American Journal of Industrial and Business Management, 2012, 2, 128-135
http://dx.doi.org/10.4236/ajibm.2012.24017 Published Online October 2012 (http://www.SciRP.org/journal/ajibm)
Cost Analysis of Introducing a Log Identification System
Using RFID in the Wood Supply Chain: A Case Study at a
Swedish Forest Company
Daniel Timpe, Leif Olsson, Johan Sidén
Department of Information Technology and Media, Mid Sweden University, Sundsvall, Sweden.
Received June 2nd, 2012; revised June 29th, 2012; accepted July 30th, 2012
ABSTRACT
A cost analysis for the possibility of a log identification system using Radio Frequency Identification (RFID) is pre-
sented in this paper. The introduction provides a brief description of the RFID technology and its usefulness within the
area of forest logistics. Information network mapping is used to facilitate an understanding of the current information
flow and identification requirements along the supply chain. The cost analysis is performed using the method of
break-even analysis using nine different scenarios by means of a case study at the Ortviken paper mill, which is located
in central Sweden. The analyses of the processes in the supply chain revealed that the poten tial exists to streamline op-
erations and to make more efficient use of the available resources by implementing an open loop RFID-based log
tracking system in the supply chain using read only tags. Furthermore, this study indicates that even in those cases in
which RFID does not provide any major improvements to the firm’s inventory management; it is still possible to
achieve economic benefits. However, implementation of such a system will require further development of, in particular,
the RFID tags to satisfy the feasibility requirements in the wood supply chain.
Keywords: Log Stamping; Forest Logistics; Track and Trace; Break-Even Analysis; RFID
1. Introduction
There has been a steady increase in the use of informa-
tion technology in the transport and logistics sector.
These information systems consist of advanced business
systems, decision support systems using operation re-
search methods [1] and different devices for track and
trace of the products along the supply chain. One possi-
ble technology for track and trace is Radio Frequency
Identification (RFID).
The term RFID describes technologies that use radio
waves to extract data from a microchip to a reader. The
data stored on the microchip can be used to identify peo-
ple and various kinds of objects on which the microchip
can be mounted. The microchip and the small antenna
attached to it are called an RFID tag and general techni-
cal information of its advantages and disadvantages can
be found in [2].
At present more and more attention is being paid to
RFID in a variety of industries. As the prices continue to
drop, more and more companies are exploring the bene-
fits possible through the implementation of this technol-
ogy. Typical applications of RFID range from the identi-
fication of pets and livestock, access control and toll col-
lection, to baggage and parcel identification and object
tracking in various industrial supply chains. Some dif-
ferent RFID tags are depicted in Figure 1.
Tags can be active, meaning the requirement of a bat-
tery which results in longer maximum read ranges but
also a higher cost and a limited lifetime of five to ten
years. Alternatively they can be passive, thus no battery
is necessary, but, in this case, the requirement is then for
the power to be supplied by the reader’s interrogating
radio wave. Tags may be distinguished from one another
based on whether they are Read-Only (RO) tags, Read-
Write (RW) tags or belong to the Write Once-Read Many
(WORM) class of tags.
According to [3] passive RO tags are the simplest and
cheapest RFID tags and are pre-programmed by the chip
manufacturer. They carry a serial number, which can be
retrieved by reading the tag, but no additional d ata can be
stored on the chip. If these tags are used in an application
where additional data is required on the tagged item, a
central database is necessary where the serial number of
the tagged items is linked to any required addition al data
for the object. Passive RO RFID tags are evaluated in
this study since they are well suited for use within the
forestry supply chain.

Cost Analysis of Introducing a Log Identification System Using RFID in the Wood Supply Chain:
A Case Study at a Swedish Forest Company 129
Figure 1. Examples of RFID tags for different applications.
