American Pole and Timber Aiming at the National Market

Building Products Plus currently serves the national market but focuses mainly on the Texas Gulf Coast region. The American Pole and Timber division of the company is currently redefining itself as a national service center. American Pole and Timber will be actively marketing and selling to clients across the nation. Contractors, architects and engineers, and homeowners will be able to easily access our services and products online at www.americanpoleandtimber.com and place orders via phone. Online purchases are slated for the future.

Steel Business

I am proud to announce that Building Products Plus is getting into the steel sheet-piling business. This brings up a whole new set of fantastic inventory and management issues! Here we go!

Real Time Initiatives

Currently, a major concern at Building Products Plus is getting the inventory, and the company as a whole, into real-time.

Customization Pleases Customers and Attacks Inventory Accuracy
The difficulty with real-time inventory and information systems for this company stems from the inherent nature of a job-shop and custom production environment. Materials often enter the system as one SKU, change into three other SKUs, and might even leave without a SKU because of extreme customization and manufacturing. There is no SKU (other than a "special" code) for something that was cut, drilled, dried, treated, redried, and coated with a polymer coating before it was shipped.

Attempts are made to maintain a SKU throughout the process but often, especially with longer and more complex projects, that SKU is lost when the item begins to look like another SKU, at which point the existing materials are NOT removed from the system and other non-existant materials ARE removed from the system, resulting in a large positive qty of one SKU and a large negative qty of another. The difficulty is in ensuring that transactions occur in the system - which affects costing, pricing, inventory accuracy, and possibly even the customer's experience.

My current focus for achieving a real-time environment is split into four inter-connected areas.
1. Receiving
2. Treating Transactions
3. Cycle Counting
4. Kiln Transactions

Complexities
Each area has its own set of complexities. We have the hardware, including wireless barcoding equipment and a wireless canopy that covers approximately 20 acres. Receiving with the handhelds has been established as a way of business now. Kiln transactions are being entered on the handheld by myself right now. This is mostly because I am not comfortable with the level of training and understanding the workers in the yard have concerning the item codes, the way the kiln modules work, and ways in which the transactions actually affect the total system from inventory qty to financial impacts. Cycle counting is in its infancy and treating transactions are still entered into the system manually from handwritten purchase orders (the treating plant is a strategically located, but separate, company).

General Order of Transactions
In a simple environment, without customization, an ideal complete material flow for - say a 10x10-20 - from raw to finished good in our system would be thus:

1. The 10x10 is received via wireless handheld at the delivery truck as an untreated timber SKU, let's say U10x10. Inventory transx looks like "plus U10x10".
2. The timber is dried before treating and the transaction is accomplished via the wireless handheld at the point of entering the kiln. The adjustment to the new SKU occurs automatically in the system. The transx looks like "minus U10x10, plus D10x10".
3. The timber is then treated. This should be a transaction whereby a Purchase Order is created for the treating of the timber via the wireless handheld, which automatically emails/faxes the PO to the treating company and prints a copy of the PO for our office use. The adjustment to the SKU/inventory will be made at the time of receipt (back to step one) and looks like "minus D10x10 and plus T10x10".
4. The timber is sold (was probably already on order when we bought it). When the order is invoiced, this adjustment looks like "minus T10x10".
5. Cycle Counting is near-random and is intended to be an adjustment to "tidy-up" the accuracy of the inventory.

8-25 Log Inventory Grid Method is Effective

I am pleased to report that after about four months in use, the 8-25 Log Inventory Grid method has taken hold very well and is effective for minimizing confusion and disorder in log inventory. One main contributor to the success, as predicted, is the ability of salespeople to customize the item description on sales orders and tickets when needed. An effective and simple way to help workers at all levels learn the 8-25 system is to simply advise that for pole/piling inventory the number 9 will never be used for diameter.

