Editor's Note: On July 11, shortly after this story and the following item on ProBuild were sent to the printer, ProBuild president and CEO Bill Myrick left the company.
Just over two years ago, ProBuild's then-chief operating officer, Bill Myrick, announced a company reorganization that divided the country into six regions and created a "shared services" operation at the Denver headquarters to handle common back-office tasks. "Increasing customer responsiveness is the primary goal behind these organizational changes," Myrick said then. "Given current market conditions, we feel it is critical that we get even closer to our customers. Grouping similar customers into more manageable service areas will enable our region leaders to successfully achieve this goal."
Now Myrick is ProBuild's chief executive officer and he has reorganized the LBM giant again. This time, ProBuild's roughly 450 locations will be divided into three groups focusing on metropolitan, local, and specialty markets. Meanwhile, the six regional offices will be phased out and the work done there will be consolidated in Denver.
Why make the change? ProBuild officials weren't available for comment by ProSales' deadline, but anecdotal evidence suggests that the company has decided its customers vary more by type than by geography. Equally important, closing regional offices will cut costs while removing a layer of management.
The metropolitan group will be led by Frank Garcia, until now president of ProBuild's South Central region. He'll oversee facilities in more populated areas that tend to have multiple ProBuild locations offering specialized services such as millwork.
Ed Waite, until now president of the company's Northwest region, will lead the local stores. These facilities are in areas with fewer than 50,000 people. They tend to have a stronger retail focus and more diverse customers and products than the metro region stores.
Joseph Todd, who led ProBuild's Northeast region and is president of gypsum operations, will head the specialty distribution group, which includes those ProBuild facilities that focus on products such as gypsum and roofing. The other three presidents have taken "senior operational leadership roles" within the organization, ProBuild said, without identifying those jobs.
With the reorganization, back-office tasks such as marketing, human resources and information technology will be done in Denver. It was not immediately clear how much purchasing authority will be controlled by central office buyers and how much will be done at the local level.
ProBuild is like many large dealers nationwide in that it has struggled to find the right balance between centralized efficiency and local freedom. At the same time, it has had to contend with changes in practices at the big builders that provide a signifcant share of the company's revenues.
Several years ago, a number of big builders promoted the notion of buying building materials on a national scale. Doing so, they thought, would help reduce costs by buying in volume and in a more efficient manner. But the big builders soon found it was harder to write and enforce national contracts across their networks than they thought. At the same time, as the recession reduced sales, it cut their buying power. Lately, big builders have stopped talking about pursuing nationwide deals and are promoting local flexibility instead. In such an environment, having a dealer with coast-to-coast capabilities loses some of its attractivness.
ProBuild is ranked No. 2 on this year's ProSales 100 listing, with roughly 450 locations throughout the country and $3.5 billion in sales in 2010.