University of Montana ScholarWorks at University of Montana Graduate Student Theses, Dissertations, & Professional Papers Graduate School 1973 Comparative analysis of two lumber production systems| Thrasher thin blade versus a conventional mill operation John Michael Shepherd The University of Montana Follow this and additional works at: https://scholarworks.umt.edu/etd Let us know how access to this document benefits ou.y Recommended Citation Shepherd, John Michael, "Comparative analysis of two lumber production systems| Thrasher thin blade versus a conventional mill operation" (1973). Graduate Student Theses, Dissertations, & Professional Papers. 1840. https://scholarworks.umt.edu/etd/1840 This Thesis is brought to you for free and open access by the Graduate School at ScholarWorks at University of Montana. It has been accepted for inclusion in Graduate Student Theses, Dissertations, & Professional Papers by an authorized administrator of ScholarWorks at University of Montana. For more information, please contact [email protected]. A COMPARATIVE ANALYSIS OP TWO LUMBER PRODUCTION SYSTEMS: THRASHER THIN BLADE VERSUS A CONVENTIONAL MILL OPERATION By John M. Shepherd B.S., University of Montana, 1972 Presented in partial fulfillment of the requirements for the degree of Master of Science In Business Administration UNIVERSITY OP MONTANA 1973 Approved by: UMI Number: EP34208 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent on the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. UMT umnfaraQn nHwsning UMI EP34208 Copyright 2012 by ProQuest LLC. All rights reserved. This edition of the work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 h TABLE OP CONTENTS CHAPTER PAGE LIST OP TABLES iii LIST OP EXHIBITS v I. INTRODUCTION 1 II. DESCRIPTION OP THE THRASHER SYSTEM: AN EPPORT TO REDUCE WASTE 11 III. DESCRIPTION OP THE CONVENTIONAL MILL 20 IV. THE EVALUATION OP KERP REDUCTION: THE SAWMILL SIMULATION MODEL 2^1 1 V. RESULTS OP REDUCING KERP AS CALCULATED BY THE SIMULATION MODEL 36 VI. SUMMARY: CONCLUSIONS AND RECOMMENDATIONS. 5^ BIBLIOGRAPHY 60 APPENDIX 63 ii LIST OP TABLES TABLE PAGE I. Current Wholesale Prices per Thousand Board Feet Douglas Fir - Random Lengths 28 II. Simplified Flowchart of Sawmill Simulation Model 29 III. Conversion of Current Lumber Prices per 1,000 Board Feet (MBF) to Lumber Prices per 1,000 Lineal Feet (MLF) 33 IV. Results of Sawmill Simulation Model Using the Conventional Mill Operation 38 V. Summation of Values for the Four Sides Plus the Cant Conventional Mill ^0 VI. Results of Sawmill Simulation Model using the Thrasher Production System VII. Thrasher Mill Systems ^^3 VIII. Comparison of Value Obtained from Selected Log Diameters by Thrasher System and Conventional Mill System ^5 IX. Comparison of Scaled Log Volume to Conventional Mill Tally for l6-Poot Logs Scribner Decimal C ^9 X. Volumetric Comparison of Lumber Recovery by Thrasher System and the Conventional Mill using the Simulation Model 50 XI. Differences in Volume of Material That Must be Planed from Rough Green Lumber When Comparing the Thrasher System to the Conventional Mill 53 ill TABLE PAGE XII. Effect on Cash Plows of Converting to the Thrasher System Over the Ten-year Life of the Asset 56 XIII. Calculations of Internal Rate of Return and Pay Back Period 58 XIV. Common Fractions and Their Decimal Equivalents XV. Conventional Mill: Monthly Production Figures by Years Beginning January 1968 to January 1972 Sawmill Only (In MBF) ... XVI. Conventional Mill Production Costs for Years 1968-I969 (Sawmilling Only) XVII. Inland Mills, Western Wood Products - Association December 7, 1972 XVIII. Cubic Content of Commonly Manufactured Lumber Sizes Dressed to 1972 W.W.P.A. Standard Lumber Sizes 1 XIX. Conventional Mill Total Volume of Wood Needed to Produce the Nominal Sizes Under the Present Manufacturing System per Lineal Foot ' ^ XX. Thrasher System Total Volume of Wood Needed to Produce the Nominal Sizes of Lumber using the Thrasher System of . Manufacturing XXI. Additional Volume of Wood Used by Conventional Mill as Compared to Thrasher System of Manufacturing '5 XXII. 1966 Output of Roundwood Products from Montana Timberlands by Land Ownership, Class and Product, 1966 XXIII. 