Companies in theWood Components Manufacturers Association have met the challenge to become moreefficient in their own processes while delivering more services, smallerquantities and shorter lead times to a wide variety of wood product customers.

 

Those efforts havegotten a boost from the expanding housing market.

 

“There are many WCMAmembers that are extremely dependent on the housing industry. We have membersthat produce cabinets, cabinet doors, stair parts, window treatments, mouldingand trim and components for all of these segments of the industry,” said PaulO. Dow, president of the WCMA and export sales manager and dimension salesmanfor Yoder Lumber Co., Inc. in Millersburg, Ohio.

 

“In conversationswith the members I have found that the members that are producing products forthe housing or commercial construction industries seem to be quite busy.”

 

“Yoder Lumber isvery dependent on the home construction and remodeling industries.  We are involved in the institutionalfurniture business as well.

 

Sid Anderson,president of Anderson Wood Products Co., Louisville, Kentucky, agreed thathousing is an important component market.

 

“Housing startsdrive a number of our members’ markets, especially cabinets and buildingproducts. The continuing increase (albeit the increase is slowing) inhousing starts is critical to the health of our industry and is driving much ofthe growth we see.”

 

Keith D. Atherholt,president of Lewis Lumber Products, Picture Rocks, Pennsylvania, said hiscompany’s business.

is separated intofour basic markets: cabinets, furniture, millwork and secondaryprocessing.  In 2014, millwork grew themost and is most important from a profit standpoint.  Secondary processing sales decreased the mostand for the opposite reason (least profitable sales). 

 

“We consider ourproducts as aftermarket items with regard to the housing market.  We often are not involved in the bulk housingcommodity items.  We are involved inhigher end homes and that market has been a bit better for us in 2014.  We anticipate demand to be higher in 2015.”

 

Components in demand

 

Which products arein demand?

 

“Paint gradeproducts are king right now,” Atherholt said. “The demand for these kinds ofapplications are as high as 65 percent of the cabinet demand. Mouldings followa similar look, and we see a larger percentage of jobs coming through specifiedas primed or painted. Blanks are mostly poplar and I assume (they are) forpaint jobs.

 

Furniture for us isa bit different as we are selling into a higher end market, and show wood tendsto be walnut, cherry, and mahogany, or substitutes such as sapele and redgrandis. 

 

“On non paint grade;walnut picked up demand quite a bit in 2014. Soft maple sap has picked up somedemand but probably at the cost of white hard maple. Cherry seems to be inchingup in demand. Rift and/or quartered white oak is also a hot item. Plain sawn redoak dropped in demand toward the end of 2014.”

 

“The demand for mostof our products has been quite good,” said Yoder Lumber’s Paul Dow. “Demand forlaminated squares, panels, treads, risers, and moulder blanks has also beenvery strong. The furniture parts segment of our business has improved and isshowing some very good signs of additional growth.

 

“The species indemand have held fairly steady in our production. Red oak and poplar are thelargest species we use followed by white oak, cherry and walnut.”

 

Doors, mouldings,blanks and furniture parts are in demand at Anderson Wood Products. “But wecontinue to have excess capacity in our industry so there are not shortages orlong lead times currently,” Anderson said.

 

“True white oak isvery much in demand because of the increasing needs for barrels to support thegrowth in distilled spirits.”

 

Small runs, short lead times

 

Component customerswant smaller runs, shorter lead times, and in some cases more processes to beperformed.

 

“We are definitelyoffering more services than in the past,” Lewis Lumber’s Atherholt said. “Weare partnering with other shops to do that efficiently and meet demand deliverydates. CNC routing, boring, custom gluing, specific chopping (miters), primingand finishing are all examples of things we outsource.

 

“We may have 10 to 15percent of our work that has some kind of outsource on it. That may not seemhigh, but five years ago we had almost none. Interesting that we see ourselvesas being a solution to others who could benefit from ‘outsourcing’.”

 

Sid Anderson saidthat customers want smaller runs and shorter lead times.  “Our customersdo not want to hold inventory,” he said. “Most WCMA members welcome theopportunity to add value in the manufacturing process as this is a way we candifferentiate ourselves.”

