Select issue
Silva Fennica 1926-1997
1990-1997
1980-1989
1970-1979
1960-1969
1950-1959
1940-1949
1926-1939
Acta Forestalia Fennica
1992-1999
1984-1991
1974-1983
1968-1973
1953-1968
1933-1952
1913-1932
Articles by David Gritten
Category : Research article
article id 124,
category
Research article
(2010).
Supply chain management applications for forest fuel procurement – cost or benefit?
Silva Fennica
vol.
44
no.
5
article id 124.
https://doi.org/10.14214/sf.124
Abstract |
View details
|
Full text in PDF |
Author Info
It is commonly agreed that logistics is very demanding in forest fuel business. Even though logistics and supply chain management (SCM) tools already have found their way into forestry business, for example, in roundwood operations, they are not yet very widespread in the field of forest fuel procurement. The present study investigates if modern supply chain management applications are capable of increasing the profitability of forest fuel procurement operations. Since margins are low, decreasing the provision costs could boost wood-based bioenergy business. The study is based on the investigation of two Finnish forest owners associations (FOA) involved in forest fuel procurement using a modern SCM tool. The investigation is done by cost-benefit analysis (CBA) using the net present value (NPV) methodology to determine the profitability. According to the estimates made by the staff, which are based on data such as work time records and delivery notes from before and after introduction of the new system, in both FOAs, the benefits far outweigh the costs over a considered timespan of ten years. However, the amount of the NPV varied significantly. For FOA1, with an annual chip production of 150 000 loose m3, the NPV is 212 739 euro, while for FOA2, with an annual chip production of 37 000 loose m3, the NPV is 969 841 euro. Even if the NPV of FOA2 seems to be very high, the profitability of SCM tools in forest fuel procurement is clearly demonstrated. Additionally, the results indicate that a considerable cost saving potential in forest fuel procurement is attainable through improving work flows and thus reduce the work input.
-
Windisch,
Finnish Forest Research Institute, Joensuu Research Unit, Yliopistokatu 6, P.O. Box 68, FI-80101 Joensuu, Finland
E-mail:
johannes.windisch@metla.fi
- Sikanen, University of Eastern Finland, School of Forest Science, Yliopistokatu 7, P.O. Box 111, FI-80101 Joensuu, Finland E-mail: ls@nn.fi
- Röser, Finnish Forest Research Institute, Joensuu Research Unit, Yliopistokatu 6, P.O. Box 68, FI-80101 Joensuu, Finland E-mail: dr@nn.fi
- Gritten, University of Eastern Finland, School of Forest Science, Yliopistokatu 7, P.O. Box 111, FI-80101 Joensuu, Finland E-mail: dg@nn.fi
Click this link to register to Silva Fennica.
If you are a registered user, log in to save your selected articles for later access.
Your selected articles
Silva Fennica ·
Finnish Society of Forest Science