Furthermore, there are two types of systems: An open
loop RFID system and a closed loop system as described
in Figure 2. In an open loop, tags will van ish in the pro-
duction process and every log tagged receives a new
transponder. In contrast to that, in a closed loop tags are
recycled, i.e. removed from the logs before they enter
into productio n and re-used on fresh lo gs.
In the open loop system, proposed in this paper, the
number of required tags, becomes the main cost driver.
Thus, the number of marked logs must be kept at a mini-
mum in order for the costs to be as low as possible. The
key to this problem is the question of what (e.g. individ-
ual log, log batch, log pile) actually must be identified at
what stage along the chain.
The greatest obstacle to large-scale, global imple-
mentations of RFID systems has been the lack of interna-
tional standards and certification. Hence, a standard is
proposed by the Electronic Product Code (EPC) organi-
zation [4] tags are usually designed with a sufficiently
wide band to be read in all regions.
Forestry is an industry that deals with perishable re-
sources. To ensure the quality of the wood in paper pro-
duction, it is crucial to log the correct forest area at the
correct time and to ensure that the logs do not remain
unprocessed for any great length of time. Efficient plan-
ning of and control o ver the activities in the supp ly chain
therefore plays a major role in maintaining a cost effec-
tive operation.
However, track and trace in forestry is a challenging
task due to the harsh environment for the devices being
used. Nevertheless, logs arriving at a paper mill or fac-
tory must be identifiable. The ability to trace them back
to their area of origin is important in order to deal cor-
rectly with ownership and payment issues and in addition
ensures that all logs are processed within the projected
timescale and that a sensible plan for future logging ac-
tivities exists. It should be noted that at present this
tracking is performed manually.
Therefore, the purpose of this study is to investigate
the possibilities of using the RFID technology to take
advantage of its unique benefits in terms of the quantity
Figure 2. An open loop system compared to a closed loop
system for logs with RFID tags.
of information that can be stored and retrieved and fur-
ther automation of identification procedures throughout
the supply chain. The main focus refers to whether or not
this technology has the capability to improve the effi-
ciency along the supply chain, e.g. by enabling a reduc-
tion of lead time and inventory levels.
Note that no log iden tification technolog y has yet been
put in place that provides handlers with easy access to
data regarding the age of the logs. Thus, time control is
still limited and a major problem, which still exists for
the forestry industry involves losses from deteriorated
wood fiber, as described in [5].
It should also be noted that the functionality of com-
puter based decision support systems using operations
research (OR) methods in forestry is heavily dependent
on accurate and efficient data management. Hence, the
use of RFID is expected to promote the use of OR-sys-
tems within forest logistics, such as those systems de-
scribed in [6-8].
The entire project presented in this article has been
undertaken in the form of a case study, investigating the
prospects for an RFID-based log tracking system for the
SCA Skog AB Ortviken paper mill in Sundsvall (Swe-
den).
SCA is a large, Sweden-based, international paper
company with annual revenue of rough ly SEK 90 billion.
It manufactures a variety of products, ranging from pub-
liccation papers to packaging solutions and hygiene
products. SCA Skog is part of SCA Forest Products, one
of the many business groups of SCA. Its task is to man-
age the forests SCA owns in Sweden, which amounts to
2.6 million hectares.
To coordinate logging and shipping activities, forestry
firms, such as SCA, assign numbers to the different log-
ging areas. These numbers identify associated forest
owners and the nature of their business relationship with
regard to contracts, payment agreements, etc.
Furthermore, these numbers enable the logging and
processing teams in the forests to identify the correct
assigned location. If logs lie idle and unprocessed for too
long the wood deteriorates to such an extent that the

Cost Analysis of Introducing a Log Identification System Using RFID in the Wood Supply Chain:
A Case Study at a Swedish Forest Company
130
quality of the finished product is adversely affected. In
the case of paper products, such deteriorated wood fiber
always requires the extensive and costly use of chemicals
on the pulp during its process. Therefore, good planning
and control is crucial.
