What’s wrong with the timber supply chain?

For over 20 years, the timber industry’s security standards have depended on a redundant paper-trail, the burden of which has largely been borne by loggers and their administrators. Due to the amount of data required to maintain some level of chain of custody a huge administrative bottleneck exists across the industry with no real solution in sight. The bottleneck is now such a big deal that can keep a lot of companies from being successful.

To understand what’s going on, we need to look at industry standard today and where are there opportunities to improve upon it. So, let’s start by looking at how the accounting process typically works today.

Traditional-load-tracking-and-chain-of-custody-in-the-timber-industry

So, not all loggers or dealers have an actual accounting or security process, but typically, if they do, loggers will keep track of the loads they put on trailers by using a paper load sheet. They’ll jot down the product they loaded, the mill it’s going to, the time, etc. Sometimes, if a crew is really advanced they’ll text a picture of this load sheet to their forester at the end of the day.

Next, once that load is delivered to the mill, the truckers will keep all of their tickets in their truck with them and turn them into the crew leader at the end of the week, who will hand them off to the forester or office manager. Once the administrator has those tickets, a week later, they re-enter all of the data that already exists on the paper load sheet along with new data from the mill like scale ticket number, weight, and delivery date.

The administrator then has to verify that the loads that were written into the load sheet showed up on all of the tickets. Sometimes, and quite often actually, there are discrepancies that require further investigation.

Once the data is in their accounting system and they’ve received a reconciliation report from the mill, an administrator must go back and make sure that the mill did in fact pay them for all of the loads on the paper load sheet and in the accounting system.

So, by the time it’s all said and done, administrators have to enter 10 pieces of data two to three different times, ultimately created more-and-more opportunity for error. And error’s do happen.

This timeline also doesn’t account for data entry from the forester when cruising the tract or data entry from the mill. When it’s all said-and-done, one load probably has 10 – 15 pieces of information entered by three to four individuals in the supply chain. That’s a total of 60 points of data entry for every load delivered in the U.S., which is estimated to be around 1,000,000,000 tons annually.

That’s about 2,000,000,000 pieces of data entered annually! That’s quite the burden.

Typically, when it comes to creating more efficiency around data, software is a good solution, especially when there’s a lot of redundancy. But, how do you do it when there’s a 20 year software gap in the timber industry and no existing solutions?. Well, there is one emerging technology out there, TRACT’s™ timber security and forestry accounting software, that is actually reducing the burden.

So, how are they achieving this? Let’s start with the big picture.

 

timber-industry-administrative-bottleneck

 

If there are currently up to 2 billion points of data-entry in the timber supply chain, how much money could be saved by reducing that by 30%? How much money could be saved and how much additional security added with more transparency around the process? How can existing tech be leveraged to create an easily adoptable solution?

A 30% improvement on administrative redundancy comes to a savings of about 600,000,000 points of data entry. If each point takes up around 5 seconds, that’s about 50,000,000 minutes or 833,333 hours saved. If the average salary for the forest industry is around $26/hr, then we’re sitting on around $22,000,000 in potential savings. That’s huge!

From there, we have to look at how to actually add more transparency to the timber industry’s chain of custody and add transparency. Think back to the first chart we posted and then compare that to TRACT’s™ digital load tracking:

 

digital-load-tracking-and-chain-of-custody-in-the-timber-industry

Traditionally, there are typically 10ish points of data attached to a load once it’s delivered to the mill. This data is pretty high level and includes things like: tract, mill, product, etc. But, imagine if you could leverage smartphone technology and double that amount of information, while also reducing the time and effort it took to gather it.

By passively and actively collecting data-points at every level of the supply chain, TRACT™ load tracking software, is collecting over twice the points of data with nearly double the efficiency. How do they accomplish this feat? By replacing the old paper burden with web and smartphone solutions.

Enterprise software no longer has to be hard-to-use, difficult to onboard, or require heavy manuals of documentation. But, historically, for whatever reason, the timber industry has been content with doing things the hard way. Whether that be using expensive proprietary handhelds instead of smartphones or integrating with hard-to-use accounting systems instead of simple web-based solutions.

If you look at the figure above, you’ll notice that┬áTRACT™ is using a digital ledger to create a transactions-based accounting and dispatching system and leveraging smartphone technology to do it along every level of the timber supply chain. By digitizing the paper load sheet, 5 – 6 data points enter the system without having to be re-entered later. By digitizing logging dispatch solutions, another 5 – 6 data points enter the system without having to be re-entered. And if mills would take up the call-to-arms and help create more accessibility to load-data from the scalehouse, every piece of load data could be entered and accounted for before a logging company or timber dealer administrator touched it.

If I can login to my bank account and access transactions within seconds, why can’t I access mill transactions the same way? Well, thanks to TRACT’s™ timber security and forestry accounting software, soon you just might be able to.

Got more than 75 acres of timber? Maximize your timber investment today!

Get Started!

    Comments

    Leave a Reply

    Your email address will not be published. Required fields are marked *