Aug 22 2008 8:23AM | Permalink | Email this | Comments (0) |

Over the past few weeks I have been talking with a lot of building material manufacturers and have learned that their raw material costs have been rising at an unprecedented rate this year. This is particularly true with those products that utilize petroleum-based raw materials like roofing and vinyl siding and windows. Manufacturers of products that use metals like copper and steel have also experienced very high price increases. Obviously the manufacturers have been forced to raise their prices to home builders across the country.

The builders that I have talked to recently have verified that they are receiving price increases at an alarming rate and are scrambling to cope with this increase in cost. I have also been told that even though some builders have long-term pricing contracts with some manufacturers that there are clauses that void the contract are the manufac...Read More

Aug 11 2008 9:50AM | Permalink | Email this | Comments (0) |

If you look at my picture you will notice that I have been around the industry for some time and, as a result, I have been heavily involved with the National Association of Home Builders. Recently, I have been somewhat involved in NAHB’s green building initiative and I have identified some key areas in which building material manufacturers can play an essential role in helping builders build green homes efficiently and effectively.

1. Manufacturers can assist builders to obtain code approval and certification from third party verifiers.

2. Provide direction on which products work best in specific climates

3. Be clear on product warranties and any maintenance aspects of your product warranty

4. Become knowledgeable about the NAHB and USGBC g...Read More

Aug 5 2008 8:07AM | Permalink | Email this | Comments (0) |

Over the past several weeks I have been observing the process of problem resolution between a Builder Partnerships’ builder member and manufacturer associate as I have been copied on all their email correspondence. It seems that the builder has been experiencing quality problems with one of the manufacturer’s products. It seems that this particular product always is delivered to the jobsite with some form of damage to it.

The manufacturer has been very responsive and has communicated well since the inception of this problem. In fact, the senior vice president of sales and marketing has been involved from the beginning as well. He has had his team visit the distributor to determine if there has been some handling and shipping problems. He has also examined the manufacturing process as well as the shipping process to determine if the problem lies in this area....Read More

Jul 21 2008 9:35AM | Permalink | Email this | Comments (2) |

Through out my life I have observed that there are two kinds of people, those that sit and complain when the going gets tough and those that get up out of their chairs and try to change their situation. This is no different when you look at builders and manufacturers during this tough, tough economy.

Some builders have taken the bull by the horns and have taken costs out of their operation; they have reduced the number of standard items or offers in their homes and have made them options, thus reducing the price of their standard home. Many builders have retrained their sales personnel to better react to the market and to hone their selling skills that may have become rusty during the long upward building cycle.

When it comes to manufacturers, many of them have also become proactive in this down market. Obviously, they have cut costs be reducing head cou...Read More

Jul 9 2008 10:28AM | Permalink | Email this | Comments (0) |

I recently had an interesting experience during a discussion with several building material manufacturers. These folks were not competitors so the conversation centered on common issues and opportunities such as how to help builders sell upgrades, how to get builders to buy new products, etc. Suddenly the conversation took a new turn and the manufacturers began talking about how they can help each other in specific markets and with specific builders. Manufacturer “A” told Manufacturer “B” that he would personally introduce him to Builder “X” as he had a very good relationship with the builder.

I thought this was great but they took it a step further in that they decided to work together in two markets, Charlotte and the state of Ohio. They scheduled a conference call for their respective sales teams to discuss a strategy on how they c...Read More

Jun 27 2008 9:31AM | Permalink | Email this | Comments (1) |

Earlier this week I had the opportunity to have a discussion with several non-competing manufacturers who were attending the Pacific Coast Builders’ Conference in San Francisco. As you can imagine, the topics were varied and the content was quite interesting as many different view points were expressed, that is, until the subject of Request for Proposal (RFP) came up. On this subject the manufacturers were all on the same page.

Let me explain. Several years ago most public builders initiated the R.F.P. process with major building material manufacturers. Legend has it that industry consultants assisted the builders in developing this process which has been used in other industries and government for some time. The manufacturers are requested to fill out forms addressing the following subjects:

• Price
• Base Rebate
• Co...Read More

Jun 9 2008 8:53AM | Permalink | Email this | Comments (0) |

I have been talking with quite a few manufacturers in the past few weeks and the current world oil crisis is hitting home. I am not only talking about the tremendous increase at the pump, but I am also talking about how this situation is affecting the building material manufacturers. Just think about all of the building material products that utilize petroleum-based materials in the manufacturing process – vinyl siding, shingles, windows, fencing, decking, to name a few. The manufacturers who produce these products are getting hit with tremendous raw material price increases and, they are now forced to raise the price of these products to their respective supply channels. All of this means that the builder will pay more and, eventually, the price of new homes will have to increase or the builder will have to eat these cost increases.