 

“Our customers aredemanding shorter lead times and the ability to produce smaller orders at aneconomical price,” said Paul Dow. “Customers are requesting many custom partswith limited quantities with extremely short lead times.   So far we have seen little demand forincreased machining capabilities.”

 

Imported components

 

Are importedcomponents affecting the domestic market?

“Components areoften imported because they have nominally lower prices,” Anderson said. “Domesticmanufacturers are being asked to match those prices. This has the effect ofcompressing margins or in the worst case the domestic manufacturer loses thebusiness.”

 

“Imported productsare not just a problem in our local markets but we have lost the opportunity toexport our products to other markets around the world,” said Dow, speaking asWCMA president. “Many of our members were very involved in the exporting ofparts to Europe. (This business) has been relocated to either Asia or EasternEurope (sources).  The Asianmanufacturers of course are a large and difficult competitor to most of us inthe component industry.

 

“In Yoder Lumber’s casewe have constant pressure from Asian competitors,” Dow said. “With currencyvalues, freight issues, cost of labor and the demand for smaller quantities weare planning on a repositioning of some products back to our operations. However,the large commodity items will most likely remain in the Asian supply chain inspite of the other influences.”

 

Lewis Lumber Products’Atherholt does not see imports as large an issue. “We don’t see it as such,because our customer base comes to us with specifications that often includethe species,” he said. “If that specification is for an imported wood, we justsource it. I do believe we are sourcing a bit more imported than in the past,but not much more. Imported woods probably represent less than 10 percent ofour mix. I do not know of any demand loss due to other imported items replacingwhat we make.  Our customer base has beencustom from the beginning, and that has probably protected us from thischallenge.”

 

Technology and competitiveness

 

In order to delivershorter lead times and more custom products, component producers have had tobecome more efficient in their own operations.

 

“Our industry hasgone thru substantial investment to the latest manufacturing technology andwill need to continue to maintain our competitiveness globally,” said Dow.“(Yoder Lumber), like most of the membership, spent large amounts of capitalupdating and modernizing its facility including state of the art manufacturingequipment.”

 

“Much of theemphasis over the past few years has been on improving efficiency and yield inthe rough mill through technology,” Anderson said. “Most medium and largeoperations now have computerized optimizing systems.”

 

Lewis LumberProducts has undergone a lean continuous improvement process, and the companyhas started with an Innovation Engineering System to learn about developing newproducts and services. “This is a cultural change that is exciting andextremely challenging, but is beginning to bear fruit,” Atherholt said.

 

“We had upgraded ourequipment in 2008 and now are investigating the need to develop systems ofproduction that better fit our mix of products being sold. In other words,meeting customer demand is driving the production floor; not the other wayaround. That sounds elementary, but it is a cultural change.”

 

In the past, theybuilt their sales message around telling the customer what the company could dofor them. “Now we ask the customer totell us what he does and then tailor our abilities to help that customer,”Atherholt said.  “Those answers force usto think about how we can solve their problems and success in that area writesmore business.”

 

In order to competeboth domestically and with imports, Atherholt said that U.S. and Canadianproducers need to deliver fast dependable service and first-time quality.

 

“Our goals for 2015expect similar outcomes. We are purposefully driving our millwork sales. Thatkeeps more work in our business. We have the capacity to grow into and are wellpositioned with equipment and skilled employees to meet the need.”

 

Anderson said thatcomponent producers must be responsive, provide shorter lead times and have theability to deal with change quickly. “My sense is the general outlook of theWCMA membership is positive, but only for slow growth,” he said.

 

“Our industry willcontinue to thrive if we adapt to the changing economies and demands by our customers,”Dow said.  “We can offer quicker leadtimes, fulfillment of smaller quantity orders and in many cases a moreconsistent quality than overseas competitors can provide.”  

 

For Yoder Lumber, “Ourbusiness for 2014 was vastly better than 2013 and the previous six years duringthe great recession. We are forecasting an improved 2015 over 2014 and are veryoptimistic about 2016 and 2017.”

  

Wood ComponentManufacturers Association

www.wcma.com/  651-332-6332651-332-6332, wcma@wcma.com

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