Timber is a great product to sell.  Timber products are a rare combination of eminently practical, can be made to fit a range of applications, are aesthetically pleasing and can come with strong environmental credentials.  

The range and flexibility of timber as a product to sell, makes it a challenging type of product to control and manage as a stock holding, especially on a computer.  Computers like defined data to work with, “I buy in tins of beans, I stock tins of beans and I sell tins of beans.”  Timber, however, is both changeable as a product between stock holding and sale, “I hold 3.6m lengths of timber, but I saw it down to sell a 2.9m length to a customer”, and described differently as the sale process progresses, “customer ordered 300m and we are sending him 91 x 3.3m”.

This article aims to give some pointers on how to manage timber products on a computer system, so the business can benefit from detailed and accurate stock availability and forecast information.  Good timber stock information helps buy the right timber at the right time and provides instant information to a sales team and ultimately customers, to know that what they need is available and when.

Due to the nature of stock (inventory) control being at the centre of purchasing, milling and sales operations, I may touch on some of these topics, but other articles will focus on these areas in more detail.

CHOOSE A LEVEL OF STOCK CONTROL THAT SUITS EACH PRODUCT

When looking at timber products there are different levels of control that can be recorded.  At the simplest level a product can be held to a total length or volume.  This means that purchases and sales can be made both with detailed quantities recorded, or just overall measure, so long as there is sufficient information to record the total amount being moved with every transaction.  This is easy to record and manage day-to-day but provides limited information to the business.  Whilst it is useful to know you have 30m3 of a product in stock, if a customer is asking for some specific lengths, someone is going to need to check if they are available or could be made from another size.

At the other end of the scale are ‘mixed size’ or unique item stocks, where the dimensions of each item are recorded and can be checked on the computer.  This is an amazing level of detail, to know exactly what is in stock, but requires both more recording every time a piece is received, machined, dispatched, etc. and an accuracy of recording to ensure the computer record is always trusted.
 

STOCK CONTROL BY RANGE

The best approach is to consider the ranges of timber products you are offering and choose stock control levels that are appropriate to each one.  Generally, it is sensible to have a common level of stock control across a range of products, (i.e. all carcassing timber is stocked to a specification (tally) of lengths), but there may be individual products that are worth recording with more or less detail.

The second point is to be guided by the value of the product as to how much effort is worth putting into recording it.  As a rule of thumb, inexpensive softwoods are worth some effort to record to overall length, volume, and/or pieces.  Going to a level recorded by a specification of lengths.  More valuable hardwoods can be worth the additional recording effort of mixed width (single fixed dimension, with two variable dimensions), mixed size or even unique pieces.

Finally, it is worth considering how customers tend to want to buy the different products.  If they purchase in bulk, and only need to know overall quantities there is no benefit in recording more detail.  On the other hand, if they are usually request specific dimensions of a product, effort in building an accurate stock record, will pay dividends in the speed and quality of customer service you can provide.
 

PACK TIMBER STOCK

The first section of this article focused on the management of the loose stock of timber, at a piece level.  Alongside the loose stock, timber businesses may also want to record pack stock as well.  Different businesses will want to work with timber packs in different ways, depending on where their operations are in the supply chain.  A timber agent/importer will often purchase, stock and sell whole packs of timber, that are never ‘broken’ or converted as they pass through the business.  As you get more to merchanting and retailing of timber products, there is more likelihood to purchase in packs, but break them into loose pieces to be either milled into other items or sold at the piece level to customers.

Managing pack stock is relatively easy on a timber computer system, as an unbroken pack is a defined quantity, from a specific source, at a known cost.  It makes a pack a sort of advanced unit product, in that the detail benefits the overall stock record for the product, but it is simple to receive, stock count, take to mill or dispatch.

 

WHEN TO BREAK PACKS

The process of breaking a pack should be recorded on the computer at the point at which the bands strapping the pack together are cut.  This is because from that point you cannot guarantee that the quantity the pack originally had in it is still all there.  So, stock counting a pack (PCK123 – 200 x 3.6m) as “do we have PCK123?”, becomes “do we have 200 x 3.6m lengths?” once the pack is broken.

