RESEARCH BRIEF: Opportunities for Appalachian Forest Products in Guatemala and El Salvador: A Case Study

Scott Lyon, swlyon@vt.edu
MS Candidate
Virginia Tech

 

From November 17-24, 2010 Dr. Henry Quesada and Scott Lyon, graduate research assistant visited 8 forest product importers, 2 non-government organizations, and 2 governmental forestry agencies in Guatemala and El Salvador. The researchers were examining the forest products markets in these countries to identify opportunities for Appalachian forest products companies.  The researchers used a structured interview to gain valuable information about the companies and organizations. The objectives were to: (1) identify main competitors of forest product companies in Central American countries; (2) investigate distribution channels of forest products; and (3) investigate local production, demand, and policy of forest products in Central American countries.

Figure 1. Teak Plantation (Author's photo)

The researchers found that restrictive regulations in these countries may create an opportunity for Appalachian forest products.  The Guatemalan government requires permission and payment of taxes before harvesting, causes a decrease of timber harvested. In El Salvador, beginning in 2011 the government will be checking for legality of the wood to prevent illegal harvesting of timber. A permit must accompany the wood product through the harvesting and manufacturing process, which may cause some companies to look elsewhere for raw material.  Currently trees are harvested from agroforestry sites such as coffee plantations.  These trees are small in diameter and low quality.  There is only a small amount of funding available for expanding plantations and no incentive to be certified.  Plantations grow primarily gmelina (Gmelina arborea) which is sold locally and teak (Tectona grandis) (Figure 1) which is shipped to Europe and Southeast Asia. 

In both countries, furniture constitutes a large portion of wood products production.  Because the majority of hardwoods used in furniture production are reddish to dark brown in color, black cherry (Prunus serotina) and black walnut (Juglans nigra) from the Appalachian region may substitute for the species currently used.  Many of the companies interviewed import a variety of building materials from Canada and Chile, including:  plywood, osb, mdf, and softwood lumber.  Some companies buy southern yellow pine from brokers in the United States. Many of the companies were concerned about the specific dimensions of softwood lumber available from the United States.  Most lumber is bought and sold in “varas” (32.9”).  The interviewees stated they would prefer lumber from the United States in metric dimensions. 

Figure 2. Dr. Quesada and Scott Lyon interviewing a furniture manufacturer in Guatemala City (Author's photo)

Hardwood and softwood lumber is primarily purchased as “green” and the companies have a lack of information regarding kiln drying.  The researchers visited a local cooperative group in El Salvador that recently purchased a Finnish kiln by using funds from a NGO from Finland.   Small and medium enterprises use the kiln for drying local lumber. 

Logistics for importing did not seem to be a problem in Guatemala.  The main port of entry in Guatemala is Puerto Barrios on the Caribbean Coast.  The Appalachian region may have a problem importing directly to El Salvador.  Most imports to El Salvador arrive by ship to either Guatemala or Puerto Cortes, Honduras and trucked to El Salvador. 

There appears to be a large demand for wood from international sources with abundant raw materials and efficient transportation systems to deliver products. Because the Appalachian forest products industry offers products that are similar to those currently imported in Guatemala and El Salvador, they have a unique opportunity to expand their markets into Central America.  This marketing research project is funded by the UDSA Federal State Marketing Improvement Program (FSMIP).

Center for Innovation-based Manufacturing launched its first workshop

BlACKSBURG, VA. December 6, 2010. On November 11, the Center for Innovation-based Manufacturing (CIbM) presented its first workshop on Innovation-based Manufacturing. The workshop was organized by Dr. Henry Quesada, assistant professor of business and manufacturing processes in the Department of Wood Science and Forest Products and member of the CIbM. The CIbm was created with the goal to help local industries to solve current manufacturing issues and to help the university commercialize new technologies that steam out research projects. The CIbM is supported by the Institute for Critical Technology & Applied Science (ICTAS).

