Thursday, December 12, 2013

New articles on process management in forest biomass procurement chains

That organisation and management are not for free in a business environment is common sense. However, in forest biomass procurement chains this topic has not attracted much attention, yet. Two new publications address the cost factor organisation and management and investigate it by means of case studies from Finland and Germany.

The first paper investigates processes involved in forest biomass to energy procurement in detail and applies discrete-event simulation to assess the organisational and managerial effort put into operations. The subsequent paper on process reengineering explores the possibilities of improving the cost efficiency of operations through redesigning business processes in combination with discrete-event simulation. These papers put a new perspective on forest supply chains and set a framework for evaluating the efficiency of their organisation and management and provide insight in what had largely been a black box before.

Taking a look into the black box:

Windisch, J. Röser, D. Mola-Yudego,  B. Sikanen, L. Asikainen, A. 2013. Business process mapping and discrete-eventsimulation of two forest biomass supply chains. Biomass and Bioenergy 56(2013): p. 370-381. 

Previous research in forest biomass procurement has been focusing on reducing harvesting costs. However, organisation and management of supply chains as well are considerable cost factors. The present study applies a methodological framework to investigate two forest biomass supply chains in different operational environments of two European countries (Finland and Germany) in order to identify the business processes and stakeholders making up the supply chains using a business process mapping methodology. Additionally, the work time expenditure for organisational and managerial tasks for each of the supply chains is estimated using discrete-event simulations.
The business process mapping revealed that the number of processes in the supply chains varies considerably involving 213 project objects (activities, information items, others) in the Finnish supply chain and 268 in Germany. The work time expenditure on managerial and organisational tasks assessed by discrete-event simulation was 1483 min / 100 m3 in the Finnish and 1381 min / 100 m3 in the German supply chain. Even though the results of the study are company specific and cannot be directly generalized, as each supply chain reflects the characteristics of its operational environment, the proposed methodology has shown its potential for the in-depth analysis of supply chains in forest business and it is a step towards holistic cost calculation and business process improvement approaches on supply chain level.

Key words
Supply chain management, discrete-event simulation, forest bioenergy, organisation of work, forest fuel procurement

Biomass and Bioenergy [link]
ResearchGate [link]

Improving the supply chain:

Windisch, J. Röser, D. Sikanen, L. Routa, J. 2013. Reengineering business processes to improve an integrated industrialroundwood and energywood procurement chain. International Journal of Forest Engineering 24(3): p. 233-248.

Procurement systems and supply chains for industrial-scale forest fuel recovery are still immature. Business process improvement techniques can significantly improve system performance. The present study applies business process modelling and reengineering approaches to an integrated industrial roundwood and energywood supply chain in Germany. The existing business process was reengineered. A new business process for integrated industrial roundwood and energywood procurement and two new business processes for future biomass procurement operations were designed using proven best practices. The improvement potential of the new business processes was investigated by determining the organisational and managerial work load of all actors using discrete-event simulation. The results of the discrete-event simulation were then used as a basis for a comprehensive cost calculation. Finally, the cost-saving potential compared to the current practice was determined.
The redesign of the current business process provides a cost-saving potential of 20 – 39% (-2.64 – -5.25 $ m-3). The first biomass procurement process involves a saving potential of 12 – 53% (-1.60 – -7.20 $ m-3), while the second might even increase the costs by 13% if the probability of failures is high. With decreasing probability of failures the costs can decrease by up to 32% (+1.76 – -4.27 $ m-3).
The study demonstrates that simple and low-cost measures can improve business processes in forest supply chains and achieve considerable cost-savings.

Key words:

Business process reengineering, business process modelling, discrete-event simulation, supply chain management, forest biomass, Germany

 International Journal of Forest Engineering [link]

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