OR/MS Today - June 1998

June 1998

INFORMS News:
Chilean Timber Company Branches out with OR

Bosques Arauco, S.A. wins Edelman Competition for innovative implementation of five optimization systems

Often dubbed the "Olympics of OR/MS," the Edelman competition ended in Montréal with an international "bang" heard around the world.

This year's winner was Bosques Arauco S.A., which represents a consortium of five Chilean timber companies. This is the first time that top honors have gone to a South American competitor.

The Edelman Award (jointly sponsored by INFORMS and CPMS, the Practice Section of INFORMS) recognizes outstanding work in operations research that has had a significant impact on the performance of the client organization. The winning team receives $10,000.

This is the 27th year that the year-long competition has been held. It begins with a call for nominations and culminates with a series of presentations at the spring meeting of INFORMS.

Timber is Chile's second largest industry. One of the largest Chilean forestry firms, Bosques Arauco employs five different optimization systems, designed by a team from the University of Chile, at three different decision levels. The systems include ASICAM, a daily truck scheduling system; OPTICORT, a short-term harvesting system; PLANEX, a harvesting equipment and access road location optimization system; OPTIMED, a medium range planning tool; and MEDFOR, a long-term strategic planning tool.

These systems will continue to evolve with time, as the needs of firms change and systems become increasingly sophisticated. The impact of these systems has been organizational and financial with Bosques Arauco reporting a total savings of $5 million a year over a total annual timber production of $140 million. Since the implementation of the technology in 1989, the five major firms report minimum annual savings of $17 million. Those sections impacted by the work have reported up to 25 percent savings in operational costs.

OR/MS Today sat down with Andres Weintraub, of the University of Chile and a member of the winning team shortly after his victory. This win was important to Weintraub, not only for personal and professional reasons, but for patriotic reasons as well.

"Chile is an evolving country," he said. "The fact that was can show we are competing and winning against Sears, for example. That's a big thrill. It adds to the thrill that we could compete on a technological aspect and win."

Weintraub said many things went into winning the Edelman the preparation (and practicing) of the presentation to the Award Committee, years of hard work and working with people such as Jorgé Serón, the CEO of Bosques Arauco, S.A. whom Weintraub credits as being an outstanding visionary.

"He's an incredible guy. If I owned a big business, I'd want him as a general manager. He's a leader; he has vision," Weintraub said. "We defined the project with him. He was looking over our shoulders all the time, and that's the only way to do a successful project.

"You don't do a project where you go back to your office and then come back three months later with a result. You do it day by day, jointly, because that's the only way to be sure it's what the client needs."

As the president of International Federation of Operational Research Societies (IFORS), Weintraub has seen the importance of operations research around the world, and how awards such as the Edelman can bring countries together.

"With the Edelman, you can see how important operations research is and the links between countries and continents. One finalist from Chile; one finalist from Europe. INFORMS, and the most prestigious award, brings them together," he said.

As for how he personally views winning this award? "It's very exciting. Probably when I am 70 years old, and I look back, this will be the highlight of my career."

The judges of the 1998 Edelman competition were Stephen Strauss of AT&T Labs, Joseph Discenza of Wagner & Associates, Howard Finkelberg of BBDO, H. Newton Garber of Garber Associates, Steven Graves of MIT, Yoshiro Ikura of Saitech, Rick Rosenthal of the Naval Postgraduate School and Michael Rothkopf of Rutgers University.

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