inno-forest 24. may 2005 iisalmi, finland
DESCRIPTION
INNO-FOREST 24. May 2005 Iisalmi, Finland. Prefabricated Wood Frame Components – towards A Sustainable Competitive Advantage among SME’s in Woodworking Industries. INNO-FOREST 24. May 2005 Iisalmi, Finland. - PowerPoint PPT PresentationTRANSCRIPT
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Prefabricated Wood Frame Components – towards A Prefabricated Wood Frame Components – towards A Sustainable Competitive Advantage among SME’s in Sustainable Competitive Advantage among SME’s in
Woodworking IndustriesWoodworking Industries
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Prefabricated Wood Frame Components – towards A Sustainable Competitive Advantage among SME’s in Woodworking Prefabricated Wood Frame Components – towards A Sustainable Competitive Advantage among SME’s in Woodworking IndustriesIndustries
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
ContentsContentsWood in European Construction Wood in European Construction
Forest - Based IndustriesForest - Based Industries
Timber Use in European House Construction Timber Use in European House Construction
Roadmap 2010 for the European Woodworking IndustriesRoadmap 2010 for the European Woodworking Industries
Residential house construction in FinlandResidential house construction in Finland
Demand Structures in Residential House Construction in FinlandDemand Structures in Residential House Construction in Finland Supply of Wood Components, Modules and ElementsSupply of Wood Components, Modules and Elements
Competitive advantages of wood constructionCompetitive advantages of wood construction
Vertical Profile & Subsidiary in Architecture – New Town Planning Vertical Profile & Subsidiary in Architecture – New Town Planning
New Town Planning – wood pilot alternativeNew Town Planning – wood pilot alternative
Competitive factors of SMEs in Woodworking IndustriesCompetitive factors of SMEs in Woodworking Industries
Challenges to wood - forest product chainChallenges to wood - forest product chain
Success factors of Finnish woodworking industry SMEs in a changing competitive Success factors of Finnish woodworking industry SMEs in a changing competitive environment environment
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Wood in European ConstructionWood in European Construction
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Forest Based IndustriesForest Based Industries
Costs of input factorsCosts of input factors
Cost of EU raw material resourcesCost of EU raw material resources:: most important competitiveness factor among EU woodworking firmsmost important competitiveness factor among EU woodworking firms
Labour costs and labour productivityLabour costs and labour productivity: : determine the relative competitiveness among countries inside EUdetermine the relative competitiveness among countries inside EU
Productivity, automation and modernisationProductivity, automation and modernisation: : key priorities to compensate high labour costskey priorities to compensate high labour costs
Eastern European countriesEastern European countries: : labour cost advantages constitute a key driving force for capacity investments labour cost advantages constitute a key driving force for capacity investments in woodworking industryin woodworking industry
Firm size and value creation integrationFirm size and value creation integration
SMEs: SMEs: Adopted frequently the fully integrated production covering from basic raw materials (sawn-wood Adopted frequently the fully integrated production covering from basic raw materials (sawn-wood and and panels) to end-products panels) to end-products
M&LEs: M&LEs: Apply flexible production model with a) pre-planned delivery schedules for components, b) Apply flexible production model with a) pre-planned delivery schedules for components, b) assembling assembling and finishing of end-products as their core business and finishing of end-products as their core business
Business networkBusiness network: : Allow efficientuse of competitive advantages among partners against low raw material and Allow efficientuse of competitive advantages among partners against low raw material and labour cost supply labour cost supply
http://europa.eu.int/comm/enterprise/forest_based/forestry_en.htmlhttp://europa.eu.int/comm/enterprise/forest_based/forestry_en.html
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Wood in European Construction Wood in European Construction
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Forest Based IndustriesForest Based Industries
Small and medium-sized enterprisesSmall and medium-sized enterprises
engines of economic growth and employment throughout the European Unionengines of economic growth and employment throughout the European Union
main policy topics: main policy topics:
improvement of framework conditions for SMEs, improvement of framework conditions for SMEs,
financial instruments and programmes in support of SMEs financial instruments and programmes in support of SMEs
enlargement, pre-accession and co-operation with non-member countries.enlargement, pre-accession and co-operation with non-member countries.
