Tactical Planning of a Region-Wide Procurement Network

Aims: Procuring enough raw materials is a crucial decision faced by industries’ logistics managers to sustain production lines and improve the competitiveness of an industry within the global market. The current study, therefore, developed a linear-based inventory model with transportation planning to analyze the current procurement network, which is outsourced from different pathways, and propose possible logistic scenarios to improve inbound logistics decisions involving inventory levels and the effort of transporting the logs to the manufacturing destination. In addition, the flow of multiple various raw materials from terminals, private farms and illegal sources was considered.  Materials & Methods: Since 2017 a large number of forest companies in northern Iran have been in crisis due to insufficient wood supply to retain their production line demands as a result of the logging ban policy over commercial forests. Therefore, they have to purchase logs or trees from far-distant terminals, between 100 and 150 km, and low-quality timbers, either from private farms or illegal sources. This situation has negatively hampered planning of transportation activities and unit delivery costs of raw materials. The model was applied to a realistic region-wide forest covering 23,000 km² with 172 forest companies that stretch across 20 cities in northern Iran. We assessed sensitivity of the model inputs, such as changing inbound logistics through reducing, increasing or removing illegally sourced timbers from the current supply-chain network.

Tactical Planning of a Region-Wide Procurement Network Keywords:

Wood terminal , forest logistics , inventory , illegal harvesting , transportation , optimization