From file "046_PSs" entitled "PFaknyc.qxd" page 01
From file "046_PSs" entitled "PFaknyc.qxd" page 01
From file "046_PSs" entitled "PFaknyc.qxd" page 01
From file "046_PSs" entitled "PFaknyc.qxd" page 01

Extreme Measures / Spenard Builders Supply empowers employees and teams up with customers and suppliers to keep product moving from the pounding seas of the north Pacific to the icy expanses above the Arctic Circle.

During Thanksgiving week of 2002, a late autumn storm came barreling across the Gulf of Alaska as the contract barge W.J. Carbon was making its way to Anchorage, Alaska, loaded with building materials for Spenard Builders Supply (SBS). Huge, icy waves battered the 8,300-ton barge as it rounded Cape St. Elias, and the U.S. Coast Guard ordered an emergency rerouting to the relative safety of the port of Valdez. At one point, it was feared the Carbon, which was severely listing to the side, would roll in the heavy seas, dumping its cargo of pro dealer special orders to the frigid depths of the Gulf.

“It was the ugliest situation we've ever had,” recalls Spenard vice president of operations Stan Smith. “The barge came into Valdez with a 33 percent list and was missing approximately 40 percent of its cargo. Sheetrock and lumber were hanging over the side, and there were local fishermen in boats fighting over the floating construction materials.”

As the wounded ship limped into port, a fleet of Spenard trucks was already making the 154-mile trek from Anchorage, and Smith and other company personnel had forgone the holiday to assess the situation on site with their shipping partner. “Two days after Thanksgiving we had all of the remaining product at the distribution center in Anchorage and the barge was undergoing repairs to set sail again,” says Smith. “We sold the salvage, we trucked out the inventory, and it all worked.”

Accounts of epic logistics like the sailing of the W.J. Carbon are scattered throughout the history of SBS, which for more than 50 years has been meeting the challenges of dicey situations in what could be America's last great pro dealer frontier. The 19-unit, Anchorage-based company, which joined forces with Redmond, Wash.–based Lanoga Corp. in 1978, deploys a vast array of ships, trucks, helicopters, snowmobiles, planes, Rollagon tundra vehicles, and even sealskin boats to get building materials delivered and meet the company's stated mission of serving customers by going “the extra mile” to any jobsite in Alaska.

“The state is one-fifth the size of the entire United States, and only one-third of it is covered by a permanent road system,” explains Steve Voves, a residential sales manager at SBS' Anchorage yard. “When it comes to logistics, you can't make mistakes.”

As insurance against logistical errors, SBS relies on several key strategies, including frequent and open communication with customers, seasoned personnel empowered to call the shots, and a dependable inventory of product on hand in Alaska.

“They've got a lot of logistical challenges just to inventory sufficient materials for their customers, not to mention having to bring those materials up from the lower 48,” says Mike Ritchie, general manager for Osborne Construction, a commercial, residential, and public works builder based in Anchorage that has been using SBS as a supplier since 1980. “But they understand those logistical challenges. They provide on-site personnel and resources to help manage the flow of materials. They attend our weekly coordination meetings. They have a constant interface with contractors as far as the delivery of materials.”

Getting It In SBS president Ed Waite credits an Alaskan “can-do” attitude among employees and customers alike for keeping communication and logistical coordination a top priority. “It's a roll up your sleeves mentality, and that's a trait of just being an Alaskan,” Waite says. “We have procedures, but we're not departmentalized—we have a lot of people who know a lot about moving material up into Alaska so that the contractors can do what they want to do when they want to do it.”

But to sell something in Alaska, you first have to get it there. Virtually everything a pro dealer requires—from inventory to racking to trucks to manufacturing equipment—has to be steamed up from the lower 48 states. Logistics for SBS thus begin in Seattle, where traffic manager Joanne Crockett sets up all freight bound for Alaska from the company's Lakewood distribution center. “Everything that is bought by any of our buyers at any of our locations funnels through here,” Crockett explains. “This is the central receiving and dispersing hub for all of the shipping information, so we have to have our finger on the pulse of everything that is moving: What direction is it going? When is it received? Is it OK?”

That's no small task for Crockett and other employees at the Lakewood facility. Due to federal requirements under the Jones Act, material transported to Alaska must be on U.S.-built, U.S.-manned vessels and vehicles, effectively restricting the amount of traffic headed to the Last Frontier State. Still, several transport options are available, including contract and common carrier barges, deep-water carriers, the Aquatrain, and overland “sleeper” trucking teams (see “Getting It There,” page 50). “We use every carrier that is known to man to get product up to Alaska,” says Crockett, who characterizes SBS as one of the top shippers in the state. “You have to work at all times with all of your carriers to make sure that the supply lines are not overly clogged,” she adds. “You reroute, you postpone, but you always keep everything moving and orchestrated.”

