If you’ve ever had to install an organization system in a garage where there wasn’t one before, you know what a difference it can make to your mindset. Enough space to hang all your tools, with room for future purchases? Check. Proper storage for paint and chemicals? Check. Special containers for individual nails, bolts and screws? Triple check. Without the disorganization, you can rest easy knowing exactly where everything is. You might even finally start a project on your to-do list.
Imagine that feeling on a lumberyard scale: how easily you could find inventory on-hand and be able to use your space to its fullest potential.
That’s what Zuern Building Products envisioned when it embarked on a project to utilize a 60,000-sq.-ft warehouse for centralized storage for windows, doors, millwork, and cabinetry. The Wisconsin- based building materials dealer partnered with Sunbelt Rack and CT Darnell Construction to create a climate-controlled hub for customized storage.
Zuern Financial Controller Brendon Kons said the project has been a gamechanger: trim orders are picked faster, the number of trucks needed has reduced from seven to five, and the ability to maximize space on those trucks has increased, leading to more deliveries overall.
“Since the completion of the project, we have grown our millwork category sales by 51% over a three-year time span,” he said. “Based on the storage solutions put in place by CT Darnell and Sunbelt Rack, we have used the model as a marketing tool to showcase best-in-class handling and storage of millwork related items, which in turn has led to new business. So much so that we have placed numerous repeat orders for storage solution components—mainly millwork racks as we have ordered an additional 240 since the inception of the project. The ability to utilize the storage solutions as proposed has allowed us to bring in additional materials, reduce the number of times the products is handled, and limit the number of headcount additions within the operation.”
Beyond the basic operational needs, the project goes to show how much of an impact custom storage can have for a yard or facility. So much so, Kons said the company has already completed work on another storage project.
“We just completed a 24,000-sq.-ft. addition to our facility in Slinger, which CT Darnell and Sunbelt Rack provided the racking solution for that space as they did the initial build-out. We have a rack-supported building on order for our Watertown facility, which construction should begin on later this year,” he said. “Given the partnership and repeat business with both CT Darnell and Sunbelt Rack, it is evident we trust them as partner in our business and will look to build on material handling solutions for years to come.”
An answer to labor woes?
While the U.S. unemployment rate—currently sitting at about 4% as of June 2024—has largely returned to pre-pandemic levels, according to Department of Labor figures, finding the right people for open roles remains one of the largest concerns for many LBM dealers.
In fact, in our “LBM 100” survey conducted earlier this year, more than 70% of dealers reported that hiring and retaining talent has remained an issue. And 51% of those companies reported that yard workers were among the toughest to hire, second only to drivers.
Additionally, the rising costs of both labor and goods has made the need for efficiency more important than ever, because as we all know, time is money. According to data from the Federal Reserve Bank of Atlanta, average hourly wages have been steadily on the rise since late 2021.
While it’s not a cure-all, Sue Silva, marketing director for Sunbelt Rack/CT Darnell Construction, argues that having the right system in place can make a huge difference.
“The issue today is more about rising labor costs rather than labor shortages. So, for LBM dealers, there’s a premium on finding ways to reduce labor inputs. Using the right racking systems and material-handling equipment, like multi-directional forklifts and automated bin systems, can dramatically increase efficiency,” she says. “For example, we recently completed a … facility for a lumberyard in the Southeast. The branch manager remarked that at one of its older yards, it could take two employees 3.5 hours to pull a standard 2,000-sq.-ft. house framing package. Now at this new yard, one employee can do the same job in about an hour. That’s a huge gain in manpower efficiency, all due to using the right lumberyard layout, and storage and handling solutions.”
Kons agreed, adding that their improvements allow for less material handling, leading to an overall increase in quality.
“Eliminating touches on product does so much more than eliminate labor costs,” he said. “While it is hard to truly measure the number of touches on a product, we all know that lessening the number of touches is the ultimate win. By eliminating touches on millwork products you are ensuring the product quality and integrity to ensure customer and end-user satisfaction. The ability to modernize millwork material handing with the use of equipment and racking components that allow utilization of height within buildings instead of additional square footage requirements is a cost that we underestimated going into this project. The storage and racking solutions provided by CT Darnell and Sunbelt Rack have eliminated the need to build additional facility and allow other facilities to be repurposed for storage of other product categories.”
In addition to creating more efficiencies, Dell White, sales and marketing manager for Sellick Equipment Limited, adds that investing in upgraded facilities in equipment can help with employee retainment by giving them a more comfortable place to work.
“LBM dealers that maintain newer fleets and provide operators with options like enclosed air-conditioned cabs, and hydraulic fork positioners to improve productivity, will benefit from retaining longer-term employees,” White explained.
Busier seasons on the horizon
Another trend seen in the LBM industry that contributes to demand in materials and handling is consolidation, Silva says.
“Although there’s some concern that interest rates will stay high due to lingering inflation, we are seeing a modest increase in demand and expect it to be sustained over the next year. A major reason for this is that the more successful lumberyards are only getting stronger. Along with continuing to invest in their facilities, they are acquiring weaker-performing yards and upgrading them to make them more efficient and profitable. Additional demand for LBM storage and material-handling solutions is coming from the home-improvement big-box stores. Small-scale and DIY renovations are down significantly from recent years, and these retailers are now making changes to cater more to professional business.”
With interest rates not dropping as quickly as previously expected, analysts are seeing signs of a more approachable housing market. As of this writing in Summer 2024, mortgage applications were on the rise and inflation has begun to ease, signaling growing confidence in the industry.
“While there are some trouble spots on the economic horizon, fortunately, not all areas of the economy are negatively impacted. Resource based economies should see continue growth and the LBM dealers in those regions should still remain vibrant and be in need to replace material handling equipment,” said Sellick’s White.
Additionally, White said companies gearing up for growing demand should ensure their equipment is up to the task.
“It seems loads are getting heavier, trusses are getting larger, so when specifying equipment, the trend is to go up in capacity to ensure the machinery meets the requirements.”
Silva said dealers who might be hesitant to make improvements to their material handling and storage should consider working with a company to find customized solutions that work for them, rather than overspending on basic warehouse systems.
“Often, hesitation about making changes stems from the assumption that improvements will be cost-prohibitive. So, the one piece of advice I would give to all dealers is to work with a company that specializes in LBM facility design. You want someone who starts the process by taking a holistic view of your current facility and understanding what it is you want to accomplish. Beyond that, every yard is different, and any advice or recommendations should be tailored to each particular operation. Drive-thru sheds and changes in layout could be a game-changer for one yard; for another, it might be adding stack racks and an automated bin system. Ultimately, the result should be improvements in capacity, traffic flow, material handling efficiency, and the customer experience, along with reduced cull and labor costs. Gains in these areas are what produce a timely ROI.”
