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Supplier Secrets Revealed: 10 Ways to Reduce Hardwood Lumber Cost


The cat is out of the bag! Your lumber supplier would be horrified if we shared his tricks of the trade, but here at TigerStop, we are all about evening out the playing field. Everyone deserves to have a fighting chance. We actually make it our mission to empower local manufacturers to be globally competitive. One way to gain a competitive advantage is to increase profits by cutting superfluous costs. One of those is hardwood lumber cost.

If you have ever questioned whether you’re actually getting what you’re paying for when buying hardwood and hardwood components, well, you aren’t alone. Do you really know what you’re paying for when you order material that is ripped and planed? You just might be surprised by how much you’re actually paying for these services. But how do you figure out what your real costs are?

We’re here to help! Here are 10 things your hardwood supplier is already doing, that you should be doing, to cut costs by as much as 20 to 45 percent. The secret is out!

1. Tally Your Lumber10-ways-to-reduce-hardwood-lumber-cost-tigerstop

Buy a tally stick and tally cards and use them to tally your lumber according to NHLA rules. Keep in mind that a large number of mills and distributors are using block tallies to fill your order. Those nice square bundles are what they’re measuring; the width, length, and height, not the individual boards, as they should be measuring by law. Lucky you gets to pay for all of the air in-between at the same price as you’re paying for the lumber.

Do your due diligence and tally your lumber. Ensure you’re receiving the exact board footage you paid for. You may even be in for a surprise when you find out that your suppliers are actually giving you what you’re paying for. There’s only one way to find out. Under Federal Law, the only way to tally lumber is by NHLA tallying rules. It’s not uncommon to find you’re 7 to 10 percent short when your distributor passes on a block tally.

2. Grade Your Lumber Using NHLA Rules

You buy a lot of hardwood lumber. Do you know if all those boards meet the legal standards for the grade you specify? Ever wonder how sawmills get those nice neat square bundles? Often, they fill the bundle with any board that fits the remaining space. They will build the row from the outside edges and then find a board to fit the remaining space in the middle. Some mills will make sure it’s a board that meets grade, but when you’re working on the line, pulling lumber on a hot day with a “hurry up!” kind of boss breathing down your neck, you’re likely going to grab any old board that comes along and stuff it into the remaining bundle slot.

This is just one example of how you may be getting short-changed. But there are many other areas you could also be getting the shaft. Understanding grading rules will help you identify how much wane, warp, bow, crook, twist, pith, stain, sapwood, permissible cuttings, and clear pieces should be available in each board.

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What if you had to pay extra money for the air inside your potato chip bag? Stop paying extra for the air between your lumber bundles.

Even Old Dogs Can Learn New Tricks

Not long ago, we had lunch with a very smart friend of ours who has been buying hardwood lumber, both from mills and from distributors, for better than 30 years. He’s purchased tens of millions of board feet in his lifetime. We were discussing the issues of processing and buying hardwoods, and we mentioned that the grading rules for rough lumber versus planed material, including “hit or miss,” were substantially different. He adamantly disagreed. So we investigated further.

Mark Barford, former executive director of the National Hardwood Lumber Association, put us in contact with his lumber grading rules guru, and this is what he had to say: “When lumber is surfaced 2 sides to standard surfaced thickness, then it is graded from the better face. When lumber is ordered as “Hit or Miss” it shall be graded as lumber surfaced 2 sides, but if it was not ordered as hit or miss, then it would be graded as standard inspection.”

To simplify what he said, rough lumber must be graded from the worst side, “hit or miss,” while fully planed is graded from the best side. I forwarded this to my friend, and I have not heard from him since! Even old dogs can learn a new trick when it comes to hardwood.

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Not all the boards will jump in grade after planing, but a significant portion of the material will be able to be upgraded. The lumber that can be upgraded is worth a lot more than the cost of planing and overtime this adds up to. Now you know why many lumber suppliers have such nice trucks and offices. Not to mention those Italian suits and handmade shoes!