BREAKING PACKS TO LOOSE STOCK OR LOTS

When breaking a pack there should be the choice of either ‘breaking to loose’, which adds the pieces from the pack into the loose stock of the product, or ‘Break to Lot’, where a Lot (batch, sub-stock) keeps the definition of the original pack number(s), but records the pieces individually, to be milled, sold, dispatched as required.

Breaking to loose stock is useful as it is easier to see all the stock of lengths in one overall display, where breaking to Lot is useful where you want to keep traceability of the source of timber for certification recording.
 

DEFINED, STANDARD AND UNIQUE PACKS

There are three main ways to hold packs of timber, each with benefits that suit different applications. 

• Defined packs (crates) are for products that have a set quantity of timber in each pack, and there is no variation between packs.  They are easy to record as each pack does not need to be uniquely identified and labelled, and operationally any pack can be picked for milling or sale.  Though occasionally used for timber products, defined packs, or crates, are most commonly used for stock control of sheet materials (MDF, Plywood, etc.)
• Standard packs are a way to understand what a ‘normal’ pack for a product would be (i.e. 200 pieces), so when a number of unique packs are recorded against the product it is easy to summarise them.  So, a pack with 197 x 3.6m would count as 1 x standard pack of 3.6m, and another pack with 55 x 3.6m would be 0.5 x standard pack of 3.6m.  If a customer wants to order 3 x 3.6m packs it is easy to see what you have in stock without needing to investigate the detail in each pack
• Unique packs are most commonly used in the timber industry.  Each pack has a unique quantity of timber in it, which will be related to the stock control level of the product it is a pack of.  It can be an overall quantity, a specification (tally) of pieces, to a unique item like a hardwood log.  Unique packs will have their own pack number issued by the computer system but can also reference shipper/mill/supplier pack numbers as well.  Unique packs make trading specific quantities of timber easier.
   

PICKING UNIQUE PACKS

As part of the yard operations of a timber business a pack quantity may be required to be picked for a mill or sales order.  There are a couple of approaches depending on the style of the operation of the business, and it is worth choosing the best fit for your requirements.

Some businesses will let the yard/warehouse operations team select the best pack for the job.  This means they can choose what is a good fit for the order requirements and is the most accessible.  This makes for fast yard operations but can lead to less diligent operators picking the easiest pack to get at, which might be a poor fit for the order requirements.

A mid-point approach is to have the user entering the order on the system select pack(s) as a recommendation of the best pack(s) to use for the job.  Then the experienced yard team have the ability to override that choice if another pack is more suitable for selection.  This works well where the sales, mill and yard teams trust and respect each other’s decision making and actions.

Finally, you can choose to have the pack selection on the order as a firm instruction of the pack(s) to pick for the order.  This gives clear instructions to the yard, can help pick the best timber for the job, but can come with a substantial time overhead in finding and picking the specifically requested packs.
 

LOT/BATCH STOCKS

Generally, if you are stock controlling a product it will be in a stock holding for a Depot/Branch/Quay.  This total stock holding can be broken down into sub-stock holdings called Lots.  Each Lot can have its own description, cost and other details and be summarised as part of the overall company/depot stock.  Different businesses may want to use Lots for different purposes:

• Broken Packs – seeing the pieces left from what was originally a pack of timber
• Shipments – all the timber that was received on a shipment
• Certification – all the timber from a certified source
• Other – anything that is a useful definition for a subset of stock of product, such as country of origin, end customer, etc.

Using Lot stocks is a great way to understand more detail on your stockholding, even beyond what is obvious from looking at the products in the yard.  Recording Lot stock comes with an overhead that every time a Lot controlled product is received or dispatched from stock the Lot it came from or is going to, needs recording.
 

LOCATION CONTROL OF TIMBER STOCK

Where Lots control timber into sub-stocks, that may not be obvious from looking at the product. Location control is about recording physically where all the stock is held.  There is a big upside in terms of knowing exactly where stock is to make picking much quicker, however for most timber businesses this gain is offset by the amount of recording required to track the stock between locations, on top of all the usual receipt, dispatch and milling actions. On a good trading and stock control system providing functionality to record stock by location is relatively easy, but yet it is rarely adopted by timber businesses.

