Your Supplier—A Friend in Need …
Ulf Wolf / September 2017
… is a friend indeed.
Before you can hammer the first nail or tape the first seam, you need hammer and nails, or tape. Before you can spackle, you need compound and a knife. Before you build, you need supplies. And to obtain those, you need a supplier.
Today, the relationship between contractor and supplier is probably one of the closest and most important in our industry: for the success of one does, in large measure, depend on the success of the other and upon mutual trust and loyalty developed over time.
Many contractors sing their suppliers’ praises—they could not perform miracles without them.
But how do the suppliers view this relationship? We turned to our supplier members to find out.
First we asked: “What would you say characterizes the contemporary relationship between contractor and supplier?”
Johnny Aldy, vice president of operations at Pyramid Interiors in Tennessee, observes, “Today, you cannot just be a supplier but need to be a partner in the sub’s customer’s business as well and, on a daily basis, help them run their projects as smoothly as possible.”
Jeanne McGrath, president of Holmes Drywall Supply, Inc. in Kansas, concurs and adds, “One key to this relationship is knowledgeable staff who can inform contractors about new products and arrange demonstrations and training on both new and existing products. This relationship is often personal, which develops trust. Our business really is relationship driven, and I’ve found that the more personal the communication between supplier and contractor, the faster and more reliable it becomes, which makes for better service.”
Tim Rogan, owner of Coastal Plaster Supply in Texas, has this take: “As in any good relationship, this one must be based on integrity and honesty.”
John Kindt, president of Delta Gypsum, LLC in North Carolina elaborates: “The healthy relationship between supplier and contractor is one of trust, and not solely on the level of getting a delivery there exactly when needed.
“This relationship is mutual. If the cash flow is tight on one job, you may extend some help and conversely, if the job cash flow allows it, this can be reciprocated by accelerated payments.
“That’s the meaning of modern day dependability: transcending each other’s needs to where you ultimately leverage each other’s strengths to maximize the offering to the GC or their customer.”
Alana Parker, CEO of Rocket City Drywall & Supply, Inc. in Alabama, suggests that “the contemporary relationship between a contractor and supplier remains close to the roots of our industry. While contracts may no longer be bound by only a handshake, both contractors and suppliers are still in need of a relationship built on trust, integrity and a commitment to mutual prosperity.”
Robert Waterhouse, executive vice president at L&W Supply Corporation, an Illinois supplier with yards throughout the country, sums it up well: “A supplier’s goal is to earn customers’ trust and become an important part of their businesses.”
Then, in their opinion, what would improve this relationship and the supplier/contractor supply chain efficiency?
Suggests Aldy, “As a supplier we would love to see the orders sooner and a better lead time for delivery. Especially during busy summer months, it can be a challenge to turn orders around in 24 hours.”
“Many things,” says McGrath. “One thing we focus on is sharing as much information as possible with our contractors. Our website, for example, connects to many manufacturers who in turn supply a lot of information such as short videos about various aspects of their products and how to deploy them.”
Adds Rogan, “Long relationships and paying bills on time go a long way. Let’s not forget, suppliers have to be timely in their payment to the manufacturer or the next truckload won’t arrive.”
Kindt suggests that “it would benefit all parties to include the supplier in early project conversations in order to add accuracy to the specification and quote process. Excluding, or bringing the supplier in at the 11th hour, leads to potential errors and misinterpretation of intent or spec. As the industry evolves and adds more specialty products and SKUs (stock keeping units), it is imperative to add clarity to the process. Early supplier involvement would accomplish that.”
Observes Parker: “Like all relationships, communication is key. The supplier must be cognizant of market conditions, including changes in the economy as well as distribution, and must know how best to share vital information with the contractor. Also, the contractor should be in close communication with suppliers regarding timelines so that their supplier can secure pricing and availability through the completion of the project.”
Adds Waterhouse, “It is our job as the dealer to make the supply chain even more reliable for our customers, which we work at every day. Our areas of emphasis include forecasting upcoming projects, updating lead times to avoid surprises and connecting job quotes with orders to ensure invoice accuracy.”
How do suppliers make themselves indispensable to wall and ceiling contractors?
“By working 24/7,” quips Aldy. Then adds a more serious note, “Try to have whatever materials the contractor may need from day to day, and if not on hand, be able to source it quickly. Also, supply sufficient staff and equipment to ensure customer orders are delivered and stocked in a timely fashion.”
