.
In an effort to maximize the yield of its hefty lumber investment, American Drew invested
$1 million two years ago on what it believes to be one of North America's most efficient
rough mills. It features a feed-through electric scanning device that generates information
about each board's knot characteristics and compiles that data in a computer. This
captured information has helped ripsaw operators make better-informed cutting decisions as
evidenced by at least a 2 percent gain in lumber yields.
American Drew personnel refer to their
newest rough mill operation as an "either-way" system. The higher grades of
lumber are cross cut first to obtain long pieces free of gluelines. Lower grades of lumber
are split on a gang ripsaw and then cross cut. Conceptually speaking, the either-way rough
mill should have provided American Drew with the best of both worlds - maximum throughput
for high-grade lumber and maximum yields for lower grades. Standing in the way of peak
operating efficiency, however, was an antiquated lumber tallying system. In stark contrast
to the newly re-tooled rough mill, pretty much the same bare-essential, labor-intensive,
paper-shuffling and sometimes confusing system that had been used to tally, process and
locate lumber since the 1960s was being used to support 1990's rough mill technology.
"We were not reaping the full
benefits of the rough mill because of a lack of information from the lumberyard,"
said Patricia "Pati" Lovins, lumber buyer/yard manager of American Drew.
"We were only utilizing three of the eight lumber management characteristics: vendor
identification, species and thickness." Missing from the mix, Lovins said, were
length, width, age, grade and location. "Managed properly, each of these eight
characteristics can affect yield positively," Lovins said.
As a consequence of not having complete
information, American Drew's sawyers, under the pressures of production schedules, were
not always able to make the best decision for each board of lumber that entered the rough
mill "We began to notice that while overall lumber yields were improved, that a
comparison of the daily reports showed sharp peaks and valleys in the percentage of
yields. Because we were using the same system operated by the same people, we decided that
our old method of procuring, grading, sorting and storing lumber must be responsible for
the wide swings," Lovins said.
A Time For Change
Immediately upon coming to work for
American Drew in 1995, Lovins made it her mission to bring greater organization and modern
know-how to the company's most neglected manufacturing operation - the lumberyard.
"The first thing I did when I came
here," said Lovins, "was to have all of the buildings in the yard cleaned and
painted." In addition, an area of the yard that resembled a mud pond was filled in
and lumber piles were regrouped by species to make them more easily identifiable. These
cosmetic improvements foreshadowed the technological upgrades to come. Lovins, whose
educational background is accounting, brought an accountant's mentality to better manage
the lumberyard. "Lumber is our most costly raw material and is the only raw material
that we inspect 100 percent. But with our old tally system we were only going through the
motions to be able pay our suppliers. To reap the full benefits of grading lumber for
ourselves, we knew we had to be capable of compiling and sorting more data to better
manage it." Lovins said a prime example of the lumberyard's disorganization was the
substantial quantity of lumber that was subject to degradation because there was no system
in place to make sure the oldest wood was utilized first. "Degrade was costing us
more than $45,000 per year for lumber that either devalued over time or rejected entirely.
This problem in itself made it clear that we needed a system to better manage our
inventories," she said.
Getting More From Less
"Our goal is to minimize
lumber costs by converting the greatest possible amount of lumber into useable parts out
of the lowest cost lumber, said Pati Lovins, lumber buyer/yard manager for American Drew.
Since joining American Drew last
year, Lovins and Lee Houston, senior vice president of operations, have gradually
increased the company's use of less expensive No. 2 common lumber from 10 percent to 30
percent. The duo further aims to increase that percentage to 40 percent by the end of the
year.
Houston said that the conversion
to more No. 2 common has not only helped save American Drew money, it has resulted in
higher quality products. "One of the things that I discovered is that upper grade
lumber may have straighter grain but it also has fewer interesting characteristics than
less grade lumber. The action is around the knots. This is particularly true with cherry
and oak.
"I think it is a pity that
the consumer has been miseducated to think that lumber grade is related to lumber quality.
All the grade signifies is the clear space between the knots."
Enter Bar Coding
The quest to improve the company's
lumber management ultimately led Lovins to visit other lumberyards, including that of
Granite Hardwoods, Granite Falls NC, one of American Drew's lumber suppliers. "They
were using a barcode system that I found very interesting," she said. "I liked
the fact that it eliminated a ton of paperwork and could capture information on all eight
grading characteristics."
On April 5, 1995 Lovins submitted a
Capital Appropriation Request Summary to the company's management committee seeking
approximately $50,000 to purchase a computerized Raw Materials Management System from
Integrated Solutions. The approval form accompanying the ˝ inch of supporting
documentation was signed off on April 20.
A little more than two months later the
bar code system, using the Universal Product Code popularized by supermarkets in the '80s,
was implemented. It features Integrated Solutions Lumber Grading Series 2000/3000 base
unit consisting of an operator terminal that is IBM XT compatible and software that is
menu driven to make it user friendly. Also included in the package are a barcode printer
and six Laser Wand ALR Barcode Readers. The barcode readers are utilized by forklift
drivers serving the company's lumberyard, three rough mills, air drying yard and dry
kilns.