A more practical solution is to use non-controlled locations for products, so you know that there are 1,000m of a product in stock and that it is held in two locations in the yard.  This doesn’t give the split of the 1,000m between those two locations, but requires no more recording of movements over normal depot stock control.
 

MILLING, MACHINING AND VALUE-ADDED PROCESSING

A key attribute that makes timber a great product to stock and sell, is the ability to convert it through milling, machining and value-added processing into exactly what the customer requires.

As part of managing stock, accurate stock control is beneficial in knowing what is available to choose in respect of what the best raw material is to use for any milling/machining jobs.

Recording milling, whether it is through Mill Orders where you are converting products for stock to be sold as finished items, or embedded in Sales Orders as instructions for a specific job; both are key to managing accurate stock levels.
 

RECORDING OFF-CUTS

Often as part of a milling/machining process there will be off-cuts or other by-products from the process.  We are often asked whether these should be recorded.  It comes back to the value vs. time/effort as to whether they should be recorded and costed.

Any product that could usefully be reused or sold onto a customer should be recorded.  However, it may not be necessary if the offcut is going into a non-controlled product (e.g. firewood, sawdust, etc.)

On costing returns to stock, if the milling process is embedded in a sales order any value given to the returned items will reduce the cost of doing the job on the order (and increase the margin), but it may be worth considering the genuine value of what is being returned.  A product may be milled that has a cost of £400 per m3, and several 5.4m lengths required for the job.  The offcuts are some lengths around 1m in length, so to return them at £400/m3 might be to overvalue them, and it would be better to return them at £200/m3 or even zero value.  This is a management decision on where you wish to draw the line on revaluing returned items.
 

ADVANCED TECHNOLOGY TO HELP TIMBER STOCK CONTROL

There are several hardware and software tools that can be introduced to a business to help with managing timber stock:

• Mobile computing – with cloud-based stock management software it is useful to put the information and recording in the hands of the people working the operations of the business.  From yard pickers, machinists, stock controllers, drivers, having information at their fingertips can help them work smartly and keep the rest of the business up to date as soon as anything is progressed.  There are a couple of practical challenges to mobile computing, around having good signal to be connected to the main system, and the durability of the computers in a relatively harsh working environment.  Devices are becoming less expensive, including ruggedised versions.  There are lots of benefits to mobile computing, but if you need to work with both hands, it is still not as convenient as a piece of paper that can be folded and put in a pocket.
• Barcode labels – labelling packs and timber pieces can make the operations faster as more accurate, as users can scan items to confirm it is correct and record the action.  The biggest challenge to piece labelling is the cost of adding a label to each piece, relabelling as pieces are milled, and how to manually process pieces when the label falls off or fades over time.
• RFiD labels – can be a great way to minimise the effort of recording packs/pieces of timber as they are received, moved and dispatched through the business.  With good infrastructure the process taking a product past an RFiD scanner can perform the stock movement on the system.  This is expensive to set up and suffers some of the same problems as barcode labelling but can be valuable for businesses with fast paced operations and the desire to manage stock by location on top of the quantity levels described above.
   

CONCLUSIONS

Managing timber stocks is not the most straightforward of operations on a computer but is achievable with the right tools.

Here are my key conclusions and recommendations:

• Choose the level of stock control that best suits each product
• For each product, only stock control to a level that is likely to stay pretty accurate between stock counts, so everyone trusts what the computer says is in stock
• Hold stock in packs for as long as bound packs are moved in the business
• Understand the talents within the team to know who is best placed to make decisions day-to-day around stock operations, and that different parts of the business can work together
• Avoid full location stock control unless there are real financial benefits to be had
• Record off-cuts and milling by-products if they have value
• Use the right technology to make operations as simple as possible (easy processes are more likely to be done and done accurately)
• With timber stock control perfection is rarely achieved, so agree with the team what is an acceptable level of accuracy to trust the computer records, and the work they have to put in to maintain that
• All the technology for managing timber stock cannot replace the skills, knowledge, experience and recording diligence of the team in the business, but can make all the processes easier