Oct 23 2007 7:39AM | Permalink | Email this | Comments (0) |
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I have been wondering how builders and manufacturers are dealing with the current extended downturn in our industry.  I think I know what some of the smarter builders are doing. They are having regular communication with their bankers, selling off inventory, working on cost reduction strategies, “leaning down” their organizations and implementing other process improvements.  These builders will come out of the downturn stronger and smarter and will have the greatest chance of succeeding.

But I really wonder what is taking place at the various corporate headquarters.  How is the top management of major building material manufacturers responding to the downturn?  I know that many are curtailing production capacity, not replacing personnel who leave, cutting expenses, etc.  But I wonder how many manufacturers are reevaluating their builder strategies to determine how they are going to change to become more effective now and when the market turns up.

In the past, most manufacturers focused their resources on the top 25 to 50 public builders in the United States but I would like to know if the manufacturers are evaluating a more balanced approach to the market.  By this I mean a strategy that targets smaller privately-held builders, custom builders as well as the largest public builders.  How many manufacturers are trying to better understand the internal business aspects of the home builder so that they can develop more meaningful marketing and product strategies to the home builder? 

One thing is for sure and that is that manufacturers became complacent during the long housing boom of the past and they didn’t continue to fine tune their builder strategies and programs.  I maintain that those manufacturers who are currently retooling their approach to the builder now will be the winners when the market turns up again.  But for now, we can only guess what is happening behind the closed doors of the building material manufacturers.