Now that the industry slowdown is working its way through the supply chain, the question for manufacturers, distributors, and other building trade partners is: How will you manage through it?
One strategy is to cut your operation to the bone to ride out the bad times then, once the expected upturn comes, start building your organization again.
Although this is a rational plan to manage less cash flow and lower profits during the down cycle, it is also one that guarantees that you come out the other end of the downturn in no better competitive position than you went into it, maybe even worse.
Builders have been so busy building houses as fast as possible that they have had little time to invest precious management resources into redesigning their systems and supply chains.
Although many builders have had IT, supply chain, and design changes in mind, only those changes that caused minor disruption to production were initiated.
With schedules for builders slowing, they now have time to look at the larger changes necessary to propel them into hyper-competition now and when the cycle starts to curve upward again. Savvy builders plan to come out of this downturn with healthier processes, systems and reduced costs.
Manufacturers, distributors, and installers now have the same potential to change the way they compete and win business as well. And they should be able to do it in cooperation with builders, that now have the will and time to also examine systems to really improve the supply chain.
Improving energy efficiency, instituting green building techniques, improving cycle times, and developing lower-cost systems and high-performance housing are now goals in their sights.
So it is not only a good time to make certain you are working with builders to truly gain competitive position, but it may be the best time.
As you examine where you can cut expenses, look hard at where you can gain competitive advantage. That means examining your salesforce, strategy, processes, marketing, and all touch points with the builder.
With many manufacturers cutting staff, there could be excellent new potential employees out looking for new jobs in the next few months. So now might be the best time to upgrade and create a true value-added salesforce.
Focus attention on your customers as well. Spend time with your builders, making sure you know how they are using your products and services.
Go to jobsites and interview every builder department that touches your product or service. They usually have ideas of ways to improve things. All you need to do is ask.
This quieter market is also the time to forge new alliances and partnerships, introduce your new products, better focus your promotions and advertising spending, sharpen your marketing message, and deliver better value.
Confident, clear strategies through the downturn will propel us into the next up-cycle with strong vision, improved market position and a sustainable advantage. –Michael Hartnett, vice president, Hanley Wood Market Intelligence. E-mail: email@example.com