support and encouragement on SMEssupport and encouragement on SMEs::
Increased education and training for entrepreneurship, Increased education and training for entrepreneurship,
Cheap and fast enteprise start-up Cheap and fast enteprise start-up
Eased 1) legislation and regulation 2) taxation and 3) other financial matters Eased 1) legislation and regulation 2) taxation and 3) other financial matters
Availability of skills and strengthening the technological capacity Availability of skills and strengthening the technological capacity
Improving online access and use of e-business models Improving online access and use of e-business models
Developing top-class small business support Developing top-class small business support
Strong, effective representation of SME’s interests at Union and national level Strong, effective representation of SME’s interests at Union and national level
http://europa.eu.int/comm/enterprise/forest_based/forestry_en.htmlhttp://europa.eu.int/comm/enterprise/forest_based/forestry_en.html
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Wood in European ConstructionWood in European Construction
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Competitive Advantages
tangible input factors
Forest wood:
annual rate of EU wood resources used = 70% of growth
remaining 30% includes forests that are not suitable or available for industrial use.
complementing wood supplies from outside are needed
intangible input factors
R&D and innovation and skills
Mergers, clustering and knowledge sharing with other linked industries have all helped to create a high level of R&D, innovation and skills within the Forest Based Industries in the EU
increased technological know-how has increased production efficiency and quality.
Increase by working closely with Forest cluster ie. related sectors, such as machine and equipment suppliersprocess designers, etc
http://europa.eu.int/comm/enterprise/forest_based/forestry_en.htmlhttp://europa.eu.int/comm/enterprise/forest_based/forestry_en.html
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Wood in European ConstructionWood in European Construction
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
European woodworking industries promote European woodworking industries promote
policies to get demand for wood products to growpolicies to get demand for wood products to grow
integratoin of sustainable value chains into national and EU policies to create more favourable regulations.integratoin of sustainable value chains into national and EU policies to create more favourable regulations.
repair on the current EU renewable energy policy to properly acknowledge the industry’s interest in rationally utilizing repair on the current EU renewable energy policy to properly acknowledge the industry’s interest in rationally utilizing the value-added potential of wood raw material before bio-energy use the value-added potential of wood raw material before bio-energy use
growth opportunities for trade in engineered wood products (EWPs) in the short term. growth opportunities for trade in engineered wood products (EWPs) in the short term.
new applications for EWPs in factory-built housing components if historical growth rates are to continuenew applications for EWPs in factory-built housing components if historical growth rates are to continue
the Conformité Européen (CE) Marking in the BJC segment to be extended to several new building products in 2005-the Conformité Européen (CE) Marking in the BJC segment to be extended to several new building products in 2005-2006, following the entry into force of the CE marking on plywood in 20042006, following the entry into force of the CE marking on plywood in 2004
Mr. Jukka Tissari, Mr. Craig Adair, and Dr. Al Schuler Mr. Jukka Tissari, Mr. Craig Adair, and Dr. Al Schuler http://www.unece.org/trade/timber/docs/fpama/2003/fpama2003a.htmhttp://www.unece.org/trade/timber/docs/fpama/2003/fpama2003a.htm
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Roadmap 2010Roadmap 2010
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Woodworking Industry Structure:Woodworking Industry Structure:
Partially consolidated, with some large groups but very many small and medium sized companies Partially consolidated, with some large groups but very many small and medium sized companies
Companies remain very small compared to steel and concrete industries Companies remain very small compared to steel and concrete industries
Customers are consolidating more quickly than the suppliersCustomers are consolidating more quickly than the suppliers
Companies are smaller in Europe than in North AmericaCompanies are smaller in Europe than in North America
MarketsMarkets::
Increase the per capita consumption of wood products in a profitable and (as now) sustainable way Increase the per capita consumption of wood products in a profitable and (as now) sustainable way
Develop new markets outside EuropeDevelop new markets outside Europe
Wood SupplyWood Supply : :
Balance the usage of wood raw material between various interests in the societyBalance the usage of wood raw material between various interests in the society
BarriersBarriers::
Overcome weaknesses of wood at technical/educational level Overcome weaknesses of wood at technical/educational level
Perception:Perception:
Make wood products the leading material and preferred Make wood products the leading material and preferred
Choice in structural and appearance applications, packaging and transport with the public at large Choice in structural and appearance applications, packaging and transport with the public at large
Industry StructureIndustry Structure::
Maintain relative competitiveness of the European production capacity (SME enterprises) Maintain relative competitiveness of the European production capacity (SME enterprises)
Promotion Promotion ::
Effectively promote the interests of the industryEffectively promote the interests of the industry
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Roadmap 2010Roadmap 2010
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Building with wood:Building with wood:
Goal 2010Goal 2010 - - double wood based materials’ market share in constructiondouble wood based materials’ market share in construction
Main Actions:Main Actions:Changes in the construction and wood supply chainsChanges in the construction and wood supply chains
European building system and inter-changeability / modularity of building components through standardization processEuropean building system and inter-changeability / modularity of building components through standardization process
Planning toolboxes, e.g. CADCAM, and web sites to share information Planning toolboxes, e.g. CADCAM, and web sites to share information
Industrial and non-industrial codes & standards if not availableIndustrial and non-industrial codes & standards if not available
Needs of non-housing applications (i.e. industrial, commercial, heavy structures, etc.)Needs of non-housing applications (i.e. industrial, commercial, heavy structures, etc.)