Daniel Murphy, branch manager at Builders Gypsum/Division of Allied Building Products Corp. in Texas, observes, “Contractors are always looking for just the right mix when choosing who to do business with. They look for a supplier who is available at all times and who has the right product mix with quality manufacturers. Also, you should be able to quote smartly a fair price and then do what you say you’ll do as far as delivery is concerned.”
Offers McGrath: “By always staying in front of our contractors and helping them as much as we can. That means keeping the contractor’s best interest at heart, making sure we help him or her as much as possible to achieve the best result. Of course, a little bit of customer appreciation goes a long way. Little perks, for instance. We find out what they like, whether baseball tickets or fishing trips, and treat them.
“Finally, a knowledgeable and helpful staff is a must. Needless to say, they always have to be truthful about delivery schedules.”
Adds Kindt, “The industry is changing more and at a faster pace than ever before. These days, to become indispensable, you must be available and have expertise in what you are selling—and I mean in real time, up-to-date expertise. It is incumbent upon us to know as much, if not more, about the products we distribute than the manufacturer does. When you have answers, you gain trust. In that trust you earn a partner, which is the embodiment of the contemporary relationship.”
Parker elaborates: “As the owner of an independent supply company, it is my responsibility to know and understand every element of distribution, and to serve as a knowledgeable and reliable liaison between manufacturers and contractors. Knowledge is power, and I utilize social media to survey industry professionals for product feedback, trade demands and industry trends. This provides me access to real-time data from thousands of wall-and-ceiling contractors across and outside the United States, and positions me as their go-to-resource for product and industry questions.”
Waterhouse shares, “We help our customers manage their full costs. Among other things, we prioritize key factors like being on time, accurately placing products, jobsite safety and offering innovative solutions including the latest installation efficiency products. Every contractor knows exactly what a successful job looks and feels like. We want our customers to know we’re committed to their success and see us as an extension of their team.”
On the other hand, what can contractors start (or stop) doing to make a supplier’s life easier?
Aldy is emphatic: “Lead times is the main thing, not just for deliveries but also for quotes. Often, we are not given enough time to really work the quotes in optimum detail. Ninety percent of the time the requested turnaround for a quote is around three hours.”
McGrath agrees: “In an ideal world we would have more lead time and no last-minute changes. A new project manager or superintendent may not be on top of the job and suddenly discover that they need so-and-so right now or in two hours, which does not give you a lot of time to deliver. Of course, timely payment is always expected. Our business is based on trust and faith, and we expect to receive payment on schedule whether the contractor has been paid yet or not.”
Bevan Wulfenstein, marketing director at Grabber Utah, observes that “contractors are sometimes slow to adopt new technologies. We would like contractors to keep a close eye on new innovations that improve different aspects of construction and see how these innovations can help them.
“Also, contractors are often focused more on price than they are on innovation that could improve their business opportunities and profitability.”
Wishes Rogan, “For GCs, start paying in a timely manner and stop beating up the subs so they can see a better margin. This is especially true with the new generation of PMs that are trying to score brownie points with the owners while ruining long-term working relationships.”
Adds Kindt, “The supplier/contractor relationship is sometimes threatened by the compulsion to buy at the lowest level. Price is important, but basing all decisions on price can ultimately have an erosive effect on your business. We all must profit in order to participate in the contemporary relationship at a healthy and sustainable level.”
Suggests Peter Wilhelms, vice president of marketing at Negwer Materials, Inc. in St. Louis, Mo., “Get the supplier involved early to eliminate last-minute issues, which are costly for both parties. Also, clearly communicate job-site conditions and safety requirements before we have to pull onto the job site. That’ll make us all more productive.”
Advises Parker, “When choosing—whether products, employees or business partners—seek value and quality above all else. This will cost you less in the long run.”
Waterhouse sums up, “Communication is the key, and we welcome constant customer feedback to help us improve.”
EIFS and Other Warranties
When it comes to building systems like exterior insulation and finish systems, what, if anything, can suppliers do to ensure that contractors are buying the correct products to secure the manufacturer’s warranty?
Warns Aldy, “I would say make sure you’re not selling one of the lower grade systems and for sure don’t sell to a person who is not a certified EIFS installer.”
