Peter Rauch

The Terminal Location Problem in the Forest Fuels Supply Network

Abstract Being sustainably available and CO2-neutral, woody biomass is becoming increasingly more important as an alternative energy source on a worldwide basis. However, despite broad acceptance of bioenergy plants in Austria, more and more neighboring residents are lodging a protest because of the noise and dust burden during wood-chipping operations. These circumstances force plant operators to utilize separate terminals for storing and chipping forest wood, in turn resulting in a redesigning of the forest fuel supply chains. The present paper focuses on the choice of spatial arrangement and the type of terminals used. For redesigning the forest fuels supply network, a Mixed Integer Linear Programming (MILP) model was developed and subsequently implemented for a study region. The network consists of direct supplies from the forest for combined heat and power facilities (CHP) and indirect supply lines via terminals. The MILP model provides a cost-optimal spatial arrangement of terminals by considering different terminal types with respect to spatial context, chipping technology, and the volume processed. Different scenarios are used to test the robustness of the network design. A simulation of a transportation cost increase shows that the optimal network design is stable within an increase of 20 to 50% and between 70 and 110%. At other levels of increase, the number of terminals used decreases. Furthermore, the number of terminals decreases as the domestic forest timber utilization rate increases. It was possible to demonstrate that industrial terminals offer considerable saving potentials. Therefore, the cooperation of CHP operators with a forest-based industry partner as a terminal provider is one of main management implications of the study results.

Co-operative forest fuel procurement strategy and its saving effects on overall transportation costs

Abstract Minimum procurement cost is an essential element for the competitiveness of the forest fuel supply chain. This paper compares one co-operative procurement strategy with several non-co-operative strategies by measuring the cost gap. For a study region consisting of five Austrian provinces, forest fuel supply potential and transportation costs were investigated concerning 28 newly built combined heat and power (CHP) plants. In the case of co-operation, the minimum total transportation cost was derived by solving the corresponding transportation problem. In non-co-operative supply chains, CHP plants compete for forest fuel. This case was illustrated by analysing three different clearly non-co-operative procurement strategies, because CHP plants guard their real supply sources as business secrets. The minimum procurement cost for all CHP plants is provided by the co-operative strategy. It comprises a total transportation cost of €17 million and an average procurement distance of 122 km. Co-operation between CHP plants lowers forest fuel transportation costs by 23% on average and reduces average transportation distances by 26%. The resultant cost-cutting potential stresses the importance of co-operation between CHP plants in order to allocate forest fuel supplies efficiently. Establishing partnerships and working alliances for forest fuel procurement therefore has important management implications for achieving efficiency in forest fuel supplies and strengthening the competitiveness of wood-fuel-based energy production.

Stochastic simulation of forest fuel sourcing models under risk

Abstract Climate change effects such as storms and droughts are leading to increased risk of forest damage in central Europe. The aim of this paper was to evaluate forest fuel sourcing models including climate change-induced risks on forest fuel supply. Stochastic risk events, such as storms and bark beetle infestations, were modelled by means of a Monte Carlo simulation, and the economic performance was evaluated for two fuel-sourcing models supplying a single combined heat and power plant (CHP). The first sourcing model depicted a common sourcing model for Austrian CHPs, where only forest chips provided by long- and short-term suppliers were stored. The second sourcing model additionally enabled the storage of salvaged pulpwood to supply forest fuel from the plants own inventory during shortage periods. Simulation results showed that storing salvage pulpwood as feedstock considerably reduced supply chain risks and resulted in lower procurement costs (1–3% less than normal delivered cost without storing salvaged pulpwood).

Evaluating organisational designs in the forestry wood supply chain to support Forest Owners’ Cooperations

In the coming decades European forest-based industries could face a lack of wood as raw material because of low mobilisation of the net annual increment, even though there is a huge amount of green inventory in European forests. The main obstacle to systematic exploitation of the wood inventories is small-scale ownership. Forest Owner Cooperations (FOCs) try to overcome this by jointly undertaking activities including harvesting, transporting, marketing and accounting. In this paper, the concept of business-process engineering is applied to FOCs in Austria and Germany. Using case studies, productivity is compared for three business process models that are implemented by FOCs. Because of the lack of consistent data about time spent by various process owners for different processes, interactions are used as an indicator of process efficiency of the alternative business process models. The main contribution of the paper is to provide a guideline to compare different FOC business process models with respect to the interactions of participants. Reducing the interaction (or transaction) cost of timber supply is one way to improve the availability of wood as a raw material. It can be shown that the proposed dividend model requires less process interactions than other models examined in this paper.