Vice President and General Manager
Bath & Kitchen - Americas
Fifteen years ago, only about 20 percent of consumers were involved in selecting plumbing products for the home. Today, it is about 75 percent. But you can't have unlimited choices and have a cost-effective supply chain. So our major challenge, in partnership with our distributors and builders, is to give consumers the choice they want while keeping the supply chain simple, cost-effective, and profitable for everyone.
We've been aggressively driving quality into our products for five years. Now, we are focusing on bringing pre-packaged solutions to the marketplace in what we call bathroom suites. These include all the elements for the bathroom, everything from the shower stall to the sink and faucet, all with a coordinated design, and at price points from entry-level to more style-oriented, luxury bathrooms. This way you can give consumers what they want -- a beautiful bathroom that won't give them any hassles -- and keep the supply chain cost efficient.
We also rebuilt our sales force to include experts in plumbing and home building who can work directly with our customers. We used to spend 5 percent of our time with home builders. Now it is about 35 percent, and it will be 50 percent in the next couple of years.
President and CEO
One challenge is to elevate the window product category to be on a par with some other categories. We would like consumers to have more of a say in what windows are used in their homes.
The other challenge we all face is posed by these uncertain economic times. It's been a pleasant surprise to see the building industry doing so well, but I think with economic influences such as potential war with Iraq, the economy is a little more precarious going forward.
We will continue to align our business with builders at all levels. With our recent acquisition of KML, we're now in a position to offer a broader line of products than ever before at a broader range of price points, which is something the home building industry has asked for. We'll also continue streamlining our distribution because lead times are always a concern. Finally, we will celebrate our centennial. With increased involvement, we will communicate to the industry that we are looking forward with some very innovative ideas about what windows can be.
Vice President and General Manager
Sales and Marketing, North America Residential
We believe that consumer confidence, coupled with an economic recovery and the stability of interest rates, are the greatest challenges for next year. The question of a looming housing bubble is a related area to watch.
A home's HVAC system constitutes approximately 40 percent to 45 percent of its energy usage and is the biggest contributor to indoor air quality. Consequently, we need builders and homeowners to better understand the importance and role that the HVAC system plays as a significant investment in the home. Carrier is committed to working with the building community to stress the importance of such issues. In 2003, we plan to introduce a unique product that supports the builder's need for consistency and simplicity in the installation process while allowing the homeowner flexibility to upgrade their system. Carrier will continue to work very closely with builders to ensure we are meeting the ever-changing requirements of the industry. The emphasis on Energy Star and other energy related requirements will continue to drive our products and solutions. The importance of training and of educating home buyers about the financial and indoor air quality benefits of high efficiency HVAC systems also will continue to be an area of focus for us.
Executive Vice President
Exterior Products Group
In 2003, we will focus more attention on the home building market, and in particular, the large builders. First, we added a marketing position with specific responsibility for this market. Through our Building Solutions initiative, builders can take advantage of a rebate program based on multi-product use. Now, all products that we manufacture, including roofing, windows, siding, insulation, deck, fencing, and railing, as well as ventilation, will be available to builders signed up in the program.
Additionally, we are going to bring several new products to this market in 2003, including our Prestige line of fencing, which debuts at the International Builders Show. We also recently introduced NewBridge, an economical new construction window. And we will focus on improving service levels. We made a number of acquisitions in recent years that increased our manufacturing capacity in roofing, siding, and most notably in the windows area. We are currently adding new fabrication capacity to have greater control over the window manufacturing process and to be more responsive to market needs.
General Manager, Contract Sales
General Electric Consumer Products
Our challenge, as it is for everyone, is interest rates. What we have seen as we track from the first quarter through the third quarter is the slowdown in completions, in particular completions of single-family homes. If interest rates start rising, we will see starts and completions fall off much more dramatically than what we have seen through the last three quarters. A rise of even a single basis point would really hurt the industry at this point.
From a product perspective, clearly the challenge is to meet the consumer's desire for energy stingy products. We are seeing more and more offerings like the Energy Star products. The way you go about meeting a challenge like that is through product innovation. We already have a fairly complete line of Energy Star products in every major product line, such as dishwashers, refrigerators, washing machines, air conditioners, and dehumidifiers. In addition, we start with Energy Star products at the lowest price points and roll the concept throughout the entire product line, as well as across product lines. We also have some new energy-efficient products such as our Arctica(TM) refrigerators and Advantium(TM) ovens.
Lee M. Thomas
The challenges for us are to take to market more effectively the broad range of products [in] our various building product businesses. We have been very focused on product lines, but I don't think we have really educated our customers as to what that whole range of products is.
This involves effort in the supply chain and sales and marketing. In the supply chain, we are going to make sure that our manufacturing business and our distribution business work much more effectively together and that they work with our dealer-partners to provide various supply chain options to builders. On the sales and marketing side, we're going to look at how we use our sales force for training and education efforts. One example of how we will work across product lines is a program called "lunch and learn," which deals with educating architects and specifiers about our gypsum board product. We are going to expand that program.
