Plum Creek Timber Owns and Manages Timber

Plum Creek Timber owns and manages timber lands in the United States. The company engages in the sale and management of timber lands, and the sale of timber lands. It also produces a line of lumber products, including studs, edge-glued boards, and finger-jointed studs. These products are targeted to domestic lumber retailers, such as retail home centers, for use in repair and remodeling projects. These products are also sold to stocking distributors for use in home construction.

In addition, the company engages in the natural resource businesses that focus on opportunities relating to mineral extraction, natural gas production, and communication and transportation. The company owns and managed approximately 7.8 million acres of timber lands in the northwest, southern, and northeast U.S. The company also owns and operats 10 wood product conversion facilities in the northwest U.S.

In regards to manufacturing processes, Plum Creek is primarily a make to order manufacturer. In many instances, the underlying business operations of the firm depend on a litany of factors. These factors are often outside of the companies' immediate control. Aspects such as consumer confidence, weather, and macroeconomic factors significantly impact the overall business. As such, the make-to-order concept is integral to profitable operations. This is currently the case, as the United States economy continues to mend and recovery. Plum Creek uses much of its timber in housing related activities. Currently housing is the catalyst driving economic growth within America. Consumers are becoming more confident in the future outlook of America and are therefore purchasing homes. Unemployment continues to decline which also bodes well for Plum Creek. As a result, the company has elected to adopt a make-to-order form of manufacture ring. Under this instance, consumers order the timber as demand dictates. Demand, particularly in the housing sector is becoming more robust as consumers feel confident regarding their financial standing, unemployment continues to decline, and business operations become more profitable. As such, an MTO strategy makes sense in regards to the business operations of the firm.

MTO is a manufacturing process in which manufacturing starts only after a customer's order is received. As in the case with Plum Creek, as housing continues to improve, more orders are subsequently filled. An assembly process starts when demand actually occurs, which reduced the overall uncertainty regarding business activities. This concept reduces the overall variability of production, which enhances profitability for the firm. Plum Creep, using the MTO concept does not depend heavily on forecasts, which are heavily reliant on assumptions. These assumptions can be very aggressive or conservative depending on the individual using them. MTO however, eliminates a large portion of the assumptions and replaces it with concrete evidence regarding demand (Jermanok, 2006).

Two unique aspects regarding to Plum Creek manufacturing are the sustainability initiatives in which it spearheads. The first being the Sustainable Forestry Initiative principles and objectives guide. The SFI was developed in 1994 and has been updated regularly to keep pace with forest science, technology and environmental understanding. This is unique as many manufacture ring companies are not actively engaged in standard setting as Plum Creek is. The SFI principles are based on the goal of meeting the public's need for wood and paper products using environmentally responsible forest management that will ensure the health and sustainability of forests far into the future. Thirteen major SFI objectives translate the principles into action and help to establish specific measures for monitoring, evaluating and reporting performance.

Plum Creek voluntarily hosts rigorous forest audits, performed by independent, third-party professionals, to certify that our management practices meet SFI standards. All Plum Creek forestlands have been audited and certified as compliant with SFI standards. Independent auditing is very important as it helps the company assure customers and the public that we continue to meet SFI objectives as they evolve.