...Read More

May 22 2008 12:48PM | Permalink | Email this | Comments (0) |

In my last blog article, I talked about how down times in the market tend to lead to changes and learning for all. Well, I got to thinking about that article and realized that another group, the building material manufacturers, has learned a big lesson during this downturn. They learned not to put “all of their eggs in one basket”. Prior to the down turn the manufacturers focused their sales and marketing efforts with the top public builders. Well, when the bubble burst and the public builders’ starts went down, these manufacturers found that they didn’t really know the privately-held builders.

My company, Builder Partnerships has expe...Read More

May 12 2008 1:13PM | Permalink | Email this | Comments (0) |

I was reflecting the other day about the 44 years that I have been in this industry and about the things that I have experienced during that timeframe. As you can imagine, I have witnessed and experienced a lot and, I am happy to say, that most of it was good and positive. The home building industry is a great industry with some great people.

As you can imagine, I have been through a lot of cycles during my 44 years and I was reflecting on two downturns, the one in the 1977 timeframe and the downturn in 1990-91. I will say that those were the two worst I have experienced until this one that we are living through right now. One thing that happens when the market swings back is that there is always a new “wrinkle” in the supply chain. For example in the upturn in the 80’s we saw the birth of public builders and the start of consolidation. In the 90’s...Read More

May 7 2008 9:07AM | Permalink | Email this | Comments (2) |

Last week I attended the NAHB’s Spring Board of Directors’ meeting in Washington, DC and, as you can imagine, heard a ton about Green Building. It seemed that every meeting I attended, there was some mention or discussion about Green Building and how it was going to save the industry, provide a healthier environment, etc, etc, etc.

I am a member of the Building Products Issues Committee which consists of home builders, manufacturers and other industry officials. The purpose of this committee is to review various product performance issues and to encourage dialogue with manufacturers and builders to be proactive on getting to the bottom of issues and solving them before they become major issues.

...Read More

Apr 28 2008 11:04AM | Permalink | Email this | Comments (0) |

Last week I had a conversation with the national vice president for a nationally-known building material manufacturer as his company had just signed up with my company, Builder Partnerships, LLC. The purpose of the call was to indoctrinate him and his team to the specific details of our program and to lay out a strategy to convert our builder members to his product offering.

At the end of the conversation I asked him what his goals were with us and what did he want to get out of the first year. Well, I got the usual response, “x” number of conversions representing “y” amount of dollars, etc. Then he paused and said “I also want to better understand the confusion that exists in the supply chain and to eliminate the supply chain noise that exists today.” You see, this executive is well aware that there exists a lack of cooperation by the...Read More

Apr 16 2008 8:03AM | Permalink | Email this | Comments (0) |

I know that many builders wanting to build “green” homes and buildings are struggling to understand the new national green building guidelines and to figure out what works best for them in their local market. There are national, state and local guidelines that the builder has to evaluate to determine the applicable green specifications.

I would like to suggest to these builders that they have an additional resource to assist them through “the green maze”. That resource is the building material manufacturer, as many produce and sell green products; have complete knowledge of the various green guidelines and can assist the builder in determining which products best meet the various guidelines and standards.

There are also companies like my company, ...Read More

Apr 8 2008 10:16AM | Permalink | Email this | Comments (0) |

Every home building publication you pick up or see on the Internet has at least one article about “green building”. It is to the point where you want to say, “Alright already, enough is enough”! But now it is my turn to talk about “green”. So please indulge me.

The NAHB has its Green Building Guidelines that it just introduced at the International Builders’ Show in February. The United States Green Building Council has its Residential LEED Program and there are at least 90 other state and local green building programs that already exist across the country. One would think that things might get a little confusing for a builder or a manufacturer who wants to participate in the green movement.

...Read More

Mar 25 2008 1:56PM | Permalink | Email this | Comments (0) |

I have talked with many manufacturers over the past month and have learned that they are scratching hard to find new business to grow their respective market shares without destroying the market. It seems that these manufacturers have successful grown share in the past with the large public builders but that train ride has ended as the public builders are pulling in their horns and are not in a growth mode.

The manufacturers are now looking elsewhere for new business which is now with the smaller, privately-held builder. The only problem is that the manufacturers do not really know the smaller local builder since they have focused all of their efforts on the publics. I am happy to say that my company, Builder Partnerships, is fill that void in that we represent over 75 privately-held builders who will build over 22,000 homes this year. It gives me great pleasure to link...Read More

Mar 6 2008 7:23AM | Permalink | Email this | Comments (1) |

I have sat in on several “How to Survive the Market” discussions and seminars and they have been extremely helpful to the builders who participated in them. One of the main messages to builders is to call together their “key” trade contractors and suppliers and explain the state of each builder’s business condition. Shoot straight with them; let them know the condition of your sales, backlog, inventory and cost position. Ask your trade contractors and suppliers look for ways to reduce their costs and to pass on some of the savings to you, the builder.

This is all excellent advice for the builder as it has proven to work for both the builder and the trade contractors and local suppliers, and it should be followed. However, the process I just described leaves out one important player in the supply chain, the building material manufacturer. T...Read More