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Supply Chain Relationships: What's Working and What's Not [Research]

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Building Materials

Supply Chain Relationships: What's Working and What's Not [Research]

Here’s what builders and building products suppliers say about their construction products supply chain relationships


By Rich Binsacca, Editor-in-Chief July 31, 2019
chart showing builder-supplier relationship data about new-product concerns
Our survey found that the supply chain is serving its home builder partners well, but there's room for improvement in specific areas.
This article first appeared in the August 2019 issue of Pro Builder.

The relationship between any home building operation and the building products supply chain is critical to delivering new homes on time and on budget. So we asked home builders and general contractors nationwide to share their preferences about working with their supply chain partners, and we asked manufacturers, retailers, and others along that chain to offer their insights about builders as well.

The results show a great deal of alignment in terms of product knowledge, local availability of products and installation labor, and who’s responsible for making product specification and purchasing decisions—all good signs that the supply chain is already serving its home builder partners well.

Among the areas for improvement is a greater respect for a builder’s time; either enough to adjust to price increases and delivery schedules, or timely resolutions to product-related problems or mistakes. Builders and suppliers still tend to point fingers at each other when things go wrong, the former blaming a product’s inherent design for poor performance, the latter leaning toward installation errors. 

“I think the savvy manufacturers and LBM dealers will invest more time and energy into ensuring their outside sales reps are well-trained on new products that can save their customers time and money,” says Rick Schumacher, editor and publisher of LBM Journal, which cosponsored the research. “The construction supply industry is extremely competitive, and smart dealers know they’ll succeed only to the extent they help their builder customers succeed.” 

We’ve selected and illustrated several aspects of the survey data; for more info and greater depth, go to probuilder.com and our social media channels.

 

Methodology and Respondent Information: Professional Builder conducted a short online survey among our home builder and general contractor readers from May 17 to June 14, 2019, collecting 245 responses. We also issued a separate yet similar online survey, in conjunction with LBM Journal, to building products manufacturers and their supply chain members, receiving 99 responses in the same time frame. Thanks to Builder Partnerships for sharing the builder survey with its client network and to Home Innovation Research Labs for reviewing the survey questions to further improve the response rate and quality of results.

(Icons: eveleen007 and Arcady / stock.adobe.com)

 

research about builder-supplier relationships chart 1

 

research about builder-supplier relationships chart 2
While nearly 47% of builders rated the company owner or GM as the most influential product decision maker, that role among others on the team was mixed; the influence of construction and purchasing managers, for instance, was evenly distributed from least to most often, while the role of design and sales professionals was usually slight. Most likely, homebuyers given the authority to make product selections are custom home clients, though overall, consumer influence is one aspect suppliers may want to consider going forward.

 

 

research about builder-supplier relationships chart 3

 

research about builder-supplier relationships chart 4
Responses underscore the age-old divergence between builders and suppliers, most notably that builders blame the product while suppliers point the finger at installation. Builders also continue to want a good price (or overall value), but suppliers report that’s not as big an issue for builders compared with other considerations.

 

 

research about builder-supplier relationships chart 5
Trying a new product or material on a house flies in the face of new-home building’s risk-averse culture, and builder concerns reflect a fairly even distribution of the various risks.

 

 

research about builder-supplier relationships chart 6
It’s all about “time” for builders, either enough time to adjust to changes in pricing and lead times or to quickly resolve issues to stay on schedule. Good news: Supply chain partners appear to be able to walk the talk about their products and how to apply them and are right on with how often they make contact, according to Pro Builder’s survey respondents.

 

 

research on builder-supplier relationships chart 7
Note to suppliers: If you want a home builder to change to a spec for your product, lead first with either a competitive (or lower) price or clearly articulate a greater cost-related value, then follow with how the new product will perform better than the current spec does. Everything else is usually secondary and won’t move the needle alone. 

 

builder-supplier relationships chart 8

 

 

builder-supplier relationships chart 9

 

Access a PDF of this article in Professional Builder's August 2019 digital edition 

Written By
Editorial Director

Rich Binsacca is editorial director of Pro Builder Media, Custom Builder, and PRODUCTS. He has reported and written about all aspects of the housing industry since 1987 and most recently was editor-in-chief of Pro Builder Media. [email protected]

 

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