LBM Journal’s Dealer of the Year Awards recognize three LBM companies of different sizes that epitomize the entrepreneurial spirit. By our definition, a Dealer of the Year describes a company in which leadership excels at identifying underserved—or emerging—markets, satisfying customers, and constantly working to grow and improve business.
Our 2019 winners—Sunroc Building Materials, Howe Lumber, and Taylor’s Do it Best Building Supply—represent vastly different operations. The common thread in these companies is their fierce commitment to finding ever better ways to serve their customers and their communities.
Consolidation keeps Howe Lumber focused on the future
Scott and Kate Norrie know a thing or two about the concept of addition by subtraction. When the Central Massachusetts building supply dealer consolidated locations in 2016, the company solidified its standing as an LBM supplier focused on the future. The company’s continued efforts toward Lean business operations and energy efficiency has earned Howe Lumber LBM Journal’s Dealer of the Year award for companies with revenues of $10 million to $50 million annually.
Started by Kate Norrie’s father and grandfather in 1965, Howe Lumber is now in its third generation in the Howe family. Neither Scott nor Kate Norrie had any idea they’d one day be operating the business, however. The two were living in Colorado when Scott Norrie had applied to medical school. When the couple decided to take a summer off and travel back home while they waited on word of Scott’s admittance, they took part time jobs at the family lumberyard, and they’ve never looked back.
“I lived next door to it all my life,” Kate says. “We had a house that adjoined the property. I grew up right there and started working part time in high school.”
That work continued periodically through college and when she brought Scott home to work as well, they decided to stay.
“I never did get into medical school and in hindsight, I’m glad that I didn’t,” Scott says. “I was disappointed at the time, but now I’m thankful. It was a summer job for both of us, and now it has been 20 years.”
Expansion and consolidation
The story of Howe Lumber’s expansion and consolidation has a foot on each side of the Great Recession that stunted the U.S. economy starting in 2008. With one location in East Brookfield, Mass. during a strong market in the years leading up to the recession, the business opened a second Howe Lumber location in 2004, less than two miles away from the store in which Kate grew up. The new store featured a delivery yard and a kitchen and bath showroom.
“Our plans were, in a few years, to move our retail store down there too,” Kate says.
Once the recession hit, it became clear that the expense of moving would need to wait and instead, it was most feasible to keep both locations running as-is.
In 2016, once the market allowed for the company to focus on building changes, the Norries closed up the original location and moved everything to the new store.
“It was supposed to be a five year or less plan to have two locations,” Scott says, “But then 2007 came and we really got hit hard.”
Central Massachusetts, where Howe Lumber is located, is about a half hour from Worcester, Mass., in a very rural market. An area that Scott says, “got hit really, really hard during the slowdown.”
Back in one place
With inventory all under one location, the Norries were able to honor the company’s history while shaping its future. The new location features the original sign from the first location, and lumber salvaged from a dismantled shed is now used as trim in the new location. Old stamped tin ceiling tiles were salvaged and now line the ceiling in the office Kate and Scott share.
“When we opened, a painter—now in his 70s—noticed that he had painted those some 30 years ago,” Scott says.
Honoring the company’s history also means upholding the focus on community and service that was ingrained through Kate’s grandfather and then her father. With a company of 44 employees serving a customer mix of about 65% pro and 35% retail, Howe Lumber is the majority supplier for building materials in its area, and that’s a designation the Norries don’t take lightly.
Kate’s father, Steve, passed away five years ago. “He was a real inspiration for a lot of folks here,” Scott says.
Scott says Kate is now the leader that employees turn to for advice and support.
“We’re a family business,” Kate says. “That’s just who we are.” Kate adds that both Norries are conscious to maintain a degree of flexibility that only a true family company can offer. “We have our own family, our own children, and we understand the challenges people face raising families,” she says. “We try to accommodate when we can when any issues arise.”
The commitment to a family atmosphere is evident in Howe Lumber’s employee base, some who have been with the company for 30, 35, even 40 years. The family strength is beyond the Norrie and Howe families too, as several employees’ family members have come to work at Howe Lumber.
For as much as a small-town lumberyard focuses on a community’s history, Howe Lumber is equally tuned into the company and the community’s future.
Since the end of the Great Recession, Howe Lumber has seen steadily increasing revenue, and the past couple years have seen increases of about 8%, Scott says. “I think that’s probably a conservative estimate going forward. It will be interesting to see the big fluctuations with commodities such as lumber and plywood. We’ll see how that works out. The fundamentals are there for organic growth,” he says.
The growth for Howe Lumber will come not only in sales, but in product quality, operations, and environmental practices that will help mold the company’s future.
A few years ago, Scott introduced a “flight to quality” initiative with his lumber suppliers. In doing so, the company is stocking better grades of lumber. Though initially concerned that such a practice would reduce sales volume on lumber, it actually had the opposite effect.
“No matter what you say about grading rules and how lumber is only graded to one face, nobody wants to hear it,” Scott says about lumber quality across the industry.
“All lumber is graded visually these days, and there is still a market for quality. We’ve proven that.”
The same commitment to quality shows in the company’s kitchen and millwork specialization. Howe Lumber hangs its hat on kitchen design and millwork sales, Scott says. The company employs three full-time kitchen designers and millwork salespeople. The focus in both categories is on consultative sales.
“Often, especially with kitchen cabinetry sales, price is the only question that customers know to ask in the beginning,” Scott says. “We expand their knowledge base throughout the design process, so they start to think about how they will really use the space, not just which cabinets go where. The real product our designers sell is the ideas, not the cabinets. Cabinetry is how we monetize the process, but in reality what our designers try to do is offer solutions for the long-term.”
Long-term solutions are at the heart of Howe Lumber operations. Recently, the company began a focus on Lean operations initiatives to recognize efficiencies and save the company money by optimizing workflow.
“We were at an LMC annual meeting and attended classes on Lean. We’re just getting started with it, and we started small, but we’re noticing reduced waste. We’re into it now and see the value in it,” Scott says.
The Norries also see the value in developing their own electric power for the company. With 300 solar panels on top of one of the buildings, Howe Lumber is now 100% powered by self-generated electricity.
A USDA grant helped offset the installation costs, and Scott says the lumberyard is now making all of the power it needs. A metered system allows for Howe Lumber to generate more electricity on sunny days that it builds up as credits in the grid to help carry it through the winter. “We’re pretty much electricity neutral,” he says. “We’ve made enough to cover what we’ve used and put into it.” The decision was an easy one, the Norries added. With the desire to become a sustainable company, and the costs of doing so becoming more affordable, it made sense for them to make the step to solar.
Having been through both an expansion and a consolidation, the Norries say now their plan is to remain at their current single location and focus on gaining efficiencies and refining their operations in East Brookfield. The focus, Scott says, is the company’s Lean journey and its continued effort to reduce waste.