Q: With a continuing strong new construction and remodeling industry in most markets, what do you see as the biggest challenge facing LBM dealers?
A: With the continuing recovery from the depths of the housing crash, the tight market for skilled labor seems to be the biggest issue across the housing industry, including at the LBM dealer level. Many tradespeople and skilled laborers were severely displaced and consequently left the industry for good. There is also some evidence that the millennial generation does not desire nor is prepared to enter into these skilled labor type roles. The labor situation has effectively capped the industry capacity at all levels.
Q: The flipside of that question—what do you see as the biggest opportunity?
A: The biggest opportunity is that, as a result of the housing crisis, we have a considerable shortage of housing based on underlying demand. This opportunity is due in part to industry constraints and a growing trend among millennials to delay family formation. This should significantly extend the runway of the current housing recovery. Opportunities and challenges tend to go hand in hand, so meeting housing demands presents a need for housing that balances velocity with quality, profitability with affordability, and efficiency with a limited skilled workforce.
Q: A shortage of skilled labor continues to be a serious problem for homebuilders. What, if anything, can dealers, distributors and manufacturers do to help?
A: The entire supply chain must innovate for more efficiency in the development of products and services that take cost, complexity and inefficacy out of the equation. Our industry must become more productive and place a greater emphasis on process improvement going forward to compensate for the tighter labor supply. Manufacturers and LBMs must become easier to work with and more nimble in servicing the market. Information technology can play a big role in this.
Q: How do you see technological advances like materials estimating and structural frame design impacting the residential construction supply industry?
A: It goes back to the improvement in products and services that go beyond the traditional features and benefits of products and basic service needs. Our industry must look at more end-to-end solutions to get there. Though relatively still in its infancy, panelization and structural building components are examples of how various sectors are impacting the construction supply industry. We’ve seen how this can work outside the U.S., but domestically this is still in the early development phase. This will require the use of new technology that creates better collaboration across different aspects of the supply chain in order to deliver a real competitive advantage to the parties involved. In addition to how this systematically changes the way the industry thinks, we ultimately need to design better, and execute against those designs better, with new technology and automation.
Q: LP has built a reputation for developing innovative trim, siding and engineered lumber products. What should dealers watch for from LP, in 2018 and beyond?
A: LP Building Products has transitioned from the survival mindset of 2009-12 to become much more focused on innovation and system investment in all that we do. We have challenged ourselves to be a leader in the industry by providing solutions that our customers value, versus reacting. This would include the investments that we are making in people, technology, product development and overall systems improvement in how we interact with the marketplace. We are adding many more field resources and more technical people to assist our customers, and we are testing innovative new products that exceed today’s standards to help builders and their channel partners build better, smarter and faster with solutions that are durable and dependable. Today’s audiences—whether they are architects, engineers, dealers, builders, homeowners and anyone else in between—are looking for more than a product that meets a basic need. Rather, they are looking for products that deliver value, and LP is strongly committed to continue delivering the building solutions that bring the industry value through high performance.
|Mike Sims is Senior Vice President, Sales, Marketing and Strategy for LP Building Products. Sims has worked in building products in various sales and marketing capacities since 1984. In his current role, he is responsible for driving innovation and value through LP’s retail sales, corporate marketing, EWP and Growth and Innovation efforts. Previously, he was Vice President of OSB Sales and Marketing for LP. Sims holds a B.A. from Western State Colorado University.|