Aligning the Chain
In this model of national accounts, there’s a lot of talk from every player about supply chain alignment. What it means, simply, is matching a “national” builder’s hierarchy of regional divisions and local community offices with the manufacturer’s distribution network serving the markets in which both companies operate. “Typically, manufacturers approach us [about a national agreement] and we see if there’s an existing relationship somewhere in the company,” says Justus. “Or they’ll tell us who their [supply chain] partners are in our markets, and we see where there’s a match.”
Similarly, when Pulte Homes approached Clopay as a potential partner, the manufacturer found many of its residential-focused dealer-installers were already serving the builder’s divisions in some markets. That helped clinch the deal.
But manufacturers and builders see the local dealers in these national agreements as being more than just names in a Rolodex. Lynch takes pains to introduce Pulte’s local reps to the dealers Clopay knows in that territory. Clopay also has a corporate-level national accounts staff that communicates and gathers feedback from its dealer-installer network to continually refine the program, including better marketing support and product changes that improve installation, performance, and reliability.
Builders apply the same tactic. “We don’t leave our partners,” says Justus. He gives manufacturers contact lists detailing whom to call at each division or local office, as well as any history they’ve had with the products or brands. He also tells his divisions to expect a call from the supplier’s reps while the supplier informs its dealer network about the contract and its particulars. “The goal is to get all the partners in that channel actively managing the channel to deliver the greatest value.”
Let’s Talk
This new era of shared information is all part of streamlining a historically costly and accuracy-challenged supply chain. Rather than blame individual links for creating waste, the new wisdom appears to be that each link has value—even if each also has some work to do to make its role more efficient and accurate.
“If you look at the supply chain rationally, it makes sense to have specialists at each link,” says Paul Hylbert, president and CEO of Lanoga Corp., a $2.5 billion dealer that manages 350-plus locations from its Redmond, Wash., headquarters. “In an ideal situation, we’re in partnership [with manufacturers and builders] to identify the needs of each local market and create an efficient supply channel to serve those needs.”
Those efficiencies include centralized purchasing standards (if not precise pricing structures) that manufacturers and big builders have been creating within their operations. Those changes in turn will place new demands on dealers. For instance, Owens Corning used to have individual building product divisions selling windows, roofing, siding, Cultured Stone, and insulation. Now the Toledo, Ohio–based company has reorganized itself to target certain “impact” builders via a corporate-level national accounts staff that works closely with local dealers.