Grading Rules

Learning to grade sounds difficult, but in reality, it’s a relatively easy skill to master. There are a number of simple tricks that can get you about 90 percent of the way there.

For example: If a board has one, two, or three, knots in it, it will be close to FAS, #1 Common, and #2 Common. It’s not a perfect rule, but it ends up pretty darn close.

With some experience and a few simple rules like this last one, you can train someone fairly quickly. The NHLA also offers lumber grading courses. Based on the volume of material you purchase, a training course can pay for itself in no time flat.

In short, know the grading rules. These rules are the legal standards by which hardwoods are sold in the US. They can be downloaded here for free. Read them and read them again. If you have questions, call the NHLA. (They are very nice people and are more than willing to answer questions.)

3. Check the Moisture Content of Your Lumber

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Buy a moisture meter and check a few boards from every batch of hardwood and components you buy. The number one cause of problems with hardwood components and products is moisture content. Keep in mind that one size does not fit all. Depending on where your product ends up, moisture content will need to be between 6 and 11 percent. The average is around 8 percent for most of the northern areas of the US. Download the US Forest Service’s Wood Handbook. It’s free! Read chapter 13. It covers not only moisture content by region but additional information on problems that can arise in the drying process. It’s not that long of a chapter; read it a couple of times—the information is invaluable.

Drying hardwood lumber costs money. Suppliers want to minimize their costs, especially on commodity hardwoods. This means you’re very likely to get material that is marginal in its moisture content and can cause a host of issues such as shrinkage, expansion, bad glue lines, finish issues, and more, that can crop up during manufacturing and, worse, in your customer’s home or office. Get a good moisture meter. There are a lot of them out there ranging from just a few dollars to a few hundred dollars. It’s a critical tool, so if you can, buy a top-of-the-line unit. Make sure the one you buy has pins that you force into the material. Non-contact units tell you surface moisture only, and you need to know what the moisture content is inside of your material.

4. Clean Up Your Purchase Orders

With a full understanding of the grading and tallying rules, along with the required moisture content for the region your products get shipped to, you should clean up your POs to your suppliers. Ensure that you clearly specify what you’re ordering and with no wiggle room. For instance, if you don’t specify kiln-dried and the moisture content, then you may be paying for the board footage before it went into the kiln, not for net footage after the kiln. Boards shrink significantly when kiln-dried.

Remember, if you order material that has been planed, be it to net size or “hit or miss,” your vendor can legally grade the boards from the best face versus the worst face for rough. For example, a board that was downgraded to #1 Common when it was rough, might go up in grade and value after being planed “hit or miss” to 15/16 because now it can be graded as an FAS high-grade board. When you buy material, you need to understand the implications of the grading rules. Your suppliers do.

We spoke with a supplier who will remain anonymous for obvious reasons. We asked him what he did when a customer began holding him accountable on grade and tally. He replied, “Oh, we don’t raise prices, we just send the junk to some other guy, who is not watching what he’s buying.” Are you the other guy?

5. Make It Right the First Time10-ways-to-reduce-hardwood-lumber-cost-tigerstop

Eliminating cutting errors is one of the fastest ways to reduce your hardwood lumber costs. By the time your material hits the cross-cut station, regardless of whether you’re purchasing rips or rough milling your own material, it has become far more valuable. This means each piece you put in that scrap bin due to operator error is just that much more expensive.

Tape measures, pencils, and manual stops can do an adequate job, but on average, you will find that for every 100 parts cut, there will be 2 to 5 miscut parts. This becomes very expensive and disruptive to the flow of work in the plant. Often, these parts aren’t discovered until far down the process when even more value has been added.

There are a number of solutions on the market in the form of CNC length stops that can reduce these issues significantly. Some units can print labels, count your parts as they cut, defect, and optimize for yield to further reduce errors down line.

 

To access the last 5 ways to reduce hardwood costs, click HERE and download the FREE guide instantly. Hold your suppliers accountable and reduce your costs today.