Impacts of interenterprise collaboration and backhauling on wood procurement in Finland

Abstract

The impacts of interenterprise collaboration were evaluated by examining the solutions for four experimental wood procurement cases. Three cases are based on actual wood procurement organizations. The other case is a hypothetical situation that assumes the integration of the organizations. Analysis of these situations allowed a theoretical examination of the benefits of integrating the transportation systems of the three largest wood industries. Two different timber-flow models were used for planning the procurement management: one described one-way transportation situations and the other described backhauling situations. The impacts of backhauling were evaluated by analysing the results of the modelling exercises. Eight different optimal solutions were examined and summarized. Costs and transported volumes were calculated for the wood procurement operations and for the entire wood procurement process. Transportation distances were also calculated. The results showed as much as a 20% reduction in transport costs with interenterprise collaboration. The total cost reduction due to interenterprise collaboration of the entire wood procurement process was 4% of the total cost without collaboration. The difference between the lowest and the highest average transportation distance was 36% of the highest average distance. The use of backhauling decreased transportation costs by 2% of the costs without backhauling and the total wood procurement costs by 0.3% of the total costs without backhauling for both the traditional and the collaborative transportation process. Therefore, the economic efficiency of wood procurement was increased specifically as a consequence of interenterprise collaboration.

Keywords:

• Dynamic linear programming
• logistics
• timber-flow model
• transportation

Acknowledgments

This study was carried out in collaboration with the University of Joensuu and the Finnish Forest Research Institute (Metla). We would like to thank the Academy of Finland and the Foundation for the Research of Natural Resources in Finland for funding, and Professor Antti Asikainen for his encouraging comments.