Efficiency in storage and movement of inventory are key for LBM Dealers’ success.
In the iconic science fiction film, “Aliens,” the movie’s Space Marines use a fictional piece of material handling equipment to efficiently move heavy objects. Named the P-5000 Powered Work Loader, this exoskeleton enabled a single individual to pick up and transport exceptionally heavy cargo from one point to another with ease (not to mention enabling the movie’s main character, Ripley, to defeat her alien nemesis in the final climactic scene).
It’s a piece of equipment that isn’t so far-fetched. For example, the U.S. military is currently in development with various tech companies such as Lockheed Martin to create similar technology that would enable soldiers and first responders to lift objects they would not ordinarily be able to or to do a job that would normally require multiple personnel.
While we’re not yet to the level of development seen in “Aliens,” there are a variety of solutions for material storage and handling that LBM dealers can take advantage of. That’s good news, especially considering the current diminished workforce LBM dealers are facing. Being able to do more with less—whether it’s working with fewer people or storing more in existing square footage—is critical in this post-COVID world.
To help you make the best decisions on how to approach material storage and handling, we turned to a couple of industry experts— Clint Darnell, vice president of Sunbelt Rack/ CT Darnell Construction, and Chris Krauter, president of Krauter Auto-Stak—to help shed light on potential solutions you can implement today to ensure tomorrow’s success.
Fewer hands need new solutions
If there’s one factor that seems to be driving the materials handling market, it’s the so-called “Great Resignation,” an economic trend that’s seen employees leave their pre-COVID jobs in record numbers over the last 18 months. As with most industries, LBM dealers are facing the reality of providing an expected level of service while doing it with a greatly diminished workforce. As Clint Darnell explains, “The biggest issue that I believe has affected the lumber industry since COVID is the labor force. It is extremely difficult to attract and keep good talent in what can be a physically demanding job. This has put a premium on our ability to design buildings and storage systems that make it less physically demanding to store and pull orders.” It’s a situation that can leave one asking how the workforce—or lack thereof—ever got to this point. Chris Krauter points to a variety of influences that, when combined, created a perfect storm of factors that have brought the LBM industry to its current conundrum. “The COVID experience sadly did extreme long-term damage to the behavior of the working-class population,” he points out. “While the initial hysteria was met with government unemployment funding at both the federal and state level combined with stimulus checks and child tax credits, this protracted period of essentially ‘paid time off’ resulted in a change in attitude. As a consequence, a great portion of the country’s work ethic was lost. This unfortunate situation led to the current and ongoing chronic lack of labor throughout the entire economic spectrum.”
As if adding insult to injury, the pandemic has driven a radical increase in home improvement spending. For example, The Joint Center for Housing Studies at Harvard University reported that in 2020, home improvement spending increased by 3% while the overall economy dipped by 3.5%. This same organization has also predicted sustained accelerated growth through 2022.
“The activity has been at a fever pitch for a solid 24 months now, after an initial pause from March 2020 through mid-May 2020,” explains Krauter. “My opinion on the lumber industry getting behind the demand curve in Q2 of 2020 was that the executives were not going to see a repeat of the Great Recession, whereby they waited too long to ramp down. This time, it was a near immediate flipping of the switch, only to see demand become a tidal wave two months after the initial shock of the COVID restrictions. Since that time, the demand has continued to snowball….As a result of the chronic lack of manpower, the need for efficient material handling has increased. No longer is lumber a low-value commodity; that has changed. The ability to do more with high density and effective racking systems is key.”
Not only are LBM dealers now having to deal with a lack of manpower at their respective businesses, that same lack of staffing is causing a radical increase in lead times from the manufacturers. “We now find ourselves facing long lead times, now with a six to seven month duration being the new normal, versus the pre-COVID factory production cycles of eight to 10 weeks,” says Krauter.
