Grant: Collaborative Research and Development Grants

The Canadian sawmilling industry is primarily a producer of commodity wood products for the US housing industry. In this market, Canadian producers have been historically dominant but unfortunately, are now faced with unprecedented challenges. The return on capital investment in this industry as a whole has lagged behind acceptable investment returns for most of the last decade. Increasing commodity lumber production from Russia, China, South America and Oceania will weaken commodity markets, reducing prices and profits. As a result, Canada is rapidly becoming a high cost supplier in a market that depends on low prices. The urgency of the problem is further highlighted when the significant provincial budget tax contributions and the futures of many Canadian forest dependent communities are considered. The industry desperately needs a strategy to break out of the downward spiral of commodity lumber production. Part of the solution to this problem can be addressed by technology. Sawmill technology in Canada has been developed solely for volume recovery of commodity products with a cost minimization approach. What is needed is a sawmill technology that promotes just in time manufacturing of higher value products, at the same time as allowing commodity production. Such a production strategy would employ more people per volume harvested, return a higher value to Canada's forests and take better advantage of the high quality timber that is the source of much of Canada's competitive advantage. The strategic goal of this research is to encourage the Canadian lumber industry to invest in flexible manufacturing technology and reduce their dependence on commodity products. This will be done by developing a prototype flexible manufacturing system using an existing lumber mill in the region, Kalesnikoff Lumber Company, as research partner. In working with this company, this project will generate new knowledge about the implications and feasibility of implementing a highly flexible manufacturing system in wood processing facilities that is expected to apply to a broad spectrum of Canadian lumber businesses.