American Drew bar codes its lumber.

A computerized barcode system ushers in a new 'order' and helps American Drew save more than $500,000 on wood costs.

Time was when furniture manufacturers could take advantage of a bountiful and relatively inexpensive supply of No. 1 common and better lumber. As long as their products were selling and lumber was cheap, they thought they could afford not to be selective about the grade mix of wood that went into their furniture.

Rising lumber costs coupled with environmental issues, however, have prompted manufacturers to be more concerned about the cut-off remnants that are burned or hauled to the dump. They have learned to get more usable lumber from less expensive material through optimization. In particular, the trend toward greater use of No. 2 common hardwoods has seen more rough mills adopt "rip-first" cutting strategies to boost lumber yields.

American Drew of North Wilkesboro, N.C., is a fitting example of the new era of conservation and economy that is making a profound impression on the furniture industry. Each year, the well-known member of the LADD Furniture family spends about $8 million on lumber including ash, oak, hickory and cherry. In an effort to maximize the yield of its hefty lumber investment, American Drew invested $1 million two years ago on what it believes to be one of North America's most efficient rough mills. It features a feedthrough electric scanning device that generates information about each board's knot characteristics and compiles that data in a computer. This captured information has helped ripsaw operators make better-informed cutting decisions as evidenced by at least a 2 percent gain in lumber yields.

American Drew personnel refer to their newest rough mill operation as an "either-way" system. The higher grades of lumber are cross cut first to obtain long pieces free of gluelines. Lower grades of lumber are split on a gang ripsaw and then cross cut. Conceptually speaking, the either-way rough mill should have provided American Drew with the best of both worlds - maximum throughput for high-grade lumber and maximum yields for lower grades. Standing in the way of peak operating efficiency, however, was an antiquated lumber tallying system. In stark contrast to the newly re-tooled rough mill, pretty much the same bare-essential, labor-intensive, paper-shuffling and sometimes confusing system that had been used to tally, process and locate lumber since the 1960s was being used to support 1990's rough mill technology.

"We were not reaping the full benefits of the rough mill because of a lack of information from the lumberyard," said Patricia "Pati" Lovins, lumber buyer/yard manager of American Drew. "We were only utilizing three of the eight lumber management characteristics: vendor identification, species and thickness." Missing from the mix, Lovins said, were length, width, age, grade and location. "Managed properly, each of these eight characteristics can affect yield positively," Lovins said.

As a consequence of not having complete information, American Drew's sawyers, under the pressures of production schedules, were not always able to make the best decision for each board of lumber that entered the rough mill. "We began to notice that while overall lumber yields were improved, that a comparison of the daily reports showed sharp peaks and valleys in the percentage of yields. Because we were using the same system operated by the same people, we decided that our old method of procuring, grading, sorting and storing lumber must be responsible for the wide swings," Lovins said.

A time for change

Immediately upon coming to work for American Drew in 1995, Lovins made it her mission to bring greater organization and modern know-how to the company's most neglected manufacturing operation - the lumberyard.

"The first thing I did when I came here," said Lovins, "was to have all of the buildings in the yard cleaned and painted." In addition, an area of the yard that resembled a mud pond was filled in and lumber piles were regrouped by species to make them more easily identifiable. These cosmetic improvements fore-shadowed the technological upgrades to come.

Lovins, whose educational background is accounting, brought an accountant's mentality to better manage the lumberyard. "Lumber is our most costly raw material and is the only raw material that we inspect 100 percent. But with our old tally system we were only going through the motions to be able to pay our suppliers. To reap the full benefits of grading lumber for ourselves, we knew we had to be capable of compiling and sorting more data to better manage it."

Lovins said a prime example of the lumberyard's disorganization was the substantial quantity of lumber that was subject to degradation because there was no system in place to make sure the oldest wood was utilized first. "Degrade was costing us more than $45,000 per year for lumber that either devalued over time or rejected entirely. This problem in itself made it clear that we needed a system to better manage our inventories," she said.

Enter bar coding

The quest to improve the company's lumber management ultimately led Lovins to visit other lumberyards, including that of Granite Hardwoods, Granite Falls, N.C., one of American Drew's lumber suppliers. "They were using a barcode system that I found very interesting," she said. "I liked the fact that it eliminated a ton of paperwork and could capture information on all eight grading characteristics."

On April 5, 1995, Lovins submitted a "Capital Appropriation Request Summary" to the company's management committee seeking approximately $50,000 to purchase a computerized Raw Materials Management System from Integrated Solutions. The approval form accompanying the 1/2 inch of supporting documentation was signed off on April 20.

A little more than two months later, the barcode system, using the Universal Product Code popularized by supermarkets in the 1980s, was implemented. It features Integrated Solutions' Lumber Grading Series-2000/3000 base unit consisting of an operator terminal that is IBM XT compatible and software that is menu-driven to make it more user friendly. Also included in the package are a barcode printer and six Laser Wand ALR Barcode Readers. The barcode readers are utilized by forklift rivers serving the company's lumberyard, three rough mills, air drying yard and dry kilns.

How the system works

Each week, American Drew receives 20 to 30 truckloads of lumber. Within the last year, the company has reduced its number of lumber suppliers from 225 to about 20; the down-sizing move dovetails with its streamlining strategy. "It made me unpopular with some vendors," Lovins said, "but quite frankly when we were dealing with that many suppliers, a lot of them were really not getting that much business from us."

After the lumber is unloaded, a number designating the supply source is spray painted on the side of each bundle. The lumber remains in the "deadpack" area for up to 10 days before being graded.

