The impact of industrial context on procurement, management and development of harvesting services: A comparison of two Swedish forest owners associations

Abstract

Increasing demands to harvesting production and quality require improved management practices. This study's purpose was to analyze the impact of industrial context on procurement, management, and development of harvesting services. Using interviews, functions were modeled at two forest owners associations (FOAs) with outsourced harvesting services. One FOA had its own sawmills, requiring frequent harvesting production adjustments to meet varying volume demand in the short-term. The long-term uncertainty was however low because of good visibility of future demand (>6 months). The other FOA did not own mills and produced wood according to fixed six-month delivery contracts. This meant few short-term production adjustments, but long-term uncertainty due to low visibility of future demand. Demand uncertainty resulted in corresponding needs for harvesting capacity flexibility. This could have been met by a corresponding proportion of short-term contracts for capacity. In this study, however, a large proportion (>90%) of long-term contracts was found, motivated by a perceived contractor shortage. It was also noted that although contractor investment cycles (4-6 years) matched the FOAs' strategic horizons (3-5 years), contractors' investment plans were not considered in the FOAs' strategic planning. The study concludes with a characterization of different FOA contexts and their corresponding needs for capacity flexibility. © 2013 by the authors.