SOLVING THE MYSTERY OF YIELD

The art of the sale. If you Google that, it seems everyone has an opinion on what exactly defines the art of the sale. How to increase sales? How to make the buying decision go your way versus your competitor’s? How to make the first sale lead to the second?

Specifically, for the hardwood industry, and more specifically for the primary manufacturers in the hardwood industry, how do we make our products more appealing to our customers? Due to the competitive nature of our businesses, what can I do to make my offering stand out above the others?

I am willing to bet our customers want a consistently high-quality product at a fair price. Along with those attributes, our customers want a product that makes sales to their customers easier and more profitable. How can I make my customer’s job easier? If I can do that, I suspect additional sales will come.

In October 2018, then NHLA President Brent Stief wrote an article in Hardwood Matters that really resonated with me. He brought up the question of random widths versus standardized widths. His comments have stayed with me for several years. I have visited some of our customers and watched them process our random-width products. The customer must be highly skilled and strategic about each board and strive to get the highest yield solution for every board. How can I make this easier for them?

Some industry competitors, notably plywood, MDF, and plastic manufacturers, can provide the advantage of yield consistency. Customers will know what they can yield from each panel of MDF, for example. Our hardwood products have a superior environmental and durability story to tell, but the yield mystery can make the sale decision a bit more challenging.

What if we took a little of the randomness out of random width? Would that make the purchasing decision a little easier for your customer?

For example, in manufacturing cabinetry, a lot of manufacturers use a door rail or face frame material that is approximately 2-1/2” wide. Most generally rip a blank slightly over this width, then mold the blank before cutting to their length needs. So ideally, multiples of this 2-5/8” ripped blank can help maximize yields. Multiples help in our high-wage environment as one piece can make 2x rips, 3x rips, or even 4x rips (except in my mill, those of you familiar with Alder know we don’t get a lot of 12” wide lumber) while at the same time decreasing the number of pieces through the saw improving both yield and productivity.

The same holds true for furniture manufacturers. A lot of production furniture plants rely heavily on 3” wide parts. So here, the better width might be 7” or 10”, but still, there is a sweet spot that enhances yield and efficiency.

So, the challenge is multi-faceted for our industry. Are we adequately training salespeople to understand the manufacturing capabilities of their employer so that they can work hand-in-hand with the downstream manufacturer on optimized yield solutions? Do salespeople understand the manufacturing processes at the cabinet, furniture, molding, and millwork plants deeply enough to help steer their mill to optimized widths? Are operations people learning how our products are being used and looking at opportunities to tweak processes upstream to generate both margins and efficiency in hardwood-using manufactured products? We are a random width industry, but more and more of us are looking to offer rip solutions to our customers.

This is not a new idea. The strip flooring people have been sawing ties alongside low-grade Oak for years, optimizing the ripping of blanks to make 2-1/4” and 3-1/4” strip flooring. Ask the people you know that run both sawmills and flooring plants. Nearly all will share that they took the random out of random width long ago.

We train lumber inspectors; that is one of the primary missions of NHLA. That is why NHLA has been offering classes on yield at the sawmill level for several years. Maybe it’s time to expand our mission and start offering training options for the salespeople and mill operations people of tomorrow. Our resource is valuable yet underutilized. If we can work hand in hand with manufacturers to expand the use of hardwoods by making it easier and more profitable to do so, shouldn’t we look at what we can offer? Twenty-five years ago, North American hardwood lumber production was double or more than what it is today. Might this be one reason why?

Thank you for taking the time to read my letter. I hope it leads you to think about ways to improve yield. I also hope this letter increases your involvement in the NHLA by voicing your agreement or disagreement with the above thoughts and expressing your opinions on how we, as an industry, can recover market share. Best wishes to you, your families, and your business.

Jon Syre NHLA Chairman | Cascade Hardwood