Today’s business environment is constantly changing. Customers are more demanding. They seek solutions to problems rather than just products. They also want to know more about your business, its operations, management and prospects.

Nowhere is this more true than in construction where the last few years have seen some dramatic changes in attitudes and ways of working as well as more sophisticated products and process techniques. Construction uses 70% of all wood products in the UK and so it is the needs of our construction customers that are of paramount importance.

Here are some of the key questions managers are, or should be, asking if they truly wish to grow their businesses – and, as we all know, staying still is not a long term option: How good is my business compared to my competitors? Are my customers really satisfied with our service? Where do I find out the hard facts?

Traditionally, construction has been a relatively low margin industry governed by price and the cheapest deal. It appeared to be a never-ending cycle, but slowly this attitude is changing. In 1998, BAA chairman Sir John Egan was commissioned by the government to head a task force to look into the workings of the industry. The task force’s report, Rethinking Construction, identified 10 key areas for improvement. It also spelt out that the major driver for implementing these improvements would be client satisfaction.

Many earlier government task force reports have faded into obscurity but this one seems to have taken root. Building procurers, the clients, are asking – and in some cases forcefully demanding – that contractors take up the Egan challenge if they want their business.

The Movement for Innovation, set up to take forward the recommendations of the Egan report, identifies good or best practice through demonstration projects. To help businesses focus on the key issues, a pan-construction set of indicators known as key performance indicators (KPIs) has been drawn up. The KPIs are benchmarks against which businesses can assess how they perform compared to the rest of the industry; clients are beginning to use them to select contractors.

Although of generic use to major contractors, it is difficult to apply these KPIs to the timber industry. For benchmarks to be relevant and useful, they must measure business issues which enable organisations to identify their current position (establish the benchmark), take action to improve and then to measure the improvements. To be meaningful, standard performance indicators must relate to the industry in question.

No standard KPIs currently exist for our industry but TRADA Technology (through its Business Solutions group) is working with leading edge organisations in the timber trade to fill the gap. These KPIs will enable businesses to identify how they perform relative to the rest of the industry against a set of key business issues – finance, people, stock, customers and suppliers.

This information can have direct impact on the immediate selling process as part of PR and promotion. It can also identify areas requiring improvement and enable positive actions to be effected in a structured way.

The key to the success of this pan-industry project is to get the timber industry to buy into it, both the big players and the small to medium-sized. TRADA wants to hear from all companies which want to get involved.

The first set of KPIs is due to be published in January 2002 and all businesses and organisations in the industry will be free to use them.
Related Files
Profitability
Product
Service