Participants in the first Innovation-based Manufacturing workshop ask questions

Speakers at the workshop included Dr. Roop Mahajan, Director of ICTAS, Director of the Institute for Critical Technology & Applied Science (ICTAS), Dr. Darrene Hackler, VP at the International Economic Development Council, Dr. Allister James, Senior Expert Engineer from Siemens Energy, Dr. Julia Lane from the National Science Foundation, and Mr. Jose Vicente-Gomila from the Polytechnic Institute of Valencia in Spain and co-founder of TRIZ XXI.

The morning session of the workshop focused on discussing the basics behind innovation-based manufacturing, the relationship of innovation with economic development, innovation and science of innovation policy, and examples of innovation-based manufacturing in action. The afternoon session was focused on innovation tools such as TRIZ, innovation monitoring, and innovation intelligence. The workshop was attended by 45 participants and it was held at the Inn at Virginia Tech.

According to current research from Dr. Quesada’s group, the wood products industry sector needs to focus more on innovative ways to improve their manufacturing process and innovation-based manufacturing opens enormous potential for companies in this industry sector to increase their competitiveness

RESEARCH BRIEF: Furniture Engineering Process Analysis

Chao Wang, MS Candidate
Virginia Tech

Andersen and Fagerhaug (2001) defines a process as “a logic series of related transactions that converts input to results or output.” The engineering process is an important component of a business process since it is (Ericsson 1993):

   A chain of logical connected, repetitive activities that

Ÿ   utilizes the enterprise’s resources to

Ÿ   refine an object (physical or mental)

Ÿ   for the purpose of achieving specified and measurable results/products for

Ÿ   internal or external customers

Figure 1. Typical furniture engineering process

Our previous had identified the product family within a case study household furniture manufacturer, next we could further define different processes of engineering for making the family of products. Figure 1 shows a typical furniture engineering process by using functional flow chart.

Further, based on our initial study, we specifically identify 15 major engineering processes for the sofa products. Each process is interpreted in Table 1. 

Table 1. Fifteen engineering major processes

ID Process Interpretation
1 Research Product Architecture Generally, this process is fulfilled by a product architecture discussion meeting. The attendees include associates from three departments which are product development, engineering, and production. The goal of this meeting is to streamline each product architecture in the context of customer requirements, engineering feasibility, and production manufacturability.
2 Create drawings and bills of material (BOM) Drawings include perspective drawings, assembly drawings, part drawings, cutting tool drawings for fabrication. BOM includes both bills of material and bills of hardware.
3 Create fabric cutting drawings The previous step completes the drawings for solid wood and wood-based components. Since most of the upholstery products contain fabric material, the fabric cutting drawing is generated to telling the production associates how to cut the fabric.
4 Apply new material SKU# Since new product inevitably needs to use new material, so engineers need to apply new SKU# for each type of material to facilitate the procurement process
5 Create law tag This is a mandatory tag shows that the product attributes are compliance with the local law for distributing and selling in the destination market
6 Fill out material purchasing form As long as the SKU# is approved, engineer can start to fill out the purchasing form to order certain materials and attach essential drawings and specification to the use of suppliers
7 Create sofa specifications The specifications include both design specification for engineering details and manufacturing specification for fabrication details
8 Create 2.5 axis CNC programs The programs include all the precision machining by the CNC machine such as certain component fabrication templates, part routing programs, and plywood dies for the thermoforming process
9 Check/sign-off/distribute preproduction documents After all the above processes, a preproduction document is established which contains all the essential drawings, bills of material, instruction, specification for fabricating a product or product family. Next, the engineering supervisor will check the document, then the document will sign-off by the engineering manager and distribute to the manufacturing plant.
10 Follow up preproduction mock-up process After releasing the preproduction document, engineers also need to coordinate with production associate on fabricating the mock-up and collect feedback on fabrication difficulties in the mock-up process
11 Compile mass production document According to the fabrication feedback in the mock-up process, engineers could start improving the engineering design and making adjustments in the mass production document
12 Check/sign-off/distribute mass production documents Engineering supervisor and manager do the same process to check, sign-off, and distribute mass production documents
13 Create fabric manufacturing specification This process paralleled with the process of generating production documents. The document not only include detail design specifications, but also contains detailed information on fabric material and what specific area of a certain product will apply this material
14 Create packaging document This process happens after the process of generating production documents. The packaging document include all the drawings, BOM, and specification for packaging a furniture product
15 Create 5-axis CNC program This process parallel with the process of generating production documents. It usually deals with 3D-shaped components that are difficult to generate in the 2.5-axis CNC machine.

