7 Must-Track KPIs for Optimal Forestry and Timber Harvesting Operations

Are you looking to optimize your forestry and timber harvesting operations? The key to success lies in tracking and analyzing your performance through the right KPIs. In this blog, we will take a deep dive into the top seven forestry and timber harvesting KPI metrics that every business owner should track and calculate.

• Amount of harvested timber is the primary KPI for measuring your forest's productivity. It showcases the efficiency of your logging operations and the amount of wood your forest can produce annually.
• Forest regeneration rate measures the forest's ability to regrow and replenish its resources. It is crucial for the sustainable harvesting of timber.
• Employee turnover rate is a significant indicator of your business's workplace environment and culture. Keeping employee turnover low is essential for retaining skilled workers and maintaining productivity.

Furthermore, community involvement and support, revenue per acre of forest, proportion of certified sustainable wood products, and customer satisfaction with eco-friendly wood products also play a vital role in determining your forestry and timber harvesting operations' success.

Now that you know the core KPIs let's dive deeper into each one, discussing how to track, calculate, and optimize them.

Amount of harvested timber

Forestry and timber harvesting industry rely heavily on keeping track of how much timber is harvested within a given period. The amount of harvested timber Key Performance Indicator (KPI) is one of the most critical metrics that help businesses in the forestry sector to measure their success rate. In this chapter, we will discuss the various aspects of the amount of harvested timber KPI.

Definition

The amount of harvested timber KPI is a measure of the total volume of trees harvested during a specific period by a forestry or timber harvesting company. It calculates the total number of logs produced using the height, diameter, and length of the trees felled. It helps business owners to track overall productivity and profitability.

Use Case

The amount of harvested timber KPI is crucial to forestry and timber harvesting companies as it provides information on the overall efficiency of the harvesting process. The KPI is helpful in determining whether a company is operating efficiently or not. It facilitates data-driven decision making that helps to increase yield, reduce harvesting costs and optimize the harvesting process.

How To Calculate KPI

The formula for calculating the amount of harvested timber KPI is:

Where:

• Sum of trees harvested: Total number of trees harvested
• Volume/Tree: Average volume of trees harvested
• Total Area of Harvested Land: Total land area harvested

Calculation Example

Suppose a company harvested 500 trees from an area of 200 acres, with the average volume of felled trees being 200 cubic feet. The KPI calculation would be:

Therefore, the amount of harvested timber KPI for the given period is 500.

KPI Advantages

• Helps to track productivity and profitability
• Provides insights into operational efficiency
• Allows businesses to make data-driven decisions
• Facilitates optimization of the harvesting process

KPI Disadvantages

• May not take into account quality of harvested timber
• Does not provide information on the revenue generated from harvested timber
• Profitability of the company may not directly correlate with the amount of timber harvested

KPI Industry Benchmarks

The amount of harvested timber KPI benchmarks may vary across regions and countries depending on factors such as forest type, harvesting method, and tree species. In general, the amount of harvested timber KPI is measured in cubic meters or cubic feet of timber per hectare or acre. Some industry benchmarks for the KPI include:

• US - 60-70 cubic feet of timber per acre
• Canada - 60-120 cubic meters of timber per hectare
• Australia - 120-180 cubic meters of timber per hectare

Forest regeneration rate

Definition:

Forest regeneration rate is a KPI metric used to measure the growth rate of young trees in a forest after a harvest. This metric tracks whether a forest is recovering at a rapid enough pace to replace the harvested timber.

Use Case:

A forestry company can use this KPI to track the growth rate of a newly planted forest. This KPI is important because a successful regeneration rate ensures the long-term sustainability of the forest and its ability to produce timber in the future.

How To Calculate KPI:

To calculate the forest regeneration rate, divide the number of healthy young trees by the number of trees planted, then multiply by 100 to get a percentage. Use the following formula:

Calculation Example:

If a forestry company planted 10,000 trees and had 8,000 healthy young trees after 3 years, the calculation would be:

KPI Advantages:

• Helps ensure the sustainability of the forest and its ability to produce timber in the long term.
• Provides a straightforward measurement of the success of forest regeneration efforts.
• Assists in identifying areas where improvement is needed and helps prioritize resources.

KPI Disadvantages:

• Does not take into account the quality of the regenerated forest.
• May not account for other variables that influence the regeneration rate, such as weather or soil quality.
• Can be time-consuming to measure as it requires counting individual healthy young trees.

KPI Industry Benchmarks:

The forest regeneration rate can vary depending on the species of trees planted, the age of the forest, and environmental factors such as climate and soil quality. Industry benchmarks vary, but rates of 80-90% are generally considered good outcomes.

Employee turnover rate

Definition

Employee turnover rate measures the percentage of employees who leave an organization over a specific period. It helps companies to identify the reasons behind the high turnover rate and develop measures to reduce it.

Use Case

High employee turnover rate can be a sign of underlying issues within the organization. It can lead to a negative impact on productivity, morale, and company culture. Therefore, it is important to measure the employee turnover rate to develop effective retention strategies.

How to Calculate KPI

Calculation Example

Suppose your organization has 150 employees at the beginning of the year, and 30 employees left the company during the year. The average number of employees during the year was 140. The employee turnover rate for the year would be:

KPI Advantages

• Helps to identify areas of improvement in the organization.
• Assists in developing effective retention strategies.
• Enables benchmarking with other companies in the industry.

