Australia Forestry Corporation Case Study - Research and Development Into Bushfire Resilience - Management Assignment Help

Assignment Task :

Case Study: Australia Forestry Corporation 

Forestry is an important sector within the Australian economy. The Australian Department of Agriculture estimates the industry generates $23 billion in income and employs over 70,000 individuals. [Source: http://www.agriculture.gov.au/forestry/industries] 

You are a consultant working for a company named Australian Forestry Corporation (AFC). This company is a large owner of varied forested estates in New South Wales and Queensland – they grow and sell trees. Their holdings include some 400,000 ha of land and they harvest the tree crop on a cycle of about 20,000 ha per year (or nearly 10 million trees a year!). They grow pine and spotted gum varieties in plantation settings (softwood and hardwood). They have traditionally just been a grower of trees (planting, maintaining) and outsourced all other elements of the supply chain including logistics (cutting, transport, processing) and manufacturing of a product. An example of some forestry business components and supply chain elements is listed below: 

Australia Forestry Corporation is a seven-year-old private company with roots in the American tree farming industry with an interesting past. They used to be a state-owned organization, but the state divested their interest in the sector and now leases the land to AFC. This has brought with it some legacy issues including a contingent of employees ‘the old-timers’ who are used to antiquated technology, systems and a limited range of operations on the estate. The company receives most of its revenue from domestic markets (selling wood to sawmills, pulp mills, board manufactures, etc.) for consumer products but has recently been more and more engaged with international markets (namely China and Korea) exporting high grade logs for veneer and cabinet making. They desire to grow the business in the most profitable and sustainable way and there are internal discussions as to how to do this. 

Recently, a new entrepreneurial CEO, Hugh Jones, has come on board and wants to take the business in a new more profitable direction by deploying state of the art technology to improve management systems (namely drones for insect spraying and unmanned harvesting equipment) while also placing a higher emphasis on more lucrative international markets. Hugh along with their lead research scientist, Jacko, have been strategizing ways to grow their business and increase their bottom line and market capitalization. Jacko is of the opinion that these changes would be much more complex to implement than it’s worth and believes the company should refocus on domestic markets and the potential for the expanding biomass market (unmarketable tree parts) which would help streamline on-ground operations and provide an alternative revenue stream. Their COO Mark Carter (a holdover from the old days with ties to the American group) would like to see some divesting in their land holdings with a reorientation of focus on softwoods vs. hardwoods given the cost of production. To further complicate matters, the industry has been grasping with a devastating year of bushfires and export issues connected with the coronavirus. The team has approached you with a suite of potential projects as they look to grow, change, adapt and improve their business into the future. 

Project 1 – Incorporation of Advanced Technology into Operations 

The forest sector is always changing, and businesses must adapt to maintain their competitive posture. In line with Hugh’s vision of incorporating technology to streamline operations and save costs AFC has requested a project be developed to provide a roadmap for technology trials, deployment and operationalisation of data capture. It is thought that drones could be used for insect spraying and inventory management while unmanned harvesting equipment (machines that cut down trees) could also be employed. Additionally, an app could be developed to better capture and disseminate data and information throughout the company, though they are open to other suggestions that will help them best change and adapt to the industry and remain competitive. They request that this project be operational in 2 years and be financially viable (i.e. investment required is less than project costs over a 10-year horizon). The company has allocated 75k budget to scope the work and up to a 5-million- dollar budget for full technology deployment. 

Project 2 – Research and Development Into Bushfire Resilience 

The latest bushfire season was one of the worst on record with much of the plantation coming under threat. Many say that this season was 10x worse than usual in Queensland and it was 10x worse than that in NSW. AFC has really been struggling with the business and operational ramifications of this disastrous season (losing crops, having to change crop rotation to meet demand, varying planting schemes and timing, clean-up, etc.) and wants to develop a project to help mitigate the impacts of such extreme weather and conditions in the future. They believe that research and development into topics such as 1) drought and fire resistant genetically modified tree species, 2) increased use of low intensity burning on their plantations (deliberately setting fire to the crop periodically to lower the threat of a high intensity catastrophic crop killing burns), and/or 3) research to determine if they should forgo, abandon or relocate crops due to regional climatic forecasts. The group expects a comprehensive research proposal (goal, methods, deliverables), thorough reporting of results and contextualized advice (strategy, financial, etc.) and recommendations for deployment for a budget of 100k. 

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