VOL. 33 NO. 11 Editor's Comments
Modern Trade Communications Inc. 7450 Skokie Blvd., Skokie, IL 60077 Phone: (847) 674-2200 Fax: (847) 674-3676
www.moderntrade.com www.metalconstructionnews.com
Editorial & Production Paul Deffenbaugh, Editorial Director
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Have you ever tried to map out the building product supply chain for the metal construction industry? It’s not a map; it’s a web of crisscrossed distribution channels. Contractors may receive products direct from a manufacturer (one-step distribution), or through a distributor (two-step), or through a distributor and a trade contractor (two-and-a-half step), or through a distributor and a local pro supply retailer (three-step). Often the distribution channel depends on what the product is. For example, metal building systems
are likely to come directly from the manufacturer, while metal roofi ng may be ordered through a specialty retailer. There are, of course, products that lend themselves to a variety of distribution options, and the channel is often directed by the end user—the contractor. Take metal roofi ng systems. Large contractors may get the product directly from the manufac-
turer or at least the distributor, while smaller contractors are probably ordering through their local supplier. Looking at the channel from the other end—metal roofi ng manufacturers—the end user also includes do-it-yourself homeowners who might get their product from a Big Box store such as Home Depot, Lowe’s or Menard’s. A large part of a contractor’s effort in building is making sure all those disparate elements of the
supply chain work in unison, and that is nearly impossible given how tangled the web is. A building site is a little like a manufacturing plant with the raw product coming from multiple ven- dors, delivered to the site, where workers combine the raw product into a fi nished product—the build- ing. Among many differences, though, is the way those products arrive on-site and how they can be
stored. A manufacturing facility can stockpile raw materials, allowing it to purchase when prices are low, but a building contractor doesn’t have room on-site for such a solution. They require just-in-time delivery so that materials don’t sit around or take up space in tight quarters of many building sites. This whole system is about as ineffi cient as you can get. Supply chains in most industries have
been streamlined and achieved remarkable levels of effi ciency. The result has been reduced costs, and increased reliability and service. In the building product supply chain, though, ineffi ciency is rampant, and the burden is on the con-
tractors to manage the chain from the bottom end of it, using whatever means they have. Often, the most effective means for imposing effi ciency is demanding lower costs. That forces the chain to fi nd effi ciency to be able to deliver at the reduced cost. Still, this often works against the contractor who discovers that when his supplier cuts the cost of a product, he does so by removing essential services (just-in-time deliv- ery, technical support or warranty backup) the contractor had come to rely on. Essentially, those services just get passed down to the contractor who now needs to absorb the costs. Want to make a huge difference in the metal construction industry? Improved products are essential,
yes. Better service and support are increasingly important, yes. But fi nding more effi cient ways to get products to contractors through streamlined distribution channels would have more of an advantageous effect on the industry than almost any other change.
Circulation audited by
METAL CONSTRUCTION NEWS (ISSN-8756-2014) is pub- lished monthly and bimonthly in March by Modern Trade Communications Inc., 7450 Skokie Blvd., Skokie, IL 60077. Subscriptions are free for those in the metal construction industry in the United States. For those outside the industry, the subscription price is $45 per year, in the United States; $75, in Canada and Mexico; and $150 per year, in all other countries. Periodicals class postage paid at Skokie, IL, and additional mailing offi ces. POSTMASTER: Address service requested. METAL CONSTRUCTION NEWS, 7450 Skokie Blvd., Skokie, IL 60077.
www.metalconstructionnews.com October 2012 METAL CONSTRUCTION NEWS 3
Paul Deffenbaugh Editorial Director
pdeffenbaugh@moderntrade.com
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