Supply chain survey reveals what builders think of dealer relationships

In the lumber and building materials distribution industry, where so many factors contribute to the process of constructing a home or business, the last thing anyone along the supply chain—builder, dealer, distributor, manufacturer—wants to worry about is their relationship with one another. But indeed, those relationships are often the key to getting a building constructed on time and on budget. In short, a builder’s interpretation of supply chain relationships directly reflects on how that builder views his LBM dealer.

Earlier this summer, LBM Journal partnered with Professional Builder magazine on a survey to gauge the level of satisfaction among builders and LBM dealers with the relationships within the construction products supply chain. The survey asked builders and contractors to share their preferences about working with supply chain partners. In turn, manufacturers and retailers were asked to share insights about builders and contractors as well. While some of the findings showed that areas such as product knowledge, product availability, and installed labor were in alignment, other areas showed room for improvement.

Perhaps the largest area of concern for builders was reflected in the adage Time is Money. Builders want more respect for their time, including delivery schedules and timely resolutions to product-related issues.

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“I think the savvy manufacturers and LBM dealers will invest more time and energy into ensuring their outside sales reps are well-trained on new products that can save their customers time and money,” says Rick Schumacher, editor and publisher of LBM Journal. “The construction supply industry is extremely competitive, and smart dealers know they’ll succeed only to the extent they help their builder customers succeed.”

Supply chain - Selecting the spec

Supply Chain - selecting the spec 2

While nearly 47% of builders rated the company owner or GM as the most influential product decision maker, that role among others on the team was mixed; the influence of construction and purchasing managers, for instance, was evenly distributed from least to most often, while the role of design and sales professionals was usually slight. Most likely, homebuyers given the authority to make product selections are custom home clients, though overall, consumer influence is one aspect suppliers may want to consider going forward.

What builders say

what suppliers hear

Responses underscore the age-old divergence between builders and suppliers, most notably that builders blame the product while suppliers point the finger at installation. Builders also continue to want a good price (or overall value), but suppliers report that’s not as big an issue for builders compared with other considerations.

Trying a new product or material on a house flies in the face of new-home building’s risk-averse culture, and builder concerns reflect a fairly even distribution of the various risks.

Why change products

Note to suppliers: If you want a home builder to change to a spec for your product, lead first with either a competitive (or lower) price or clearly articulate a greater cost-related value, then follow with how the new product will perform better than the current spec does. Everything else is usually secondary and won’t move the needle alone.

Supply chain - room for improvement

It’s all about “time” for builders, either enough time to adjust to changes in pricing and lead times or to quickly resolve issues to stay on schedule. Good news: Supply chain partners appear to be able to walk the talk about their products and how to apply them, and are right on with how often they make contact, according to survey respondents.

 

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