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Energy wood is now at record levels of competition – a software partner helps wood sourcing organizations monitor profitability of energy wood trade

Energy wood biomass in front of an energy factory

As 2023 starts, the situation in most energy companies remains the same as at the end of the previous year: there is fierce price competition and struggle for ensuring availability of raw materials. The energy crisis and the chronic shortages of raw materials are likely to separate the wheat from the chaff in the energy market and test whose supply chain works efficiently during peak demand. Many people are considering setting up their own sourcing organization, and an experienced software partner can be a key enabler in achieving this.

The past year has been a good time for energy companies to take a closer look at the wood supply chain, and many are now looking for new solutions through bold moves. A clear trend is, for example, to set up a dedicated sourcing organization to ensure the availability of raw materials and the best market price.

However, setting up a sourcing organization is an investment that is not made lightly. Setting up a new sourcing model not only requires time, money and effort, but in many cases also organizational changes. The company has to adopt a new operating model and often make either transfers of staff between different functions or new recruitments.

The argument for setting up a sourcing organization is that it can help energy companies strengthen their own position, better control the supply chain, and ensure that the energy they need is available in a sufficiently cost-effective way. The tighter the overall market situation appears, the more significant these benefits become.

A software partner is a strong pillar for sourcing energy wood

Although a software partner does not buy or sell energy wood, at best it can provide significant and versatile support for efficient sourcing of energy wood. The partner can make a significant contribution to improving customer processes and work efficiency, as well as managing the entire supply chain, among other things. This support covers both sourcing through contract partners and energy wood purchases made by the company’s own sourcing organization.

Many companies also operate a mixed model, where energy wood is not only traded through contract partners but also through their own sourcing organization. The best software solutions support the business comprehensively also in this case, and enable both sourcing models to work in a streamlined way – together and separately.

The core of the software solution for the energy wood trade is that the company can manage large volumes of raw materials, the entire logistics chain, financial transactions and also the necessary documentation at the same time.

The sourcing, processing and transport of energy wood involves a number of steps that, in the traditional model, have been largely based on the parties’ own memory or on self-made Excel spreadsheets. As volumes increase and supply chains become more complex, managing data using the old model will inevitably become more difficult or even impossible in practice. That’s why many companies choose to enter the digital age by acquiring software that specializes in their industry.

Software specializing in energy wood trading offers a wide range of functionalities

The comprehensive software supports sourcing wood in a number of ways, including
  • by enabling convenient entries directly at the point of work on volumes, qualities, storage transactions, location and transport of energy wood – and at the end of the supply chain also on the achieved energy content
  • by providing interfaces to BI reporting, accounting and control systems
  • by providing practical keys to decision-making, including through batch management and monitoring, and flexible conversion of species and units
  • by ensuring responsible and legal traceability and certifications such as PEFC and FSC
  • by enabling convenient financial transactions, including contractor payments and self-billing, saving time for both the biller and the bill verifiers.
  • by providing a view and influence on all cost elements of the entire raw material chain, instead of a single lump sum price
  • by providing up-to-date profitability data on a continuous basis.
Without ignoring the other benefits of the software, it’s probably safe to say that the biggest steak on the tray is the last item on the list. Real-time profitability calculation lays the foundation for the entire business of a company – both from a management and a practical work perspective.

Why Pinja? 

We at Pinja offer energy operators a genuine partnership based on strong industry expertise and understanding, support and development of operational processes. Our comprehensive Forest by Pinja ERP system specializes in the needs of the forest industry and the management of energy wood: sourcing, harvesting, and logistics. The system enables fully electronic energy wood trade, real-time harvesting and transport logistics, and real-time monitoring of costs, volumes and yields of the delivered timber.

One of the companies that relies on Pinja’s solutions is the fast-growing Metsäenergia Meter Oy, which buys and resells energy wood, and manages young forests for growth. The company has recognized the importance of effective information management in growing its business, which is why it adopted the Forest by Pinja system in 2019.

The modular ERP system offers many functions to facilitate daily routines, and includes maps and tracking of the origin of the wood. Documents related to wood procurement are easily generated, and mandatory official documents, such as the forest use declaration, can be handled electronically, directly from the system. The required documents can be printed directly from the system in, for example, Finnish, Swedish or English.

If your company is considering setting up its own energy wood sourcing organization, or if you would otherwise like to streamline the information management, logistics and financial flows of your energy wood trade – and thus create new opportunities for improved profitability – please do not hesitate to contact us. We would be happy to tell you how your plan can be effectively supported by a software solution specialized in energy wood trading.

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Read more

Forest by Pinja – ERP system for wood procurement, harvesting and logistics
Blog: Efficient information management in the energy wood supply chain answers core business questions
Blog: StanForD 2010, a new standard for forest machines, improves logging quality

Juha Valkola

Juha Valkola

I’m Pinja’s Forest Business Area Manager, responsible for the overall management of our forest-related products and services. My main goal in this role is to create opportunities for success for our clients and our staff alike – managing the big picture but not forgetting the grassroots and practical forestry work. I spend most of my free time with my family and tinkering with all kinds of things from home automation to house building.

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