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By Admin

The Case for digitisation of the Forestry Industry

February 07, 2020

My father started his company in the forestry industry exactly forty-five years ago. Back then typewriters, mail, calculators and telex (which was later replaced by fax) were the main tools required to conduct business.

Due to language barriers and geographic distance, trading-houses were engaged to act as an outsourced export department, whoms main task was to manage orders, oversee the supply-chain, open markets, provide finance security, ensure compliance and organise logistics.

Despite the advancement of technology surprisingly little has actually changed in global trade and most of all in the forestry industry. Essentially computers and the software within are just quicker versions of the same old tools like typewriters, fax, calculators and mail. The conveniences of modern technology have not delivered on automation of processes or their elimination to global companies. If anything processes have become more complex and most surprising of all is that commodity traders profiting from information and geographic arbitrage are more than ever before. Technology should have automated processes, reduced the number of middle-men and enabled closer integration to various kinds of partners and institutions.

In global trade and especially a complex industry such as forestry which is a highly inefficient market where there exists no price index. The price is determined by what can be motivated based on recent transactions or rumours, supply availability requires old personal relationships and demand is subject to brand power.

Meanwhile the market is not simplified by the fact that a seemingly endless amount of product combinations exist due to a high degree of product differentiation thanks to factors such as fiber quality, interpretations of grading requirements, moisture content, value-adding and finally lengths - all exist in parallel in a global market with language barriers and non-stop business and information flow, there should be significantly more efficient tools available to companies to choose from than what is available today.

Today a significant amount of time is spent on non-value adding processes such as coordinating with colleagues or partners, calculating offers, tendering goods or logistics, sending offers, drafting documents, approving, analysing performance and much else. According to our estimates with leading industrial companies this takes upto 25% of export and logistics teams time.

Most importantly, companies work in information silos - both internally and with external partners. Due to a lack of a common framework colleagues and partners are forced to coordinate and update via email and chat, organise in manually updated excel sheets, folders and and personal notes which in turn reduces efficiency, transparency and visibility - and ultimately effects profitability and accountability as operational complexity and compliance has changed the business model to work with large bulk orders with lower average price instead of the opposite.

The lack of integrated sophisticated systems providing business decision-support as well as supply-chain analytics and visibility is itself a risk which instead requires constant human assistance. When instead minimising resources used whilst maximising profitability, customer satisfaction should be the goal.

We are changing this starting today - because the supply-chain doesn’t end when the goods are loaded onto a truck in the factory - its only the start. Our promise is to deliver tools which automate manual processes, enhance cross-border trade, increase profitability, removes middle-men that combined significantly improves efficiency, transparency and accountability - by orders of magnitude.

We are proud to introduce the Timber.Exchange, a digital platform and toolset for sawmills, Importers, and forwarders to collaborate more efficiently which provides users a common workspace that streamlines Trading, Supply-Chain Visibility, Intelligence Discovery, Accountability. Which saves time, improves document-flow, support sale of smaller batches and thereby increasing price per unit.

Today we automate all the key processes across Trade, Logistics, Document-flow, Analytics, Tracking and News consumption which when combined in a virtual collaborative supply-chain which is the foundation of our next vision which we hope to unveil soon. Because a global industrial company's single most important differentiating asset and competitive advantage is the flexibility and efficiency of its supply-chain.

We look forward to serving you and helping you become significantly more efficient. Feel free to reach out to us anytime regarding any issue.

The Timber Exchange Team