An activity scanning-oriented holistic simulation model
of forest products export logistics has been developed. The model is based on
the SLAMSYSTEM network simulation platform. The logistics network model provides
a holistic approach by representing the flow and storage of forest products
units from the end point of their production line to the final user destination.
The utility of the model was illustrated with a case study of newsprint paper
reels logistics from Finland to London and New York. Several scenarios of
different inventory times were used to illustrate
the
effect of inventory time on interest rate cost, the cost on each operational
stage, and the total cost at the final destination at the printing house. The
simulation results indicate that there is room for improvement in the exporting
logistical chain of the newsprint paper industry.
Logistical costs represent a substantial portion of the
delivered cost of many forest products. In particular, the cost added due to
intermediary inventories where forest products are stored for transportation
contributes an additional cost on per forest products unit final pricing.
The transportation distance is a very crucial factor in
forest products logistics. Distance is clearly impacts to transportation time
and this results in additional capital interest cost as capital has been
invested in each product unit during its transportation. Also, transport and
inventory are linked logistical phases (Sjostrom 1997, Brown 1995, Pastijn and
Schaffers 1994).
The phases of forest products export logistics occur in
several stages: storing at the factory's warehouse, domestic transportation,
domestic port, truck or train handling, sea or land freight, foreign port, truck
or train handling, foreign local transportation, intermediary repackaging,
intermediary warehouse, and the final local transportation (Gallis 1997, Wisdom
1994).
The total logistics cost includes the transportation
costs, the handling costs, the warehousing costs, the capital costs during
transportation and warehousing, the insurance costs, and the intermediate
repackaging costs. The export logistics of forest products have not been a top
priority by today's executives of the forest products industry (Sierila and
Tuominen 1991), and have not been extensively studied from a holistic approach.
Furthermore, simulation applications specific to paper industry logistics are
scarce (Lehtonen and Holstrom 1998).
The main objectives of the study introduced in this paper
are to: 1) introduce to the forest products logistics scientists and managers
the activity scanning-oriented computer simulation method and demonstrate its
potential by developing an activity scanning-oriented deterministic
computer-based simulation model of forest products export logistics that
provides a holistic approach, from the production point to the final
destination; 2) define the factors affecting the cost per unit and per
logistical stage; and 3) formulate several scenarios of alternative inventory
times.
