Good times lie ahead17 March 2012 by John White
Timber Trade Federation chief executive John White says that understanding and engaging with the supply chain will ensure the timber industry survives today’s commercial challenges
Seven years into the job at the TTF and I think I can safely say that the timber industry has come a long way in that time.
The Achilles’ heel of our wonderful product has been the environmental risk brought about by illegal logging and deforestation around the globe. The trade has almost put that one to bed. And with the introduction of the EU Timber Regulation anyone who thinks that not properly understanding where your wood comes from is a good idea should be locked up in a lunatic asylum. They may well end up locked up anyway as the offences under this new law are criminal ones.
The law bites in one year’s time but, taking into account delivery lead times, not doing the ‘due diligence’ now is placing you and your customers at legal and, perhaps more importantly, reputational risk.
It has become easier over the past seven years to husband the latter as the timber industry has really appreciated the business benefits of an improved reputation. Whilst overall numbers are down due to the recession, the anecdotal evidence at least is telling me that our market share vis à vis other materials and systems is increasing.
But we can’t let our guard down. Illegal logging goes on and that wood finds its way into products that could end up in the UK. We have to maintain our vigilance, otherwise all the hard work the industry has gone through could be ruined. A recent incident affecting a couple of the major DIY chains that do huge amounts to ensure that they buy certified products, shows the damage that can be caused. Through no fault of their own an FSC certificate was rescinded on a product they bought. They were then accused of causing carnage in Borneo’s forests for selling this stuff.
“So what?” you may ask. Well, the reputations of this size of consumer-facing companies are worth a fortune, and their websites contained comments from disgruntled consumers who swore never to shop there again. This stuff matters because it matters to our customers and our customers’ customers.
But it is not the whole story.
The TTF has spent the past year or so thinking about the future of the industry. Having largely dealt with our Achilles’ heel, we felt the time was right to put our foot on the accelerator in marketing timber. Together with a re-energised Wood for Good and with our sector’s other trade bodies, we felt that all the signs were right for a major expansion in the use of wood. If only we could get our act together.
We thought this because every relevant policy objective coming out of government at the moment seems to have climate change and sustainability at its heart. For each of those policy objectives, wood is the answer; the sustainable answer. What a fantastic opportunity! Our members agreed.
However, in doing the research we found that only a few of the companies in this industry really could capitalise. A lack of capacity and a lack of appreciation, particularly amongst the smaller companies, means that the industry still has some way to go in grasping the opportunity that presents itself.
Part of the problem is the view we have of ourselves as compartmentalised industry sectors. There is a fundamental mind-shift required on the part of timber traders, agents, truss fabricators, engineering companies, importers, merchants, timber treaters and so on. Namely, we have to see ourselves as part of a supply chain.
Secondly, we have to reach out to those parts of the supply chain that are not currently within our ambit because we spend too much time competing with each other and looking back up the supply chain. Important as those things are, it misses the point that it is down the supply chain to our customers where our sales are ultimately made. Understanding and engaging at this end of the supply chain will pull our products through.
From the research we did in preparing our Action Plan there is one key message the industry needs to take on board: find solutions to the problems the customer has.
What does that mean? It means engagement, partnership, and co-operation. It means talking the same language (a builder wants a price for a product not the per metre cost of the material). It means working together to standardise in non-competitive areas (the steel and glass industries have worked out a standard connector, for example). It means investing in the product not just selling it on price (architects and engineers need performance and life cycle data otherwise they just won’t specify).
Investing in people
And, finally, it means investing in people. We have done a huge amount over the past few years with our Sector Skills Council, Proskills to give the industry the qualifications it wants. The industry must use them. Training delivers an uplift in productivity.
These things can only be done if we work and act together as a supply chain. The industry trade bodies need to get ever closer together to provide the political capital for this process and they need the industry’s leading companies to support the process.
Thankfully over the past seven years I have seen progress on that front too. All the CEOs and presidents/chairmen of the leading trade bodies have got together to take the Norton House process to its next level and already we are seeing numerous examples of where trade bodies are looking to work together.
Despite the commercial challenge of today, good stuff lies ahead.