Housing Updates – Know Where Your Business Stands

Key points

• Working with IndustryEdge, FTMA is establishing a simple, voluntary and confidential business information program for fabricators.
• It involves collecting data from fabricators, creating aggregates and averages and sharing them with participating companies.
• The aim is to provide insights to help businesses make decisions in the sector, the supply chain and their specific markets.
• In 2020, the goal is to commence with a trial, to work out what is possible and create a program that meets the needs of fabricators
• A Zoom meeting (what else!) is being set up so you can learn more.

Business insights for the frame and truss sector

Every day, fabricators are operating in the middle of a supply chain that builds the nation’s houses. Your role is significant.

You might frame as many as 120,000 houses and townhouses each year. We are pretty sure you are the largest users of sawnwood in Australia. We suspect that you provide more wood products to home builders than any other sector in the wood products supply chain.

The reason we say ‘might’, ‘pretty sure’ and ‘suspect’ is because as a whole, the sector doesn’t have its own data, that is typically consistent with such a significant sector of the housing supply chain.

It is true that every fabricator knows how much wood they buy, what average price they are paying and how their orders look, compared with last month and last year. But are they using more wood than average? Are they paying more or less than other fabricators? How’s the order book, compared with the average?

To find these things out – and a bit more besides – the FTMA is working with IndustryEdge to establish an ongoing, confidential and voluntary survey of members, to provide up to date information that can help you navigate your business environment.

The brief provided to IndustryEdge by the FTMA was simple. Keep it simple! Make it easy for fabricators to participate and keep fabricator data confidential.

Of course, this is a voluntary program, and it is also a trial. It is important to work out what works best for the FTMA and members.

All FTMA members will have access to some of the headline insights, but the main insights will only be available to fabricators participating in the program.

Why data driven insights are needed

Australia’s frame and truss manufacturers are the largest users of sawnwood, situated as the primary interface between sawnwood processors and importers on the one hand, and the home building industry on the other hand.

Despite their importance in the supply chain, the structure of the sector (relatively large number of small businesses, most operating in regional or local centres) means fabricators have limited key business data and information at the sector level.

This inhibits the ability of businesses in the sector to understand the sector’s market share as a proportion of total dwellings (eg. compared with steel frames), their businesses’ market share within the sector (eg. compared with other fabricators), the amount of timber being used per dwelling, including compared with the ‘average’. That information will also assist the FTMA and fabricators to communicate the relative size, health and importance of the sector, and so on.

Businesses with this level of information can plan for the periods ahead, for the timber they need, the design and development work they need to do, the investments they can make, and in these very difficult times, where the future lies and how they are tracking compared to the entire sector.

To achieve this, fabricators need to build a program of aggregated and shared information that gives them key information on an ongoing basis. Most significant sectors in the supply chain do this already, for their own purposes.

What data is required

Fabricators and the FTMA will decide what data should be collected, during the trial, and after.

For the trial, as a minimum, we expect the data to be collected each month would include;

• How much sawn wood (m3) did you use?
• How much plywood / particleboard / OSB / MDF (m3) did you use?
• How many frames did you complete?
  • Houses
  • Townhouses (1 & 2 Storey)
  • Flats, apartments etc.
• How much sawn wood did you use in;
  • Houses
  • Townhouses (1 & 2 Storey)
  • Flats, apartments etc.

But, we know that there may be other national aggregate and average information that would be useful for fabricators to understand. It is up to you. That can be discussed and tested during the trial.

After the trial, once the program is up and running and everyone is contributing to it consistently, there are still options to increase the data being collected, to provide more insights that are useful to fabricators, the FTMA and the supply chain as a whole.

How easy is this?

This will be a simple program – otherwise it wont work. Most likely, it will work so that every month, you’ll receive an email, asking you to fill out a simple table with your data, for the previous month. Respond to the email, and that’s it. There are other options for collecting data, but the aim is to ensure it is no more complex than this.

When the trial program starts, IndustryEdge will provide support to get the information right and answer your questions. For the first data collection, we will probably ask for three months of back data, so we can get moving on the data analysis sooner.

What information will my business get?

Each month, shortly after all of the data is in, you’ll receive a simple report, providing you with all the industry averaged data, at a national and state level. Depending on whether confidentiality can be maintained, it might also be possible to provide you with regional data.

Only the headlines – and only what has been agreed can become public – will be provided to non-participants, through FTMA News, and only once the participating companies have already received their monthly report.

How do I know my data will be confidential?

On behalf of fabricators, FTMA will have an agreement with IndustryEdge to maintain the confidentiality of information provided by fabricators. The information provided by fabricators will go to IndustryEdge and be loaded to a database, without company details being recorded.

The only outputs from this program will be totals (eg. how much wood, etc) and averages (eg. how much wood per house, etc), nationally and at a state level. Whether it is possible to provide regional data and maintain confidentiality will be confirmed by the FTMA, prior to that information being published.