Production capacity utilization in the southern logging industry

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Virginia Tech


Daily production data were obtained from 22 independent contractors. The collected information included the contractors' estimates of their maximum production capacity and the actual production achieved. Explanations were requested to explain any difference between actual and achieved production.

Most frequent causes of lost production were: 1) adverse weather, 2) quotas,3) moving. Other reasons for delays included mechanical problems, and labor problems. Median capacity utilization for the study period was 70%. The region of operation had a significant influence on capacity utilization: Contractors from the Piedmont had the highest capacity utilization (median of 81%), Coastal Plain (70%), and southern Appalachian (63%).

Rain had the most impact on contractors. Above average rainfall occurred over much of the region during the study period. Stricter environmental regulations are suspected to have increased the impact of rain on harvesting operations. Production quotas affected a number of loggers during the study, especially in the southern Appalachians. Capacity losses accounted for six to nineteen percent for these contractors. Overall, weather proved much more significant than quota.

A model was developed to estimate the cumulative cost of extra capacity in relation to the risk of wood outage at the consuming mill. The model could serve as a starting point for a better understanding of stump to mill wood flow.

Quality control statistical methods were adapted to analyze logging operations systems. Run charts, control charts, and cusum charts were used to measure variability in systems' production. Variation in production levels appear to be increasing with increased regulation. Elasticity has become essential for contractors to maintain profitability. High production during the relatively short periods of good weather and no quotas generated the margin necessary to sustain the contractors during periods of little or no production.

Findings suggested that long term production record should be maintained for a selected group of contractors. Better knowledge on the southern wood supply system sustain ability and adaptability could be developed for use in operation and inventory management planning. An increased knowledge and a broader use of quality management tools should be considered in wood procurement.