Utilization of logging capacity in the southern United States and Maine

Abstract

Timber harvesting businesses do not have a standard method to quantify performance or determine the capacity of an individual logging crew. Both productivity and efficiency are often used as measures of performance. Productivity is the ratio of output to input. Efficiency is a comparison or ratio between an observed level of output and a benchmark, defined as the optimal level of output (capacity) for a given a level of input. This study attempts to define input, output, and a benchmarking technique to estimate utilization of production capacity for individual logging crews. Approximately 60 logging crews provided weekly production data during 2000 and 2001. The weekly data serves as a quantitative narrative of the workweek, explaining the number and types of loads hauled, the amount of labor employed, the number of moves, and the extent of use of contract trucking. To estimate technical efficiency, stochastic frontier analysis (SFA) was applied. A production frontier was estimated based on production, labor, and capital expense estimate. The capital expense estimate uses each crew’s scheduled machine-hours and equipment mix to predict a cost per scheduled machine-hour. Explanatory environmental variables were tested for significance and influence on production. SFA shows great promise as a means to benchmark logging crew production capacity.