1971 Agricultural Statistics United States Department of Agriculture, U.S. Government Printing Office, Washington, D.C '' iv. LIST OP EXHIBITS EXHIBIT PAGE 1. Thrasher Method 2. Thrasher Method 3. Breakdovm of a l4-lnch Log Thrasher Mill. 31 Best Breakdown of a 14" Log Using the Thrasher System 35 5. Conventional Mill Wood Required to Manufacture Common Nominal Sizes of Lumber 61 Thrasher System Wood Required to Manufacture Common Nominal Sizes of Lumber V. CHAPTER I INTRODUCTION In Western Montana, the forest products industry supports 43 per cent of the population, either directly or indirectly, and generates 51 per cent of the personal income (Johnson, 1972). Just as Western Montana is dependent on the timber * industry, the timber industry is dependent on the avail­ ability of timber. The volume of timber that can be cut in any year is dependent on the number of acres available forJ harvesting (at a fixed level of management) and any reduction in acreage will have a corresponding effect on timber production and thus on the economy of Western Montana. The individual mill owner faces stumpage prices that are rising faster than the market value of lumber. The mill owner must become more efficient, and the Thrasher system of thin- blade precision sawing may offer an opportunity to increase efficiency and profitability of the sawmill (Thrasher 1972). Until recently, the woods products industry and the 1 2 Forest Service were primarily concerned with the harvesting of timber in the most economical way for the short run. The logging pressure on the national forests has increased sub­ stantially during the past 25 years. Between 1952 and 1969, total timber harvested in the Western states showed an increase of 35 per cent. During the same period, timber cutting on Western National forests increased from 3,855 million board feet to 9,798 million board feet, or 15^ per cent (Wikstrom and Hutchison, 1971). Sixty per cent of the wood harvested in Montana comes from the national forests (Johnson, 1972). During the past decade, changes in attitudes by the American public have resulted in legislation and directives that may have serious repercussions for many in the forest products industry. The Multiple Use Act recognizes that our national forests have important uses other than timber. (i960). The American public has increased its demands for more recreation land, more wilderness areas, better harvesting methods, and a reduction or total elimination of clearcutting on the national forests. The end result is an estimated reduction in the allowable cut by the Forest Service of 22 per cent. (M. Johnson, 1972). In 1963, the allowable cut for the lands comprising the Ninth District Federal Reserve system was approximately 3 455 million cubic feet with an estimated growth rate of 320 million cubic feet and a reservoir of 17 billion cubic feet of standing timber (Nelson,. 1963). The allowable cuts exceeded the current growth rate by 135 million cubic feet. The figures quoted by Nelson are not actual but esti­ mated volumes. With estimates such as the current annual growth of 320 million cubic feet, it must be remembered that changes in the intensity of management can alter the figures drastically. If the apparent level of overharvesting continues, the timber reservoir will be completely depleted in 126 years. When Edgar T. Ensign conducted the first survey of Western Montana Forests in 1887 for the United States Department of Agriculture, he was appalled at the amount of timber being harvested in the Missoula area and felt certain the supply would be exhausted in 15 years (1888). An interesting figure developed by Nelson is the estimated 155 million cubic feet of logging and mill residue. One-hundrec fifty-five million cubic feet of solid wood could be processed into approximately 900 million board feet of lumber by a conventional mill operation (155 MMCP x 12 BF/Cublc Foot). ( 2(avg. recovery)) of the 1963 allowable cut would remove 100 million cubic feet of standing lumber and 600 million board feet of lumber The projected 22 per cent reduction in timber to be harvested is expected to drive the stumpage value of timber higher. The mill owners can be expected to try to continue to operate their miles at the present or higher levels of production. With a smaller supply of logs, the increased competition for the available logs will drive the stumpage prices higher (Johnson, 1972). The higher stumpage prices will make the selling and harvesting of timber more attrac­ tive to small woodlot owners (Bolle, i960). However, the total board foot volume available from private woodlots cannot compensate for the volume of timber to be removed from the market by the Forest Service (Setzer and Wilson, 1970). In the Rocky Mountain States, national forests accounted for 500 million of the 800 million cubic foot volume of round wood products in 1966 (includes posts, poles, veneer, lumber, etc.). In Montana, national forests accounted for 59.^ per cent of the round wood usage in 1966. Non- industrial private resources contributed less than 10 per cent for the Rocky Mountain region and 15 per cent for Montana (Setzer and Wilson, 1970). The price paid for stumpage by the mills has increased drastically over the past decade. In 196I, the national average was $27.60 for Douglas fir (Pseudotsuga menziesil) and $12.10 for ponderosa pine (Pinus ponderosa) per thousand board feet (MBP).