HALCO's LogProfitability™ system has been developed as an improved alternative to traditional Return-to-log (RTL) analysis. RTL is the standard forest-industry term for the value of products developed from a log when it is converted to products, less the conversion cost. RTL values are obviously useful as a measure of value and as a guide to purchasing and selling prices, however there are some significant shortcomings. RTL values are often determined through execution of a series of detailed log tests. This is problematic, for a number of reasons:
It can even prove very difficult to hold these variables relatively constant for the amount of time required to run the required series of mill tests!
Mill throughput can be highly variable hour-to-hour or shift-to-shift due to breakdowns
Knowledge of how a particular sample of logs flows through the mill when run in isolation is not necessarily indicative of how that sample runs as a component of the overall log mix
Running a mill test of 5-7" top diameter logs gives you information about the 5-7" top diameter grouping but tells you nothing about how 5, 6 and 7" logs perform relative to one another
The LogProfitability™ system combines HALCO’s WOODSIM™ (bucking simulation), SAWSIM® (sawing/peeling simulation) and WOODMAN™ (linear programming optimization) to model your process from delivered logs to finished products, ready for market. Since a well calibrated simulation model of the facility is at the heart of the model, it is relatively easy to incorporate the changes that occur over time and investigate potential changes before moving forward.
The primary inputs to LogProfitability™ are:
Veneer mill / Plywood plant
From these inputs, LogProfitability™ produces reports that summarize the following both overall and qualified by any field or combination of fields available in the underlying scale data (e.g. vendor/source/forester, species/diameter/length etc.).
In addition, detailed analyses can be conducted, as required, to show the reasons for the variations in profitability between supplies or loads. The system makes it possible to compare the profitability of loads that have been purchased or obtained from different sources, and to learn from experience. Where log profitability analysis has been used, this experience has been used with great effect in negotiations with suppliers.