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Computerized Cost Control Aids Efficiency
Forestry Systems: Computerized Cost Control Aids Effficiency for Pallet Companies.
By Diane Calabrese - Contributing Author
Date Posted: 4/1/2001
Forestry Systems YardMaster Programs Help Loggers, Sawmills, Pallet Companies Track Inventory and Cost
GREENSBORO, N.C. — Output is easy to measure. Figuring out how to price logs, boards, dimension lumber or pallets and make a profit, however, is more complicated. Yet the better a logging business or sawmill or pallet plant understands its various costs — from the last load of cants delivered to the most recent contract hauler that it paid — the more accurately it can set a price that covers its costs and makes a profit.
Even when costs are relatively stable, the task of staying on top of where dollars are going can be tricky. When prices for raw material and fuel fluctuate dramatically, and often, even the most exacting keeper of records can be confounded by the amount of time that must be spent to allocate costs. One company that offers help to both sawmills and pallet manufacturers is Forestry Systems Inc. in Greensboro, N.C.
Forestry Systems provides technological solutions for monitoring inventory every step of the way from incoming raw material to outgoing finished product. In a nugget, the company sells computer software that makes the most of wood.
Forestry Systems dates to 1987, when it started as a division of an existing computer firm. Patrick Jenks was a member of the sales staff of the parent company and conceived of a product that launched Forestry Systems. He purchased Forestry Systems in 1995.
Forestry Systems markets its software under the signature umbrella name YardMaster. The YardMaster software offerings include a log system, a lumber system and a dimension system. Early this year, the company officially added the YardMaster Premier Pallet System to its line of software products. Forestry Systems also supplies hand-held computers to the forest and wood products industries.
Besides its headquarters in Greensboro, Forestry Systems has offices in Lebanon, N.H., Titusville, Penn. and Lincoln, Ill. The satellite offices are important to the philosophy behind the company. Patrick wants customers to be able to interact with sales representatives so they can learn from each other. Sales representatives help the customers reconfigure their systems, add modules and integrate other software.
In short, the YardMaster software line allows loggers, sawmills, pallet plants and other businesses in the forest products industry to be more efficient. The Premier Log System, for example, focuses on accurate inventory control from purchased loads through processing to final shipments of logs to customers. The Premier Lumber System tackles accurate inventory from green loads delivered to the kiln dried lumber that heads to customers.
Tracking material is extremely important to companies that air or kiln dry lumber. The time that elapses between the arrival of incoming logs and when the finished lumber is shipped out can be as much as a year. Shuffling papers to keep track of the cost of different lots is cumbersome and inefficient.
Forestry Systems’ software changes all that. Its systems streamline re-ordering as well as price-setting. The different programs also can be linked together, and they can be integrated with existing commercial and proprietary accounting systems.
The newest offering in the software series is the YardMaster Premier Pallet System. Moving into the pallet niche seemed a natural progression when Patrick considered the possibility. About two years ago, he decided he wanted to diversify and serve the pallet industry. By late 1999, the first pallet software had been installed at two pallet companies.
Helping pallet manufacturers sort out the cost components of their production operations lines just made sense. "Forty-three percent of all pallets are (made of) hardwood," Patrick explained. "And (pallet makers) purchase more than any segment of all hardwood lumber produced." Thus, helping pallet manufacturers to control their costs seemed like a good fit for Forestry Systems.
The pallet system allows pallet manufacturers to control lumber and cant inventories, orders, and orders in process. When the company receives an order, it becomes a simple matter "to look into the component inventory to see if there’s enough stock," explained Patrick. If there is not, it is time to cut or to re-order.
Pallet companies may sell other products besides pallets, and Forestry Systems helps them keep track of their inventory, no matter what it is. For those that are processing scrap and waste wood into mulch, for example, Forestry Systems has a comprehensive mulch sales software system. The mulch sales module is just one example of how Forestry Systems can custom-tailor software programs to the specific requirements of a given customer.
Forestry Systems already is gearing up to provide software for pallet recycling operations. "Recycling is a little trickier," said Patrick. "But we have all the hooks in for recycling operations. We can track loss and upgrade."
Accurate collection and processing of data for pallet recycling operations can help improve efficiency, Patrick noted. "If 80 percent of pallets coming from customer ‘A’ can be upgraded, and 61 percent of pallets coming from customer ‘B’ can be upgraded," said Patrick, the pallet recycler might want to "re-negotiate a purchase price from customer ‘B.’"
The YardMaster software series can provide analyses that allow customers to evaluate every aspect of their inventory and the cost of all the components of a pallet. The ability to calculate the actual cost of a pallet, right down to each component, can help a pallet company know how to set prices competitively and profitably.
