lumber inventory

[kderby]

As I ventured into owning a mill I purchased two USFS timber sales and several other loads of logs.  I have sold a significant amount of material and accumulated an inventory (20mbf?).  I call it "mish mash." Sorted, dried, stacked, banded and tarped units of locust, maple, juniper, pine, fir and tamarack  Other local sawyers do not accumulate inventory at all.  One says he does not start the mill until the lumber is sold.  Another says he has seen several  mills go under because they had a yard full of material they thought had value and no one else did.  How about you? 

I do think my material has value.  On the way to milling 1x12, I get some very nice 1x8.  Now the 1x8 lumber sits until I sell it.  I am remote (thirty miles to the nearest bank/grocery store and over a hundred miles to the nearest Walmart) and a small one man show.  I am working to better manage the inventory I have in the stackyard and on paper.   I need to increase sales or the inventory will be what has tied up my capital and pulled me under.  Other sawyers I visit have a messy collection of milled material weathering in the yard they wish they could sell.  Does that describe you?    What can I do to avoid this predicament?

I sure appreciate the shared perspectives this electronic world offers us!

Best to all.

KDerby

[solodan]

I think having an inventory is a good thing. I wish I had an inventory.
I think customers want to see at least a few units of stacked and stickered lumber around, and I think they want it to look neat. If you know what sells for you, you can keep a rotating stock. Find out what the closest lumber yards sell but don't stock, maybe they will special order it from you?

[Duncan]

With Softwoods,

Around here it is mostly used GREEN, I mean squirting water at you when nailing.  I have sold 2X stock to a customer when the tree was standing earlier that morning.  I cut all "waste" into 2x4 2x6 stock and sticker and stack it.  It usually sells to a couple of local farmers that are close to me.

For hardwoods,

I try to keep stock of whatever I have on hand.  I have rarely been able to sell any green hardwood lumber, and when I have it has always been a special order.


Kelly

[ohsoloco]

I have plenty of milled, weathered boards lying around in my yard (as well as my parent's yard).  The only thing is, I don't want to sell any of it    I have all of these projects in my mind.  If I only had the time to get around to all of them 

[Ron Wenrich]

We keep very little inventory.  If someone wants something, they have to order it, then we cut it when we are cutting that species of logs. 

We do have some excess in softwoods that we keep primarily in 2 x stock or 1 x stock.  We will put these in orders and fill it out with fresh cut.  If it gets too bad due to weathering, then it goes into the chipper.

We sell very little hardwoods, even though we are a hardwood mill.  We sell primarily to brokers and don't have any on hand.  Most times you never have exactly what someone wants, so you have to cut it anyways.  Best to keep inventories low.

[DanG]

Ron, I always enjoy your answers to this kind of question, partly because you  are so knowledgable, and partly because your operation is so exactly opposite from mine.

My customer base is mostly farmers and homeowners who want to build a little shed or fix up the barn before it falls in on their head.  These folks don't usually plan ahead very much, so they want their stuff right away.  If I don't have it in inventory, they head straight for the big box store.

The freshest lumber I ever sold was a couple of years ago.  This fella called looking for some 22' 5/4 pine to deck a new trailer he had built.  Well, of course I didn't have that particular item in stock, but I did have a pine tree in my yard that had just succumbed to a beetle overdose.  He came over with his trailer frame, and we cut the tree down, bucked the log, and put it on the mill.  He installed his decking as it came off the mill.  An hour after he got here, we were sitting down with a cold beer, admiring our work.   That was about the funnest job I've had, so far!

[oakiemac]

I'm with Dang on this one. I am trying to build upmy inventory. I am adding a 32X40 pole building onto my other barn just so I can store more lumber. If someone calls and wants 6/4 QS white oak I want to have it, if they want 5/4 Hickory then I want to have it available. If I have to saw and dry it then that puts the order out to 6-8weeks and they most likely will go somewhere else.

My operation is a lot differernt then a mill that sells to the brokers. I fell the trees, buck the logs, hual the logs, saw the logs, dry the lumber, store the lumber, finish the lumber, market the lumber, sell the lumber, deliver the lumber, and then in my free time I do maintenance and clean up. You have to love it

[kderby]

Oakiemac, your DanG Crazy!  You just listed off all the things I whine about having to do.  It would be too simple to expect magically having material come and go as I operated my mill.  I do want to get away from being overwhelmed all the time.  Your list is accurate and a recipe for being overwhelmed.  I hope you only mill one species and it has very high value.  Oh there I go, dreaming again.

Anyone out there know where I can get the product the places bar codes on every board?  In some regards it sounds extreme and in other regards it sounds like a solution.  

