Vidzeme entrepreneurs analyze their “bottlenecks” – product prices and production times – during simulation

In June for the second time entrepreneurs from Vidzeme and Võru (Estonia)  within the framework of the study visits of project “Wood and furniture” shared experience, this time visiting Estonian wooden house companies. In addition to the exchange of experience, entrepreneurs participated in the simulation to learn how to identify and manage “bottlenecks” in the production process, concluding that, basically, all producing companies are faced with challenges in terms of competitiveness – pricing for services and manufacturing times.

The aim of the simulation was to introduce entrepreneurs to a methodology to give an insight into how to identify and manage “bottlenecks” in the manufacturing proceses. As pointed out the head of the Center for the woodworking and furniture manufacturing in Estonia (Tsenter) and also the moderator of the seminar Kalev Kaarna, understanding the production of “bottlenecks” is important, as their capacity in the production chain is what essentially defines the entire chain (or production) capacity. “With a systematic approach to production management it is possible to make production more efficient without the need for more people to engage or to purchase additional equipment,” said Kaarna.

In the simulation, entrepreneurs concluded that, for the most part, the main problem they are facing in business is related with price and production terms. Namely to be able to offer competitive prices to their customers, entrepreneurs need to minimize production costs. In turn, in order to be more efficient and able to manufacture in shorter terms, it is necessary to make production processes more efficient.

According to Kalev Kaarna, both problems can be effectively solved through more efficient production management, using specific methods that can significantly reduce costs by making processes more efficient. For example, providing a work for the workshop continuously, organizing staff lunches one after the other rather than one pause for all, can increase productivity by about 10%.

Another host of delegations from two countries was welcomed by Stylewood OÜ the manufacturer of barrels and other products of barrels, the manufacturer of hand-made log houses Vipson Projekt OÜ and the currently requested hotel building manufacturer with a contemporary and unusual design ÖÖD House.

The form and scope of the company’s activities vary, and participants were interested in the philosophy of each company whole, as well as sales, marketing and production.

Company Stylewood OÜ said that their philosophy is to use the best quality material as well as the efforts to manufacture their products, paying attention to each and every part of it. The company’s representatives said that good reputation and customer satisfaction are the basis for building a business.

Entrepreneur Taavi Tuvike, presenting the company Vipson Projekt OÜ, shared with the conclusion that while automation in the field of wooden house building is becoming more widespread, nowadays, more and more customers are interested in hand-made log houses. “Therefore, the company makes almost all parts of the log homes by hand using only electric hand tools and axes, “says the entrepreneur.

A slightly different approach to manufacturing and marketing processes was expressed by ÖÖD House. Their approach to business planning differs by the fact that most part of houses builders focus on their ability to manufacture and then marketing, the approach of this company is the opposite. They focus primarily on marketing and sales, and only then on manufacturing.

Experience exchange trips were organized by the Vidzeme Planning Region and the Center for Woodworking and Furniture Manufacturing in Estonia (Tsenter – Puidutöötlemise ja mööblitootmise kompetentsikeskus) in the project “Innovation and Export of Woodworking and Furniture Industry Products in the Võru  and Vidzeme Planning Region” within the framework of the Latvia-Estonia Cross Border Cooperation Program.

Information prepared by: Ieva Bīviņa, Vidzeme Planning Region Communication Manager, +371 28674617, ieva.bivina@vidzeme.lv

The above information in this publication reflects the view of the author and the managing authority of the Estonian-Latvian program is not responsible for the possible use of this information.

 

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