Enjoy this review of some of our favorite requests, all commonplace in our industry:
“I’m finally starting the new job you quoted months ago! The framer is starting tomorrow, so please send out the basement and I-Joist load first thing. Also, can you put the trusses on for next week? This framer is fast!”
“Just ran out of studs—can you get me 50 more in the next hour?”
“I’m short 15 2x4x16s to finish my wall plate. Can you rush those back with that same truck? While he’s out here, he can grab 2 bunks of 2×6—turns out we didn’t need those.”
Customer disorganization is at its worst now because builders are busy, and yet remain hesitant to add staff for fear of getting burned in a recession. The overall lack of planning equates to greater expectations and pressure on suppliers. Everything hinges on keeping the job on schedule, so what choices do we have as we manage customer expectations?
- We could uphold a strict delivery policy and point to it every time a customer calls with their emergency needs. This approach is the most operationally efficient and easiest on the operational team. The downside is lost business and unsatisfied
- We could choose not to uphold a delivery policy at all, and let customers ask for last minute orders that are not planned (which stresses team members out and still leads to unhappy customers).
- Perhaps the best solution is this: Embrace these customers, remain flexible, know your costs, and build a “yes we can” culture within your These tangible operational changes will help you say “yes” as often as possible without stressing your operation or your team.
Build in planned flexibility
Embrace the reality that a percentage of customers will require more hand-holding and emergency resources. The reason emergencies hurt more than they should is because we don’t anticipate them.
Create flexible positions in the yard to serve expected emergencies. Allocate team members to manage activities that are not time-dependent like processing credits, cleaning, rotating stock, etc., while also “on call.” Training them to pick material and make deliveries.
Watch industry trends. There are building material delivery services that respond like Uber. They charge as little as $40 to pick up a load and deliver it in 4 hours or less. They are entering new markets with lumberyard partners that guarantee them a certain level of delivery business. Be the company introducing them to your market, not the one trying to fight against them when they arrive.
Know your actual delivery costs and charge for it
Use your ERP software to create categories that isolate time and coordinating costs.
Set delivery zones that differ depending on the cost to serve. Break deliveries down to a percentage per category, highest to lowest cost:
- 911
- First Load
- Before Noon
- Anytime
Track order lead time in four ways from the time the order was picked to the time it was delivered. This can be automated.
- Less than 8 hours
- 8-24 Hours
- 1-2 days
- More than 2 days
Set a dollar-per-hour-per-truck figure and track actual dollars of delivery/credits as a percentage of sales. Analyze the percentage by customer and set an average. The percent over average or under average should tie directly to their margin structure.
Exceed customer expectations, create loyalty, and charge confidently for the value you offer. At the very same time, you’ll create clarity for your team, your culture and your profits.
Shane Soule consults with LBM and component companies to increase productivity and profits, and improve the experience for both customers and team members. Reach Shane at shane@shanesoule.com.
