Supply chain management in forestry – case studies at Södra Cell AB

The use of supply chain management and optimisation is of increasing importance in the forest industry. The overall wood-flow starts with standing trees in forests and continues with harvesting, bucking, sorting, transportation to terminals, sawmills, pulp mills, paper mills, and heating plants, conversion into products such as pulp, paper, lumber, and ends at different customers. Many planning problems arise along the chain and these cover different time horizons. Co-ordinating the wood-flow is a vital concern for many companies. We study Södra, one of the larger Swedish forest companies, which is involved in all stages of the wood-flow. We focus in particular on Södra Cell AB, a company within Södra, which is responsible for pulp production. We describe the operations at Södra Cell and the decision support tools used for supply chain planning. We describe five major projects or cases which focus on improving their supply chain management and optimisation. These cases include the introduction of new technologies for sales and orders, new distribution structures using terminals, and the development of integrated optimisation models and methods.