Harmonized standards for Engineer Wood Products to ensure the smooth introduction of innovative wood products into Harmonized standards for Engineer Wood Products to ensure the smooth introduction of innovative wood products into the construction chainthe construction chain
Removal of institutional, technical, economical and perceptional barriers & regulatory limitations on the use of woodRemoval of institutional, technical, economical and perceptional barriers & regulatory limitations on the use of wood
Use environmental credentials of wood.Use environmental credentials of wood.
Roadmap 2010 for the European Woodworking Industries. Action Program. CEI-Bois in collaboration with TIMWOOD. Roadmap 2010 for the European Woodworking Industries. Action Program. CEI-Bois in collaboration with TIMWOOD. Stockholm, March 2, 2004. Stockholm, March 2, 2004.
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
House construction (residential) House construction (residential)
mrd €mrd €
new housesnew houses 99 ( 60 ( 60 %)%)
repairrepair 6,66,6 ( 40 %) ( 40 %)
TYPES TYPES (new units)(new units)
• residentialresidential 29 50029 500
• free time & saunasfree time & saunas 12 00012 000
• TOTALTOTAL 41 50041 500
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Demand Structures in Residential House Construction in FinlandDemand Structures in Residential House Construction in Finland
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Wood frame - residential constructionWood frame - residential construction
Wood frame Wood frame • only reference construction in multi storey housesonly reference construction in multi storey houses• competitive in row house constructioncompetitive in row house construction• dominate in single house constructiondominate in single house construction
WOOD FRAME
TYPE units % units %f lat (multi storey) 11500 39 115 0,8
flat (row ) 5000 17 3000 21
single houses 13000 44 10920 78
RESIDENTIAL TOTAL 29500 14035
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Demand Structures in Residential House Construction in FinlandDemand Structures in Residential House Construction in Finland
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Wood frame – single house construction Wood frame – single house construction
Wood frameWood frame dominant market share - growth only through growth in total market demanddominant market share - growth only through growth in total market demand half or more based on pre- fabricated componentshalf or more based on pre- fabricated components
residential TOTAL wood frame* free time & saunas*** WOOD FRAME TOTAL
TOTAL 13000 90 % 12200 23900
pre fabr comp. 62 % 56 50 % 56
in situ 38 % 34 50 % 44
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Demand Structures in Residential House Construction in FinlandDemand Structures in Residential House Construction in Finland
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Demand segments BtoC & BtoB Demand segments BtoC & BtoB (residential houses and free time houses)(residential houses and free time houses)
BtoC construction BtoC construction 86 %86 %
BtoB constructionBtoB construction 14 % 14 %
Transfer from BtoC to BtoB do not change the share of wood frame but can increase the use of pre fabricated Transfer from BtoC to BtoB do not change the share of wood frame but can increase the use of pre fabricated modulesmodules
BtoC: private person direct entrepreneur contractsBtoC: private person direct entrepreneur contracts
BtoB: construction entrepreneur & business network (upflow) BtoB: construction entrepreneur & business network (upflow)
pre fabricated Residential single houses
% %
BtoC I (wood frame) 20 47**
BtoC II (wood frame & in situ asembl) 55 29
BtoB I (wood frame & entr. contr.) 20 11
BtoB II (complete delivery) 5 3
** full in situ construction included
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Demand Structures in Residential House Construction in FinlandDemand Structures in Residential House Construction in Finland
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Markets & production & foreign tradeMarkets & production & foreign trade
features of home market industriesfeatures of home market industries competitive export production competitive export production competitive power of import lowcompetitive power of import low
milj. € HOME MARKET SALES DOM. FIRMS EXPORT IMPORT NET EXPORTEXPORT % OF
DOMEST. PROD.IMPORT % DOMEST.
