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ERP in the timber industry: SAP solutions for processing and production

In this article, you will learn:

– what requirements the timber industry places on ERP systems

– why SAP is frequently used in the timber sector

– how companies are digitising their production processes.

The timber industry is a key pillar of the Austrian economy (and also in several other European countries). At the same time, the sector faces challenges ranging from sustainable forestry and efficient processing to international dependency. Austrian timber producers and processors source a great deal of their raw materials from the USA and Asia – a situation rarely seen to such an extent in any other sector. The timber industry must hold its own on the global market. Furthermore, it must cope with a constantly fluctuating market cycle (supply and demand). Whilst it experienced an enormous upswing from 2022 onwards due to uncertainty over future gas supplies – with wood pellets, in particular, seeing high demand from wood processors – a downturn is now becoming apparent. The reason: the entire construction sector is suffering from price rises and high bank interest rates, and this is also affecting the wood-processing industry, which is once again coming under greater pressure.

Innovative thinking in times of crisis

However, the timber sector is defying the economic downturn with innovative ideas and is increasingly moving towards generating added value (and value-added products) from the raw material. Austrian timber companies are joining forces in networks such as ProHolz or Holzcluster to collectively drive their sector forward. The timber industry is regarded as a driver of innovation for the Austrian economy. It is no coincidence that the construction of the world’s tallest timber-framed building is currently planned for Vienna. In this diverse sector, the integration of a functioning IT infrastructure has a significant impact on business processes, profitability and environmental performance. And that is precisely why we have been working for many years with leading companies in the timber industry, integrating the right SAP solutions to meet our clients’ requirements. Here is a brief overview:

The digitalisation of the timber industry requires specialised ERP solutions for production, logistics and international processes.

SAP & scc in the timber industry

1
Austrian Federal Forests
As early as 2008, we were able to support Austrian Federal Forests AG with its forestry planning (relating to timber harvesting and forest management). In early 2011, the collaboration continued with the implementation of a hunting and fishing application within the SAP environment. Since then, we have jointly implemented several major analytics and planning projects and developed timber-specific SAP solutions tailored to the client’s needs and requirements.
2
Mayr-Melnhof Wood
In 2019, in view of its ongoing expansion, the company decided to implement an international ERP system. The decision was made in favour of an on-premises SAP solution, and we at scc were able to very successfully implement the migration to SAP S/4HANA for Mayr-Melnhof Holz. In addition to traditional tasks such as accounting, controlling and warehouse management, we were confronted here with typical production processes found in the timber industry, such as sawing, cutting to size, drying and much more. The task was to map these processes using SAP. The large high-bay warehouse was also integrated into the SAP system. Over the past two years, the solution has also been rolled out in Germany and the Czech Republic. The project was carried out within the scc Group, in collaboration with the two companies CrossIT and HRForce.
3
HS Timber
(formerly Holzindustrie Schweighofer) At the start of our collaboration, we carried out a new SAP implementation in Romania. The major challenge here was that all HS Timber staff working with SAP there are, of course, Romanian, meaning language barriers had to be overcome. The Covid-19 restrictions in place at the time further complicated the project. The current project involves the implementation of financial management and solutions for procurement and logistics, as well as the integration into – and (gradual) replacement of – TimberTec (a third-party specialist timber solution). Another distinctive feature of this project is that the SAP system is operated as an on-premises solution in the Azure Cloud.
4
Binderholz
Binderholz operates several large sites internationally. We support the Austrian solid timber manufacturer primarily with its day-to-day SAP operations in the finance function – chiefly in Finland.
Another scc client, whilst not strictly part of the traditional timber industry as a manufacturer of formwork and scaffolding, is regarded as a major processor of timber as a raw material. We are supporting and guiding this client through the transition to the new S/4HANA environment.

Success Story: Mayr-Melnhof Wood & scc

Zur Story
Digitalisation is already well advanced in the timber industry, and the use of SAP solutions is now state-of-the-art. We are delighted to continue building on the wealth of experience we have gained in this sector over recent years, and to strengthen and continually advance our collaboration with our clients.

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Why the timber industry needs specialised ERP systems
Companies in the timber industry must manage complex production processes, international supply chains and fluctuating market conditions. Standard software is often insufficient for this.
1
Volatile commodity prices
2
International supply chains
3
Complex production processes
4
Increasing competitive pressure

Traktor in der Holzverarbeitung
What requirements does the timber industry place on ERP systems?
ERP systems in the timber industry must be able to centrally manage production processes, warehouse management, logistics and finance. At the same time, they must be flexibly adapted to industry-specific workflows.
Digitalisation is already well advanced in the timber industry, and the use of SAP solutions is now state-of-the-art. We are delighted to continue building on the wealth of experience we have gained in this sector over recent years, and to strengthen and continually advance our collaboration with our customers.

Typical areas of SAP application in the timber industry

1
Production

– Sawmills

– Cutting

– Drying

2
Warehousing & Logistics

– High-bay warehouses

– International sites

3
Analytics

– Reporting & Planning

4
Finance

– Controlling
– Accounting

Why SAP is used in the timber and forestry sectors

SAP enables the integration of all business areas into a centralised system. This allows manufacturing companies to manage their processes more efficiently and scale them internationally.

The process of implementing an ERP system in the timber industry

1. Analysis of production processes
2. Definition of requirements
3. Selection of SAP modules
4. Implementation and integration
5. Roll-out and optimisation

Challenges in the digitalisation of the timber industry

– Integration of existing systems

– Mapping complex production processes

– International roll-outs

– Training requirements for staff

FAQs - Frequently asked questions

Why does the timber industry need specialised ERP systems?

The timber industry operates with complex production processes, international supply chains and fluctuating raw material prices. ERP systems help to manage these processes centrally and coordinate them efficiently.

What benefits does SAP offer timber companies?

SAP enables the integration of production, logistics, warehouse management and finance within a single system. This provides companies with greater transparency, more efficient processes and better planning capabilities.

Which processes can be managed using SAP?

SAP can be used to manage, amongst other things, production planning, warehouse management, logistics, procurement, sales and controlling. International sites and complex supply chains can also be integrated.

How long does an ERP implementation take?

The duration depends on the size of the company and the scope of the project. As a rule, an ERP implementation takes several months to over a year, particularly in the case of international roll-outs.

Is SAP suitable for international timber companies?

SAP is particularly suitable for medium-sized and large timber companies with complex production or logistics processes, as well as international sites.

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