It is vital to identify th e correct unit of logs to b e iden-
tified at the various stages along the chain. In the Ort-
viken supply chain, logs lie in piles in the forest, which
are subsequently loaded onto the trucks in stacks for
haulage to the mill. Thus, log piles and log stacks are the
two kinds of units that must be identified and traced
along the Ortviken chain. Our focus in the case study is
on the day-to-day operations. The costs incurred during
this phase are thus solely operational and are driven
mainly by the costs involved in the daily tagging acti-
vities. In addition, some cost saving b enefits may also be
found from the use of RFID during this phase. However,
at present, the Ortviken paper mill is not yet capable of
providing flexible treatment for log batches, which has
been fine-tuned according to the specific characteristics
of the batch in process even if the necessary information
was to be made known.
Figure 3 illustrates how information is communicated
along the chain. The division charged with the planning
of logging activities and ensuring an adequate supply to
the mills must communicate to the harvesting and ship-
ment teams those areas requiring attention. These teams
must then report their progress to the planning division.
Once a shipment of new logs has arrived at the measuring
station of the mill, it is accounted for and its arrival infor-
mation is communicated back to the planning division to
ensure that the most recent information is always on hand
for the managers to plan future activities and give out new
assignments.
One of the most commonly used techniques for marking
logs involves providing an identification number by
stamping the log. Stamping is carried out manually onto
the cross sections of the logs once they have been har-
vested and piled in the forest. The necessary equipment
involves an ink pad and a metal core to which different
Hands
o
ut
o
rders
Hands
out
orders Report
back
Report
back
Planning Division
Shipment
teams
harvesting
teams
Meas uring
Station
Figure 3. The information flow along the wood supply
chain.
number plates can be attached. However, sometimes the
marking is even more simplified as depicted in Figure
4. Unfortunately, the ink usually used is very sticky and
difficult to get rid of once it has touched either skin or
fibre which makes this manual stamping a very dirty,
tedious and time-consuming process even if only 20% of
the logs are usually marked.
Although no fully operational RFID-based log track-
ing system has yet been developed, the potential of this
technology with regard to log identification is obvious.
The issue raised further attention when Cambium Forst-
betriebe, a German forestry firm received the 2005 Com-
puterworld Honor Award for Innovation in Manufactur-
ing for their promising pilot project that tested RFID
nails for log identification [9]. However, for the case
study presented in this article, the relevance of Cam-
bium’s RFID efforts is limited due to several important
differences between SCA and Cambium. Since Cambium
is a medium-sized business whereas SCA is a large co-
operation, there are significant differen ces with regard to
the inefficiencies from which the two companies suffer
and their ability to ach ieve economies of scale.
In general, the major challenge with regard to the im-
plementation of a fully operational RFID system re-
mains that of find ing a tag design that fits both the work-
ing requirements and cost effectiveness targets of the
firm simultaneously. In this paper we only focus on the
cost effectiveness and some feasibility issues can be
found in [10,11 ].
However, some feasibility requirements concern the ac-
tual handling and thus relate to ergonomics, while others
concern the restrictions on wood contamination often set
by the mills and requirements regarding weather resis-
tance and durability.
Furthermore, processing wood fiber for paper produc-
tion is a very sensitive procedure that can easily be
harmed if the fiber is contaminated with too much un-
wanted material. Therefore, in the SCA case, the labels
and the tags used on the wood logs should carry the
minimum possible objectionable material (plastics or
metals) into the processing. In contrast, paper is tolerable
Figure 4. Piled logs with traditional paint marking.

Cost Analysis of Introducing a Log Identification System Using RFID in the Wood Supply Chain:
A Case Study at a Swedish Forest Company 131
as a tagging or labeling material as it unable to withstand
the high temperatures involved in processing the fiber
and thus simply vanishes.
