The timber industry has always been cyclical. It is typically the first to be affected by a downturn, and the last to emerge from it. For example, in the recent sub-prime mortgage crisis of 2007-2010, much of our lumber investments and interests were transferred to China. Since then, we have seen a slow but sure increase in housing starts and lumber prices. Most predictions indicate the next super-cycle peak is yet to come, which means new opportunities and next generation technology will continue to push the wood industry forward.
With Every Bust, Comes a Boom
Back in the mid 1970s, when we were just coming out of a recession (anyone remember The “Energy Crisis?”), one of my first jobs after college was grading lumber using brand new technology brought over from Sweden by SAAB Systems. Believe it or not, the first real sawmill scanning was on edgers using opposing banks of automobile headlights to illuminate flitches. Cameras with galvo-controlled mirrors captured optical profiles of the top of the flitch every six inches, referencing a mechanical thickness shoe on the near end-lumber line to bring the profiles up to height. Today we’re achieving coplanar laser profile measurements every 1/3 inch along the length of a board. How times have changed!
After every crisis, there is always a surge in innovation that helps mills become more profitable; which in turn enables them to invest in new technology and equipment. Every surge enables mills to extract better grades and achieve more value recovery.
This trend is illustrated in the chart above. Since 2011, we’ve seen a steady, healthier upturn in business all around. That’s because super cycles impact other industries such as computers. Microchip development grows during these peaks, allowing 3D technology companies to develop next generation sensors more efficiently.
We all know that what comes up must come down, but in this industry the best is yet to come, because housing is not up to where it needs to be or where it has been historically in previous cycles. In a typical super cycle, housing usually peaks around 1.5 million housing starts. Current projections in the US estimate 500,000 housing starts. By 2017, projections estimate 1 million housing starts. There’s enough local demand to keep lumber prices up, and there’s no indication that this is going to slow down in the foreseeable future.
Super Mills Push the Limits of Technology
Technology advancements during a super cycle resurgence always push the boundaries to get to next generation solutions quicker than in previous cycles. And because the wood industry is becoming more and more corporate driven, super mills have evolved by acquiring smaller family owned mills.
Super mills are really a consolidation of small satellite mills. They are very large, with two or three log lines per mill, and can transport wood by ships, trains and trucks. Typically small satellite mills have one log line and produce about 40 MBF (million board feet), whereas super mills are capable of producing in excess of 600 MBF. Super mills, therefore, create much higher demand for better technology in order to produce better grades and value recovery. In turn, this demand drives technology companies to develop next generation solutions faster.
For instance, in the 1990s and early 2000s, we saw major advancements in vision scanning with sensors providing mills with unprecedented vision technology. This advancement in vision technology is one of the main reasons super mills have evolved. The next wave will see even faster speeds and even better scan data (eg., profile, vision, and tracheid), reflecting super mill requirements to produce more high-grade lumber than ever before.
There is also an opportunity with stitching 3D vision data from log scans similar to the use of 3D vision scanning on boards. For example, 3D vision sensors can fuse vision data with geometric data on the log to get more recovery just by seeing where the characteristics of the log are, especially knots. Knots go toward the center or “pith” of the tree. Now you can identify every knot on the outside of the log. Older technology could not do this; it could only pick up the radius or the diameter of the log and produce sparse low-resolution images. Now we’re getting much higher quality images that are picking up these knots.
Next Generation 3D Sensors
New 3D log scanning technology has distinct advantages over previous technology: faster scan speeds, higher quality resolution, and more intense laser lighting to measure “dark” logs. This all leads to better recovery. For lumber grading, maximizing recovery of lumber with relatively small face and edge knots will result in increased high-grade lumber recovery. With high resolution 360 degree scans as illustrated below, knots can be recognized and pith assumptions can be incorporated into sawing solutions. One of the opportunities of using high-performance, next generation 3D sensors is the intensity data can capture these knots relatively quickly and efficiently allowing mills to obtain optimal yield. Currently, the most significant opportunity is using 3D technology to visually recreate the surface characteristics. X-rays, ultrasound and CAT scans let you see inside the log. But this technology has been advancing slowly due to its cost and complexity.
3D technology companies are enhancing the wood industry by creating profitability through the efficiencies that next generation technology creates. The opportunities generated from super cycles for mills and their suppliers is tremendous. Revenues and profitability will increase as purchasing power increases the ability to hold prices and drive down cost. That means 3D technology suppliers can lower prices and still be profitable.
The potential for further technology advancement is higher resolution scanning. That said, it has been well established that because of the nature of the way wood is processed – from the time it comes into the process in the form of a log, until it goes out dried, surfaced and graded – at a certain point there are diminishing returns. It’s all about how you can efficiently extract all those rectangles and squares out of a irregular shaped log.
Because of the advancements in 3D scanning technology, many mills and technology suppliers have seen a steady increase in business across the board (no pun intended). At LMI, for example, our growth is enabling us to not only develop next generation technology, but also acquire technologies that accelerate our capability to bring next generation technology to the forefront. Our position continues to be strengthened by developing and acquiring cutting-edge technology. A lot of great ideas come from cross-industry 3D technology development, which leads to industries sharing breakthroughs to strengthen their respective industries.
Every cycle creates change and pushes innovators toward developing next generation technology. The next wave of 3D sensors will continue to reshape the timber industry in ways we can only imagine.
Posted by Mark Maleta
Mark has been involved in the wood processing industry for 40 years, and also has decades of experience in business automation and optimization. He joined LMI Technologies in 2009 and is a Senior Account Manager.