On June 1, David Helmers became vice president of Weyerhaeuser Distribution, moving up from the position of director of sales and business development that he had held since 2011. Helmers’ operation takes in 21 distribution centers from which roughly 185 trucks travel an average of 36,000 miles a day delivering goods to dealers in most U.S. housing markets. The division employs 750 associates and contractor partners. Recently, Helmers spoke to ProSales about where the building material distribution is headed and what are the keys to future success. Here are his comments, edited for space and clarity.
Goodbye to the Old Business Model
Over the last four years, we’ve really been in a rebuilding phase as we came out of the downturn. If you look 10 to 20 years into the past, wood products distribution helped satisfy the second-to-last mile in the supply chain. The economics of the supply chain allowed for multiple steps, and folks could make a reasonable living in each of those steps.
The economics that were driven by the Great Recession has forever changed the supply chain, from the home buyer all the way back to the manufacturer. Our tolerance for price is much less than it was. If that’s the case, for everyone backwards in the chain, you have to be really good or really different.
Focus on Fundamentals
As we talk to our teams, we don’t need them to be distracted by what 10 years from now looks like. For us to be successful, regardless of what that model looks like, there still are some fundamentals: You have to be great at the basics—sales effectiveness and logistics. That’s true today and will be true in 10 years.
How information is exchanged and how we interact with customers will have some changes in style and approach. But ultimately, to help the dealer handle market changes, logistics has to be key. So we focus on our lean principles, be as agile as possible, and keep costs down.
On the sales side, it goes back to really listening and not selling with the intent that ‘I have something I want you to buy;’ rather, we understand what’s going on in the customer’s world and really listen to the customer. It isn’t complex, but it’s very difficult work. You have to have discipline. We’ve talked to our team about that discipline. It’s hard work, but it’s good work. And if your folks are really talented, then as that supply chain migrates we’ll be able to adapt to it.
At different times in the past, a distributor could get by with break-bulking product and getting it to a dealer yard. That satisfied a large portion of that second-to-last mile. Given our belief in housing, we will continue to be on this steady ramp up, but there will be surges. If we believe that having big trucks and big bulk products and carrying it to resale yards is going to carry the day, we’re wrong. We might need more timely service--jobsite delivery, if the customer wants it.
Embracing Lean Management Principles
Over the last several years, we’ve broken our business down into five fundamental elements: source, stock, store, sell, and ship. Within each of those there are fundamental practices you need to be great at. For instance, in inventory management it’s: Do you have products in the right amounts? Is your access on your yard appropriate? How are you handling your fastest movers? We’ve invested a lot. We’ve got 30 folks who are green belt in lean. Every day, we’re looking to remove waste. That applies to each of those fundamental processes. And removing that waste reduces costs, and our arteries are less clogged.
One of the shining examples of that is we have an estimating and spec service that we do on engineered wood products. We’ve reduced the cost of that processing by 50% while maintaining the same capacity, if not more, and we’ve improved the turnaround time on customer service by 50%. So we’ve cut our costs in half and doubled our speed. That’s done by understanding what the customer wants, when do they need it, and what resources we have in place.
We’ve been hiring heavily over the last four years, adding maybe
250 people. In terms of marketplace, our focus has been first to be great where
we’re at and then get great in other places. Do we aspire to improve our
footprint? Where it makes sense, absolutely. But being broader today isn’t the
benefit. We think being better is the benefit.