The handling and shipping of logs involves a great
deal of heavy machinery, which requires the label or tag
in question to be very robust and rugged. Moreover, the
tags or labels must be sufficiently weather resistant to
remain unharmed if left unprocessed outdoors for several
weeks.
With respect to the above-described requirements, for
instance, barcodes are not feasible alternative to RFID as
described in more detail by [10]. Hence, this cheap al-
ternative is no option in the forestry supply chain.
The organisation of the rest of this paper includes a
brief discussion about research methods in section two,
and then the results from case study follow in section
three. Conclusions and the discussion are in section four.
This paper concludes with acknowledgements and refer-
ences.
2. Model and Method
At the very beginning of the investigation an exploratory
and empirical approach to the subject was required in
order to obtain a deeper understanding of the problem.
To understand the processes involved in forest logistics,
the A-R-A model, developed in Ford [12] proved to be
very useful.
At a later stage, information network mapping was
required in order to facilitate the comprehension of the
current information flow and identification requirements
along the chain. The concept of value-adding time vs. non-
value-adding time, introduced in [13] has then been ap-
plied in order to categorize the activities along the supply
chain and identify those processes that are the least effi-
cient.
An analysis of the cost structure along the Ortviken
paper mill supply chain was conducted to identify those
costs that were expected to change if RFID technology
was deployed. It should be noticed that the effect of
RFID technology on lead times and inventory levels
were not known. Hence, breakeven analysis using sce-
narios was the cho s en method.
Different assumptions have been made with regard to
the changes involved in these costs and different sce-
narios have been developed based on these assumptions.
In a break -even anal ysis the break -even point in terms of
the price per RFID tag was identified for all the nine
scenarios, assuming different marking frequencies.
As will be shown below, two cost categories were ex-
pected to be influenced by the deployment of RFID and
thus formed the foundation for the break-even analysis.
That results in the following:
Total expected cost change = change in cost category
A + change in cost category B
For both categories we developed 3 assumptions re-
garding their possible behavior in an RFID system. Thus
the scenarios developed as follows:
 Scenario 1: 1st assumed change in category A + 1st
assumed change in category B
 Scenario 2: 1st assumed change in category A + 2nd
assumed change in category B
 Scenario 3: 2nd assumed ch ange in category A + 2nd
assumed change in category B
The key question of the analysis then was: How much
may an RFID tag cost under a given marking frequency
to make the total costs of scenario x match present day
total costs along the supply chain? The answer to that
question yields the upper price limit that is tolerable un-
der the assumption that the costs of categories A and B
behave in a certain way if RFID in utilized. A break-even
point was thus reached as the following formula des-
cribes:
Break-even point scenario x:
present day costs = costs for RFID tagging(x) +
change in category A(x) + change in category B(x)
When presenting the relevant costs, only those expect-
ed to be influenced by an implementation of RFID are
taken into account. All other costs can be disregarded
since they are irrelevant to the question regarding the
circumstances under which an RFID application becomes
cost effective. Note, furthermore, that the actual details
of costs and volumes are confidential information for
SCA. Hence, the results are presented using relative
volumes and no specific details about the involved costs.
The relevant costs are described below.
 One of the costs that are taken into account is the
marking of logs, which consists of the stamping ma-
terial and labour;
 Another cost category that must be considered in-
volves inventory costs. They represent the capital lock-
up caused by materials lying idle at various points
along the chain;
 Due to the deterioration of wood fibers a certain
amount of wood must be downgraded to a lower qua-
lity class. One of the expected benefits of RFID is
better control over lead times, which should result in
a better utilization of resources and more precise ti me
planning of shipping activities.
The most interesting variable to investigate is the price
per RFID tag. It is the main cost driver of the system and
finding the right price level is crucial in order to maintain
the economic viability of the system. As tag prices and
properties vary greatly, it is crucial to know the break-
even point for the price per tag. As was explained above,
there are two factors, namely inventory and downgrading

Cost Analysis of Introducing a Log Identification System Using RFID in the Wood Supply Chain:
A Case Study at a Swedish Forest Company
132
co s t s t h at are expected to be influenced by an implementa-
tion of RFID. To discover the break-even price per tag
when these t wo fact ors a re assu med to behave i n a particul ar
way , i n v o l v e s t h e d e vel opment of different scenari os.
