Making material handling more efficient - Reduction of non-value-adding activities at a wood product

The forest industry is one of the most important businesses in Sweden, accounting for 9-12 percent of the Swedish industry's total occupation, export, turnover, and added value. However, the industry stills struggles with low profitability.

Development of the value chain can be decisive for sawmills to raise their solvency, such as improving productivity and achieve cost-saving through adopting operations management initiatives. Professionals acknowledge order picking as the highest priority for productivity improvements since its operations have a significant impact on the overall performance as part of the logistics chain. The emphasis on quality improvement and customer service has increased, forcing managers to focus more on minimizing product damage, lead time, and picking accuracy.

The study aimed to identify non-value adding activities within the existing inventory management and material handling at a wood company, focusing on the order picking process. The intent was to explore opportunities for improvement with the support of operations management theory. Through focus group interviews, time studies, observations and inventory statistics, non-value adding activities were identified to further discuss improvements and increase efficiency and productivity within the process. The results showed that unnecessary inventory and transportation occurred most often followed by defects, waiting, inappropriate processing, and unused employee creativity. The number of unnecessary movements of packages occurred to a great extent. The main factors causing it were incorrect positions, unstructured storage areas, and non-standard packages.

The recommendation is to allocate products according to demand and order frequency periodically, pick orders in direct connection to production, and performing stocktaking regularly to make sure that the package's accessibility is consistent with reality. Further, the existing compartments should be utilized better to avoid temporary storage and mixed compartments which will decrease transportation and unnecessary movements of packages.

About me

Karin Gyllengahm Jägmästarprogrmmet

In 2015, I moved to Umeå to study forestry at Jägmästarprogrammet. After three years I moved to Uppsala to finish my master's in forest economics. During my previous semester, I wrote my thesis in forest science about production and during the spring I have written a thesis in business administration focusing on order picking. During my years as a student, I have gained a great interest in operations management and the development of processes. I am sure it will continue to be an interest of mine and I am looking forward to applying it in future work assignments.