Ruth Kellick-Grubbs, a longtime consultant to Maine's Hancock Lumber, the 2017 ProSales Dealer of the Year, believes Hancock has become a top dealer today because it focuses on what drives value, reduces costs, and gives the company a competitive advantage. Here are a myriad of operational practices, both big and small, that help Hancock win every day.
1. Treat Special Orders Special
Special orders represent close to half of Hancock Lumber's business. One way Hancock reduces errors is to have a yard's on-site inventory manager print out a set of customized stickers as soon as a truck carrying the special orders arrives. Each sticker details numerous things: who gets the product, where the product will go, the item’s number on the invoice, its place as part of a bigger collection of items, and more. There’s also a bar code for easy entry into the computer system. Creating a tag for each incoming item helps staff spot whether a product is missing. And the tag has a color strip at the top that changes every six months, making it easy to tell if a product brought in a long while back was never delivered.
Once the special order is received and stored, the logistics manager launches a delivery process that includes sending a notice to the customer. Formatted so it can be read easily on a smartphone, this Special Order Notification tells what will be delivered on what day within a wished-for time slot. That gives customers an opportunity to adjust what’s to be delivered (if they want an extra box of nails, for instance) and request a better delivery time.
2. Special Carts for Special Orders
Aside from reducing errors by setting up a tracking system when the orders arrive, Hancock also confronted a related problem: Making sure that smaller items often kept inside the store get included in the special order. Typically, this part of the order is fulfilled by different people than the ones pulling product from outside bins. So Hancock bought as many rolling carts as it has trucks. Then, when a special order from inside the store needs to be fulfilled, the inside person pulling the order knows that the products have to be delivered to the cart assigned to that particularly delivery truck. And the driver and loader know they need to look on the cart to find those smaller, often overlooked items.
3. "Guard Every Intersection"
This sign--one of many placed in Hancock stores--urges staff to “guard every intersection”—that is, take care as a transaction passes through multiple staffers before reaching the customer (who presumably is reading the same sign, given how prominently it places these messages).
4. Track--and Share--Key Data
Hancock is a big fan of OTIF, which stands for On Time In Full and measures the percentage of deliveries made by the time promised and with everything on board that the dealer committed to bring. Most dealers that launch OTIF start with results in the 70s. Lately, Hancock’s been running a sterling 94.3%. It also tracks Journey Value, the total dollar value of goods on a vehicle. Hancock wants each truck to carry the maximum possible number of dollars’ worth of materials because that maximizes resources and promotes efficiency. The company promotes this among drivers and loaders by having them sharing internally photos they've snapped showing full loads. But these just aren't internal metrics. Hancock also publishes them in "Builder Buzz," its quarterly newsletter for customers. Here's one such report from Summer 2016.
5. Use Data to Spot & Promote Opportunities
Savvy dealers have learned that one good way to boost sales is to examine each customer's sales patterns and identify items you sell that the customer apparently is getting from somewhere else. Hancock does this, but it goes a step further. Each year, it creates a multi-sheet presentation that its sales reps share with customers showing what that contractor bought from Hancock in previous years. Unusually, it also shows the customer how his purchases compare with Hancock's averages. Thanks to the sheet, if a customer's total purchases omit a category that other pros are buying, the sales rep has an opportunity to increase the total package and the customer gets alerted to the possibility that he could be missing out on deals that his fellow contractors are getting.
6. Create Your Own Product Labels
Hancock doesn't rely on distributors or manufacturers to generate the labels that get placed on products. It has created its own. Each symbol has its place and special meaning.
7. Drive Out Simple Mistakes
Suppose a brand-new yard worker came on board. How long would it take to learn your yard's layout? Hancock strives to make things easy even for beginners by posting signs showing where to find materials and what the markings on an end stamp mean. It even uses arrows on its storage racks to avoid cases in which a newcomer might not know whether the 2x4x10s go in the upper or lower rack.
8. Team Huddles
Instituting a culture of bottom-up problem-solving requires lots of communications and goal-setting from above combined with constant encouragement for lower-level staffers to speak up and provide solutions to challenges. Hancock does this in part through weekly team huddles, such as this one in Brunswick, Maine. Company president Kevin Hancock often gets ready for a meeting by creating a list of topics to be discussed, but then he puts that list under other papers and lets the person he's meeting with bring up the issues. Often, he says, that person not only will raise all the issues that Kevin wanted to discuss but also will recommend solutions. “Leadership has evolved,” says Harland Storey, general manager of Hancock’s store in Yarmouth. “They understand that the good ideas come from the people doing the work.”
9. Promote Freedom Within a Framework
While Hancock makes a big deal about how much it empowers workers to solve problems and promote bottom-up management, that freedom has limits. Hancock's internal messaging signs constantly reinforce company expectations of employees, not just when dealing with customers but also in the ways things are handled internally. This sign gives an example of those standards.