As specialists in yard design and redesign, Sunbelt has helped to retool approximately 500 lumberyards over the years, and the expertise it has gleaned from the experience reaches far beyond inventory turns and product pitches. “It’s rare that someone calls us up and just asks for a 150-foot T-shed,” Darnell says. “Almost everyone is looking instead for strategic improvements. While dealers across the country differ in their products and their inventory mixes, their challenges are quite similar, and best practices in yard design range over areas that include improving workmen’s comp, operational efficiencies, and maximizing space.”
At Indianapolis-based Krauter Storage Systems, vice president of sales Rick Hogue and his sales team aim to provide their dealer-customers with design and operational advice accumulated partly by visiting approximately 12 different dealer yards every week. “We get to see the good, the bad, and the ugly,” Hogue says. “[The exposure] makes us a good resource for best practices.” Hogue agrees that there is less of a concern with inventory turn metrics from the vendor standpoint. “Most successful dealers really have a handle on that already,” he says. “People are usually interested in what other dealers are doing in terms of keeping product under cover, dealing with the mold issue, and learning other best practices.”
Group Efforts Buying groups, as well, are fast emerging as a go-to source for both financial metric data comparisons and full-on roundtables, especially since multiple market coverage and deep membership ranks allow dealers to network among non-competing peers and size themselves up against larger- and smaller-volume operations. Since most buying groups and co-ops already require members to submit annual financials, providing dealers with a comparative analysis of those metrics is becoming a key service offering for many organizations. “Traditionally, a buying group has been just exactly that—we help you buy stuff better and [then] everything else you turn elsewhere for,” says Nelson Wood, marketing manager for Grand Rapids, Mich.–based Progressive Affiliated Lumbermen (PAL), a buying group with more than 300 members in 16 states. “But as we grow, we are trying to expand the services that we offer members other than just trying to find a cheap 2×4.”
To that end, PAL provides dealer-members with a confidential comparison of annual financials against dealers in 10 separate sales volume categories ranging from $1 million to $100 million. “If a guy is doing well in that comparison, he can sit back and smile, and hopefully it doesn’t give him the wherewithal to simply think, ‘Oh, I have got it made and I don’t need to do anything,’” Wood says. “But if he is not doing as well as at least the average PAL member, then he can dig in and determine why.”
To assist members in determining just how, when, and why to leverage the operational and strategic significance of comparative analyses, PAL launched its first roundtable this year to facilitate face-to-face networking and benchmarking for dealer members, an effort that Wood says the co-op intends to grow, hopefully getting an additional five to six roundtables underway in the coming year.
At Ballston Spa, N.Y.–based Curtis Lumber, management has relied on similar co-op roundtables—primarily through Wayne, Pa.–based purchasing organization Lumbermens Merchandising Corp. (LMC)—to gauge the financial health of the company, collect best practices, and generate new business ideas for the 18-unit pro dealer. “We favor using co-op roundtables for comparing benchmarks because outside of that environment it can be challenging to find a non-competitive atmosphere,” says company director of purchasing, marketing, and advertising John Kirk, who—along with company president Jay Curtis and vice president Jon Hallgren—has been a stalwart supporter of LMC’s annual roundtable for several years.
While Kirk says the LMC roundtable is among his best resources, he suggests that dealers will always benefit from buying group benchmarking programs regardless of their affiliation, and should commit themselves accordingly. “It is time out of our busy schedules, but at Curtis we truly feel the networking opportunity with our peers is well worth our time. It gives you insight and opens your eyes.” And although the non-competitive atmosphere that co-op networking provides has been invaluable to Kirk, Curtis also supports roundtables—especially those geared toward best practices—within its own market regions via participation in programs of the Northeastern Retail Lumber Association (NRLA). “The programs and opportunities [at NRLA] are great,” he says. “And by now we all know what not to say in a room with possible competitors.”
Stick to It Regardless of whether you seek financial and best practice benchmarking opportunities via vendors, associations, buying groups, or a combination of these sources, industry experts and roundtable veterans have a couple of tips to help you get the most out of the process.
Obviously, when you’re opening up the books—especially for the first time—to other business owners outside your company, hesitancy looms large. Achieving marked and measurable results from your roundtable efforts requires honesty in the presentation of your state of affairs, and establishing a comfort zone with your group prior to the formal sit-down can help eliminate the diffidence. “Have a few drinks, go to dinner, play golf,” suggests Enter. “It is critical to establish that trust, because the value is going to be in what the dealers learn from each other and ultimately how they hold each other accountable.”
Once you’ve settled in with a group, remain consistent in approach and show patience with obtaining results. “You throw 90 financial ratios at a new dealer, often they are seeing some of those metrics for the very first time,” explains Adams. “They have to develop an understanding of what those numbers and calculations mean. Over time, with help from the group, they can begin to discover how to positively change those numbers.”