As a result, LBM dealers need to order and store more materials onsite so that it’s available for their customers when they need it. “Companies have to purchase and keep more inventory on hand due to long lead times,” says Darnell. “They really have to forecast way in advance. We’re seeing this especially with doors and windows. Due to this we have seen an increase in companies ordering portable blue millwork storage racks. We’ve also been building more millwork buildings/facilities than ever before.”
“Engineered wood is a similar issue,” he continues. “We’re building more and longer length racks to hold these products. Because companies are holding more inventory, space is at a premium. Therefore, we are building more systems for narrow aisle storage that are good for combi lifts/side-loading forklifts.”
The idea of increasing on-site storage, either through looking for ways to store more in existing square footage or through building new storage, can be a daunting one for LBM dealers, and material handling and storage manufacturers are very aware of the fear factor the situation can cause. “Lumberyards are striving to pack more inventory into their existing facilities,” says Krauter. “The idea of building warehouse structures is daunting, with not only commodity prices at all-time highs, but the protracted timeframe to get permitting executed. We recently completed two jobs—one in South Carolina, the other in Florida—where it took 18 months to get the building permit. This was regrettable; nevertheless, many lumberyards are looking at present facilities and operations to see if a better way is available. The logistical problem with this however is the pain it will create to execute continuing operations while the improvements are made. It is daunting.”
Efficiency equals success
For LBM dealers to best weather these challenges, manufacturers of material handling equipment recommend being as proactive as possible. It’s not just about being able to store more, they point out; it also involves making it as easy as possible to access that material. “We want to create storage systems that minimize how much handling is done on a yard and make it easier to use equipment with those storage systems,” explains Darnell. “This makes the job less demanding physically, so it is more appealing.”
Darnell points out his company’s covered cantilever racking systems/buildings and power bin systems as examples. “These buildings also provide cover and keep people out of the weather. They are easy to load and unload with forklifts. In addition, the power bin system also allows for easier handling of material. Another example is portable/stackable millwork racks that decrease the handling of doors and windows. This not only keeps the products safe with less breakage, but makes them easier to handle and move with equipment.”
Like Darnell, Krauter emphasizes the need for a lumberyard’s efficient racking systems to best enable an LBM dealer’s employees to do more in less time. “Dealers need to look for systems and machinery that enable present staff to more easily execute tasks,” recommends Krauter. “In addition to high density lumber rack storage systems, we are seeing an incredible demand in stacking frame racks for doors, windows, and cabinets. These racks enable dealers to minimize handling of millwork. The ability to stack vertically and store one row next to another creates maximum density and minimizes floorspace. Essentially the order is placed into the rack by hand one time. From there, the entire stacking frame is moved via forklift.”
As well, Krauter points to the use of equipment such as his company’s Auto-Stak System as another means for an LBM dealer to increase efficiency, not just for picking but for increasing storage space. “Our Auto-Stak System is an extremely efficient way to store more SKUs in the same square footage,” he says. “We are seeing this system become more elaborate, with accessible SKUs on grade and catwalk levels, but now with an added mezzanine platform on top. This uses 100% of the cubic space. Case studies have shown an increase in SKU density of 30-40%, with the added bonus of capturing back the square footage via top mezzanine platform. Granted, this mezzanine area has a limited use, but can easily have shelving added for hardware storage, insulation, and other miscellaneous applications.”
Unfortunately for LBM dealers, the business environment isn’t a simple solution. It’s both naive and impossible to say that, by investing in this piece of equipment or that storage solution, your worries would be over. With new coronavirus variants continuing to emerge and the always-present possibilities of future restrictions on the possible horizon, nothing can be said with complete certainty. Still, material handling and storage experts stress that, with proper preparation, LBM dealers can be poised to succeed despite the unknown. Efficient racking systems and handling equipment will enable a dealer’s employees to do more in the same timeframe, thus increasing efficiency and customer satisfaction. As Clint Darnell puts it, “The playbook has already been written. They already went through it once and now have things in place to deal with it.”