Johnson: Our global sourcing ability and superior supply chain ensures that builders have access to what they need, when they need it. We have a diversified portfolio of businesses that hold leadership positions in every vertical market from infrastructure to construction to maintenance and remodel. This provides a range of benefits for more efficient project management, making it easier for customers to meet timeline commitments and continue to grow at a healthy pace.
Hylbert: There are always opportunities in a downturn as companies decide to get out [of the business], deemphasize an area of their business, or reallocate their assets. We and other dealers welcome those opportunities. It’s also a great time to work out the best kinds of relationships and programs that will take us into the future.
Harmon: Likewise, as a [local] builder, we continue to seek new opportunities as the national builders are retrenching due to the slowing of other markets nationally.
Baker: It’s hard to generalize, but I don’t think dealers will be as dominant in five years as they are now. A decade ago, there was pressure on them really only from large manufacturers dictating terms and product mix. Now, and going forward, dealers are between two large and powerful forces—manufacturers and big builders—and lack the ability to get to the scale where they’ll be able to control their own fates. There’s a lot of power on both ends of the chain.
Judd: National footprint matters. Servicing a broad geographic area not only adds value to large builders, it helps insulate the pro-oriented dealer from regional slowdowns. Selling a consistent product and service offering to larger builders is important. Managing cost, service, and product offering through systems, people, and efficient capital utilization can help create a competitive advantage.
Hylbert: Pro dealers are positioned well to add value to the supply chain, regardless of any downturn [in housing]. The challenges increase, though, to maximize profitability. It’s also the time that builders challenge us to provide products at a lower cost or faster or do different things to help them weather the storm.
Q What, if anything, is a “wild card” that could change, either dramatically or slightly, your crystal ball for 2010 regarding the LBM supply chain, housing/ home building, or the economy in general?
Harmon: The most significant wild card is the continued threat of terrorism and the impact another major event could have on the national economy. Behind that is a concern of additional regulatory burdens that could become reality if there is a shift toward less business-friendly federal and state governments.
Hylbert: One wild card is the ill-conceived [federal] attempts to stem the flow of immigration and playing politics [in that regard] to a specific crowd. We all want safe and secure borders, but there’s also work that has to get done. Our industry’s labor force is replenished and refreshed by immigrants; if that flow was stemmed, the impact on the economy would be disastrous.
Baker: What if manufacturer-direct [sales to builders] becomes more popular? Where does that leave dealers? They won’t be cut out entirely, but maybe they won’t be independent pieces of the supply chain. Or, dealers could become the labor piece of the [housing production] process, the subcontractor instead of traditional specialty trades.
Judd: Many things can affect the economy, home building, or the supply chain. Terrorism, import/export feuds, interest rates, environmental issues, and transportation are just a few of the key influencers that could change my view of the supply chain into 2010. —Rich Binsacca is a contributing editor for PROSALES.