YardMaster systems add efficiency for two reasons. One is the ability to simultaneously keep track of inventory and the cost of every component. The other is the way the software can be integrated with technology that speeds the flow of raw material and product.
"Bar-coding is the sock in the shoe for us," said Patrick. Bar codes can help companies achieve even greater efficiency. Forestry Systems sells both Symbol Technologies and Avery Denison bar-coding equipment, but it helps customers fit together the bar-coding technology and products they choose.
Patrick sees another opportunity in the high-tech log scanning and optimization systems now in many sawmills. Forestry Systems has been working with suppliers of that technology, Patrick said, in order to integrate the Forestry Systems software programs.
Patrick already had education and experience in the forest products industry before entering the field of computers. After marrying his high school sweetheart, he enrolled at Southeastern Community College in Whiteville, N.C. to study forestry. He graduated at the head of his class and took a job as a certified forestry technician, cruising timber and planting seedlings. Later, with a child on the way, he and his wife moved to Columbia, S.C., where Patrick managed a hotel and took business courses at the University of South Carolina. He accepted an offer to become a salesman in a computer firm in his hometown of Greensboro in 1986.
In the computer arena, it did not take long for Patrick to envision what computer technology could do for forestry. He persuaded his company to develop a hand-held device for automating the data collection of timber cruising. Patrick worked to sell the hand-held computer, although it did not gain acceptance rapidly because it "was ahead of its time."
Patrick was not dissuaded. After all, he had worked in the forest, cruising timber with a manual dot tally method, and he knew that hand-held computers could revolutionize the work. "I saw the advantage," he said. A pragmatist, he also saw the need to help prospective customers learn the benefits of technology. His perseverance paid off. A year later, the proprietary End Tally system was introduced, and it put Forestry Systems on a solid foundation.
"[Today], we are the largest supplier of hand-held devices" to the forest industry, said Patrick. If one tallied all the tallies being input into Forestry Systems hand-held devices, the sum would be 60-70 million board feet per day.
Over 3,000 hand-held computers from Forestry Systems are in use among more than 900 customers. The devices have been refined to take advantage of technological breakthroughs, such as wireless communications, bar-coding and long-range laser scanners. The hand-helds are also configured to interface with the inventory software Forestry Systems markets in its YardMaster series.
Mike Price is corporate sales manager for Forestry Systems and spends a good deal of time on the road, meeting with businesses in the forest products industry that could benefit from the YardMaster systems. One customer is using both the YardMaster log and log lumber systems in tandem. "One enhances the other," said Mike.
The YardMaster log system "assists in all log purchases for gate control, settlement of those loads," said Mike. "It helps with purchasing of tracts, all settlements behind the tract (including) owner, logger, (and) trucker costs." The program also can incorporate costs for logging road construction, other miscellaneous costs, and taxes. It maintains data on log inventories and ‘gate wood’ and provides consumption reports to a mill.
Like Patrick, Mike was extremely enthusiastic about the YardMaster Premier Pallet System that has been on the market for just a few months. "I see more companies making specialty pallets," noted Mike. The YardMaster system features a work order-build list that can store unique specifications or characteristics of specialty pallets, he said, such as unusual deckboard spacing, chamfered deckboards, notched stringers, painted parts, and so on.
"The system also helps to find bottlenecks or trouble spots in the production line — by shift, inspector, location, or date," Mike explained. When integrated with bar codes, the information can be captured and analyzed particularly fast.
"It’s up to the company to decide how much bar-coding is integrated," Mike
Another benefit of the pallet inventory software is the information it provides when a company is preparing to buy cants or other raw material. It makes it easier to buy for cost-effectiveness when available stock can be assessed in an instant and evaluated against the latest mill prices.
The pallet, lumber and log systems each has an order and sales system module for the generation of PIC, shipping and export lists. The direct link means that once a YardMaster system is running, a single entry of data fills in many pieces of information. When pallets are shipped, for example, they are automatically removed from the inventory of finished pallets.
Each software package is "offered in a LAN or WAN environment," explained Mike. It can be configured "for single-user or multi-user."
Forestry Systems has YardMaster customers across the U.S. It also does some foreign sales, but Patrick prefers to keep the focus on places company representatives can travel to quickly.
Because the analytical and record keeping software can be customized to help customers deal with unique products and special problems, collaboration with the customer is important.
(Editor’s Note: For information about Forestry Systems or its products, call the company at (800) 868-2559 or visit the Web site at www.forestrysystems.com.)