Jan 9 2009 9:16AM | Permalink | Email this | Comments (0) |

As I am preparing my itinerary for the upcoming International Builders’ Show, I have had the opportunity to talk with many builders and manufacturers to confirm meetings in Las Vegas. For the most part, most of my conversations have been “upbeat” in that there was no talk about the glum and doom on the economy or the state of the new residential housing market. Instead, there has been a sense of optimism in my conversations. People are looking forward to 2009 and all that it will bring. They sense that 2009 will bring a change in the housing market and that later this year we will begin to see an upswing in activity.

This week I talked with builders in Vermont, Philadelphia and Seattle and was told that they had the most traffic last weekend that they have had in 12 months. My wife and I were vacationing in Seattle and last Saturday we went to several ...Read More

Dec 29 2008 8:22AM | Permalink | Email this | Comments (0) |

Earlier this week I had a conversation with a business colleague and friend, Rod MacKenzie, a former BlueLinx executive who is currently an industry consultant. Rod was discussing that what the building material wholesalers have to offer is just what the home building industry needs to get through this current economic downturn. Rod says that the wholesalers offer a great value proposition because they offer the following to homebuilders and trade contractors:

• They accept and store large quantities of a variety of building products
• They provide break-bulk services as needed
• They offer prompt delivery to construction supply firms or job sites
• They cover the cost of carrying inventory
• They assume the price and market risk for products they purchase.

Rod claims that the building material whol...Read More

Dec 4 2008 8:14AM | Permalink | Email this | Comments (1) |

I have been talking to a lot of manufacturers over the past month and it seems that many are on their second or third round of layoffs which reflects the state of our industry. It has been my experience that layoffs tend to cast a dark environment among the companies that have invoked the downsizing. The attitude of the remaining employees is usually gloom and sometimes even negative. People just want to keep their heads down and weather the storm and all of this can lead to a negative “vibe” that is reflected to the market place and customers.

It is my belief that now is the time for manufacturers to begin planning and implementing a recovery strategy. The experts are beginning to tell us that the market is or has bottomed out and recovery will start slowly later next year and for sure in 2010. In fact, there are markets today that are not d...Read More

Nov 25 2008 9:10AM | Permalink | Email this | Comments (0) |

Last week I had the opportunity to meet with representatives of a national building material manufacturer and we were discussing the supply chain and how it has changed but, more importantly, how was it going to change in the future. Each of us had our own “take” on this and the exchange was very interesting to say the least.

We concluded that the supply chain process will definitely change and evolve as we move forward but we agreed that major changes won’t be that easy or fast to accomplish. “Why” you ask? Well, first of all, the home building industry is slow to change and, darn right adverse to change. History tells us that it takes an average of 12 years for a new product to begin to achieve any degree of market share.

...Read More

Nov 7 2008 9:41AM | Permalink | Email this | Comments (1) |

All of us in this industry have been somewhat numbed by the very poor market that we have been experiencing all of these months and I think many of us are “mental zombies”. Our goal is to get up and just try to survive each day and hold on until the market turns.

This is normal but it is dangerous! We must continue to challenge ourselves to be creative and look for new ways to add value to our customers and potential customers. An old business colleague of mine always said “to be successful in selling builders you must first identify their pain, and then offer them a solution to eliminate that pain”. Well, just look around and you will see plenty of builders who are in deep pain so there is a lot of opportunity for each of us.

One area in which manufacturers and suppliers can help eliminate builder pain is in the area of green buil...Read More

Oct 28 2008 11:16AM | Permalink | Email this | Comments (0) |

There isn’t a company in the home building industry, be it builders, manufacturers, trade contractors or suppliers who haven’t downsized by laying off personnel. This is a normal trait during times like the industry is facing and will continue to face for some time to come.

We all understand the need for these cutbacks but, we must be careful not to have these layoffs negatively affect the quality of our offering to our customers and the other members of the supply chain. But, I am sad to report that I have seen examples of this happening as those employees who remain on the job are taxed with increased responsibilities. This increase in the individual’s work load takes it toll on the attitude and the quality of work on those remaining employees.

Some of the examples of decreasing work quality are as follows:

• Poor ...Read More

Oct 17 2008 10:54AM | Permalink | Email this | Comments (0) |

As I was preparing for a presentation I am going to make next week at a builder business forum jointly sponsored by Hyphen Solutions and Professional Builder magazine titled “Controlling Costs: Why You Are Stretched Thin”, I came across some interesting data regarding the supply chain.

I was researching NAHB’s study called “Ten Steps to Increase Jobsite Productivity” and learned that most builders think they are getting an eight hour work day out of their employees and trade contractors but the study indicated that builders are losing productive time to the following: 

Issue

...Read

Oct 6 2008 8:19AM | Permalink | Email this | Comments (2) |

Last week I attended the NAHB Fall Board of Directors’ meeting in San Diego and it was down right depressing. Congress was in the process of debating on the bailout bill that Secretary Paulson requested. NAHB’s senior officers and senior staff were urging all of us to call our senators and congressmen. There were stories of banks coming to builders asking them for more equity as they reevaluated their loans; some builders haven’t sold a home in six months. There were horror stories about excessive price increases by manufacturers whose raw materials were steel and oil-based products and major cut backs on spending and personnel.

I must admit that it was quite depressing but one great thing happened – My son and daughter-in-law live in the San Diego area and they got us tickets for a rock concert at San Diego State University for Thursday e...Read More

Sep 16 2008 8:56AM | Permalink | Email this | Comments (1) |

As our industry gets deeper and deeper into the doldrums of this down market many of the builders, manufacturers and others in the distribution channel have reacted in one of two ways. There is a group that just sits around and complains and indulges in self-pity. These are the folks that I personally want to avoid as I don’t need this kind of negative energy. The other group of industry members tries to turn these hard times into something positive – they are participating in educational programs via the web. Yes, they have acknowledged that the market is at an all time low but rather than sit around and complain they are attempting to better themselves and their businesses.

My company, Builder Partnerships, LLC has initiated a series of Webinar educational sessions for builders and other industry members. The sessions deal with design center management, im...Read More

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