Supply Chain Network Optimization of the Canadian Forest Products Industry: A Critical Review

Abstract

The Canadian forest products industry has failed to retain its competitiveness in the global markets because of the under-utilization of its resources. Supply chain optimization models can identify the best possible fibre utilization strategies from multiple options of value creation based on fluctuating market conditions in the forest industries. This paper comprehensively reviews the literature related to supply chain models used both in general and specifically in the forest products industry. The optimization models use information from multiple agents (market demand attributes, flexible wood procurement and manufacturing processes, and resource characteristics), and share this information at each level in the supply chain network. However, the modeling of two-way flow of information (market to forests and vice-versa) for order promising and demand fulfillment through all facilities including manufacturing, processing, raw material procurement and inventory control is missing. The studies that focus on optimization are mostly deterministic in nature and do not account for uncertainty both in supply of raw materials and demand of forest products. Simulation and optimization models have been independently used for supply chain management in the past. The literature lacks an integrated approach that combines simulation and optimization models throughout the supply chain network of the Canadian forest products industry. Further studies should focus on developing simulation-based optimization models that will help in providing an operational planning tool that meets industrial expectations and provides much better solutions than current industrial practice.