Take BlueLinx’s interplay with Builders FirstSource (BFS) and Guardian Industries. Judd says that some of Guardian’s fiberglass insulation salespeople work out of BlueLinx’s offices, and the distributor absorbs some of Guardian’s excess mill production either by storing it at its own distribution centers or by selling it directly to dealers. “We’ll move truck-loads from the [fiberglass] mills to a large BFS [yard, for example], so Guardian doesn’t have to worry about slowing down its mill or changing SKUs. They can make nice, long runs of a product and we’ll move it into the marketplace.” Judd says BlueLinx holds the insulation inventory for Builders FirstSource’s smaller yards until they need it.
Ultimately, dealers want suppliers they can depend on when product demand is most pressing. Last year, when I-joists were scarce, Ply Mart didn’t feel the pinch, says Hofius, because the technical manager for its supplier Boise Cascade, Nancy Allen, “got up every day thinking that she was a Ply Mart employee. She was constantly speaking with our supervisors about what our inventory needs were, and she juggled trucks to make sure we got what we needed.”
Dennis Huston, sales and marketing manager for Boise Engineered Wood Products, recalls that when this shortage hit the market, “the first thing we did was to take care of those customers who were loyal to us. We didn’t go out and solicit new business, no matter how strong the demand was.”
Modes of Communication Not too long ago, Conrad of Your Building Centers attended a dealer conference at the St. Louis headquarters of Huttig Building Products, where the distributor offered to provide dealers with access to its inventory via the Internet. Conrad says he found that only half of the 15 dealers at the conference thought this would be useful to their companies. “They still prefer phone calls and invoicing.”
As this anecdote illustrates, the way dealers manage their inventories varies widely. But as companies grow, they often see the need for more sophisticated systems that track what they buy and sell. Spahn and Rose and Oso Lumber are switching to Activant’s Falcon system, which Hannan says should give his company “a better handle on store-level inventory maintenance.” Lingenfelter is very optimistic about the upgrade, which he believes “will completely change how we look at turns and inventory management.” Oso’s old system, which wasn’t Windows-based, was set up for companies doing less than $50 million in annual revenue, whereas Oso’s sales now exceed $100 million. Lingenfelter says the new system’s first phase, which was installed in early May, is 15 times faster, and 10 of Oso’s vendors could tie into it right away. When it’s completely installed by year’s end, this system will track the profitability of each job and every customer. “All of this will be instantaneous,” he says.
Over the long run, that could be what “just-in-time” comes to mean for many other pro dealers, too. —John Caulfield is a contributing editor for PROSALES.
