Q: We manufacture hardwood furniture and the market is quite slow. Maybe you have some ideas to help us in a slow market? We have excess kiln capacity and wonder what you think about doing some custom kiln drying or drying lumber and selling KD lumber.
A: When the market goes soft, do you suppose that everyone takes the same loss of sales? With all of the hardwood lumber being kiln dried and made into various products, I would ask myself (if I was drying, producing and/or selling hardwood products) why I need to take a big cut in production. Why not let my competitors take the cuts and I will continue at the same level as before or even grow? What is it about my product or service that is not letting me do that? I challenge you to do some self examination and to think positively.
Here is one idea. Faced with lower sales, why not take some of the people that will be "laid off" and, before you release them, give them a telephone and have them contact all the potential customers in North America? Have them market your product; these are not sales calls. Your production people know the products you make better than anyone else. They know the strong points; they know why it is better than the competition's products and services. (If they don't know or if there is no difference, then perhaps you need to back up a step or two first!) If your customers or potential customers are nearby, have your employees make a "house call" to find out what would make your product or service even better than it is right now. Find out what they like about the customer's products too and then add those features to your product.
In short, spend some time on marketing (not sales). Do not lower your price to sell more; instead, raise your quality. And if quality goes up, make sure that the customers know about it too.
Do you have a marketing effort? Often we confuse sales and marketing; they are different. Marketing concentrates on the product and people; marketing looks at the service your product provides; marketing provides the answer to your customer's problem(s).
So, I think the first approach to excess kiln capacity is to fill the kilns with your own lumber for your own use. (I wonder: Don't you also have excess plant production capacity? It is interesting that you are trying to make the kilns pull you out of this economic slump. Why not have the plant pull you out instead and then the kilns won't be empty?)
Now, if you do indeed want to dry lumber for others, you need to produce kiln-dried lumber that is better than anyone else's. If yours is the same as everyone else's, then the only reason someone would buy your lumber is because it is cheaper and if it less expensive, there go your profits!
Do not lower your price to sell more KD lumber; instead, raise your quality. How? With kiln dried lumber, what if you offered a 100 percent money back guarantee? What if you guaranteed that the MC was right on target? (This is easy to do. Just measure the MC of the lumber before you ship it and pull any pieces that are not perfect!) What if you packaged your lumber so it looked fantastic? (We can learn something from people who sell strawberrieswhich berries are on the top? We know that inside or underneath, there may be some that are not quite as pretty, but they still meet the grade. But the ones on the top convince us to buy, convince us that we are looking at a quality product.) What if you visited your potential customer who would buy your KD lumber and asked them how their present sources of lumber (your competitors) are doing? What's good and what's bad? And then you produce lumber that has all the good characteristics and none of the bad!
I remember a study from Virginia Tech indicating that purchasers of KD lumber had "off grade" lumber as their #1 complaint. Actually, it was probably graded correctly; it is just that the customer expected a different quality. Non-uniform thickness was another major complaint, along with warp and end splits. These would be issues that you would have to address. Of course, if your lumber is better, you need to make sure that the customer knows and appreciates that very well. (Alerting the customer to this fact is part of marketing.) Why? Because you are going to charge a little more for your quality "customized" lumber.
Another key issue is delivery. Rapid response will be critical, so make sure you have a good inventory (including good, dry storage) and a rapid way to deliver. Rapid delivery of a few species and thicknesses is much better than slow delivery of many species and thicknesses.
In short, there is a lot of average and below average lumber on the market place today. There is no sense in your kilns adding to this glut. But, there is a fantastic opportunity for producers of higher-quality KD lumber. If you get into this quality market, you must exude this quality concept in everything you do!
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