Sawmill Firms’ Operational Challenges when acting as a Subsupplier of Advanced Wooden Blanks and Components

During the recent decade, major Northern European joinery and furniture firms have outsourced their wood processing activities. Thus, some Nordic sawmill firms have increased their further-processing, integrating forward by taking over outsourced production of wooden blanks and components. This trend has brought strategic and operational challenges connected to outsourcing, respectively to customer adapted further-processing and forward integration, in the wood-mechanical supply chain to the fore. Recent research has indicated that conventional theories and decision models in these areas might not be directly applicable in the wood-mechanical supply chain. For example, general outsourcing advantages such as access to expert knowledge and economies of scale in component manufacturing can be difficult to reach in this industry context. Moreover, sawmills engaging in advanced further-processing struggle with uncertainties and complexity stemming from a diverging product flow and the development of new competencies. Little research has been done to adapt general theories and models within the area to the specific conditions in the wood-mechanical supply chain. This study is based on five case studies of pioneers within sawmill-integrated production of advanced blanks and components in Sweden and aims to fill this gap. The study examines driving forces, key factors addressed, and development needs for sawmill firms taking over outsourced production of advanced blanks and components. Findings contribute to operations management theory in general and to development of practical tools for operations management in the sawmilling industry in particular.