CATEGORY FOCUS
MANAGEMENT MATTERS
The Category Management Teams lie at the heart of NBG, negotiating with Suppliers, and keeping track of what’s happening with their particular product sector.
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MJ chatted with Brick & Block CMT members Steve Atkins, Managing Director of PGR and County Building Supplies Director Tim Jerrad-Din.
Tim Jerrard-Din: What you tend to find with bricks and blocks is that the questions are always whether we can get allocation and what volumes would be available. Steve Atkins: In the past 12 months, because we have plenty of volume, the focus has been about improving our deals. I can see the market picking up really quickly again, which will mean price inflation again, then we will risk being where we were before, not being able to get the product. TJD: I can see house building coming back and booming again, which will affect availability. The best deal for NBG Partners is one that is the right price, and the right availability, there is no good having the cheapest deal if the Supplier can’t sell you anything. SA: I just want that element of stability. If everything stabilises, prices stay where they are, and interest rates stay the same, then people will get used to it. They will realise that this is where prices are now. Everything will level out.
BMJ: How can the CMT mitigate that? SA: We try hard to ensure all Suppliers are in the same ball park in terms of pricing. We are very proactive and Mark Smith, NBG Buyer for Brick and Block, is working hard on this. He is very proactive with Suppliers, and makes sure where we are by talking to them about what we are trying to achieve. TJD: A lot of it is down to communication between Partners and the CMT. There needs to be a channel of communication where everyone is aware of, not just what we have got, but what we are trying to achieve. I think that is going to be very fluid this year and we will have a very volatile market. I think when we get through that first quarter, prices are going to move again, and regularly.
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BMJ: Do Suppliers understand it? SA: Yes, but don’t always react to it. TJD: I think they understand. If you asked that question five years ago when we fixed prices for 12 months, it might have been different, but the world has changed, you can’t even fix for three months. It would be nice, and that is why we talk about really needing some stability.
BMJ: How does the CMT operate? TJD: We do have a lot of people in the CMT, but there is a core group that pulls it all together. These do all the day-to-day work, talking to the Suppliers, keeping things on track, and acting on behalf of the wider team. SA: Once the deals are done, you have to monitor and track everything that’s been decided. We do all work well together, and we know our Suppliers very well. TJD: Buying group focus is about prices, but also volumes, and protecting those volumes, as well as ensuring we have sufficient product to meet our commitments to our customers SA: It has been a bit feast or famine over the past few years, and it’s only going to get more difficult in the next five years. One of the things that we do struggle with, as a CMT, is getting sufficient volume commitment. If you are Travis Perkins or Jewson, you can decide you want X amount of bricks, taken to different parts of the country. We can’t do that as a collection of independents, so that is something we need to work harder at. Once we get better volume commitment we get better prices. Brick stock is a different market, compared to cement and plasterboard for example, because you pretty much know what you are going to sell. You are reliant on a builder getting a specific job, and then he will specifically need a certain type of brick. So, it is knowing your market. TJD: The trouble is, the market is constantly moving. When you have a bit of demand come into the market it can be a difficult balancing act, especially if volumes are under pressure because there is a lack of supply. It’s easy
THIS IS YOUR LIFE SO FAR...
Left: Tim Jerrard-Din, Director County Building Supplies. Right: Steve Atkins, Managing Director, PGR
enough for a Supplier to take shifts off at a block factory because the demand isn’t there, but then all of a sudden, like the flick of a switch, the demand is back. SA: Allocation isn’t always a bad thing. It gives you certainty of what you are going to get. I have to say though that the talk around this NBG Conference is a lot better than it was last year. The end of 2022, was very doom and gloom. Whereas this year, although we know it is going to be flat, we are in a better place because we know what we are dealing with. . TJD: I do think no one really knows what the next 12 months will hold but it will go really quickly, I have visions that demand will pick up. A major issue is that many of our big Suppliers rely heavily on volume orders from the big housebuilders. Housebuilders, who are currently sitting on big stocks of blocks on site. They tend to stock pile until they have overstock, which they then try to use first. That puts pressure on our Suppliers, affecting their volumes, which then leads them to increase their prices again. The cycle then starts again. SA: There is no common sense. When the volumes are lower there is no margins because we are just chasing a smaller piece of the pie.
BMJ: What is the important thing to remember about running an NBG CMT? SA: We concentrate a lot on buying but we also have to be very clear about ensuring deals fit the purpose they are meant to serve. That is what it comes down to. TJD: The important thing to remember is that we have to take in the view of every Partner, and appproach things as a collective. You can’t have individualism. The CMT isn’t about a single person, or one or two Partners; we are operating as part of a national buying group. Our efforts are all about what we can do to get the best deals we can to support all the Partners. We have a great team, all of whom understand that we look at the bigger picture, and that way we get the best deals for our Partners. It’s the collective, collaborative approach that makes the CMT work so well.
January 2024
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