Cautious optimism and anecdotes about competition in the supply chain dominated discussions during the 2014 Florida Building Materials Association Industry Panel Discussion, held on Aug. 21 at the FBMA Gulf Atlantic Building Products Expo in Orlando, Fla.
The panel was made up of: Deanna Jenkins, president and COO of Thomas Lumber; Steve Sallah, president and CEO of ENAP; Bill Myrick, CEO of American Builders Supply; Lawrence Newton, CEO of U.S. Lumber Group; Bryant Scott, COO of Robbins Manufacturing; and Rick Sanders, vice president of Langdale Forest Products Co.
The discussion, led by PROSALES columnist Don Magruder, addressed the execs' forecasts, fears, and annoyances in current distribution channel trends, and began with each panelist rating the current state of the housing market from 1-10.
"I still think we’re facing some headwinds," said Sallah, who said the rating fell between five and six. Newton agreed, saying that "things are so much better today than they were just recently." But Jenkins, whose company sells to custom home builders and remodelers, didn't see eye-to-eye with the other panelists. "I’m not as optimistic," she said, citing economic unsteadiness.
One challenge the panelists addressed several times was the ever-present competition faced from manufacturers selling directly to contractors or builders. "I would not want a manufacturer to ship direct," said Myrick, who added he thinks manufacturers would be disadvantaged to do so. "You can go from a manufacturer to a builder, but I think they would struggle to get that cost down. The customers are very inefficient."
But Scott, whose company fabricates custom metal products, says direct shipping isn't off the table. "If we can move stuff directly from my facility, that’s a smart thing to do," said Scott.
Sanders, whose company mills and sells southern yellow pine, says he's got a strict rule against skipping a step in the supply chain. "We don’t sell directly to contractors,” he said. "Our business is to manage inventory to some extent."
Another question the panelists tackled is one the LBM industry has always struggled to answer: Just what constitutes a dealer? "They should retail lumber, have a full line of products, stock inventory," said Scott. Sanders added that a dealer "could be an office wholesaler selling to a big contractor," but to really determine just who his company is selling to, he asks lots of personal questions and takes his time vetting a potential client.
What "fuzzy monsters" does the future hold? The panelists gazed into their crystal ball, with answers that ranged from a floundering economy to climbing interest rates. "Amazon.com is scary," said Scott. "We would be naive if we weren’t looking at that." Sanders, on the other hand, felt the U.S. government might not be able to react in time to another industry-wide disaster. "The bogeyman in the closet is our blundering government that can’t find some type of unity,” he said. "It’s going to hurt our industry even more." That said, with housing starts on the rise, all of the panelists agreed the immediate future calls for more LBM growth.