The processes in Table 1 that we identified include both primary engineering processes and secondary engineering processes. The primary engineering processes refer to all types of value-added engineering activities performed by the majority of product engineers for designing on-demand product architecture (1-12). The secondary engineering processes refer to the required value-added engineering activities performed by the individual product engineer mainly to facilitate production process (13-15).

Identifying each process is the basis for further analysis on process efficiency. Based on the engineering processes identified above, next the research will focus on identifying essential process metrics such as cycle time and queue time, and finally the value-added time of the process could be identified 

References:

  • Andersen, B., and T. Fagerhaug. 2001. Advantages and disadvantages of using predefined process models. Proceedings fra Strategic Manufacturing, IFIP WG5 7.
  • Ericsson Quality Institute (1993): Business Process Management, Gothenburg, Sweden.

RESEARCH BRIEF: Is Education in Innovation Important?

by Johanna Madrigal, PhD Candidate
Virginia Tech

 

Innovation is acute for day to day performance and long-lasting survival of companies. This importance places innovation at the core of any company, and subsequently creates a need to develop systemic innovation, where a climate of learning helps to understand how and where to focus on your innovation efforts (Thomas, 2006). Figure 1 shows how innovation is the result of the interception of the organization with its strategies and its desire for becoming a learning entity.

Figure 1. Relationship among organization, strategy, learning and innovation

Mitra (2000) suggests that these innovation efforts are triggered by needs such as cost reduction, value added, and new market opportunities which have made organizations more aware not only of creativity but also of the need of a systemic innovation learning process.

 Kuhn and Marsick (2005) remark that the learning process oriented to innovation posses three characteristics: (1) has to be part of the strategy development process, (2) has to be capable of transforming, and (3) reaches not only individuals but masses to create groups of learning leaders that support innovation as a fundamental company value and help other to engage in the innovation culture.

These leaders have to learn how to work in environments where diversity is a characteristic, also have to feel comfortable about making mistakes and learning from those mistakes without being punished and finally, to truly create a systemic innovation learning process, they have to be able to reproduce their experiences to lead and manage others (Kuhn and Marsick, 2005).

This increasing awareness about the need of innovation oriented learning process has contributed to the proliferation of teaching to support innovation. Figure 2 shows Innovation and learning has become a perspective in the balance score card for companies who are becoming aware that innovation is a fundamental for success.

Figure 2. Balance Score Card perspectives (Robinson, 2010)

Jorgensen and Busk (2007) and Hesselbein et al (2002) had pointed out that today, more than ever, students need to learn, practice and experience tools and methods to develop innovative capabilities that will help them to face the challenges of innovation into their own working environments; however literature shows that although innovation teaching is a need, the education on the innovation field is small. Most of the efforts in academia have been focused in entrepreneurship teaching rather than innovation teaching. By 2008 this entrepreneurship education in US offered around 2200 courses in more the 1600 education institutions. (Harkema and Schout 2008, Fayolle and Gailly 2008 and Kuratko 2005).

In response to the initial question, yes, innovation teaching is important. This teaching will give individuals the skills to think out of the box in day to day situations where creativity must become innovation to help our organizations to remain successful.

References

  • Fayolle, A. and Benoit, G. (2008), “From craft to science. Teaching models and learning processes in entrepreneurship education”, Journal of European Industrial Training, Vol.32 No.7, pp: 569-593.

  • Harkema, S. and Schout, H. (2008), “Incorportaing Student-Centered learning in innovation and entrepreneurship education”, European Journal of Education, Vol.43 No.4, pp: 513-526.

  • Hesselbein, F., Goldsmith, M. and Somerville,I. (2002), Leading Results Innovation and Organizing for results, Jossey-Bass, California.