Donald C. Devine
President and CEO
The trend toward consolidation among the national home builders is a major challenge. As they grow larger and establish a presence in more locations, the need becomes greater to coordinate our efforts, not only with their buying organization but with their regional operating entities as well.
With consolidation, the stakes get bigger for a manufacturer. The various builders have greater purchasing power and they represent a larger percentage of the overall market. On one hand, the opportunity is very good. If you perform well, you can build your market share and increase sales as they increase theirs. But at the same time, if you don't perform, it's a very easy way to lose market share. We've really beefed up our builder sales organization and our technical service organization to make sure we can support our builder customers. The [builders'] regional organizations have very significant operations. They are accountable for their performance and they want to know that you are going to pay attention to their business, service it, and give them your support. They want to make sure a manufacturer is going to perform out in the field.
James Hardie Building Products
Our biggest challenge is always top line growth. We try to drive a growth curve that buffers a lot of the ups and downs you get in the normal housing cycle. The types of fluctuations we've had in the market over the past 10 years really haven't affected us much and we don't expect them to change in the near future.
First and foremost, we will continue our ongoing brand and market development programs. We try to spend our time calling on the people who will make the buying decision. We've set up our sales organization to call on the builder. We will continue educating them and consumers, through our media programs, on the advantages of our products over alternative siding materials. We'll specifically be targeting the northern markets where we just started serious market development efforts in the last three or four years. The other area where Hardie has been very active and will continue to be so is with new product introductions. In the past 18 months, we launched Harditrim HLD exterior trim board, ColorPlus(TM) pre-finished siding, and Hardibacker 500 backer board. We have a number of additional new products under development and we expect one or two of them to be introduced this year.
Tile still has a modest market share of roofs on a national basis, even though it grows steadily. We are therefore in the enviable position that we are able to "outplay" the market volume. Our constant challenge is to make our architecturally-appealing roofs more affordable so that tile roofs become the roofing material of choice nationally.
There is no huge shift in focus for MonierLifetile in 2003. If one word was to describe our thrust, it is "modernization". Our program has already begun and it includes more automation of manufacturing processes to reduce costs, more sophisticated production controls to improve quality, more involvement of plant personnel in improvement programs to ensure quality control and sustainability, and more use of technology in our business systems to improve the quality and speed of customer service. We will also launch a newly developed roofing system solution, which guarantees the functionality of the roof. Finally, we will partner with builders, roofers, and distributors who wish to do business in a new way, which places the value of the product and service package as a top priority, rather than focusing on lower prices alone.
Vice President and General Manager
Residential Insulation Division
The data indicates that we are heading for another great year in the home building industry in terms of starts and opportunity, barring a war in Iraq.
As Owens Corning emerges from Chapter 11, our plan is to carry out the common purpose we have settled on for the company: delivering solutions, transforming our markets and, as a company, enhancing people's lives. More specifically, we must determine how best to use our brand and leverage our seven-to-one brand preference to help builders sell more homes. We have seized the initiative on new product innovation. In addition to the FastBatt(TM) insulation we introduced recently, we're now in field trials with our new FoamulaRreg; structural sheathing products. At our technology center, we are continuing 25 years of leading building science research, working on technologies related to energy and acoustical performance in the home that we think will deliver better value to the builder. Some of the results of that work will appear next year, too.
Additionally, we are working at transforming the supply chain to improve the quality of our inventory so that the right product is in the right place at the right time.
Trus Joist, a Weyerhaeuser Business
Consolidation among the major home builders has put an obligation on material suppliers such as ourselves to understand their requirements and develop solutions in a number of areas: to build quality homes that meet the buyers' needs but that can be built with lower material costs; to address the reduction in the skilled labor pool; and to help reduce their cycle time. If we can save them even a few days, that has a huge impact on their bottom line.
We are addressing these issues with our systems and the software that drives them. For example, we recently entered into a software joint venture to develop a whole house engineering package. And we will make sure that we are properly aligned with the professional retailers who have the ability to deliver complete packages. We are moving more and more to newer technology, particularly in a product called TimberStrandreg; that utilizes the forest resource more economically than more traditional engineered products. Builders will see us introducing more new products this year than any year in our history with a focus on providing a total package of engineered products.
North American Business Manager
Dupont Tyvek Weatherization Systems
Our products are not required therefore a builder must believe they will help his structure perform at an optimal level longer than it would otherwise and that he can get paid for that performance enhancement. So our major challenge s to continue being an effective communicator to as many builders as we can with the latest in building science and technology.
There are just so many builders out there. How do you get enough specialists to educate as many as possible on building science? We need to teach the interaction of that wall structure with the environment and how you can use good building science principles to construct that wall to be as robust as possible. Our answer is to invest a significant amount of money in the education of our Tyvek specialist network. We've already started a certification program with a university-style curriculum. We want to make sure they are educated in the latest technology and building science principles, plus the best communication skills because we want them to be effective communicators. We currently have 120 of these individuals throughout North America and my goal is to add ten more this year.
Published in BIG BUILDER Magazine, January 2003