After several recent conversations with clients and friends, I have to admit something to you: I'm a bit frightened about our future, but not because it's so hard to tell when housing construction will revive. Let me explain.
As of late May, the list of stores and related facilities that have closed since January 2008 exceeds 675. Bear in mind that this is just LBM dealers and direct suppliers that have closed or mothballed operations and that we heard about; many other dealers may have folded their tents without word getting beyond their community.
Taking this number and then looking both up and down the supply chain–down to our builder/contractor customers and eventually up to the timber fellers–I wondered to myself: what impact is all of this going to have on our industry when the market begins to turn?
Who is going to produce the timber to supply the few remaining mills, what distribution channels will be remaining to get that lumber to your stores, and how many LBM dealers will still be standing to provide materials to the end user? For those of you still in business, what staffing levels do you now have? If you can, as many have reported, just barely meet minimal demands right now, what would you do if the market turned in your area? How would you find sufficient staff to provide service?
The ProSales 100 also finds more than 20,000 employees have been laid off or terminated in just among 50 of the biggest companies. This number in itself is staggering, but let's go a bit further: What was the average time on the job for those employees? Assume a minimum of just two years on the job for each person. That equals 40,000 years of combined experience in our industry that is simply gone! Who is going to sell the lumber, build the loads, and drive the truck to the builder's jobsite? Meanwhile, according to a survey in the October 2007 issue of Builder, the primary staff position cut by your builder customer was carpenters. So, who is going to build the houses?
Now, how many of you complained previously about not being able to hire "good" people, couldn't staff your yards properly, couldn't find drivers, did not have salespeople who could properly sell and service accounts? If we had trouble before the market downturn, we will have just as difficult a time after the rebound in finding and hiring the right people. Those who were laid off in all probability will have found new jobs and won't be available to come back.
So what's the solution? Employee development and investment. Work closely with your existing team to ensure they are all performing at their absolute highest level. Look for and take advantage of every training and educational opportunity to ensure your team members possess the skill sets necessary to carry your business forward. Maybe now is also the time to look at hiring good salespeople. We no longer have the luxury of "carrying" an employee who can't make the grade. Fine-tune your staff so you have all the right pieces set to advance when the time comes.
I know that almost everyone reading this is focused on the immediate future, but you have to develop a long-range focus if you want to be around to enjoy housing's eventual comeback. The business you have now is riding on the shoulders of your current employees. They know it, you know it. Seek avenues for their development. Invest in your own infrastructure. Institute customer service training, sales training, yard enhancement programs, and benchmarking programs. Count and measure everything. This is the time to prepare for tomorrow. You can't afford to wait until the market returns. An investment in your employees and their professional development will pay huge dividends in the future of your business.
Mike Butts is president of LBM Solutions, a DeWitt, Mich.-based LBM supply consulting and training firm. 517.668.0585. E-mail: email@example.com