Value-adding through silvicultural flexibility: an operational level simulation study

Abstract

Forest products industry’s competitiveness is influenced by the agility of wood procurement systems in delivering raw material to support downstream manufacturing activities. However, in a hierarchical forest management planning context, silvicultural treatments are prescribed and set as constraints for supply chain managers, restricting supply flexibilityand consequently value-adding potential. This study was conducted with an objective of quantifying the benefits of improving wood procurement systems agility through flexibility in the choice of silvicultural treatments at the operational level. The aim was also to determine the range of conditions under which benefits from flexibility can be realized while accounting for the impact on long-term supply. We present a novel approach that integrates silvicultural options into operational-level decision-making to solve the multi-product, multiindustry problem with divergent flow. The approach entails solving a mixed integer programming model in a rolling planning horizon framework. Subsequently, we demonstrate benefits associated with integrating supply chain and silvicultural decisions through a case study. Future impact of exercising flexibility on long-term supply was accounted through incorporating costs associated with applying different silvicultural regimes. The presented approach will prove to be useful in implementing an adaptive forest management system that integrates the complexity of social, economic and ecological dimensions.