MARKET
TOTAL 1106 1425 386 67 319 22,4 6,1
w ood houses 317 437 150 30 120 27,5 9,4
w indow s 339 340 8 7 1 0,2 2,1
doors 104 151 57 10 47 31,1 9,6
parqette 111 180 80 11 69 38,6 9,6
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Demand Structures in Residential House Construction in FinlandDemand Structures in Residential House Construction in Finland
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Demand segments in wood frame house construction - BtoC & BtoBDemand segments in wood frame house construction - BtoC & BtoB
(Demand for pre fabricated wood modules)(Demand for pre fabricated wood modules)
Multi storey house Multi storey house (BtoB markets) (BtoB markets)
Demand: Demand: Missing, CA in construction based on concrete elements Missing, CA in construction based on concrete elements
Supply: Supply: A few product innovations available, process innovations missingA few product innovations available, process innovations missing
Row houseRow house (BtoB markets)(BtoB markets)
Demand: Demand: Competitive, in situ construction preferred due to the customer oriented Competitive, in situ construction preferred due to the customer oriented differentation options. Strong competition with concrete elements in pre- fabricated differentation options. Strong competition with concrete elements in pre- fabricated
module markets module markets
Supply: Supply: Cost efficient process innovations missing in module productionCost efficient process innovations missing in module production
Single house Single house (BtoC markets)(BtoC markets)
Demand:Demand: Competitive, majority of production is in vertically integrated large firmsCompetitive, majority of production is in vertically integrated large firms
Supply:Supply: SME’s following differentiation strategy (supply to BtoC and BtoB markets) SME’s following differentiation strategy (supply to BtoC and BtoB markets)
Single house Single house (BtoB markets)(BtoB markets)
Demand:Demand: Competitive, CA in construction based on concrete elements Competitive, CA in construction based on concrete elements
Supply:Supply: SME’s following differentiation strategySME’s following differentiation strategy
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Production of Wood Houses (TOL 20301)Production of Wood Houses (TOL 20301) prefabricated wood house frames (assembling in factory or in situ)prefabricated wood house frames (assembling in factory or in situ)
High number of individual firms High number of individual firms Competition among major firms in product groupsCompetition among major firms in product groups
ENTERPRISES AND EMPLOYMENT
WOOD HOUSES OTHER WOODW. PROD. TOTAL
plants 260 750 1010
employment 5500 7000 12500
CONCENTRATION market share 80 % or
over
WOOD HOUSES* VINDOWS* DOORS**
number of f irms 9 8 5
* number of enterprises
** number of business units
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Supply of Wood Components, Modules and ElementsSupply of Wood Components, Modules and Elements
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Supply of Wood Components, Modules and ElementsSupply of Wood Components, Modules and Elements
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Classifying taxonomyClassifying taxonomy
Pre- cut wood components Pre- cut wood components – – precision in dimensionsprecision in dimensions
Standardized modular elements Standardized modular elements –– learning by doing advantageslearning by doing advantages
Wall elements Wall elements – – access to mass tailoring access to mass tailoring
Pre- fabricated wood frame modules Pre- fabricated wood frame modules - - integrated assembling in factoryintegrated assembling in factory
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Supply of Wood Components, Modules and ElementsSupply of Wood Components, Modules and Elements
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
On site constructionOn site construction
o unprocessed use of timberunprocessed use of timbero construction with pre- cut componentsconstruction with pre- cut components
Competitive advantagesCompetitive advantages
precision dimensions precision dimensions
positive scale economics through concentrated orderspositive scale economics through concentrated orders
flexible to architectural solutionsflexible to architectural solutions
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Supply of Wood Components, Modules and ElementsSupply of Wood Components, Modules and Elements
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Competitive disadvantagesCompetitive disadvantages
Construction on siteConstruction on siteo weather challengesweather challengeso preservation of high quality workmanshippreservation of high quality workmanshipo labour intensivelabour intensive
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Supply of Wood Components, Modules and Elements
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Pre- fabricated wood frame modulesPre- fabricated wood frame modules