American Drew's conveyorized grading operation handles about 50,000 board feet a day on a single shift. Two graders take turns to minimize fatigue and errors. "These guys can grade up to 28 boards per minute," Lovins said. "They switch off because it takes a lot of concentration to inspect lumber at this fast a pace."

The grader keys in the number identifying the supplier and sorts each board into one of three groups: rejects, No. 1 common and No. 2 common. Four-foot by 6-foot packs of lumber comprised of the same species, thickness, length and grade are assembled. When necessary, American Drew's grading team will make full packs using lumber from multiple sources. By making up complete packs, American Drew is able to maximize its dry kiln space.

A barcode printer located near the tail end of the grading line spits out a barcode tag, personalized for each pack of lumber. The tag includes information on the species, number of pieces, square footage, board footage, thickness, grade and vendor.

In recent months, American Drew has switched from paper barcode tags to more durable polyester-plastic-faced tags. "The paper tags were subject to damage from water and especially fading from the sun," Lovins said.

Each time a pack of lumber is moved, such as from the pre-drying to the dry kiln, the forklift driver scans the barcode label with one of the hand-held laser wands. The driver reads the barcode using the scanner and selects the new pack location from a destination list. The wand entries are stored and later downloaded into the Raw Materials Management System. A lot of cumbersome paperwork is eliminated as the barcodes stay with the lumber from air drying, to pre-dryer, to kiln, to dry storage, and finally to shipping or rough mill.

In a nutshell, Lovins said the barcode system provides automatic report generation and prints more legible and durable bunk tags. In addition, the barcode identification improves the availability and accuracy of lumber data, allows for downloading of data directly into databases and uses barcoding to track bunk location and movement. Thus, at any given moment, the lumberyard's managers know how much inventory is on hand for each species by grade, size and thickness. They also know how old each pack is and its location.

Benefits gained

Lovins said that isolated from the purchase price variance of lumber, American Drew saved nearly $500,000 last year, "and we anticipate a total savings of $1 million over all."

Lovins said the barcode system has helped American Drew more effectively and efficiently schedule and control lumber inventories. For example, she said within a few months of implementing the barcode system, inventories were reduced by 21 percent. American Drew currently inventories about 3.5 million board feet.

"The most helpful feature of the System 3000 is the Automatic Package Full Detection, which enables us to know the exact footage per pack. With this, we have been able to report more actual yield on a per plant basis instead of as a whole."

In addition, Lovins said, "The barcode system helps enforce discipline in the lumberyard. It makes for better organization and creates a system for rotating lumber so that the first boards of a particular species, grade and thickness are the first ones out."

Looking ahead

Lee Houston, senior vice president of operations for American Drew, said, "We have learned that the lumberyard and rough mill must be highly integrated. We now know that we can no longer operate them as two distinct departments and expect to get maximum result."

Houston said he is continuing to work with Group Seven Systems, which helped reconfigure and retool to the either-way rough mill. "We are going to add more computerization so that when we send bills of materials to the lumberyard they will know exactly what the rough mill needs that day," he said. "Plus, we will be able to make our cutting decisions based on lumber price fluctuations to obtain maximum value.

"The barcoding system has definitely made a positive impact. We are using (lower) grades of lumber that I would never have dreamed of using six months ago and still putting out a very quality product," Houston said.

"None of these changes and improvements would have been made possible without the cooperation, dedication and hard work of the monumental American Drew lumberyard team, the rough mill managers and Conley Call," vice president of purchasing," Lovins said. She added that the historical information being collected by virtue of the barcode system will help bring about further improvements to the lumberyard operation and lumber acquisitions.

"One of my goals is to turn the lumberyard into a profit center. We're already beginning to grade and sort lumber for others," she said.

RELATED ARTICLE: 10 BARCODE BENEFITS

American Drew has compiled the following list of qualitative benefits of its nearly one-year-old lumberyard bar coding system. The company said the system has helped:

1 Minimize the possibility of fraudulent inventory activities.

2 Lessen the chance for human error by eliminating hand writing and keying of information.

3 Enhance lumber management with less paperwork.

4 Reduce lumber degrade problems and improve yard usage.

5 Provide more accurate and readable bunk tags.

6 Ensure that lumber is used on a first-in, first-out basis.

7 Reduce kiln loading time by replacing paperwork with barcode readers.

8 Reduce kiln drying time by loading aged lumber first.

9 Provide more accurate yield and usage data per part per product through improved bunk definition.

10 Improve ability to more closely meet plant lumber requirements based on cutting scheduling by part characteristics. Example: Tall cabinets require long clear boards.

RELATED ARTICLE: GETTING MORE FROM LESS

"Our goal is to minimize lumber costs by converting the greatest possible amount of lumber into usable parts and producing the most quality parts out of the lowest cost lumber," said Pati Lovins, lumber buyer/yard manager for American Drew.

Since joining American Drew last year, Lovins and Lee Houston, senior vice president of operations, have gradually increased the company's use of less expensive No. 2 common lumber from 10 percent to 30 percent. The duo further aims to increase that percentage to 40 percent by the end of the year.

Houston said that the conversion to more No. 2 common has not only helped save American Drew money, it has resulted in higher quality products. "One of the things I discovered is that upper grade lumber may have straighter grain but it also has fewer interesting characteristics than less grade lumber. The action is around the knots. This is particularly true with cherry and oak.

"I think its a pity that the consumer has been miseducated to think that lumber grade is related to lumber quality. All the grade signifies is the clear space between knots."

- Rich Christianson