One assumption is to take into account the worst case
scenario namely, that RFID does not fulfil the expec-
tations and no reduction of inventory can be achieved.
Another reasonable assu mption is that RFID leads to a
particular reduction in inventory, but does not actually
minimize the inventory costs. The value chosen through
discussions with SCA Skog for this moderate change is
that the inventory level should be reduced down to
83.3% of its original cost.
In an ideal situation, SCA claim that they will only
require 60% of the present inventory level to support
their operations. Thus an interesting assumption for in-
vestigation is that by implementing RFID, SCA actually
manages to reduce its inventory to that level. To summa-
rize, the three chosen assumptions regarding inventory
are:
• No change (n/c ) 10 0% o f p resent costs;
• Moderate change (mod/c) 83.3% of present costs;
• Maximum change (max/c) 60% of present costs.
In a manner similar to that for the inventory, the pos-
sibility of no change in downgraded volume must be
taken into account. Thus, downgrading costs would re-
main unchanged even if RFID was used.
Since downgrading is a problem caused directly by
insufficient information there is no “ideal” level of down-
gr ading . However, one may hope to eliminate down grad-
ing as far as possible by implementing RFID. Therefore,
the value chosen for the assumption of a moderate change
is a reduction of downgraded wood by 50 percent .
Even though the id eal would be the total elimination of
downgrading, it is no t reasonable to assume that this is in
fact achievable. Even when the most sophisticated tech-
nology is available, human error remains a factor that is
extremely difficult to eliminate entirely. Furthermore,
the pace of deterioration of wood fiber is highly de-
pendent on weather conditions, which may affect, for
instance, the standard of forest roads [14], which is
subject to daily fluctuations that are difficult to predict
with an y d egr ee of c er ta in ty. Thu s, it is more r e ason ab le
to assume that a certain volume will always have to be
downgraded. Taking that into account, the assumption
regarding the maximum change is that downgrading will
be reduced to no more than 20 percent of the present
volume. Thus, the three assumptions involved in the
downgrading result in:
• No change (n/c ) 10 0% o f p resent costs;
• Moderate change (mod/c) 50% of present costs;
• Maximum change (max/c) 20% of present costs.
Based on these six assumptions, the nine different
scenarios descri bed i n Table 1 are developed.
In Table 1, a) stands for the price per RFID tag for
which the break-even point for the costs for the corre-
sponding scenario are achieved .
In the no change/no change situation, a figure b) is
added, which represen ts the price per tag in a situation in
which the marking costs are doubled. This is the maxi-
mum additional costs approved by SCA for the case
where there are no benefits from RFID. Thus, in the no
change/no change situation, this is another possibility
that has been taken into account. Nevertheless, it must be
kept in mind that these additional costs can only be toler-
ated on a temporary basis.
Note, that b) refers to a situation in which only mark-
ing costs are doubled, not a situation in which overall
costs (marking, inventory and downgrading) are twice as
high. By contrast, a) shows the price per RFID tag at
which the total costs (marking, inventory and downgrad-
ing) equal the current total costs.
After developing the nine scenarios regarding inven-
tory and downgrading, three different degrees of RFID
implementation are chosen.
The first of the three analyses shows how much a tag
may cost if each stack (i.e. a package that goes on the
truck) receives one RFID tag, but no tags are placed on
the piles. The second analysis assumes that each pile and
each stack receive one RFID tag and shows the corre-
sponding price per tag levels that can be tolerated. Fi-
nally, the third analysis is based on the assumption that
each pile receives one tag while each stack receives two.
