According to the US Forest Service, one third of US land — about 302 million hectares — is forestland, and one fifth — about 200 million hectares — is timberland. Forestland is the number-one type of land use in the US. Both forestland and timberland contribute to the industrial manufacturing of wood products.
Traditionally, wood has been put to extensive use for home-building products such as doors, windows and furniture. Besides this, commercial purposes include manufacturing items such as boats, although synthetic-fiber-reinforced materials have been gradually replacing wood. Industrially, wood is required for packaging purposes such as pallets and crates. Wood is a hundred-billion-dollar industry with considerable export shipments.
The value chain of any wood-based product starts with the planting of trees, cutting the trees to required sizes and shapes, and finally, the manufacture of finished products. According to the US Forest Service, there are 86,000 businesses in the wood industry. The value addition happens in the aesthetic design and the finishing of the products.
The primary sub-sectors in the wood industry are sawmills, and the plywood, box and pallets and coffin and casket industries. Of these, boxes and pallets cater are used for packaging purposes. Pallets and crates are used to package products such as agricultural produce and bottling products. Agricultural produce includes bananas, and bottling includes wine. Contract manufacturing is employed by industries that need packaging solutions. The capabilities of third-party vendors are customization, assembly and fabrication. Contracting out is desirable when the business doesn’t have capabilities to assemble wood-based products and requires a regular supply of pallets and crates.
Similarly, operations in the furniture industry, such as assembly and finishing, can be contracted out. Contracting manufacturing has become a necessary strategy for businesses, and the higher number of secondary manufacturers demonstrates this.
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