Resolving Inter- and Extra-group Discord Between Forestry and Milling Industries Using Photo-optical Technology
Date
2022-03
Authors
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Journal ISSN
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Publisher
University of the Witwatersrand, Johannesburg
Abstract
TWK Agri timber mills purchase significant volumes of timber from the forestry division of the group and external plantations. A process is followed when timber arrives at a mill to determine the volume of timber to pay in tons, and this process utilises a conversion factor to convert cubic meters to tons. This conversion factor, 1.37 m3/ton, has been in use for many years, although recently it has become apparent that timber suppliers are dissatisfied with this value as they believe it to be longer representative of the state of timber being supplied to the mills. Importantly, the conversion factor has a direct impact on the amount that suppliers are compensated. The implications of low trust relationships with disgruntled suppliers of a key raw material cannot be overstated: if suppliers withdraw from supply agreements, the timber mills will be unable to meet the demand of the mining industry and other markets. This consulting report is concerned with investigating whether the conversion factor is still representative or should be adjusted. The means of conducting this investigation is using a photo-optical mobile device application, Timbeter, which can determine the volume of timber on a truck through photographing every stack and inputting the length of the logs. The application can identify each log and size it accordingly to calculate volume. The implication is that it has greater accuracy than the current manual method to determine volume. Using volume data from the Timbeter application of trucks measured from February to October 2021, along with weighbridge data, the actual factors were statistically analysed in comparison with the current factor, as well as reviewing other variables of stack density for varying timber diameter classes, species, and season. It is shown that the current factor is no longer suitable and should be adjusted to 1.24 m3/ton. This will have a profound impact on suppliers in terms of additional revenue; using volume measurements from Timbeter with the new factor the timber mills would pay a minimum additional R7.2 – R7.8m to all suppliers combined. However, with better recovery from lower input volumes calculated, the timber mills can calculate lower cost prices for products, thereby increasing gross profit. It was also imperative to investigate the perceptions of key individuals employed at the timber mills in relation to technology and the implementation of Timbeter as a technological solution to calculate timber volume on trucks. This qualitative study was conducted through semi-structured interviews and identifying the main themes into which the response data could be grouped. Four main themes were identified, covering operational challenges, supplier treatment, training and implementation and acknowledging the issues that arise with new technology implementation. The main conclusions from the quantitative and qualitative components of the consulting project were presented. Finally, recommendations were made in respect of the conclusions from the quantitative and qualitative components.
Description
A consultancy report submitted in partial fulfilment of the requirements for the degree of Master of Business Administration, to the Faculty of Commerce, Law and Management, Wits Business School, University of the Witwatersrand, Johannesburg, 2022.
Keywords
Photo-optical, Conversion factor, Density, Stack, Volume, Weighbridge, Recovery, E.Grandis, E.GxN, E.Dunnii, Mining timber, Specials, Roundwood, UCTD
Citation
Bierman, Rohan. (2022). Resolving Inter- and Extra-group Discord Between Forestry and Milling Industries Using Photo-optical Technology. [Master's dissertation, University of the Witwatersrand, Johannesburg]. https://hdl.handle.net/10539/42390