  • Jorgensen, F. and Busk, L. (2007), “Integrating the development of continuous improvement and innovation capabilities into engineering education”, European Journal of Engineering Education, Vol.32 No.2, pp: 181-191.

  • Kuhn, J. and Marsick, V. (2005), “Action learning for strategic innovation in mature organizations: key cognitive, design and contextual considerations”, Active Learning: Research and Practice, Vol.2 No.1, pp: 27-48.

  • Kuratko, D. (2005), “The emergence of entrepreneurship education: applying the theory of planned behavior”, Entrepreneurship Theory and Practice, Vol.29 No.5, pp: 577-597.

  • Mitra, F. (2000), “Making connections: Innovation and collective learning in small business”, Education and training, vol.42 No.4&5, pp: 228-236.

  • Robinson, M. (2010) retrieved from http://blog.pfmresults.com/wordpress/?p=82 on November 16th, 2010.

  • Thomas, A. (2006). Disciplined Innovation. Excellence is a habit. Leadership Excellente. 23(7): 6.

RESEARCH BRIEF: Establishing audits for lean energy in the wood product industry

Bryan Stinnett,
MS Candidate, Virginia Tech

 

Lean Principles have traditionally been applied mainly in a manufacturing environment, but today it is being applied to most areas from the business office to health care facilities. The exception is in the area of energy, especially in regards to the wood products sector. It has been used in these areas mainly for the manufacturing, man power and supply chain systems.

Figure, 1. Audit steps (Energy Efficiency Planning and management Guide, 2002)
 

Our research will focus on three wood products companies in Virginia and with the assistance of an independent third party energy metering company. The metering company will take measurements before during and after lean recommendations are implemented. With the data from the metering company we will locate the key areas of energy consumption, and what the consumption rates are at peak and non-peak times. We have completed a walk through conditional energy survey and applied the survey to lean thinking at the three participating companies. By using lean thinking we will be able to eliminate waste (Muda). Lean thinking is a powerful antidote for waste (Muda). It provides a way to specify value, line up value creating actions in the best sequence, conduct these activities with out interruption when requested, and perform them more and more effectively. It also provides a way to make work more satisfying by providing immediate feed back. (Womack and Jones,: 2003) (Figure 1) shows the initial steps of the audit. It can be tempting to move quickly into the audit itself, especially for auditors who are technically oriented. However, understanding the ground rules in advance will help auditors to use their time more efficient, and will insure that the needs of the company commissioning the audit are met. (Energy Efficiency Planning and Management Guide, 2002

 
Figure 2. Wood kiln being constructed

Although the conditional survey preceded the main audit, it can also identify EMO’s (Energy Management Opportunities). The survey ratings helps identify and prioritize areas of the facility that should be examined more extensity. Some of the key EMO’s are, Lighting Systems, material handling systems, fans, heat pumps, compressed air systems dryers, kilns, and storage areas. (Figure 2) shows a new energy efficient kiln being constructed at a hardwood flooring company. (Figure 3) Is a materials storage area at the same hardwood flooring facility. These are just some examples of the areas we will be looking at. 

The audit mandate will make the audit’s goals and objectives clear and outline the key constraints that apply when the recommendations are implemented. The audits scope is the physical extent of the audit’s focus that should be specified, and the types of information and approaches that will identify the scope of the auditors work should be identified. (Energy Efficiency Planning and Management Guide, 2002)

With information from the metering and audits we will be able to define the scope then appropriate lean implementation for each company that will improve their efficiency, decrease cost and green house gases by eliminating waste and adding value

Figure 3. Warehouse

If you consider the energy crisis the world now faces it is necessary for more research in this area than ever before. When energy cost are low which they have been for long time people usually do not think about the wasted amounts of energy until the cost start to rise. 

References:

  • Energy Efficiency Planning and Management Guide, Natural Resources Canada, 2002. Web site; oee.nrcan.gc.ca/publications/infosource/pub/cipec/efficiency/index.cfm?attr=24
  • Womack, J. and Jones, D.2003, Lean Thinking: Banish Waste and Create Wealth in your Corporation.3rd ed. Free Press. New York, USA