Imitation is the sincerest form of flattery. I am sure you have heard that statement before, and I am sure you, like 4Ward, have pivoted/changed a program/created a new product/etc. and then seen a competitor imitate it. It might bother you, but most of the time, they just do not have the creative ability to come up with something new; so they just copy. There are some who just rehash the same-old formula or idea again and again without recognizing times have changed.
It was more than three years ago that I knew 4Ward needed to adapt and change in how we provided solution services for customers and thus we as a team continued to transform how we operated. It wasn’t about charging a higher price for services, it was about providing the industry with a platform from which they could find what they needed. We didn’t need to copy someone else, like some have, we just moved forward and created the path for transformation, thus expanding our ecosystems.
Our industry, whether structural components, lumber dealers and building materials, modular, millwork, etc., sometimes finds itself unable to change to meet the operational demands required, particularly in the areas of leveraging data or in advanced automation equipment. But outside our industry, the movement to the future of industry ecosystem models has been advancing for years, such as in automotive, aerospace, and life sciences, where the trend as accelerated during the COVID-19 pandemic. Why are industry ecosystems critical for success in the digitally transformed, disrupted world we live in today? It’s because the complexity of products, supply chains, customer experiences, and changing market and consumer needs are too great for any one organization to address on its own.
The future of industry ecosystems goes beyond partnering with more companies and organizations; it is also about leveraging the sharing of data, applications, operations, and expertise — expanding upon the platform, sharing economy that was built over the past five years. We see this in some of the work being done by the Structural Building Components Association which focuses on providing best practices for the structural components industry without an individual company creating the wheel on their own. The segments of sharing across an industry ecosystem encompass the following:
- Sharing data and insights to ensure security, reduction of fraud, functional safety and security, or new mission-critical innovations, as well as cross-ecosystem reporting such as for sustainability.
- Sharing new applications to enable data and insights, improved operational efficiency, or better customer experience.
- Sharing operations so that organizations can scale their capability and capacity for new products and services to meet market, customer, and consumer needs.
Each of these shared elements of the future of industry ecosystems complements and enhances the other, producing a multiplier platform effect that results in improved innovation, intelligence, and customer experience. Industry ecosystems are dynamic entities that can change depending on customer and market need, scale to meet volume and demand, and evolve to be resilient, innovative, and open in the face of disruption, competition, and change.
Why Industries Need Industry Ecosystems
The pivot to the next normal of industry ecosystems is based on several key drivers of change. These drivers and challenges will significantly influence the purpose of an organization’s ecosystem, in addition to providing foundational operating principles:
- Customer/consumer needs and wants: For most of us in the North American building industry, it is all about each house package, whether components or loose lumber, etc., being different, so no two orders may be the same. When we think about the supply chain and how the order is processed from the initial blueprint to delivery to the site to the finished project, industry ecosystems can not only improve upon or anticipate what a customer wants to buy in a moment, but also impact how people could live differently through the products and services that they offer.
- The need for flexibility and resiliency: The rapid move to digital transformation over the past two to three years has led companies to build platforms for internal and external collaboration and begin to expand the breadth and capability of their ecosystem. We have seen this with BIM practices and the expanded integration of MEP and other suppliers earlier in the design process.
- Operational and resource constraints: This includes physical facilities, lack of skilled workers, the need for digital innovation (not just advanced automated equipment) and software development expertise, and service support.
- Innovation: A key learning from some LBM companies has been the ability to innovate; that is, the translation of an idea into a product, a service, or an action, with those ecosystems that could innovate more quickly outpacing the competition as they pivoted their offerings to adapt to the current situation. As I mentioned, 4Ward Solutions Group recognized more than three years ago that we needed to transform the way we delivered services and expand our own capabilities where we were deficient.
- Environmental sustainability: I believe the building industry has done a good job of identifying where we need to reduce construction waste including from the jobsite and the manufacturing plant. But if we are going to hire today’s Millennials or Gen Z or promote our sustainability goals, we need to change and adapt more quickly. Focusing on environmental sustainability will require organizations to have an end-to-end view of all aspects of their delivery mechanisms from raw materials to finished goods and in-service usage to disposal and recycling.
Traditionally, building industry organizations operate around a value chain: a set of sequential activities geared toward delivering a valuable product or service for the building market. As more organizations in our industry are undergoing digital transformation, these value chains are being disrupted. On top of this, COVID-19 and the dramatic disruption of markets and industry supply chains have accelerated the need for business transformation.
An increasing portion of an enterprise’s ability to generate value will be tied to its participation in this new economy. As new business models, customer requirements, and ways of operating emerge (heavy focus here on offsite construction), new ecosystems are created. Traditional industry value chains that were limited in the number of partners give way to industry digital ecosystems that leverage software and advanced automated processes to deliver scale and speed, as well as unite data from products, assets, people, and processes. These open, agile, and scaled industry ecosystems facilitate the sourcing and distribution of new innovation and provide operational support and expertise as required to support dynamic needs and opportunities.
4Ward had the fore thought to change our own ecosystem years ago and we will continue to research and share new learnings in the years to come. But most of all, we will keep adapting and transforming, without the need to copy from others. What will you do in your business, whether it be in the lumber yard, component plant, modular plant, at the jobsite, millwork, building material distributor, and more? Will you transform or stay the course? If the team at 4Ward Solutions Group can be of assistance to you, please contact us; we would be honored to work with you towards your success!
Ben Hershey is CEO of 4Ward Solutions Group including Consulting, Labor, Offsite, Design, Software Development, and Back Office Solutions. When the industry needs an actual expert, they turn to the 4Ward team with more than 150 years of experience. 4Ward Consulting Group is the leading provider of Management and Manufacturing Solutions to the Structural Component, LBM, Millwork, Modular Building and Lumber Industry. A Past President of SBCA, Ben has owned and managed several manufacturing and distribution companies and is Six Sigma Black Belt Certified. Ben has provided consulting to hundreds of Component Manufacturers, Modular Manufacturers, Lumber Dealers, and Millwork Operations in the past ten years. You can reach Ben at ben@4WardSolutionsGroup.com or 623-512-6770.
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