Key to that adaptability has been a shift in Stock’s thinking, a realization that success with big builders across geographic regions lies not in an attempt to duplicate products and services, but in an endeavor to instead duplicate the savings that Stock can offer in the reduction of costs and cycle times.
Executives at Lennar, in particular, are embracing that strategy, and are hoping to duplicate current purchasing agreements with Stock as the builder and dealer concurrently grow into new markets. “We’ve found Stock to be a logical [company] for us to try and grow our business with,” says Lennar’s regional president of national purchasing, Mark Shevory. “The products that we purchase from them, which can be almost everything but the concrete, represent the most significant purchases we make in the construction of a home. I don’t want to say where specifically our regional purchasing programs are with Stock, but I can say that we enjoy the business relationship with them and they are a great company to work with, so we’d really like to expand our relationship in the future.”
Stock’s strategy also has allowed more flexibility at the local level to provide big builder customers with a suite of products and services tailored to their specific market needs—but it also required a complete corporate reorganization to facilitate the cross-pollination of ideas, operating procedures, and service capabilities among disparate locations. To that end, Stock continues to work on a corporate reorganization begun in 2002 to operate as 10 separate market districts, allowing the company to develop yards that serve production builders exclusively and others that cater to a more custom clientele, enabling locations to focus on their own individual strengths—and the prevailing big builder winds in their markets—for the greater growth good of the district. Depending on customer requirements, materials and services can originate from virtually any of the pro dealer’s locations in a market area, explains Hord. “In the Carolinas, for example, rather than separate stores, we have a single market district that works together to increase efficiency by working out which locations best serve certain areas or customers.”
The strategy is paying off for Brown, who says the approach has allowed Stock to gain a larger regional market share of big builder business, even when faced with supply relationships hammered out between local big builder purchasing directors and some of Stock’s competitors. “Stock is strong here in the Carolinas market, particularly in Raleigh,” says Kevin Lamb, a regional purchasing director for Standard Pacific Corp. who covers Florida and the Carolinas for the big builder’s Westbrooke Homes division. While Lamb has purchasing agreements in place with Stock rival Builders FirstSource, he says Stock’s repositioning and greater focus on the production builder market is undeniable. “Stock has been particularly strong with builders doing divisions of about 200 units or so, which is smaller than some of our operations, and they’ve made an attempt with Ferguson to secure as much of the home as they can. They offer a good deal.”
Brown admits that turning builders like Westbrooke into Stock customers is challenging, but feels that the dealer has developed the tools to put the company on equal footing with the best of the best production suppliers. “There’s still a lot of autonomy out there on the builder side as far as the local markets are concerned, and where builders have a dependable relationship in place, it can be tough to turn them to using [Stock as a supplier],” he says. “But generally they are depending more on those partners at the supply and subcontractor level to help get them to the efficiency point where they can turn and burn, and that is our window of opportunity.” For example, Brown says bringing branches in the Carolinas together to turn best practices into standard operating procedures—from window installation to customer billing—offers customers working with Stock across geographic areas the consistency in service from the supply end that can speed the building cycle and give Stock competitive clout.
Leveraging best practices across market districts also eases the learning curve for Stock branches traditionally rooted in custom contractor sales that suddenly find a Pulte Homes subdivision in their backyard. “I sell our people as much as I sell the builder, because sometimes big builders are not the traditional business for them,” Brown says. “The custom side can still be up to 90 percent of the business in some of the [more rural] Carolina markets,” so leveraging the collective market district strength thus “provides the commitment on the inventory level, the product mix, and the service levels” necessary to procure and sustain production builder accounts.
Services and Scale Along with consistency in operations, expectations from big builders in all of Stock’s market regions are becoming increasingly tied to the pro dealer’s own construction service capabilities. Currently, the dealer offers value-added services across all of its markets, with approximately 130 locations boasting a truss plant, panel plant, or window or millwork manufacturing shop to provide the types of component products in combination with installation services that production builders are looking for to simultaneously alleviate labor pressure and speed the construction process. “Our reorganization helped us to focus on local markets as an alignment of branches rather than as individual locations,” explains Stock’s vice president of sales, Jim Kirkland. “But construction services are also key. The big builders have taken to panelization in the big markets, and the supply process to basically prefab the home and have it delivered and ready to go cuts down their cycle time significantly.”
Thus, a key strategy for Stock will be continuing to add on construction services as they match big builder growth across their markets. According to Robinette, developing or acquiring additional construction services will indeed be a likely precursor to Stock entering additional markets, particularly in the production builder–heavy Western regions. “If we are going to enter a market, we have to have the tools to compete effectively,” he says. “We knew if we wanted to be in Vegas we would have to be turnkey. If we want to be in Phoenix, we have to be that way, if we want to be in Tucson, we have to be that way, if we want to be in Sacramento, we have to be that way. We’ve been a little bit stealth because we’ve been offering the services for awhile, but I expect that [as it grows] we’ll [need to] have a VP running it within a year. We have an opportunity in construction services both territorially and in terms of overall market share.”
If Stock’s reorganization can continue to help maintain the consistency in local service execution—from component installation to lumber deliveries—that the company believes is necessary to win over the big builder accounts, company officials from Brown up to Hord believe the concept of one national dealer serving the needs of national builders is still a viable and worthy goal. “We’re closer to that today than we ever have been previously,” says Sean Smith, Stock’s director of national accounts, who acts as a liaison between the pro dealer’s corporate and district offices and the corporate purchasing departments for big builders. “There’s more transparency in that relationship than there has been in the past. There’s more shared information, including for example our delivery methodology. Some builders have adapted to those standards with the realization that it’s better to do something one way a thousand times than a thousand different ways.”
