For more than 40 years, AJD Forest Products of Grayling, Michigan has been producing grade and industrial hardwood lumber. The company has developed a reputation as a top quality producer of industrial lumber serving the Lake States region.
AJD boasts that many of its customers have been with the company for more than 20 years. This kind of longevity only happens when you continue to innovate to improve your operations and put a strong focus on delivery of quality expectations to customers.
Controlling every step of the process is one way that AJD has been able to maintain quality while seeking continuous improvement. The company focuses on producing high-grade red oak, hard and soft maple, aspen, ash, and basswood. It serves customers in Wisconsin, Illinois, Indiana, Michigan, Ohio and Ontario.
AJD Installs New Band Mill
Looking to increase yield and improve operating efficiencies, AJD installed a new
Cleereman Lumber Pro thin kerf double cut band mill in the fall of 2013. This saw replaced a circular saw head rig mill that had been in operation since 2000. It processes larger logs that the mill receives.
Tim Neff, general manager, explained, “Based on our research, we were convinced that the Cleereman mill was the best fit for our operation. From the foot print to the double cut system, the whole process worked very well in the space we had to install it.”
The new band mill was installed parallel to AJD’s scragg mill which allows for more efficient handling of cants and boards coming from the band mill. The AJD sawmill can produce 15 million board feet per year on one shift.
Logs go through a ring debarker before entering the mill. Once in the mill, logs are kicked, based on diameter and quality to the Mainland scragg saw or the band saw head rig. Boards from the band mill move to either a single bay or double bay edger, cants from the band mill go to the Schurman gang saw. Slabs from the scragg saw transfer to a McDonough horizontal resaw, cants go to the Schurman gang saw. Boards from the McDonough horizontal resaw are then processed by the double bay edger. Slabs are on a merry-go-round to the McDonough horizontal resaw until they are too thin to make a board. Cants sent to the gang saw are sawn into boards.
All boards are sent to the sorting table. Boards requiring edging are returned to the double bay edger. Boards that do not meet quality standards are pulled and sent to a chipper. All waste slabs are fed to a chipper. From the sorting table boards go to the TS Manufacturing trim saw.
A National Hardwood Lumber Association (NHLA) trained inspector and scanning technology optimize the value of each board prior to it being end trimmed to size. The TS Manufacturing trim saw is equipped with an Inovec (USNR) optimizer.
“The Inovec optimizer increased everything in terms of production efficiency,” commented Tony Nash, operations manager for AJD. “It set us up for improved optimization in the future, including inventory control of the mill, better utilization of the raw material and improved efficiency in the back end of the mill.”
From the trim saw, boards are automatically sorted into individual bays based on grade and dimension. An Autolog tally and sort system manages this aspect of the operation. Once a sort bay’s board count reaches a set quantity, the bay is dropped and sent to packaging. Packaged bundles are moved to the lumber yard and are sorted for shipment or stock to be re-sawn to smaller dimensions.
All bark is captured and sold primarily to the landscaping industry. All saw dust is collected and sold to a wood fueled electric generating plant. All chips are captured, screened and sold to engineered wood products manufactures and wood pellet manufactures.
Every machine center and material handling system uses PLC programs and various scanning technologies to optimize the yield and flow of material through the mill. Sawyers, edger operators, and gang saw operators use laser guides and their knowledge and experience to maximize yield on every log, cant and board.
Nash, stated, “Our mill equipment allows AJD to optimize yield while also having the flexibility to adjust product mix to satisfy customer demand and market conditions.”
Vertical Integration Brings Tighter Controls in the Supply Chain
For years, AJD has deployed its own company logging crew as well as worked with third party contractors that are closely monitored by three professional foresters who source all the logs for the mill. About 70% of the logs used by the mill come from state and private timber sales managed by AJD’s foresters. The other 30% of logs are purchased on the open market.
Neff explained, “Being a saw mill focused on industrial lumber products, it is advantageous for AJD to purchase timber sales that yield logs best suited for industrial use. These timber sales have lower stumpage cost per thousand board feet than timber sales heavy to grade or veneer logs. Purchasing and managing timber sales for 70% of our total volume allows us to better control the supply and total cost of logs delivered to the mill.”
Most timber sales managed by AJD are harvested by independent logging companies. AJD can operate one whole tree logging crew and one cut-to-length logging crew. The whole tree logging crew grew out of the company’s need to have a chipper available for timber sales that required removal of slash. The whole tree/chipper crew combination provides for more options when AJD bids on timber sales.
Neff commented, “The shortage of loggers in our area led to our starting the short wood logging crew in 2013.”
This is an issue that continues today due to tight labor conditions. Neff cautioned, “For our operation, the immediate challenges we face are a shortage of loggers and truckers in our area. Maintaining a sufficient log supply is a constant challenge. The trucking shortage impacts both the delivery of logs to our yard and the delivery of lumber to customers.”
AJD Forest Products is looking to source even more logs from third parties or might have to add to its logging crew in the future if the shortage persists.
Fred “Butch” Fisher, sales for AJD, added, “Managing our own timber sales and maintaining two logging crews is a large and ongoing investment for the successful operation of our company.”
