Forestry & Paper Industry
Forestry contributes significantly to Chile’s economy, with most of the south dominated by Pine and Eucalyptus forests. The forestry companies rely heavily on subcontractors for planting, thinning and felling trees across the region, in areas often covering hundreds of thousands of square kilometres, so monitoring productivity is not an easy task.
The productivity improvement project focused on improving the supply chain between the subcontractors and client forestry organisation, and improving the service level agreements provided by the contractors to achieve greater output.
This example demonstrates a really obvious productivity improvement from a very simple behaviour change. A Team Leader working with the Foresters in the depths of the Chilean pine forests was frustrated by a simple problem, but needed it checked out.
When lumberjacks use chainsaws to cut down trees, they should leave the tree stump as short as possible. However, chainsaws get heavy, the days are long, and the lumberjacks want to get through the work with minimum effort.
The consultant noticed that, on average, the tree stumps were left at about 1m high (waist height?). On a 20m high tree that’s 5% wastage, a significant amount when thousands of trees are felled each year.
As a result of this simple observation, a standard was put in place requiring the lumberjacks to leave no more than 25-50cms of stump, which, together with closer monitoring by the charge hands in the forests, resulted in a significant increase in yield, and profits.
Between the review of subcontractor service level agreements, internal restructuring and operational labour costs, the organisation achieved increased annual profits of just over US $660k.