Supply Chain Connections

Sep 21 2009 12:04PM | Permalink | Email this | Comments (3) |
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By Glenn Singer

Last week I was on a conference call with Chuck Shinn, the founder and owner of The Shinn Group of Companies and one of Builder Partnerships’ national suppliers and we were discussing the current state of the market and how the market will look in 2010. You will be happy to know that everyone on the call acknowledged that the new home market had bottomed out as the level of new home inventory has gone way down to a very normal level. All of us on the call felt as though the market in 2010 will show improvement. So this was good!

Of interest to me was the comment that Chuck made about the existing inventory and that was that the majority of it was in the high end market, homes priced over $500,000. Chuck felt that this level of inventory will take many years for it to work down. In addition, most builders have down sized their new offerings in terms of square footage and amenities to keep their sales prices in line.

So, what does all this mean to the supply chain? I believe that it will put pressure on manufacturers and suppliers to be sure they know what type of products the 2010 market place will demand. My guess is that it will mean that less expensive appliances, flooring, cabinets, and other building materials will be more in demand than the upgraded products we have been used to supplying. It would make good sense for building material manufactures to do their due diligence with their builder customers to ensure that they have the right product and marketing offerings for the 2010 market.