VIEWPOINT
DEALING WITH THE NOW: PREPARING FOR THE FUTURE
Matthew Carter, sales and marketing director for aircrete manufacturer, H+H outlines his company’s strategy, for meeting the needs of the current unpredictable market.
MANUFACTURING AS A sector has sometimes felt like the poor relation of the UK service-driven economy but as has always been the case, the people who make things and the people who build things, have never been more significant to the UK GDP. Our challenge is to keep ahead of volatile demand, with flexible production.
With the UK suffering the worst contraction in GDP on record, the focus is certainly on those sections of the economy that are still operating to keep on track. And when it comes to our business, keeping on track means keeping up with demand.
The last twelve months have stretched the definition of the word unpredictable to its limits and flexing our production to keep pace, while simultaneously developing and enhancing our safety regimes and working practices to protect our plant workers, has been challenging. The contraction in our economy last year was unprecedented, but despite this, we still see grounds for a lot positivity. There is a clear pattern of people looking to their home to support an entirely new way of living and this focus is being demonstrated in demand for new homes and for home improvements.
The housebuilding sector made a strong recovery after the initial shock of the first lockdown and
the number of new homes being built jumped by nearly 50% in the third quarter of 2020. The RMI sector has also been a significant factor in the recovery of the construction industry with 27% growth in the fourth quarter. Consumer confidence, buoyed by the stamp duty holiday and help to buy scheme, further fortified the housing market with a 13-year high in the number of mortgage applications approved in November.
Highlighting the strength of the market in the final months of 2020, UK residential property transactions in December 2020 were 31.5% higher than in December 2019, and 13.1% higher than November 2020. At H+H we believe the
housebuilding and RMI sectors in the UK will continue to be strong this year and we predict good
growth in 2021, leading to an even stronger 2022. We expect to see some fluctuation in demand for our range of products this year and have plans in place to manage the peaks and troughs of demand. Manufacturers have to be as efficient as possible and have to be able to adapt their manufacturing output and the stock position, to support their customers. We are part way through a long-term programme of investment, in our three factories: a programme that is designed to deliver improvements both in capacity and in consistent quality over the coming months and years.
As a result of this long-term strategy, H+H was able to accommodate the instant and sustained demand presented by our customer base in the second half of last year, with little or no impact to lead times and availability.
We have more projects planned to further improve efficiency and give us the capacity to manage production and to a greater degree, to support the inevitable fluctuations in demand. Added to the previous point, significant investment in our UK factories has enabled us to support our customers at a time when the
March 2021
www.buildersmerchantsjournal.net
impact of Covid, coupled with new Brexit regulations, is leading to a shortage in the availability of some building materials. In addition, The Builders Merchant Federation has warned of a shortage of some products until at least August 2021, for example, the Timber Trade Federation (TTF) has advised that delays to the supply of timber will continue well into this year. There are lucrative spot market opportunities for blocks that could be seductive for a supplier, looking for a short-term profit boost. However, H+H believe in the value of long-term relationships and our focus is always on our long- term trading partnerships and commitment to supply.
The strong foundations of our customer relationships mean our customers know they can rely on us. They always know what they’re going to get, and when they’re going to get it. The value and importance of these meaningful long-term partnerships has never been greater than now, when we can’t get together in person. H+H has built its business on the basis of partnership. It’s an approach that relies on trust from both sides. We do not and will not over-commit, or capitalise on short term pricing opportunities, at the expense of supplying existing customers. We ask in return that our customers work with us to make realistic forecasts of demand – enabling us, in turn, to manage our manufacturing.
Building relationships on trust and mutual respect may sound a little old fashioned, possibly cliched, but in an era where unexpected threats and challenges cause such rapid changes, I suspect that the concept of consistency might just, alongside the importance of manufacturing, be back in fashion. BMJ
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