KD

[spencerhenry]

i only mill when i have an order. i try to keep inventory of material as low as possible, unless i know i will sell it or use it within a couple of months. i sell mostly timbers, but while milling timbers i get alot of 1x and sometimes i do 2x. the outlet i have for 1x is less than what i mill, so the stuff can sit around for a while. fortunately right now, i have a 3000 sq ft shop to side. in the first days of having the mill, i wanted to mill every log i could find. now i let the logs sit until i need something. one problem especially with beams is that someone always wants what i dont have, or they want 12 pcs, and and i have 10. to stock enough to keep everyone happy, i would have to have a wharehouse full of lumber. i have had some 6X in stock so long, that they started to rot. over the last year, i cut up all the miscellaneous beams into 2x4 for my own projects.
 i also have a space issue, especially at this time of year when i have to plow and shovel about have of the day whenever i want to mill, or get to already milled stuff. but then i live at 8600' in western colorado. been below zero 3 of the last 4 mornings. with a fresh 16" on the ground from a few days back.

[karl]

I try to have 1x pine dried and on hand(10-15,000'), 1x and 2x hdwd stakes(4-5 pallets), 2x framing in 12 and 16' lengths(10-20,000'), a few 6x and 8xbeams.About half of what I stock is for my own construction business, otherwise I cut to order.
It seems like the odd hdwd stuff just accumilates in every nook and cranny- not worth keeping, but too good to toss.
 Most of my softwood downfall ends up in the small storage sheds I build (good way to use up shorts/wane/etc)
Space and organization are always an issue.
I try to discourage drop in customers and that helps eliminate those "I want the bottom board in the back pile, and can you cut it up to fit in my car and wrap it in plastic?" folks.
The customers that buy a few hundred feet at a time and plan ahead get free delivery/footage break/or some other form of "Thanks"

[TexasTimbers]

I am with the have-inventory crowd on this one. At least in my area. I know that each situation is different though. I assume Ron that you specialize in selling to bigger buyers. I get the impression you have been very successful too, so who can argue your business model.

For me I can't sell to bigger buyers because I don't have that kind of capacity. I just got an email from a guy in Washington State who wants me to palletize 100BF of 5/4 x 6" x 48" Osage lumber, clear, and he stated he can wait for it to be cut in his intial email. Before I even quoted him a price.

Those kinds of orders are nice because I do not cut Osage and stock it. I have been selling it in log form so I am spoiled, but I don't want to pass up any orders either because you never know, this customer coud place a large order after he tests my quality and service.

Locally, I absolutley have to keep ERC cut because it is the preferred farmer-project wood. I still do not officially have a sawmill business because it distracts me, but I have a fairly steady stream of customers already, and most now know that I am on the verge og having a kiln up and running so I have been getting inquiries about it from woodworkers.

There is no doubt in my mind that the smartest thing I am doing is putting in a kiln. I think the hardwood sales will eclipse the ERC sales in my area before I know it.

I plan to cut, dry, and keep in stock everything I can get my hands on. My plan is to have a full blown sawmill operation by June 2008 so that I can concentrate on timber framing as my main passion. Having "employees" again, I am afraid, is going to be an un-avoidable fact of life if I am to pull off my two-pronged business approach.

I know that Jim Rogers seems to be doing exactly what I am wanting to do so maybe I ought to be pulling on his shirt tail for some advice.

Great question kderby I hope I added something to the thread for you to ponder but remember I am not speaking from much experience . . .  just planning like you.

[Ron Wenrich]

Actually, the local orders are smaller than the commercial buyers.  But, it doesn't take long for me to pound out an order or two.  I'm sawing on the order of 1500 bf/hr.  It takes me about 1 1/2 hours to clear my log decks if they are all full.  So, if I get a call for a small order that's rush, it only takes me a matter of a few hours, and its ready; assuming I have the logs.

I can understand where if you have lower production levels or where log supply is a problem, you would want to carry more lumber inventory.  We carry inventory, its just in logs instead of lumber.

We do have guys that come in and want lumber right away.  We tell them we are a sawmill, not a lumber yard.  There is a difference.

[DanG]

This is one of the great things about this forum.  We all get to see how the other half lives.

Ron, the difference is, my place IS a lumberyard.  In fact, it is the only true lumberyard in this County, which is as large as a couple of our States.  The only other place to buy a board is a little regional "big box" store, which has 2 locations in the County.  They have standard 1x and 2x SYP lumber, and pressure treated 4x4s, and that's it.  Nothing over 16', either.  The folks that know about me will stop by before driving outside the County, and will buy from me if I have it sitting there.  But if I don't, they'll drive to Tallahassee and get something that will do the job, because they decided this morning that they're gonna build a shed this afternoon.  That is the clientele that this market provides, so that's what I cater to.

[solodan]

Anyone out there know where I can get the product the places bar codes on every board?  In some regards it sounds extreme and in other regards it sounds like a solution.  

KD

Go to uline.com they might have what you are looking for.