ProBuild announced today it has reorganized itself into six regions and created a new "shared services" model that controls where decisions get made in America's largest LBM operation. ProBuild also tacitly revealed it has eliminated roughly 80 facilities in the past 15 months.
The Denver-based company formerly had four operating regions: North, South, East and West. Now it will have six: Northwest, Midwest, Northeast, Southeast, South Central and Southwest. As part of its reorganization, the company made these management changes:
- Ed Waite, former president of Spenard Builders Supply in Alaska, will lead the Northwest region, which is headquartered in Lacey, Wash., while continuing his responsibility over Spenard.
- Joe Lawrence, former president of the West region, will lead the Southwest region, headquartered in San Diego.
- Jim Cavanaugh, former president of the South region, will lead the new South Central region, to be headquartered in Tulsa, Okla.
- Doug Ossefoort, former president of the North region, will lead the new Midwest region, based in Winona, Minn.
- Buddy Ables, former president of the East Region, will lead the new Southeast region, to be located at a new region headquarters in Atlanta.
- Joe Todd, president of market development, will take the additional title of president of the Northeast region. He will establish a new region headquarters in Morristown, N.J. Todd also will retain responsibility for growing relationships with national builders.
"Increasing customer responsiveness is the primary goal behind these organizational changes," said Bill Myrick, chief operating officer. "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."
The "shared services" term refers to back-office operations that will be handled on a centralized rather than a regional or local basis. ProBuild's announcement didn't say which back-office operations are involved, but in recent interviews with ProBuild officials, they were identified as involving information technology, finance and accounting, marketing, payroll, accounts payable, and certain supply chain functions. The regions and local branches would be in charge of operations, safety, financial planning, credit management, and supply chain management.
"We can drive millions of dollars out of daily operations by consolidating and centralizing redundant functions that we currently perform both at region and at corporate levels," said Paul Hylbert, ProBuild chief executive officer. "We have built a culture that is ready for this transition, so we are accelerating this phase of our strategic plan. Executing our move to shared services at this time also makes sense given current market conditions."
ProBuild's announcement also gave tacit confirmation of how many facilities the company has closed since January 2008. In an October 2008 news release posted on its website, ProBuild said it had more than 550 locations in 42 states. Today's announcement said ProBuild "currently operates more than 470" lumberyards, distribution facilities, and components plants, again in 42 states.
About a quarter of the 80 eliminated were part of a consolidation in the Atlanta market that occurred when ProBuild merged its yards in the area with those of HD Supply and Jasper Lumber, both of which it acquired last year. The company also has confirmed reports involving another 20 facilities shuttered this year and last (see list detailing closures for all LBM companies), but to date it has declined to reveal where the other 40 facilities were.
ProBuild ranked No. 1 on the 2008 ProSales 100, with 2007 sales of $5 billion, 90% of them to pros. It is expected to finish atop the 2009 ProSales 100 as well what that report, reflecting 2008 sales, is released in May.