The Case for digitization of the Forestry Industry

My father started his company in the forestry industry exactly forty-five years ago. Back then typewriters, mail, calculators and telex (which was later replaced by fax) were the main tools required to conduct business.

Due to language barriers and geographic distance, trading-houses were engaged as an outsourced export department, whose main task was to manage orders, oversee the supply-chain, open markets, provide financial security, ensure compliance and organize logistics.

Despite the advancement of technology surprisingly little has actually changed in global trade and most of all in the forestry industry. Essentially computers and the software within them are just quicker versions of the same old tools like typewriters, fax, calculators and mail. The conveniences of modern technology have not delivered on automation of processes or their elimination to global companies. If anything, the processes have become more complex and most surprising of all is that commodity traders are profiting from informational and geographic arbitrage more than ever before. Technology should have automated processes, reduced the number of middle-men and enabled closer integration for various kinds of partners and institutions.

In global trade, where the forestry is a complex industry and still much unexplored and inefficient, there exists no price index. As such, the price is determined by what can be motivated based on recent transactions or rumors, supply availability requires old personal relationships and demand is subject to brand power.

Meanwhile, the market is not simplified by the fact that a seemingly endless amount of product combinations exist due to a high degree of product differentiation. Thanks to factors such as fiber quality, interpretations of grading requirements, moisture content, value-adding and finally lengths - all exist in parallel in a global market. With language barriers and non-stop business and information flow, there should be significantly more efficient tools available to companies to choose from than what is available today.

Today a significant amount of time is spent on non-value-adding processes such as coordinating with colleagues or partners, calculating offers, tendering goods or logistics, sending offers, drafting documents, approving, analyzing performance and much else. According to our estimates with leading industrial companies this takes up to 25% of export and logistics teams’ time.

Most importantly, companies work in information silos - both internally and with external partners. Due to a lack of common framework colleagues and partners are forced to coordinate and update via email and chat, organize in manually updated excel sheets, folders and personal notes which in turn reduces efficiency, transparency and visibility - and ultimately affects profitability and accountability as operational complexity and compliance has changed the business model to work with large bulk orders with lower average price instead of the opposite.

The lack of integrated sophisticated systems providing business decision-support as well as supply-chain analytics and visibility is a risk in itself that requires constant human assistance. Instead, minimizing used resources, alongside maximizing profitability with increased customer satisfaction should be the goal.

We are changing this starting today - because the supply-chain doesn’t end when the goods are loaded onto a truck in the factory – it’s only the start. We promise to deliver tools that automate manual processes, enhance cross-border trade, increase profitability, remove middle-men – all that combined significantly improve efficiency, transparency and accountability by orders of magnitude.

We are proud to introduce Centersource - a digital platform and a toolset for sawmills, importers and forwarders to collaborate more efficiently. Our platform provides users a common workspace that streamlines Trading, Supply-Chain Visibility, Intelligence Discovery, Accountability. This saves time, improves document-flow, supports sales of smaller batches and thereby increasing the price per unit.

Today we automate all the key processes across Trade, Logistics, Document-flow, Analytics, Tracking and News consumption. All these functions combined together in a virtual collaborative supply-chain is the foundation of our next vision that we hope to unveil soon. Because the flexibility and efficiency of the supply-chain is the single most important differentiating asset and competitive advantage of a global industrial company.

We look forward to serving you and helping you become significantly more efficient. Feel free to reach out to us anytime regarding any issue.

The Centersource Team