A new report from the Boston Consulting Group identifies a quartet of initiatives for getting ahead in the business.
The lumber industry, like many in the country today, is a challenging one given all the complications from global supply chains, domestic construction trends and environmental considerations. So those trying to make a living working in the business are looking for all the help they can get.
Enter the well-known Boston Consulting Group, which in a new white paper identified four factors that could help companies in the industry succeed. They may not be earth-shattering revelations but they do point businesses looking to get ahead in the right direction.
1. Be in the engineered wood products (EWPs) business.
They offer better financial returns and more stable margins, often twice the size of commodity lumber.
2. Source from the Southern U.S.
Trees mature in 25 years in the American South versus 70 in British Columbia, Canada and have the extra advantage of being able to be logged year-round. Reduced freight expenses are another factor.
3. Diversify revenue sources.
“Strategic timberland acquisitions” are good for profitability, BCG says, as are moving into real estate and developing by-products for bioenergy like wood pellets and chips for power and heat generation.
4. Embrace technology.
By leveraging new tech like AI tools to streamline supply chain, production, pricing, sales and demand forecasting, companies can improve their bottom lines even in down times.