By granting two tags to each stack, the final analysis
takes into account the possibility that on e may sometimes
need to compensate for malfunctioning tags. The level of
two tags per stack and one per pile was chosen because it
is reasonable to assume that with th is additional number,
it will always be possible to identify log piles and stacks.
However, this does not necessarily mean that these ad-
ditional tags mu st actually all be attached to the stacks as
it is equally possible to place them on the piles, without
the results of the calculations being affected.
3. Results
It is important to realize that the figures used in this study
Table 1. The nine different scenarios used in the break-even
analysis put in a matrix.
No
change Downgrading mod change Max change
No change a), b) a) a)
Mod Changea) a) a)
Inventory
Max Changea) a) a)

Cost Analysis of Introducing a Log Identification System Using RFID in the Wood Supply Chain:
A Case Study at a Swedish Forest Company 133
are estimates and averages and that the actual values may
fluctuate with seasonal changes. Furthermore, the vol-
ume per pile varies widely but it may be assumed that the
total number of piles processed during the course of one
year is 1963 and the number of stacks is approximately
33 times greater than this figure.
After careful evaluation of the situation at hand it was
decided that a closed loop RFID system is not feasible in
the Ortviken supply chain. Thus, the following cost ana-
lysis was undertaken in order to design an open loop
system.
When evaluating the different scenarios, the assump-
tion has been that the marking-related labour costs will
remain at the present level for all the scenarios. The ac-
tual labour costs for an RFID implementation are highly
dependent on the technique used to mount the tags.
However, at present, marking takes between 10 and 20
minutes per pile and it is reasonable to assume that this
will not significantly change with the switch to RFID.
3.1. First Assumption: One Tag/Stack
Table 2 shows the different prices per RFID tag for the
situation where the corresponding scenario arrives at
present day cost levels. It illustrates, for instance, that if
there is a modest change in downgrading and a maximum
change in inventory levels, RFID tags may cost SEK
62.03 at most for the system to be economically viable.
As was mentioned previously, the no change/no change
scenario includes an extra figure that refers to a situation
where marking costs are twice as high as at present.
What can be seen in Table 2 is that the greatest po-
tential to make actual cost savings involves reducing the
inventory levels because the costs per volume for inven-
tory are much higher than those for downgrading.
Regardless of the amount of downgraded volume, a
reduction in inventory levels from a “no change” situa-
tion to “maximum change” always frees up an additional
SEK 55 per tag. By contrast, assuming that inventory
levels are fixed, moving from a no change in downgrad-
ing to a maximum change only involves savings of addi-
tional SEK 10.
It must be realized that actually achieving a price level
Table 2. Results from the assumption of one tag per stack.
No
change Downgrading mod change Max change
No
change SEK 0.9, SEK 6.6 SEK 7 SEK 10.68
Mod
Change SEK 23.8 SEK 29.93 SEK 33.6
Inventory
Max
Change SEK 55.9 SEK 62.03 SEK 65.7
of only SEK 0.90 per tag in a no change/no change situa-
tion will be very challenging. It is more realistic to as-
sume that an actual price per tag will be closer to the
tolerable upper limit of SEK 6.60 for this scenario.
3.2. Second Assumption: One Tag/Stack and
One Tag/Pile
In Table 3 a situation is referred to in which each stack
and each pile are marked with an RFID tag and shows
the corresponding break-even price levels, as well as the
pr eviously explained extra figure in a no change/no c ha ng e
situation.
Note that when comparing Ta ble 2 with Table 3, mov-
ing from only marking stacks to marking piles and stacks
does not have a significant influence on the allowable
cost levels. The maximum deviation from the figures in
Table 2 occu rs in th e sc en ar io wher e th e re is a max i mu m
change for both inventory and downgrading levels. In
that case, the break-even price limit is SEK 1.90 lower
under this second assumption than was the case in the
first scenario.
