A Case Study: Getting Better Results – Sawmill Operations

A colleague and I recently visited a sawmill where an executive was reviewing a request from site management for a capital expenditure on a new kiln. From a quick look at the numbers it seemed clear that the existing kilns were the bottleneck of the operation, and that replacing one of the two older units with a larger, newer unit would increase overall site capacity and yield a strong payback.

Then we took a closer look. We sat with the management team and asked them to show us the specific kiln management reports they used every day, and asked the basic questions that kiln operators need to know:

1. What is the target volume for weekly kiln throughput, and how was that target determined? Did the target take into account the mix of products actually dried that week? Was kiln fill rate part of the reporting?
2. What is the target for kiln changeover time, and what was the result over the past week?
3. For inline moisture checks done in the planer, what’s the average moisture content, and more importantly, what is the standard deviation? (Often we see kilns compensate for poor consistency by over drying, thus reducing capacity and causing quality problems along the way.)
4. What are the results of the ‘hot checks’ done in the last week with your Wagner paddle? What do they indicate about the consistency between zones in the kilns? Were any zones too wet or over dry, and what action plans were developed to improve consistency?
5. What percent of your manufacturing defects / grade reduction were caused by drying issues this week?

As we progressed through the discussion we found that site management had a good sense of weekly production and what the kilns could do in a “good week”. It was however, an “overall” number, and not specific to the actual product dried. Site managers felt that more specific targets “would not make much difference”. They said, “We keep the kilns full and follow the moisture content control system, so there is not much more you can do.”

To answer the other questions the manager and kiln superintendent had to search through the various reports or check sheets that were on their desks, or we had to walk out to the kiln area where they showed us various control charts and printouts.

It became increasingly evident that the information they needed to ensure that the kilns were being optimized was not readily available, and in some cases, not available at all.

This doesn’t mean that the manager and supervisor were not capable, or that the operators weren’t trying hard. It did mean however, that they did not know how well the current kilns were performing versus their potential, and whether the proposed capital expenditures were really necessary.

A Second Example

Compare the first example above to the performance discussions at a more effectively managed operation. In this second case – where the kilns are of similar age and design – when management is asked how the kilns are performing, they bring up a single report with all of the relevant information on one page. They then proceed to report, “Our performance is as follows:

1. Production was “x” million feet, and capacity utilization was 98%.
2. Attainment to target drying times was 96%.
3. Changeover efficiency averaged 87% on a target time of 25 minutes. We are below target because one of the door wheels broke for the second time in a month. We have a work order in to find and fix the root cause of this problem.
4. Average moisture content is x%, and my standard deviation is x.x.
5. Here is a chart showing the kiln hot checks for the past two weeks (see Exhibit 1). Our two problem zones are 7 and 10 and we recently adjusted some of the baffles so we are going to follow up next week.
6. Manufacturing defect inspections this week showed zero downgrade due to drying.”

This conversation clearly indicates that this team is managing the controllable aspects of their kiln operations. As kiln experts know, effective management can both increase kiln production significantly (by over 20% in many cases), and also materially improve quality.

The contrast in the above two scenarios is stark – the first represents an informal and ultimately ineffective approach to managing daily operations, and the second represents true performance management. The first example leaves you wondering about how well things are going, and the second gives you confidence that your people are “on it”. One makes you question capital investment proposals and hold back on decision making, and one allows you to make a decision with confidence. And finally, the first leaves a lot money on the table, and second does not.

What are the key operational differences in the two scenarios above?

The first difference is the amount and availability of the right information, and the second is behavior. Getting the right information first is crucial, and once it is in place, getting the right behavior is made easier. Getting the right behavior also requires site management to lead by example, but my experience is that if the information is gathered and accessible, and the new expectations are clear, most supervisors figure out what they need to do fairly quickly.

Moving beyond kilns and thinking about “performance management” across all areas of your sawmill, the same principles apply – information followed by behavior. Take “recovery” or “yield” as another example – it’s a critical “output” measure in every sawmill. The issue is that most mills do not have enough measures on the “inputs” that drive recovery. Some examples of the “input measures” affecting recovery that need to be looked at daily include:

• Bucking Accuracy
• % On-size and Standard Deviation
• Trimming Accuracy (Sawmill)
• Manufacturing Defects
• Debarking Accuracy
• Edger Decision Accuracy
• Trim Decision Accuracy (Planer)
• Attainment to Target Moisture Content

How does your operation measure up?

Do you measure all of the “inputs” that affect recovery every day? Are the summary numbers reported in a central platform where they are easily accessed for daily review? Does your team create action plans when there are variances from targets? Most often we see that these measures are only partially in place, and the information is scattered among a number of disconnected tally forms or excel spreadsheets. It’s like having a great set of golf clubs, the correct stance and backswing, and then ‘taking your eye off the ball’ on the forward motion. You’re doing most of the work, but not benefiting from it.

One weakness we also often see is that the required information is distributed across several systems: one for production reporting, perhaps a separate safety reporting system, a quality system, a maintenance system, and sometimes, an action plan tracking system. This is far from ideal. If you have to struggle to find the correct information, you will not get the behavior you need to see. As Tom Beck, founder of the Beck Group (which among other things conducts the most useful sawmill benchmarking studies in North America) states, “The best performing mills are often not the ones with the best capital equipment. It’s those that are the best managed”.

As one of the founders of Perforex, I co-led a team that for 15 years did extensive performance improvement projects with wood industry clients. At our peak we had 50 staff, and in our projects we created many effective tools for managing performance. We were also active in helping clients implement them. As time went on, we started to see that businesses in all industries had an increasing desire to tackle performance improvement using internal resources. As a result, companies saw huge growth in internal groups that implemented processes such as lean and six sigma. The problem with this shift to internal consulting was that while some good results were achieved, too often the impacts were underwhelming and there were few systematic changes.

The answer to attaining better sawmill operations is a combination of these approaches. Companies are right to want their improvement efforts driven as much as possible by internal resources. Internal efforts, however, will be far more effective if they have access to proven management tools and the performance reporting platform that brings all the reporting and action planning together. Internal senior teams also receive the benefit of expert guidance during the process of implementing the platform.

This approach is at the heart of Inprove Inc. Inprove’s approach ensures higher ownership for results, and the use of our InciteTM platform makes these results more sustainable. Our approach develops client staff, and does so at a much lower cost. The emphasis on “information first” also makes any follow up “coaching” much more focused. With the right information in place, it becomes fairly obvious where specific changes need to be implemented.

So where do your operations stand? How complete is your information on the required “input” measures? How well do your people react to this information? Addressing these questions is the fastest route to improving your performance.

Stop leaving money on the table. Do better. Be sure.

Bob Chown has been working with clients in the sawmilling and panels industries for over 20 years. He was a co-founder and Partner of Perforex until its sale in 2007, after which he worked with the acquiring organization until he co-led a management buyout of the company’s performance improvement software division, creating Inprove Inc. in July 2013.

Inprove’s software, combined with its best-in-class management tools, form a platform that gives sawmill companies a performance reporting system that enables internally driven continuous improvement, sustained gains, and consistent management practices across all locations.

For further information, contact Bob at bob.chown@inproveinc.com or visit www.inproveinc.com.

• 28 November 2014
• inPROVE
• inprove TIPS

• Bob Chown