How The System Works
Each week American Drew receives 20 to
30 truckloads of lumber. Within the last year the company has reduced its number of
suppliers from 225 to about 20; the down-sizing move dovetails with its streamlining
strategy. "It made me unpopular with some vendors," Lovins said, "but quite
frankly when we were dealing with that many suppliers, a lot of them were really not
getting that much business from us."
After the lumber is unloaded, a number
designating the supply source is spray painted on the side of each bundle. The lumber
remains in the "deadpack" area for up to ten days before being graded.
American Drew's computerized grading
operation handles about 50,000 board feet a day on a single shift. Two graders take turns
to minimize fatigue and errors. "These guys can grade up to 28 boards per
minute," Lovins said. "They switch off because it takes a lot of concentration
to inspect lumber at this fast a pace."
The grader keys in the number
identifying the supplier and sorts each board into one of three groups: rejects, No. 1
common and No. 2 common. Four-foot by six-foot packs of lumber comprised of the same
species, thickness, length and grade are assembled. When necessary, American Drew's
grading team will make full packs using lumber from multiple sources. By making up
complete packs, American Drew is able to maximize its kiln space.
A barcode printer located near the
tail end of the grading line spits out a barcode tag, personalized for each pack of
lumber. The tag includes information on the species, number of pieces, square footage,
board footage, thickness, grade and vendor.
In recent months American Drew has
switched from paper barcode tags to more durable polyester-plastic faced tags (available
from Electronic Imaging Materials Inc..) "The paper
tags were subject to damage from water and especially fading from the sun," Lovins
said.
Each time a pack of lumber is moved,
such as from the pre-drying to the dry kiln, the forklift driver scans the barcode label
with one of the hand-held laser wands. The driver reads the barcode using the scanner and
selects the new pack location from a destination list. The wand entries are stored and
later downloaded into the Raw Materials Management System. A lot of cumbersome paperwork
is eliminated as the barcodes stay with the lumber from air drying, to pre-dryer, to kiln,
to dry storage, and finally to shipping or rough mill.
In a nutshell, Lovins said the barcode
system provides automatic report generation and prints more legible and durable bunk tags.
In addition, barcode identification improves the availability and accuracy of lumber data,
allows for downloading of data directly into databases and uses barcoding to track bunk
location and movement. Thus, at any given moment, the lumber yard's managers know how much
inventory is on hand for each species by grade, size and thickness. They also know how old
each pack is and its location.
Benefits Gained
Lovins said that isolated from the
purchase price variance of lumber, American Drew saved nearly $500,000 last year,
"and we anticipate saving $1 million overall."
Lovins said the barcode system has
helped American Drew more effectively and efficiently schedule and control lumber
inventories. For example, she said within a few months of implementing a barcode system,
inventories were reduced by 21 percent. American Drew currently inventories about 3.5
million board feet.
"The most helpful feature of the
System 3000 is the Automatic Full Package Detection, which enables us to know the exact
footage per pack. With this we have been able to report more actual yield on a per plant
basis instead of as a whole."
In addition, Lovins said, "The
barcode system helps enforce discipline in the lumberyard. It makes for better
organization and creates a system for rotating lumber so that the first boards of a
particular species, grade and thickness are the first ones out."
Looking Ahead
Lee Houston, senior vice president of
operations for American Drew, said, "We have learned that the lumberyard and rough
mill must be highly integrated. We now know that we can no longer operate them as two
distinct departments and expect to get maximum results."
Houston said he is continuing to work
with Group Seven systems which helped reconfigure to the either-way rough mill. "We
are going to add more computerization so that when we send bills of materials to the
lumberyard they will know exactly what the rough mill needs that day," he said.
"Plus we will be able to make our cutting decisions based on lumber price
fluctuations to obtain maximum value.
"The bar coding system has
definitely made a positive impact. We are using (lower) grades of lumber that I would
never have dreamed of using six months ago and still putting out a very quality
product," Houston said.
"None of these changes and
improvements would have been made possible without the cooperation, dedication and hard
work of the monumental American Drew lumberyard team, the rough mill managers and Conley
Call, vice president of purchasing," Lovins said. She added that the historical
information being collected by virtue of the barcode system will help bring about further
improvements to the lumberyard operation and lumber acquisitions.
"One of my goals is to turn the
lumberyard into a profit center. We're already beginning to grade and sort lumber for
others," she said.
10 Barcode Benefits
American Drew has compiled the
following list of qualitative benefits of its nearly one year old lumberyard bar coding
system. The company said the system has helped:
- Minimize the possibility of fraudulent
inventory activities.
- Lessen the chance for human error by
eliminating handwriting and keying of information.
- Enhance lumber management with less
paperwork.
- Reduce lumber degrade problems and
improve yard usage.
- Provide more accurate and readable bunk
tags.
- Ensure that lumber is used on a first-in
first-out basis.
- Reduce kiln loading time by replacing
paperwork with barcode readers.
- Reduce kiln drying time by loading aged
lumber first.
- Provide more accurate yield and usage
data per part per product through improved bulk definition.
- Improve ability to more closely meet
plant lumber requirements based on cutting schedule by part characteristics. Example: Tall
cabinets require long clear boards.
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