Log costs are one of the highest expenses in any mill. But, that doesn't mean you will make money on every mill that runs across your headblocks. What you should be trying to do is eliminate those logs that lose you money. You should find another use or market for these logs. Why would you want to put a log on the carriage that will lose you money when you could be sawing logs that make money? But, how do you know which logs should be sawn and which should be marketed somewhere else?

A combination of mill studies can give you the results to find your optimum log. The optimum log is the log that will provide the maximum profit, every time it is put through the mill. It will vary by species, length, diameter and grade. Market conditions will also change the optimum log, so mill managers must keep on top of the situation. To find the optimum log, you will need to perform time studies. These studies will tell you how long it takes to mill a log into lumber. Observations will note sawing time, turning time, and loading time. These will vary by species, cutting patterns, diameter, length, and even the operator. Time studies can also be useful when searching for new equipment ideas. Putting cost per minute information will yield how much you are spending to process a single log. This can be converted over to a cost per Mbf of logs. Another mill study that is useful is a yield analysis. This will give the board footage of the various grades in a log. It is useful if this is performed for various grades, species, diameters, and lengths of logs.

By combining your data, you will come up with a curve that looks something like this. Large logs, although giving a lot of grade, are often expensive to breakdown. After log costs are considered, sometimes these are unprofitable. The peak of the curve is the point of the optimum log for that grade and species. Also, small logs are often unprofitable to saw. This is due to the low volume and value in the logs. Sawyers often spend more time turning logs than making lumber. With this information, a mill can choose to not run these logs through the mill, or change milling operations, such as a resaw, to allow for more profit. Different values can be put on logs that fall below breakeven to help offset the loss. I've always felt that for every unprofitable log sawn, two profitable logs have to be sawn. Let someone else deal with unprofitable logs.

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