The Forest History Society

http://www.lib.duke.edu/forest/

"The Forest History Society (FHS) is a 501(c)3 nonprofit educational institution that links the past to the future by identifying, collecting, preserving, interpreting, and disseminating information on the history of interactions between people, forests, and their related resources -- timber, water, soil, forage, fish and wildlife, recreation, and scenic or spiritual values. Through programs in research, publication, and education, the Society promotes and rewards scholarship in the fields of forest, conservation, and environmental history while reminding all of us about our important forest heritage."

ProSales Magazine

"The Official Magazine of the National Lumber and Building Materials Dealers Association"
http://www.prosalesonline.com/

This is a great magazine. It typically includes the latest industry news covering everything from recent mergers and acquisitions in the business to the latest trends in marketing, sales, customer preferences, inventory management, etc.

Great Forestry Industry Site

This is the most comprehensive directory I have seen for the Forest Industry.
http://www.forestdirectory.com/

8-25 Round Stock Inventory Grid

This is the 825 Log Inventory Grid, a display of a method for coding and managing log and round stock inventories. The name is derived from the two dimensional differentiation of the inventory coding decision and should be read "eight, twenty-five."

Simply explained, any pole with dimensions of 8" TOP X 25' or smaller will be coded by TOP (blue) and anything with a 9" BUTT or larger OR longer than 25' will be coded by BUTT size (red). Certain dimensions might not need codes because of duplicities (e.g. - 9"BUTT x 10' = 8"TOP X 10').

The 825 model is based on the most often specified pole and piling sizes as well as general inventory control needs.

As with any method of pole and piling inventory, there are still conflicts between inventory mangement requirements and sales/customer requirements. Specifically, in order to maintain inventory quantity accuracy, the same item code or SKU should always be used regardless of customer specification. However, the sales system should have the capability to customize the DESCRIPTION of the pole or piling in order to (1) minimize questions in the mind of the customer and (2) ensure that the yard worker pulls the material the customer specifies. It is important that the yard worker who pulls the materials then offers feedback to the system (possibly via the salesperson), especially if a material subsitution was necessary.

If you have questions or comments about the 825 Log Inventory Method, please contact me at woodscience@gmail.com.

Mill Production Output and Management

This pdf contains a great article regarding decision making in milling production from logs. It also contains an example of an overcomplication of simple concepts. Overall, the article is useful and touches on many of the factors milling managers need to take into account when making production decisions.

http://www.srs.fs.usda.gov/pubs/ja/ja_mendoza002.pdf

While there are many exceptional professionals in the lumber industry, the kind of material in this article should be displayed in a more easily understood format.

Southern Pine Beetles (SPBs)

These are some interesting pictures of SPB damage. The first is an arial photo of SPB damage to an area of forest in Louisiana. The second is a closeup of accute damage in a tree.

Pole and Piling Inventory is the current issue

Tracking inventories of poles and pilings is an industry-wide complication. The main issue is how to classify the poles/pilings because they are often requested or specified based on use. Pilings are typically requested/specified by BUTT size whereas poles are usually named by TOP size. This means the same piece of round stock might be requested in two different ways - for instance, a 10"BUTT 20' piling is the same as an 8" TOP 20' pole. This issue mainly causes confusion in TWO places - the inventory system and in the mind of the customer.

A customer who is expecting a 10"BUTT 20' item might be confused by the 8" TOP description on an invoice. Notes can be made, etc, but it causes confusion nonetheless.

The simple solution of choosing one label method or the other and using a "special" line item to set the customer at ease often causes inaccuracies in the inventory tracking system. Let's use an example where we have decided to label the poles by TOP size but a customer has requested multiple pieces of a speficic BUTT size - 10"BUTT 20' for this example which would typically have an 8" TOP but might have a 7 1/2", or even 9", TOP. Because the yard worker is pulling materials based on the required BUTT size, he might actually be pulling poles of various TOP sizes, and thus different SKUs from inventory, whereas the salesperson only invoiced only 8" TOP SKUs.

This creates inaccuracies in inventory quantities and value as well as adversely affects the actual cost and margin of that specific sale.