With most parts of the economy going through a slump since 2009, the sawmilling industry in Limpopo was not spared. Despite that Limpopo Lumber Products had won the 2011 Productivity SA National Awards in the Emerging Business Category, the company was faced with various business related challenges. Immediately after the award, Seda got involved with Limpopo Lumber to assist the business with maintaining its productivity levels, marketing research and financial support so that it can explore new opportunities in the value added side of the market.
Seda’s assessment was treated like market research intervention which enabled the agency to propose a four pronged intervention strategy.
First was offering generic basic business skills training and custom made financial management training. These trainings ensured that junior managers are capable of performing necessary daily responsibilities. This was followed by a two year Workplace Challenge Programme which focus on five productivity challenges such as quality, cost, delivery, safety and morale (QCDSM). This programme was concluded in June 2014.
Next up was business planning interventions which identified the need for market expansion beyond the traditional wet-off-saw pallet wood market into further beneficiation of timber. The value added market opportunities existed in both Limpopo and Gauteng.
The interventions are starting to bear fruit. Limpopo Lumber has been achieving targets with its Workplace Challenge Programme – which is run and monitored in partnership with Productivity SA. Its productivity level, which is the D in the QCDSM performance target, has been consistent at or above the targeted rate of 58%. In this sector, this is the benchmark. Quality has also improved a lot since the implementation of the programme.
Jane Tennant, Limpopo Lumber’s General Manager says only 1 complaint has been received about its products since 2013 to date, compared to three in 2012. This has seriously improved its order book.
Both morale and safety have also improved significantly with the workforce understanding work processes and being more alert to safety standards.
Financially, the business is also in better shape today with operating expenses going down by almost 10% in the last year, whilst operating profits rose more than 100%. The better financial position has seen an increase in job opportunities in the last year with 6 new jobs being added bringing the total workforce to 96.
Jane added that Seda reports have helped the business to focus even more strategically, whilst the business plan was helpful in focusing the business on its growth path and opportunities.