You Said It:
Steve Watson, managing director of Big Tuff Timber Products Ltd. in New Zealand answers questions from the Pallet Enterprise about working in the industry.
Date Posted: 6/1/2014
Steve Watson is the managing director of Big Tuff Timber Products Ltd., a manufacturer of pallets, crates and bins in Manukau, Auckland, New Zealand.
Pallet Enterprise: What is one thing you do at your company that is different from other pallet companies?
Watson: Big Tuff is the only pallet company in New Zealand that owns and operates its own on-site sawmill. The advantage to the company includes competitively priced pallet components along with additional timber supply at times when supply is tight due to seasonal demand etc. Big Tuff also has a larger focus on residue production than other pallet manufacturers due to its sawmill operation. Large volumes of bark, saw dust, shavings and wood chips are produced and then sold to the residues market.
Pallet Enterprise: Have you seen customer expectations change in recent years? How?
Watson: Customer expectations have changed and increased over recent years. Product quality and compliance requirements have risen considerably with customers demanding a better quality product than in the past. While pallet manufacturers have been happy to comply with these additional requirements for quality, customers have been reluctant to pay more for their products.
Compliance costs, such as those associated with ISPM-15, or customer imposed quality control, have all added to the cost of making the products. For example, customers are more demanding when it comes to timber knot tolerances, moisture content, etc. Passing on the cost of these additional requirements has been difficult. Simply put, customers now demand more “Bang for the same buck.” There is also a drive by customers to save costs within their operations. As a result of this focus on saving money, pallet manufacturers have been forced to reduce pricing for their products which in turn have eroded margin over time.
Pallet Enterprise: What is the best piece of business advice that you have ever received?
Watson: The best piece of business advice that was given to me some 20 years ago was that the most important business resource for any company is its people. Our company has some amazing dedicated and loyal staff members, both factory workers and management alike. Staff with over 20 years of service with our company and managers that treat the company like it is their own make Big Tuff a successful business in a highly competitive industry.
Pallet Enterprise: What is one of the hardest business decisions you have ever made?
Watson: This is a hard question to answer in a brief response. Business is always a challenge that needs to be constantly looked at, reviewed, and where necessary changed to meet its goals and objectives. As the sole owner and director of our company, I have made many difficult decisions over the years. After the 2008 global economic downturn, the company was forced to put some of its larger capital expenditure projects on hold. This resulted in several engineering staff being let go. This was an extremely hard decision to make and one that no business owner ever wants to do.
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