The fixed pricing is based on an AI application developed by Metsä Group. The application utilizes satellite imagery, extensive geospatial datasets and location-specific data collected from previously completed sites. Based on this data, the application calculates the workload for the site, also taking into account variation within the site. The workload determines the price for young stand management work, which will not change after the work has been carried out.
Metsä Group has been piloting fixed pricing for early cleaning and pre-commercial thinning in different parts of Finland since last spring. Based on the positive experiences gained from the pilot areas, the model is now being expanded nationwide. Fixed pricing will replace the matrix pricing used to date across the country.
“In recent years, Metsä Group has developed numerous new applications to support the planning and implementation of wood trade and forest services. The AI application for young stand management is a step towards more agile and transparent planning and implementation of forest management work,” says Olli Leino, Metsä Group’s SVP, Development, Wood Supply and Forest Services.
Young stand management ensures that trees have sufficient growing space and can develop rapidly into sturdier trees. Timely and high-quality young stand management keeps forests vital and increases forest income. According to Leino, forest owners have responded positively and with interest to the new pricing method.
“Our goal is to combine new technology and young stand management practices in a way that supports both forest owners’ decision-making and the everyday work of forest management entrepreneurs. Fixed pricing has been well received by forest owners, and feedback on the new operating model has been positive. The customer experience remains good when the final price of the work is known from the offer stage onwards,” Leino says.
The reform will also facilitate the work of forest management entrepreneurs easier. Previously, entrepreneurs have measured removal data during the work, calculating how many trees were removed from the site. Under the new model, measuring the removed stems will no longer be needed as a basis for pricing. Measuring the remaining growing stock will continue, but it can be carried out more effectively as part of the work.
In recent years, Metsä Group has developed several AI solutions to support wood trade and forest services. For example, new features have been regularly introduced to the Metsäverkko online service, and artificial intelligence is increasingly used to support customer work.