Neff further explained the company’s strategy. He said, “Having known volumes of standing timber under contract allows us to better plan for the cost of logs and lumber prices needed to make a fair profit. Having our own logging crews available gives us flexibility to harvest needed species when the species mix in the log yard is not balanced with customer orders. The end result of our vertical integration is better customer service and better operating efficiency in the mill.”
Changing Management, Challenging Markets
Over the past two years, AJD’s sales footage volume has steadily increased with increased demand from long-term customers, according to Fisher. He added, “Our selling prices have increased with the rising prices in the market. Profit margins have not changed significantly as the cost of logs has risen with the increases in selling prices. Increased demand is the main contributor to an improved bottom line.”
The market remains a challenge as the cost of purchasing timber sales and logs on the open market continues to rise. The shortage of loggers and truckers only compounds the price pressure.
Prior to the economic downturn, AJD employed 85 and had annual production of 20 million board feet. At the company’s lowest volume in recent years, it employed 40 and produced only 9 million board feet. Currently, the company employs 65 people with an annual production of 15 million board feet. The company has reached an equilibrium that matches its production well with its ability to source logs for the mill.
Nash spoke about the company’s continuous pursuit of improved operational efficiencies. He said, “Our team continuously evaluates saw mill equipment and technology. We have identified areas of our operation that we want to improve and are weighing the cost benefit of purchasing new equipment and technology. To address the shortage of loggers and truckers in our area, AJD is working with local and state agencies and educational groups to identify courses and training that will promote careers in forest product industries.”
In the future, AJD’s management sees maintaining its team of skilled employees and obtaining the capital needed to take advantage of new technology as its core challenges.
Over the past several years, the company has experienced a transition in its core management team and structure.
Tim Neff, general manager, joined AJD in 2010. Tim has a diverse business background that includes management roles with an architectural moldings manufacturer and a software distribution company. Tony Nash, operations manager rejoined AJD in 2013, Tony had previously been with AJD from 2004 to 2008. Tony has 40 years of experience in sawmill operations and forest products industries. AJD added in 1993 Craig Foy as its woodlands manager. He graduated from Michigan Technological University with a degree in forestry.
The original sawmill was built in 1974 by Lakewoods Forest Products an affiliate of Scott Paper Company. In 1979, Lakewoods Forest Products management team of “A” Albert Quaal, “J” Jess Birtcher, and “D” Dave Stephenson purchased the business from Scott Paper Company. The original management team also included Fred Fisher, sales manager and Craig Taggart, woodlands manager.
Dave Stephenson, president, remains active with AJD sharing his knowledge of sawmill operations with the new management team. And Fred Fisher is now vice president of sales, working closely with the sales team that includes his son Fred “Butch” Fisher.
Lumber Perfection – Low-grade Material Remains Its Core Focus
From its beginning, AJD Forest Products has focused on producing industrial lumber for the pallet and box industries. During the mill’s history, both softwood and hardwood have been produced. Currently, production is exclusively hardwood species, primarily red oak.
Industrial lumber production originally accounted for 95% of total production with grade lumber production making up the remaining 5%. Today, industrial lumber accounts for 80% of total production with grade lumber production at 20% of footage produced. The increase in the percentage of grade lumber produced is the result of equipment and technology upgrades, three employees who are graduates of the NHLA Inspector Training School, and the professional management of state and private forest lands resulting in improved stands of timber.
Investment in equipment and technology has led to more production footage devoted to value added dimension stock and less footage devoted to cants and timbers.
AJD currently produces industrial lumber in thicknesses from ½ inch to 7 inches, widths of 4", 6" and 8", and lengths of 4’, 6’, 7’, 8’, 10’, and 10.5’. Its largest volume industrial products are 1" x 4" x 8’ and 1" x 4" x 10’ boards.
Fisher said, “Industrial lumber is edged, end trimmed and sorted into packs that are a consistent width, thickness, and length. Some mixed length packs are produced for customers that accept mixed lengths. Customer demand drives the products we produce.”
The sawmill primarily produces 4/4, 5/4 and 6/4 boards. Two vertical resaws allows this primary stock to be re-sawn to thinner thicknesses and widths specified by customers. All industrial lumber is sold green. AJD does not currently heat treat or kiln dry any industrial lumber.
AJD purchases all hardwood species that grow within 80 miles of its mill. The minimum log diameter accepted is 8". There is no limit on the maximum log diameter.
A focus on quality has led AJD to become a major player in the Upper Midwest. AJD’s foundation for success was established in 1979 by the company’s founders Albert Quaal, Jess Birtcher and Dave Stephenson. Their focus on customer service supported by an efficient sawmill operation that produces high quality industrial lumber for the pallet and box industry remains the focus of AJD Forest Products today.
Fisher boasted, “AJD’s quality allows its customers to purchase lumber at a lower total cost per thousand board feet which leads to long-term relationships.”
He further commented, AJD has the capacity and the capability to produce and ship truckloads of mixed dimensions, specific to a customer’s requirement. This benefits our customers by allowing them to order truck load quantities of what they need instead of truck load quantities of each component they need.”
For more information on AJD Forest Products, call 989-348-5412 or visit http://www.ajdforestproducts.com.