Competitive advantagesCompetitive advantageso integrated assembling in factoryintegrated assembling in factoryo effective use of mass productioneffective use of mass productiono automatized production processesautomatized production processes o low labour input needlow labour input need
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Supply of Wood Components, Modules and Elements
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Pre- fabricated wood frame modulesPre- fabricated wood frame modules
Competitive advantagesCompetitive advantages
o highly specialized craftmanshiphighly specialized craftmanship
o degree of factory finishing and assembling can be varieddegree of factory finishing and assembling can be varied
o indoor assembling – low quality variation possibleindoor assembling – low quality variation possible
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Supply of Wood Components, Modules and Elements
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Pre- fabricated wood frame modulesPre- fabricated wood frame modules
Competitive advantagesCompetitive advantageso effective use of subcontractingeffective use of subcontractingo high applicability of specialized value networksshigh applicability of specialized value networkss
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Supply of Wood Components, Modules and Elements
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Pre- fabricated wood frame modules Pre- fabricated wood frame modules
Competitive disadvantagesCompetitive disadvantageso profitability imply high utilization of production capacityprofitability imply high utilization of production capacityo large capital investmentslarge capital investments
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Supply of Wood Components, Modules and ElementsSupply of Wood Components, Modules and Elements
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Pre- fabricated wood frame modulesPre- fabricated wood frame modules
Competitive advantagesCompetitive advantages o Syncronized delivery and site assemblingSyncronized delivery and site assemblingo Precision time schedulePrecision time scheduleo low labour input needlow labour input need
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Vertical Profile & Subsidiary in Architecture – New Town Planning
Process innovations for new town planning that make production network/chain competitive with concrete module Process innovations for new town planning that make production network/chain competitive with concrete module frame?frame?
Product innovations applying wood based elasticity to make consumer specific solutions?Product innovations applying wood based elasticity to make consumer specific solutions?
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
New Town Planning – wood pilot alternative: Puu-Linnanmaa Oulu (BtoB, mainly in situ construction)New Town Planning – wood pilot alternative: Puu-Linnanmaa Oulu (BtoB, mainly in situ construction)
AreaArea: : 12 hectares, 12 hectares,
Total constructed spaceTotal constructed space: : 25 000 m2 25 000 m2
Aggregated space:Aggregated space: 20 000 m2.20 000 m2.
308 apartments, 45 wood frame multi storey houses (2-3 storeys) 308 apartments, 45 wood frame multi storey houses (2-3 storeys)
all buildings with wood fasade and majority wood frameall buildings with wood fasade and majority wood frame
inhabitants inhabitants 450-500 450-500
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Vertical Profile & Subsidiary in Architecture – New Town Planning
Mixed demand segments to pre fabricated wood frame modulesMixed demand segments to pre fabricated wood frame modules
Case research: Karisto LahtiCase research: Karisto Lahti parallel BtoC and BtoB constructionparallel BtoC and BtoB construction subsequent subtowns – opportunities for chains based on partnership & leaning advantagessubsequent subtowns – opportunities for chains based on partnership & leaning advantages
Interview/questionnaire (2005): Interview/questionnaire (2005): BtoC: BtoC: - choice of wood frame type- choice of wood frame type
- competitive advantages among suppliers- competitive advantages among suppliers
BtoB: BtoB: - formation of business networks- formation of business networks
- use of product/process innovations- use of product/process innovations
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Challenges to wood - forest product chainChallenges to wood - forest product chain
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Competitive factors of SMEs in Woodworking IndustriesCompetitive factors of SMEs in Woodworking IndustriesInput factors/suppliersInput factors/suppliers
TimberTimber : : majority of firms have only some supply contractors which narrows their access to high quality timbermajority of firms have only some supply contractors which narrows their access to high quality timberLabourLabour: : excess demand of qualified workforce impeding systematic intellectual capacity increase excess demand of qualified workforce impeding systematic intellectual capacity increase CapitalCapital: : risky capital investments are insufficient in one third of firms risky capital investments are insufficient in one third of firms