KPI Disadvantages

• Does not provide insight into the reason behind the employee turnover.
• May not be applicable for companies with a high turnover rate, such as seasonal businesses.
• May not be accurate for multi-year comparisons.

KPI Industry Benchmarks

The average employee turnover rate varies across industries. In the forestry and timber harvesting industry, the average employee turnover rate is around 15-20% per year.

Top Seven Forestry & Timber Harvesting KPI Metrics: Community Involvement and Support

Definition:

Use Case:

How To Calculate KPI:

Calculation Example:

KPI Advantages:

KPI Disadvantages:

KPI Industry Benchmarks:

Revenue per acre of forest

Forestry and timber harvesting businesses use various Key Performance Indicators (KPIs) to measure the performance of their operations. One of the most important KPI metrics is revenue per acre of forest.

Definition

Revenue per acre of forest is an industry standard metric used to measure the financial performance of forestry businesses. It refers to the amount of revenue generated per acre of forest land owned or managed by a company.

Use Case

Revenue per acre of forest is a critical KPI for forestry businesses since it measures the profitability of the company's forestland. It helps forestry managers to assess the efficiency of their operations and identify areas where they can optimize revenue generation.

How To Calculate KPI

The formula for revenue per acre of forest is:

Where:

• Total Revenue - The total revenue generated by the business in a specified period
• Total Forest Acres - The total acreage of forest land owned or managed by the business

Calculation Example

Suppose a forestry company generated $200,000 in revenue over a year from managing 1,000 acres of forest land. The revenue per acre of forest would be:

KPI Advantages

Revenue per acre of forest has several advantages that make it essential for forestry businesses. Some of them include:

• Helps forestry managers to track the financial performance of their forestry operations
• Assists in identifying the areas that require improvement for increased profitability of operations
• Allows forestry managers to determine if they are meeting industry benchmarks

KPI Disadvantages

Despite its importance, revenue per acre of forest comes with some limitations, such as:

• It does not account for the cost of harvesting or maintaining the land
• The KPI does not provide a comprehensive view of the company's operational performance
• It assumes that all the forest land is equal in terms of productivity, which may not necessarily be accurate

KPI Industry Benchmarks

The industry benchmark for revenue per acre of forest varies depending on several factors such as the region, tree species, and management practices. However, a forestry company should aim for a revenue of an average of $150-$250 per acre.

Proportion of certified sustainable wood products

Definition

The proportion of certified sustainable wood products is a KPI that measures the percentage of wood products that are produced from sustainably managed forests.

Use Case

This KPI is particularly relevant for forestry and timber harvesting companies that have sustainability objectives. It allows them to track the extent to which their products are environmentally friendly and produced in a sustainable manner.

How to Calculate KPI

The formula for calculating the proportion of certified sustainable wood products is:

Calculation Example

Suppose a forestry company produces 100,000 cubic meters of wood products in a year, of which 20,000 cubic meters are certified as sustainable. The proportion of certified sustainable wood products would be:

KPI Advantages

• Allows companies to track their progress towards sustainability goals
• Helps companies identify areas for improvement in sustainability practices
• Can improve the reputation of companies that produce sustainable wood products

KPI Disadvantages

• Does not take into account the quality or value of the wood products
• May not capture the full extent of a company's sustainability practices
• May be difficult to accurately measure the total volume of wood products produced

KPI Industry Benchmarks

The Forest Stewardship Council (FSC) sets standards for forest management and wood product certification. In 2020, 214 million hectares of forests were FSC-certified worldwide, accounting for approximately 20% of global forest area.

Customer satisfaction with eco-friendly wood products

Definition

Customer satisfaction with eco-friendly wood products is a key performance indicator (KPI) that measures how satisfied customers are with the environmental attributes of the wood products they purchase from a company.

Use Case

Measuring customer satisfaction with eco-friendly wood products is particularly relevant for companies that want to promote their sustainability efforts and differentiate themselves in the market. This KPI can help businesses identify areas of improvement and better understand their customers' preferences and values.

How To Calculate KPI

To calculate customer satisfaction with eco-friendly wood products, first, determine the number of satisfied customers who reported that they purchased eco-friendly wood products. Next, divide the number of satisfied customers by the total number of customers who purchased eco-friendly wood products and multiply by 100 to get a percentage.

Calculation Example

Suppose a company sold 1,000 eco-friendly wood products in a month, of which 800 customers reported that they were satisfied with the product's environmental attributes. The customer satisfaction with eco-friendly wood products KPI can be calculated as:

KPI Advantages

• Helps companies identify areas of improvement in their eco-friendly product offerings.
• Reduces the environmental impact of forestry and timber harvesting operations by promoting consumer demand for sustainable wood products.
• Boosts customer loyalty and helps companies differentiate themselves in a competitive market.

KPI Disadvantages

• Difficult to quantify and measure objectively, as customer satisfaction is subjective.
• Not all customers prioritize eco-friendliness in their purchasing decisions.
• Companies may overstate their eco-friendliness to improve their KPI scores.

KPI Industry Benchmarks

• The Forest Stewardship Council (FSC) provides certification for sustainable forestry practices and sets standards for environmentally responsible harvesting and manufacturing of wood products.
• The Programme for the Endorsement of Forest Certification (PEFC) also provides certification for sustainable forestry practices and monitors supply chains for wood products.
• The Rainforest Alliance also offers certifications for sustainable forestry and promotes responsible sourcing of wood products.