This research investigated the potential costs or benefits associated with using SCM tools.
The research, titled “Supply Chain Management Applications for Forest Fuel Procurement – Cost or Benefit?”, authored by Johannes Windisch, Lauri Sikanen, Dominik Roser and David Gritten, was published in Silva Fennica (Vol. 44 No.5).
Logistics and SCM tools have been successfully used in roundwood operations in Finland. However, they are not widely used for forest fuel procurement. This research investigated if modern SCM applications were capable of improving the profitability of forest fuel procurement operations. Two Finnish forest owners associations (FOA) were studied, who had investigated using these SCM tools. Cost-benefit analyses (CBA) were carried out using the net present value (NPV) method of determining profitability.
The results showed that the benefits outweigh the costs over a timespan of ten years. The NPV results of the two FOA’s did however differ significantly. The increase in the profitability by using SCM tools was clearly demonstrated. Large cost savings were achievable in forest fuel procurement by improving work flows and reducing the work input.
Please access the paper for a more complete account of the research.
Source: http://www.metla.fi/silvafennica/full/sf44/sf445845.pdf