“The Achilles’ heel of EIF systems—where the manufacturer will no longer honor warranties—is installer ignorance and incorrect installation,” says McGrath. “If the installers are not trained, problems are likely to occur. Contractor training is obviously the key there.”
Laments Rogan, “I was once told by a large supplier of a major brand EIFS product that ‘once it’s out the door I don’t care what they do or how they do it.’ Needless to say, that guy was in it for the money and did not give a damn about our industry or long-term relationships.”
Kindt elaborates: “This is where it pays to include the supplier in pre-construction meetings. The outside envelope is a complex system that varies from region to region and in some cases state to state. Local codes help prevent failures in design and execution but do not always keep pace with innovation. A good supplier will help find an answer or provide guidance when it is needed.”
Wilhelms agrees. “You need an educated distributor who understands both design intent and the manufacturer’s product details and so can ensure compatibility,” he says. “Additionally, it takes the contractor bringing in the supplier early enough to let the contractor preplan, listen and learn all the nuances of the product or system.”
Adds Waterhouse, “Our EIFS business continues to expand, and we work with customers on training, product knowledge and technical expertise. Exteriors aren’t for everybody, and the complexity of weather heightens the importance of design, product, system selection and installation. Because of these risks, every company thinking about exteriors should have a detailed plan of action.”
Looking forward, we asked the suppliers where they see material prices going.
Predicts Murphy: “Metal products could possibly see some spiked pricing in the near future.”
Suggests McGrath: “I see a lot of business this year and next, so I expect prices to go up since by basic economics a higher demand tends to drive prices up. Of course, every product is different. Concrete, for example, is going well as an industry, so I expect an increase there. The steel industry, on the other hand, due to China and tariffs and such, is an uncertainty.”
Adds Wulfenstein, “Material prices from mills are going up, but there is downward pressure on end-product prices. My impression is there will be continued downward pressure on price for many items in the coming year.”
“I think pricing will generally be up due to the steady and consistent growth that has occurred through all the sectors of construction over the last two years,” says Kindt. “No one I have talked to thinks things are going to slow, and if things pick up in pace, it will not take much to push the manufacturers beyond their capacity, which has an obvious effect on price.
“If demand for board increases over this year, look for wallboard to be up 15 percent. Steel could be flat to up 10 percent depending on the administration’s handling of that commodity from a geo-political perspective.”
Suggests Parker, “Material prices should be rising, and any contractor working on margins should work that into their quotes.”
Adds Waterhouse, “We are certainly pleased that market demand continues to improve, and we are very optimistic about the future. One aspect of a good economy is a healthy level of inflation, and we see that in nearly every product. We expect to see price appreciation over the planning cycle.”
What trends do suppliers see in product selection?
“The vendors that we purchase from are constantly trying to come up with new items that are more user-friendly—lighter-weight drywall, easier-cutting metal and … various types of clips for easier framing,” predicts Aldy.
McGrath observes, “When the economy is good, manufacturers’ R & D departments—who are usually the first to lose funding when the economy slows—are funded and busy again. So, I see wallboard continue to evolve to improve absorption of sound and odor and to be more resistant to breakage from impact and abuse.”
Adds Wulfenstein, “There are new innovations coming to market every day. Trends in innovation seem to be in production speed and labor saving.”
Rogan sees “a growing trend in ZIP System® sheathing, especially in multifamily and HUD projects.”
Predicts Wilhelms, “With the industry labor shortage, manufacturers will continue to develop products and services that save time in the field.”
Waterhouse agrees: “We expect to see new products and services designed to improve contractor productivity. The lack of skilled labor requires all of us to provide the best performing products and services to keep the labor force productive. For instance, lighter weight products and better power tools not only improve productivity but likely extend people’s careers. We also expect to see more specifications for products that improve the performance of buildings, both commercially and residentially. Our construction market has thousands of great choices in sound, fire, appearance and other factors. Those companies that provide solutions for the complexity of options will be the leaders.”
A friend in need is a friend indeed.
Aldy sums up this relationship nicely: “Be the best partner you can be for your customers and always be honest with them.”
As does Parker: “Be authentic in your relationships and accept nothing less from your affiliates and partners. Serve others with integrity and honesty. Handle your business, sharpen your craft, and keep hustling.”
California-based Ulf Wolf is the senior writer at Words & Images.