Market/CompetitorsMarket/Competitors::
High demand elasticity among customersHigh demand elasticity among customers implying of price competitiveness implying of price competitiveness
Inferior position wrt house construction firmsInferior position wrt house construction firms implying oligopsony features in the marketimplying oligopsony features in the market
High barriers to entryHigh barriers to entry implying high cost competitiveness in the market and lack of implying high cost competitiveness in the market and lack of new competitive factors to entrancenew competitive factors to entrance
Parameters of market competitionParameters of market competition::
Dominant:Dominant: price, product quality, delivery and logistics price, product quality, delivery and logistics
MinorMinor: : R & D, marketing R & D, marketing
mail surveysmail surveys: 78 firms, 2000 (Petäjistö, Selby, Mäkinen 2001); 19 firms, 1998 (Mäntymäki 1998): 78 firms, 2000 (Petäjistö, Selby, Mäkinen 2001); 19 firms, 1998 (Mäntymäki 1998)
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Competitive factors of SMEs in Woodworking IndustriesCompetitive factors of SMEs in Woodworking Industries
Summary on impeding factorsSummary on impeding factors
Slight business management planningSlight business management planning: : even large firms subsidize documented management even large firms subsidize documented management planning with systemic non documented management planning with systemic non documented management
planningplanning
Low investments to R & DLow investments to R & D; ; mainly oriented to product development mainly oriented to product development
Missing strategic planning and structure analysesMissing strategic planning and structure analyses ; However, use of MP do not explain performance ; However, use of MP do not explain performance
Missing generic strategies and benchmarkingMissing generic strategies and benchmarking: : only 20 % of firms apply these tools systematicallyonly 20 % of firms apply these tools systematically
Inferior market knowledgeInferior market knowledge: : also among firms is what concerns relevant customers and also among firms is what concerns relevant customers and market competitionmarket competition
mail surveysmail surveys: 78 firms, 2000 (Petäjistö, Selby, Mäkinen 2001); 19 firms, 1998 (Mäntymäki 1998), : 78 firms, 2000 (Petäjistö, Selby, Mäkinen 2001); 19 firms, 1998 (Mäntymäki 1998), expert surveyexpert survey: Industry Outlook 2003 : Industry Outlook 2003 Woodworking (Ministry of Trade and Commerce)Woodworking (Ministry of Trade and Commerce)
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
THE FOREST-WOOD VALUE CHAIN THE FOREST-WOOD VALUE CHAIN
Knotty furnitureKnotty furniturequality zonequality zone
Dry knot zoneDry knot zone
Nearly knotlessNearly knotlesszonezone
Sawmilling, paper and pulp industrySawmilling, paper and pulp industry
SawmillingSawmilling
Drying Drying
Planing Planing
Furniture Furniture
Wooden houses Wooden houses
SawntimberSawntimber
LamwoodLamwoodpreforms preforms
Lamwood panels Lamwood panels
Profile planedProfile planedproductsproducts
The use of coniferous wood The use of coniferous wood
Wood workingWood working
Best qualityBest qualityWood workingWood workingWeakest qualityWeakest qualityPulp productionPulp production
SourceSource: : Antero Lepojärvi, Lapin LiittoAntero Lepojärvi, Lapin Liitto
Pulp production /Pulp production /Structural timberStructural timber Construction components Construction components
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Products & processing steps in the forest-wood value chain
•Roundwood production
•Roundwood harvesting and delivery
•Manufacturing of plywood, chipboard & fibreboard •peeling, chipping, defibration, gluing, laminating, pressing
•Sawmilling•Standard sawn timber
•Secondary & further processing of sawn or chipped timber •Special sawn timber products•Preforms and wood components for the carpentry, joinery and construction industry•Engineered wood products: LVL, Glulam, I-bars•Wood components for building construction
•Customer products•Prefabricated wooden frame houses•Joinery products: door and window frames, casings, parquet, flooring, staircases
Challenges to wood - forest product chainChallenges to wood - forest product chain
Deg
ree
of p
roce
ssin
g
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Towards A Towards A Sustainable Competitive Advantage among SME’s in Sustainable Competitive Advantage among SME’s in Woodworking Industries - COST Action E30 Woodworking Industries - COST Action E30
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Action focus:Action focus:
New rural economic development through the creation of entrepreneurshipNew rural economic development through the creation of entrepreneurship
Firms with Sustainable Competitive Advantage (SCA)?Firms with Sustainable Competitive Advantage (SCA)?