3.3. Third Assumption: Two Tags/Stack and One
Tag/Pile
As was mentioned previously, the third assumpt ion, with
results presented in Table 4, represents a situation where
the maximum possible number of tags is taken into ac-
count. However, this does not imply that all of these tags
must actually be distributed in the way suggested by the
calculation. It is equally possible for them to be placed
on piles, which provides an increased protection against
theft.
Note that, under this assumption, moving from a no
change to a maximum change in inventory while retain-
ing the same downgraded volume, merely frees an addi-
tional SEK 27. The extra amount of money that can be
spent if downgrading is reduced to a minimum while the
inventory remains constant is roughly SEK 5.
4. Discussion
An analysis of the processes in the supply chain at the
Table 3. Results from the assumption of one tag per stack
and one tag per pile.
No
change Downgrading mod change Max change
No
change SEK 0.88, SEK 6.4 SEK 6.8 SEK 10.37
Mod
Change SEK 23.12 SEK 29. 06 SEK 32.6
Inventory
Max
Change SEK 54.3 SEK 60.2 SEK 63.8

Cost Analysis of Introducing a Log Identification System Using RFID in the Wood Supply Chain:
A Case Study at a Swedish Forest Company
134
Table 4. Results from the assumption of two tags per stack
and one tag per pile.
No
change Downgrading mod change Max change
No
change SEK 0.45, SEK 3.25SEK 3.45 SEK 5.25
Mod
Change SEK 11.73SEK 14.75 SEK 16.55
Inventory
Max
Change SEK 27.45SEK 30.55 SEK 32.36
Ortviken paper mill revealed that the potential exists to
streamline operations and make more efficient use of
resources by implementing an RFID-based log tracking
system in this supply chain. This system should be an
open loop, using inexpensive, passive, RO RFID devices.
However, it is impossible to provide general recom-
mendations with regards to the specific properties for
future RFID log tracking systems as they are dependent
on the specific requirements of the particular supply
chain. Technically, satisfying both the material cons-
traints set by paper mills and the requirements for the
working environment is challenging but not impossible.
When considering an implementation of RFID, two
issues must be considered carefully. One involves the
question regarding what log units need to be identifiable
at what point in the chain. Once these units and points
have been identified a decision must be taken regarding
whether to implement a closed loop system or an open
loop system.
Furthermore, the analysis of cost structures along the
chain and the examination of the various scenarios have
shown that there is considerable potential to design a
customized tag without exceeding tolerable cost levels
regarding prices per tag. It can also be shown that fa-
vourable changes in inventory levels and the volume of
downgraded wood resulting from RFID both lead to sig-
nificant cost savings. That, in turn, enables additional
money to be spent on RFID tags without violating break-
even price limits.
It is reasonable to assume that a suitable tag for the
application can be designed without violating the price
limit of SEK 3.25 (ca. US-$ 0.43), calculated for the
worst case scenario using the highest percentage of
marked logs. Thus, it can be concluded that the prospect
exists to create an RFID-based log tracking system using
customized RO RFID labels that operates at tolerable
price levels for day-to-day operations, even when the
assumption is made that no reduction in inventory levels
or downgraded volume can be achieved.
Therefore, it makes sense to further investigate the
technical aspects of such customization, while bearing
the cost restrictions in mind. Furthermore, it is advisable
to investigate how RFID can be integrated with other
technologies (e.g. GPS) to further au tomate and facilitate
log tracking procedures in the wood supply chain for the
future.
5. Acknowledgements
First of all we thank Daniel Timpe for doing his his
bachelor thesis at Mid Sweden University and an Intern-
ship at SCA Skog working with the presented problems.
We thank Mårten Larsson and Per Anders Hedström at
SCA Skog and Hans-Erik Nilsson at Mid Sweden Uni-
versity for their assistance and guidance throughout this
project. We also thank FSCN at MIUN and SCA Skog
for financing the investigation.
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A Case Study at a Swedish Forest Company
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