and wood suppliers was the high rate of wood waste (5-20%). This resulted from a number of factors: Wood sellers used imperial measurements, while the small workshop owners used metric measurements. The quality of wood supplied was low and sometimes unacceptable for furniture production. The high humidity rates of the wood made it difficult to work with. Kiln drying required an investment that was often too expensive for small workshop owners to undertake. These chain inefficiencies could be traced back to the nature of value chain governance (an issue which will be addressed as a general phenomenon in Chapter 5). When providing credit for wood purchasing to the small workshop owners at the start of the production process, the showroom owners dictated what firm the small workshop owner must purchase from and what type of wood should be used. The restrictions placed on this process, severely limited the potential for knowledge transfers and increased operational inefficiency between the small workshop owners and their wood suppliers. The small workshop owners were locked into this arrangement. If they decided to produce their own products, to purchase their wood independently and to sell to other traders, they were out of the 2007: 148). “frozen market” (El-Shahat Skill Acquisition/Innovation The historical and cultural significance of furniture making in Domiatt generated a longstanding tradition of skill acquisition. The artisans that owned small workshops possessed a high level of skill. But they were price-takers in a competitive price-driven domestic market. As a result their margins were squeezed, and by 2002, 67% of the 80 firms interviewed had cancelled their apprenticeship programmes and 43% had reduced the number of journeymen. Table 3.10 gives an overview of the capabilities possessed by a sample of 80 small workshop owners. Significantly, the firms were capable of modifying machinery and producing a wide variety of products.
and wood suppliers was the high rate of wood waste (5-20%). This resulted from a number of factors: Wood sellers used imperial measurements, while the small workshop owners used metric measurements. The quality of wood supplied was low and sometimes unacceptable for furniture production. The high humidity rates of the wood made it difficult to work with. Kiln drying required an investment that was often too expensive for small workshop owners to undertake. These chain inefficiencies could be traced back to the nature of value chain governance (an issue which will be addressed as a general phenomenon in Chapter 5). When providing credit for wood purchasing to the small workshop owners at the start of the production process, the showroom owners dictated what firm the small workshop owner must purchase from and what type of wood should be used. The restrictions placed on this process, severely limited the potential for knowledge transfers and increased operational inefficiency between the small workshop owners and their wood suppliers. The small workshop owners were locked into this arrangement. If they decided to produce their own products, to purchase their wood independently and to sell to other traders, they were “frozen out of the market” (El-Shahat 2007: 148). Skill Acquisition/Innovation The historical and cultural significance of furniture making in Domiatt generated a longstanding tradition of skill acquisition. The artisans that owned small workshops possessed a high level of skill. But they were price-takers in a competitive price-driven domestic market. As a result their margins were squeezed, and by 2002, 67% of the 80 firms interviewed had cancelled their apprenticeship programmes and 43% had reduced the number of journeymen. Table 3.10 gives an overview of the capabilities possessed by a sample of 80 small workshop owners. Significantly, the firms were capable of modifying machinery and producing a wide variety of products.