Q: New construction and remodeling continue to be red-hot in most markets. What do you see as the biggest challenge facing LBM dealers?
A: The most obvious challenge for LBM dealers is simply finding, hiring, and retaining top-notch talent. Companies with high retention rates see the most success both with employees and their customer base. As the market advances, LBM dealers will have to continue to find ways to establish new relationships and to maintain long-standing partnerships. Embracing innovation is another big challenge. Some lumberyards have operated in the same fashion for decades, while others have adopted new processes and technology that give them substantial operational advantages. It often takes effort to get longtime employees to endorse and adopt new technology.
Q: The flipside of that question—What do you see as the biggest opportunity?
A: The expanding market has led to a great deal of change and consolidation, creating numerous opportunities for partnerships. Lumberyards are local businesses; they employ local people and create relationships within their communities. Software training is essential to get current staff up to speed with the technology and to foster confidence in its use. Programs like BC Connect are designed to facilitate project management and help lumberyards become more efficient. With increasing competition and ongoing labor shortages, effective supply chain management is more important than ever. Smaller lumberyards can use technology to stay nimble and keep up with the competition in terms of output and accuracy.
Q: Builders and LBM dealers report that a shortage of skilled labor is their #1 challenge. What, if anything, can manufacturers and wholesale distributors do to help?
A: As an industry, we need to showcase trade schools as a career choice that is just as financially viable as pursuing a four-year degree. This can be done by highlighting a ratio of college loan debt versus jobs in the LBM industry, and a 401k chart showing the benefit of saving for retirement in your 20s versus starting off paying student debt and saving for retirement later in life. For example, the average student loan debt in the U.S. is approximately $29,400. If an individual were to put that same amount into a retirement account at age 21, and earns an annual tax-free return of 7%, at age 65 the account would have over $575,000, assuming there is no money taken out of the account and no additional principle is added.
Q: As the industry continues to evolve and face challenges like consolidation, rising lumber prices and transportation shortages, what can LBM dealers do to stay ahead of the curve?
A: In the trade press, there are many articles and discussions about prefabricated construction. Automated saw systems like SawTek reduce discarded wood and enable quicker installation on the jobsite. By learning how to integrate automation tools into certain aspects of their workflow, lumberyard workers can produce more accurate jobs faster, with less waste and human error involved. LBM dealers can turn to computer programs to keep up with increasing overall supply chain efficiency, creating a win-win situation for everyone.
Q: Boise has established itself as a leader when it comes to software for dealers. What advice do you have for dealers who’ve taken a “wait and see” approach regarding technology tools for their business?
A: The wood products industry saw little change for a long time. The introduction of new tech has had a huge impact on business, but in many aspects the wood industry overall is far behind the retail supply chain in its utilization of technology. For many independent retailers who were caught off guard by large retail tech companies like Amazon, the “wait and see” approach has resulted in a struggle to catch up. We see this happening across the market, but especially with small building materials dealers. By taking advantage of software training programs to help integrate the latest technology, “wait and see” dealers can embrace new programs and tools to bring their business up to speed and to remain competitive in the expanding market.
|Gus Stallings grew up in Chattanooga, Tenn. He works for Boise Cascade as EWP National Accounts Director, where he leads a team of sales pros specializing in working with America’s largest home builders and lumber dealers to provide products, as well as tools and business guidance, through the company’s distribution networks.|