Comparative advantageComparative advantage of (nations, clusters, industry groups, industries, firms) of (nations, clusters, industry groups, industries, firms)
Characteristics of a firm environmentCharacteristics of a firm environment wrt SCA: wrt SCA:
(i)(i) factor conditions, factor conditions,
(ii)(ii) demand conditions, demand conditions,
(iii) related and supporting industries and (iii) related and supporting industries and
(iv)(iv) firm strategy, structure and rivalry. firm strategy, structure and rivalry.
Under conditions of: political and legal structures, state of technological knowledge and Under conditions of: political and legal structures, state of technological knowledge and macroeconomics (Porter 1990).macroeconomics (Porter 1990).
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Success factors of Finnish woodworking industry SMEs in a changing competitive environment Success factors of Finnish woodworking industry SMEs in a changing competitive environment
Enterprises, Innovations and Public Policy Related to Forestry-wood Value Added ChainEnterprises, Innovations and Public Policy Related to Forestry-wood Value Added Chain . .
February 11-12 2005, Joensuu, Finland. February 11-12 2005, Joensuu, Finland.
The purpose of the seminarThe purpose of the seminar: :
promote knowledge formation on challenges related to new SMEs in forestry wood-product value-chains promote knowledge formation on challenges related to new SMEs in forestry wood-product value-chains
in house and timber construction. in house and timber construction.
The special focus:The special focus:
business activities, product and process innovations in forestry wood-product value- chains, business activities, product and process innovations in forestry wood-product value- chains,
market supply and demand of wood products in house constructionmarket supply and demand of wood products in house construction
public policies associated with production, supply and demand of these wood products public policies associated with production, supply and demand of these wood products
http://www.metla.fi/tapahtumat/2005/woodconstruction/index.htmhttp://www.metla.fi/tapahtumat/2005/woodconstruction/index.htm
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland
Pekka Ollonqvist & Thomas.Rimmler METLA.Joe / METSÄNTUTKIMUSLAITOS
SKOGSFORSKNINGSINSTITUTET
FINNISH FOREST RESEARCH INSTITUTEwww.metla.fi
Success factors of Finnish woodworking industry SMEs in a changing competitive environment Success factors of Finnish woodworking industry SMEs in a changing competitive environment
METLA 2004-2008METLA 2004-2008
Katja Packalen*Katja Packalen* business networks and other co- operationbusiness networks and other co- operation
Thomas Rimmler**Thomas Rimmler** innovationsinnovations
Ashley Selby & Leena PetäjistöAshley Selby & Leena Petäjistö knowledge managementknowledge management
Pekka OllonqvistPekka Ollonqvist public policy & business environmentpublic policy & business environment
Mikko ToropainenMikko Toropainen macroeconomics of woodworking industriesmacroeconomics of woodworking industries
Eero VatanenEero Vatanen METLA house Joensuu (wood frame office)METLA house Joensuu (wood frame office)
Jari Kärnä (PuuOske) (assoc.)Jari Kärnä (PuuOske) (assoc.) technology programstechnology programs
Pekka Mäkinen (Univ of Hel,) (assoc.)Pekka Mäkinen (Univ of Hel,) (assoc.) business strategiesbusiness strategies
* STSM Nov. 2004 INEA Legnaro PD (Luca Cesaro)* STSM Nov. 2004 INEA Legnaro PD (Luca Cesaro)
** STSM spring 2005 BOKU (Ewald Rametsteiner)** STSM spring 2005 BOKU (Ewald Rametsteiner)
INNO-FOREST 24. May 2005 Iisalmi, FinlandINNO-FOREST 24. May 2005 Iisalmi, Finland