Simulation and Evaluation of Coordination Mechanisms for a Decentralized Lumber Production System with Coproduction

Sawmilling activities in softwood mills (i.e., wood-sawing, drying, and finishing) cannot be efficiently planned at the operational level in a centralized manner because of the complexity of the production process. Sawmills plan their activities in a decentralized manner (although they try to coordinate them). Thus, specific mathematical models have been developed over the years to support planning for each activity. In the literature, these planning models are usually evaluated and tested independently, or connected using heuristics and evaluated for a fixed demand-planning horizon, assuming a known demand for the entire planning period. In this study, we simulate the use of planning models for decentralized sawmill production, but in a context where new orders arrive randomly and replanning is carried out periodically using a rolling horizon. We also simulated and evaluated different coordination mechanisms at the operational level, highlighting that previously published coordination mechanisms for decentralized planning of sawmilling operations may lead to a low order-fill rate when used in such a dynamic environment. We then propose a more advanced push-pull coordination mechanism based on the concept of decoupling point, revealing that this new mechanism may be more appropriate regarding the market characteristics considered in the study, while leading to a sales increase and reduced inventory. Actual numbers vary depending on specific market conditions.
Lumber production for softwood mills involves three main production stages: sawing, drying, and finishing. Many products are generated from a single raw material, so the process is known as divergent [...]