After three years of co-ordinating specialist support for forestry and downstream businesses across Wales, UKWoodchain has moved the focus on to manufacturing for the country’s largest market segment for wood products – social housing construction and repair. The move builds on information from the earlier programmes and from research commissioned from the Welsh Economic Research Unit. In particular, it is clear that substantial numbers of businesses do not meet the requirements of modern, efficiency-driven supply chains – and procurement officers for social housing projects respond by selecting suppliers and materials from outside Wales.

It is important to establish more reliable sources of wood products because the annual cost to the Welsh economy of buying from outside Wales is estimated to be around £100m. In addition, the environmental cost or ‘footprint’ of procuring goods from outside Wales has to be taken into account as part of the Assembly’s commitment to sustainable development. The Welsh Assembly has made over £200,000 available to address the situation and the European Union‘s ERDF programme in Wales has matched the figure to develop group manufacturing capacity and efficient supply chains.

With just 25 places available in the programme, UKWoodchain has set exacting entry requirements. Businesses need to show they are serious about modern management tools, such as using the Institute of Quality Assurance’s Small Business Standard and treating suppliers as partners. Their progress ‘earns’ support from experts drawn from the automotive sector but their place in the programme is lost if there is no progress.

Social housing

The tough approach is designed to win the confidence of the procurement community in the social housing sector. It helps that the Assembly’s Housing Directorate has given the UKWoodchain programme strategic status but there is still some resistance to using wood products, especially windows, and a widespread belief that Welsh joinery businesses can’t match the efficiencies achieved by high-volume manufacturers elsewhere. The programme is challenging these perceptions by benchmarking the progress being made by the supply chains of companies selected for specialist support and by helping decision-makers to understand how modern manufacturing and engineered wood materials are effective responses to the economic and environmental challenge.

Of course, the general thrust in Wales matches what is being done across the UK and Europe, regaining and increasing market share for wood-based construction products. There are, however, two important differences.

First, UKWoodchain is connecting its programme with the DTI Manufacturing Advisory Service (MAS) initiative in Wales and with an international project, led by the Welsh Assembly/Forestry Commission Wales, and is investigating the barriers to value-added in regional supplies of wood products. MAS Wales will pick up the 25 companies at the end of the programme and will offer support to other companies willing to invest in efficiency improvements. FC Wales can support manufacturing companies that have a business case for visiting other regions to examine their markets and supply chains. The composite effort to deliver Assembly strategies, integrating the use of several different funding streams, provides a model for other regional economies.

Manufacturing efficiency

The second difference is that the UKWoodchain programme stresses the importance of manufacturing efficiency in small companies and, in 2007, will launch a scheme that simultaneously accredits business processes and products that have been benchmarked. Known as Woodchain Wales, the scheme will mean that buyers in any sector can be confident that economic and environmental benefits have been maximised without compromising quality or efficiency.

The exact source of materials used in production will be declared and the environmental footprint traced from there to the buyer, opening the way for procurement to favour regional manufacture and regional materials. Weaknesses in regional timber supply are expected to decline gradually through this kind of emphasis, aided by an increase in wood-based materials engineering in Wales that is being planned as part of the strategic effort to improve value-added.

  • UKWoodchain is a consortium of trade and professional bodies, recognised by the government as the standard-setting body for wood-using industry occupations and as the sector body responsible for developing qualifications strategies and other key planning tools.