Lessons learned

Publisher Letter

It’s said that experiences that don’t kill us make us stronger. If that’s true, then the death-defying rollercoaster that was 2020 has taken our strength training to whole new level. In addition to being stronger, hopefully the experience has made us smarter as well. While we can’t always control the obstacles that life throws our way, we can control our response.

Apart from the new normal of social distancing and mask-wearing, one of the biggest challenges our industry faced last year was price spikes and severe material shortages. The issue was so big that I hosted a panel discussion of industry experts at the recent IBSx on “Navigating Supply Chain Disruptions.” (Fun fact: while builders are the primary audience for the annual International Builders Show (IBS), LBM dealers and distributors are the second biggest audience. That’s why NAHB made a point to have dedicated dealer/distributor programming during this year’s virtual event.)

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Since the panel discussion was on supply chain disruptions, I was joined by Gary Nackers from Do it Best Corp., Clarence Wilkerson from Weyerhaeuser Distribution, and Sean Tighe from Lumbermens Merchandising Corp. Representing a member owned co-op, a leading buying group, and a national wholesale distributor, these three companies sell tens of billions of dollars in building materials every year to LBM Journal readers. From that unique vantage point, it was a powerful panel with deep insights into the product shortages and price spikes that many dealers are still wrestling with. In case you missed the excellent discussion, here are some of the key takeaways:

The power of relationships. When materials are scarce, companies will always take care of the customers who take care of them. Think about it: if you had a truckload of pressure treated wood, who are you going to sell it to? Your loyal customers.

Communication. Coming in a dangerously close second to relationships is communication—with both your builder customers and your suppliers. If you know your builder customers’ needs ahead of time, and give a heads up to your supplier, you’re one big step ahead of the game.

Balancing just-in-time with stocking inventory. Inventory costs money, which is why so many dealers have come to count on their suppliers as their unofficial warehouse. But as 2020 showed, the much-maligned winter buy programs maybe aren’t all bad. The fact is, smart dealers will have a strategy in place for what to inventory and what to just-in-time.

For multiple reasons, 2020 was a tough year. For many dealers, it also came with record-setting sales. And for some dealers, especially those who happened to have plenty of materials on hand once the market ignited, it was likely the best year they’ve ever had.

Now that we’re a couple months into 2021, let’s work together to do what we always do: move forward better and smarter, with a toolbox full of lessons learned.

— Rick Schumacher
Executive Editor & Publisher

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