Assessing the Supply Chain Efficiency of Hardwood Sawmills in New York State through Case Study Analysis and Data Envelopment Analysis Modeling

Hardwood sawmills throughout the United States were under severe financial pressures during the 2007 to 2009 recession. This was attributed to demand weakness, profitability challenges, and supply chain inefficiencies. The focus of our study was on hardwood sawmills in New York State. A supply chain assessment tool was created to evaluate the supply chain processes of 15 sawmills that had the capability to produce from 3 to 20 million board feet of lumber per year and accounted for 31 percent of the hardwood lumber produced in New York. We collected data that allowed us to rate each sawmill's supply chain and computed their relative efficiency using a mathematical modeling technique called Data Envelopment Analysis. We then used a Pearson correlation analysis to compare our sawmill assessment scores and the relative efficiency score from each sawmill and found a significant correlation of 0.716. The assessment tool we developed can help hardwood sawmills find opportunities to improve their supply chains, allowing their business to save money and improve profit margins.