Indeed, from the moment product is off-loaded at Lakewood, it is staged and prepared for transport up to Alaska. While Waite credits his suppliers as “the best vendors available that have a great appreciation for everything involved in moving product to Alaska,” materials that are delivered to Lakewood via rail and truck still must be inventoried and repacked for transit. “Loads coming in over the road are not suitable to go on the ocean,” explains Crockett. “They need to be off-loaded and banded with inch-and-a-quarter steel to withstand the Gulf of Alaska.”

While deep-water steamers offer some protection from the elements, contract and carrier barges are mostly open air, and material often is sheathed in OSB, with heavier vehicles and equipment chained on top. “For our barges that go to western Alaska, oftentimes the barge will just be beached and cargo will be craned above the historical high-water mark,” says Crockett. “So it has to be crated and packaged so it is not going to be destroyed in transit or during off-load.”

Getting It Out Whether beached in western Alaska, off-loaded at SBS dockside facilities in Anchorage, Kodiak, and Sitka, or railed up to the Fairbanks yard, building materials have a quick shelf life (for example, inventory turns at the Anchorage-area yards average around 11) before reaching their end customer, despite the fact that SBS uses broad, in-stock inventories as protection against logistics failures. “In our view, logistics is an inventory game,” says Waite. “You have to have the inventory up here in Alaska, and you have to deliver precisely what the customer wants and understand what they want it for, because to get it up here can take awhile.”

A deep and broad inventory of high-margin and high-volume products ranging from building materials to canned soda keeps Spenard Builders Supply's Alaskan contractors well fortified. With harsh climatic conditions, product must be moved quickly or protected from the elements.

Personnel throughout SBS—particularly on the sales side—are charged with fulfilling that precision directive, and most jobs involve sit-down meetings with customers to orchestrate product movement, from selection to shipping to final jobsite delivery. “Whether in Anchorage, Fairbanks, or Kodiak, our top salespeople are the key players with regard to logistics,” says Waite. “They don't delegate that—they have to be in the know, and many times they are dealing directly with Joanne to get the material up here.”

Delivery drivers also are empowered on the logistics side. Most scout out routes and drop sites prior to delivery, and if any unforeseen snafus occur, the driver makes the final “go” decision on whether or not to execute a delivery.

But with a mantra of flexibility and an institutional knowledge of how to “go the extra mile,” it is rare that a delivery doesn't make it. Building materials for resort cabins on Big Lake, for instance, are hauled via semi over the frozen ice and picked up by snowmobile and helicopter for jobsite drops. Forty-foot roof trusses are often cut in half to fit into 22-foot cargo planes and reassembled on site with a portable press. Even in the rural bush country of western and northern Alaska, massaging the options and making things work out is “regularly what we do in our job,” says rural sales rep Chuck Savoini. “In the wintertime your options are pretty limited. I had to build an 8-mile ice road to get 40-foot-long I-joists out to a village project. Customers just cannot wait to get material when they have crews and equipment out there ready to go.”

From rural regions like Barrow, the northernmost city in the United States—where housing starts might hit six in one year and the best selling product by volume is canned soda—to the fast-growing Matsu Valley where SBS has branched into component manufacturing and construction services, the diligence paid to logistics remains the same. Near Elmendorf Air Force Base, SBS is supplying trusses and wall panels for a 750-unit housing project. “We view our relationship with SBS to be critical to our success,” says Greg Romack, president of Davis Constructors, the construction management firm overseeing the Elmendorf operation in partnership with Osborne. “It is very expensive in Alaska to not have the right materials on the jobsite at the right time. From top to bottom [SBS personnel] take their commitments to us very seriously and because of this they are a key member of our team.”

The Port of Anchorage, Alaska, is dominated by the Spenard Builders Supply (SBS) dock facility where contract barges and deep-water carriers off-load up to 450 containers of pro dealer product at a time for delivery to SBS yards and contractor customers throughout the state. For all of the satisfied customers and disasters narrowly averted, the SBS team remains relatively modest when it comes to discussing their success on the logistics side and what they may have to offer pro dealers in the lower 48 in terms of strategy. “It's the same logistics game,” says Waite. “The thing that makes it different in Alaska than any other place is the distance and time and the relative expense of different methods of getting it up to where you need it to sell.” For instance, air-freighting gypsum wallboard to the Barrow yard at 30 cents per pound can raise the price of a 4x8-foot panel from a few dollars to approximately $40.

According to Smith, who has spent 28 years with SBS and was one of the first on the scene during the W.J.Carbon crisis, pro dealer logistics ultimately has no master. “I don't think we ever take the idea that we've learned the lessons already,” he says. “Each job is a different challenge, but the bottom line is that we work very hard at it. In that, we're just like everybody else. We have a great group of people that handle the constant challenge of making sure that product is moving and orchestrated every day.”