Last time we talked about software from an entrepreneurial point of view, unlike what often happens, that is analysing software in its technical characteristics, trying to understand what parameters a good entrepreneur should have in mind when facing that kind of investment.
In fact, I would like to focus this article on a style which is still too undeveloped in the wood sector in Italy: the entrepreneurial style. I think it is important to speak as an entrepreneur (and not just as a craftsman), because in the global competition in which we are all involved, to remain anchored in an excessively artisan vision, we risk getting our fingers burned.
For this reason, in today’s article I’ll define the needs of the current market to better understand its characteristics and properly manage the daily challenges.
Having said that, our starting question is “how is the market today?”
As we have already said on several occasions, the world has changed, the world is changing and consequently the market we are facing is inevitably different.
If we were able to rely on large orders in the past, this has unfortunately not been the case for some years now. The numbers have dropped dramatically, the demand for wood, especially in the window and door sector, has suffered a decline, for reasons I’m not going to mention here, but which I attribute in large part to the lack of foresight, professionalism and knowledge from a good part of “wood professionals” themselves.
The numbers not only have brutally changed, but with them, also the variety of the demand from customers, dealers and so on.
If we were lucky enough to receive large orders in the past, when the products were all the same, today we see the opposite phenomenon, that is, we often receive small orders and, as if that was not enough, they are extremely varied.
These orders require each product to be produced in different sizes and characteristics, requiring different processes and so on.
From a certain point of view, it can be of annoyance having to guarantee all this flexibility, but on the other hand it is undeniable that as long as products remain complex and qualified people are needed to produce and assemble them, we have a chance to keep our beloved work alive.
Otherwise, the chances of companies such as Amazon setting their sights on the wood market are greatly increased, and this would become a very difficult competition for many.
So, as I always tell my clients, as long as architects and alike do difficult things and then come to us to nag, we “should” have a future for our carpentry.
On the basis of these considerations, there for all to see, I would like to continue with the next question.
Are there any companies able to manage demand from the market intelligently nowadays?
In principle, there are two types of company on the market today: the craftsman and the industry.
Undoubtedly, both the craftsman and the industry have useful peculiarities, but at the same time they also have shortcomings that limit the possibility of success, if not even their survival.
The craftsman, for example, is used to managing small numbers so this aspect is certainly not a weakness, but rather a predisposition written in the DNA of the craftsman himself.
Flexibility is also a factor on which the craftsman is certainly the winner.
The craftsman is in fact prepared to follow up the most peculiar requests that come from customers, to the point of being able to satisfy even the whims of the most demanding.
At first glance, therefore, it seems that the craftsman really has the credentials to be competitive in the market, but in reality it is not so.
The main limit of the craftsman has always been something called: organisation.
Since it has become normal today to have to change product types frequently, it is of fundamental importance that internal resources (like machines and people) are able to convert from one product to another quickly.
It is also equally important that the organisation aspect takes care of material procurement.
It is useless to say that organisation has never been the strength of the craftsman, but unfortunately in these market conditions, the lack of it brings unforeseen events and delays that easily erode the already thin margins, with which all work.
Another type of company that is present on the market today is the industry.
What are its strengths? The main thing that stands out is the habit to act by clear and predefined procedures, according to an organisation followed by all the steps of the production cycle, which brings the ability to produce large numbers in a very efficient way. Another very important feature of the industry is its ability to calculate the costs of production in an analytical and detailed manner.
The ability to allocate direct, indirect and overhead costs to individual products in order to have a clear sight of the break-event and marginality on each product or each order.
I’d like to open a sad parentheses on this point, concerning the craftsman.
When I hear carpenters saying “the market decides the price” my heart breaks.
I don’t think Ikea would say that the market decides the price… and neither would Ford nor Ferrero.
The ones who know how to do the math decide the price, while the ones who don’t, seek someone or something to shift responsibility to, an excuse to continue being lazy while hiding behind harmful beliefs such as “the market decides the price”.
The market could decide the price if they were based on analytical calculations, but as long as there are companies on the market that don’t know their costs of production, each price is the result of chance and improvisation.
Doing business by pricing products in an approximate and superficial way can only lead to impoverishment, to the point of not being able to find the margin to invest in keeping the company up to date. Closed parenthesis.
Unfortunately even the industry has its limits, firstly having to deal with large numbers lest loss of margin due to the high costs of the structures used.
If we want to be fussy about it, another weakness in the industry is the lack of flexibility, the inability to produce custom objects in a streamlined and cost-effective way.
So… the craftsman has its’ advantages… so does the industry… which should we pick then?
Is there a solution? Of course, there is!
I still remember when on April 6, 2018, I used the concept of INDUSTRIAL CRAFTSMAN in front of about sixty carpenters, trying to explain in a simple way the solution to this problem.
The name was so self-explanatory that since then, I haven’t been able to detach myself from it. Today I feel like the father of this concept and every time I talk about the craftsman of the future I automatically call him Industrial Craftsman.
The Industrial Craftsman is the owner of an intelligent carpentry that respects all the recommendations listed in the Industry 4.0 definition document (we talked about that in the Xylon issue of November/December 2017).
The Industrial Craftsman is structured to handle small batches.
The Industrial Craftsman is flexible and retains his operational skills, so he can produce both the standard and special, in a profitable manner.
The Industrial Craftsman is organized, because he has an industrial mind and has the appropriate software tools that help in the synchronization of activities, minimizing inefficiencies and unexpected events.
The Industrial Craftsman does analytical accounting management to identify if there are costs that can be cut, and types of margin to establish the correct selling prices accordingly.
We could say that the Industrial Craftsman is a kind of mythological figure, almost a modern Minotaur of half craftsman (in structure) and half industrial (in thought), which absorbs the benefits of both sides, while leaving out the shortcomings.
I realise that what I have just written is not a small thing, but these are only the consequences. These are consequences that come by themselves, not without sweat and effort, but come as the craftsman’s mind begins to change attitude.
When the Italian carpenter begins to put aside pedantry and arrogance common to know-it-alls lacking study and research on how to do things better…
When the Italian carpenter understands that the knowledge of woodworking is no longer a sufficient condition to guarantee a successful future for his company…
When the Italian carpenter understands that there are more industrial craftsmen abroad than here in Italy, who have knowledge of woodwork and have automatic machines that churn out excellent products…
When the Italian carpenter understands that today the most challenging thing is not to produce (which is common knowledge) but to sell…
As soon as the Italian carpenter becomes aware of all this, only then the transformation can begin (at its own speed) and I am sure that it will lead to the path of a true Industrial Craftsman, capable of winning both on the local market and, perhaps with greater satisfaction, on the global market.
On the other hand, concepts such as learning, evolving and putting oneself to the test will continue to frighten the Italian carpenter.
If we continue to believe that the experience of 25-40 years in carpentry, gained in a world that was profoundly different from that of today, is enough to give a successful future to your company… We’re just placing an expiration date.
We’ll see you at the next stage where we’ll keep stirring the hornet’s nest with perhaps brutal reflections that want to spur us in the direction of the Industrial Craftsman, as that is the only way to go now.