The Foundation of the Wall and Ceiling Industry launched a research plan to help wall and ceiling contractors prepare for how business will be transacted during the next 10 years and to help them plan now for how they will meet their future business goals. The Foundation surveyed contractors of the Association of the Wall and Ceiling Industry and interviewed a number of industry experts to interpret the survey findings.
The survey of members looked back a little bit (past 10 years) to get a better focus on the future (next 10 years). It was comprised of 15 questions that asked contractors their opinions about possible trends and how they see changes coming to the construction industry in general and the wall and ceiling industry in particular. Of the 1,128 surveys sent, 130 responded, representing an 11.5 percent response. All but three of the respondents were from the United States.
Also, 18 industry experts were interviewed to provide reaction and perspective on the survey responses. They represented a broad cross-section of the industry, including wall and ceiling contractors, manufacturers, distributors, suppliers and allied construction industry association executives.
The complete findings of the survey are presented in Preparing for Tomorrow, the latest offering from the Foundation Research Series. This article and others coming later this year are excerpted from the Preparing for Tomorrow publication.
To be effective and profitable in the 21st century’s fast-changing, fast-paced world, businesses in all sectors of the United States, Canadian and world economies must work faster with fewer resources, requiring firms to make their organizations leaner and more efficient. In all industries, companies of all sizes are looking for ways to build faster, with customized high-quality at mass-market prices. Most are refining tools and methods that have been around for years, but they are integrating them with a new intensity that verges on automation (Sawyer, T. Demand drives homebuilders to build fast and innovate. ENR. The McGraw-Hill Companies. Jan. 2-9, 2006). In practical terms, what this means is companies are looking to combine, automate and outsource job functions that can be done more efficiently, less expensively and more effectively by fewer people using computers and Internet technologies or by an outside source. Within the wall and ceilings industry, this trend applies to functions such as human resources, design and engineering, and, in some cases, pre-fabrication of wall system components.
Industries also are consolidating in order to remain competitive. This theme was observed throughout the survey responses and interviews. One survey question asked respondents to predict the rate of business consolidation during the next 10 years among wall and ceiling contractors, general contractors and architects and engineers (see Figure 1).
Industry experts disagreed on the reasons for this finding.
One view was that business consolidation would increase, especially when considering the lack of skilled labor that is already a challenge for the construction industry, including the wall and ceiling industry. Others expressed the view that rather than businesses consolidating, the smaller, less sophisticated companies are in danger of fading away. The experts explained that these “mom and pop” firms that the wall and ceiling industry is known for do not have the resources to be in compliance with many state and federal regulations or provide a broader array of services. These smaller firms represent about 25 percent of the industry’s revenue, according to the industry experts interviewed.
Business consolidation among drywall manufacturers, distributors and suppliers already is an established trend; for example, the number of gypsum wallboard manufacturers has decreased from 11 to eight. In the residential market, the top 10 homebuilders had only an 8 percent market share 10 years ago. Now, those same 10 companies have a 25 percent market share, and a 50 percent market share predicted in the next five years (Sawyer 2006). Distributors also are consolidating, with some larger distributors frequently buying up supply yards that distribute gypsum wallboard.
The pressure to do more with less also will continue to directly impact how projects are managed during the next 10 years (see Figure 2). Of particular interest is the survey results showed that more than 80 percent of respondents believe the use of fast track or compressed schedules will increase during the next 10 years.
Also noteworthy is the survey responses reflect a greater use of the Internet and electronic communications. In fact, survey respondents and industry experts agree that the Internet and the integration of new technology on the job site to manage projects are among the most important trends to impact the wall and ceiling industry in the next 10 years.
Business journalist Thomas Friedman is a strong advocate of the power of the Internet (Friedman, T.L. The Lexus and the Olive Tree. Anchor Books, New York, April 2000): The Internet is the backbone of global commerce … . Companies that thrive on the Internet are those that grasp the importance first, get wired before the rest of the industry realizes it has to change … . Power is not just measured by the number of PCs [personal computers] a company has but also by the level of connectivity—in other words, How efficiently and comprehensively are PCs and the Internet used?
Industry experts agreed that the day is fast approaching when having fairly sophisticated computer skills will be a key requirement for supervisors. Already, general contractors are using project Web sites to track, monitor and control project details, and this trend is expected to become more popular as more subcontractors get online. The advantages of using these Web sites are many, including greater accountability among team members since what each team member is doing is clearly documented.
Another advantage is large volumes of information, such as meeting notes, specifications, shop drawing submittal logs, requests for information and site photos can be accessed instantly by any member of the project team, without having to come to a central location. These sites also support the capability of holding project team meetings via conference call and collaborating online among team members. All of these features translate into greater efficiency, faster communications and improved productivity. The use of these project Web sites is not without some disadvantages, however. Among them are not everyone uses this technology; slow Internet speeds and technical impediments, lack of project Web site standards, security concerns and viability of companies that provide or host these Web sites (Berning, P.W. and Flanagan, P. E-Commerce and the construction industry: User viewpoints, new concerns, legal updates on project websites, online bidding and web-based purchasing. Presented to Committee T of the International Bar Association. September 2003. San Francisco, California. Construction WebLinks. December 22, 2003. Available online at www.constructionweblinks.com/Resources/Industry_Reports__Newsletters/Dec_22_2003/e_commerce.htm. Accessed Feburary 28, 2006.). In 2006, people reminisced about how they ever got by without cell phones. Whatever they will be saying in 2016 is something you should start incorporating now.
The reverse auction is the only project management change that the survey respondents felt would decrease in next 10 years. This finding may be more indicative of the negative feelings about the process itself as not being in the industry’s customers’ best interests rather than the technology by which it is accomplished. Some feel reverse auction technology is a solution trying to find a problem.
With respect to purchasing materials, industry experts stated that although online purchasing is an up-and-coming trend, they believe that personal contact with manufacturers and distributors will still continue.
For example, by taking advantage of online inventory tracking and ordering technology, some manufacturers and distributors have consolidated their sales and customer service operations but still maintain personal contact with customers. The advantage is customers can discuss specific order details, find out right away if the materials are in stock and when the materials are likely to ship, all within a few minutes. In addition, current GPS technology allows customers to track individual trucks on their way to the job site. According to the industry experts, architects and specifiers also are relying more on the Internet to research products than on brochures and print catalogs.
About the Author
In the late 1970s, there was a clear recognition among industry leaders for the need to unite and expand the educational and research activities available to contractors, manufacturers, distributors and the public, in general.
At the time, there were many issues facing the industry—from a national energy crisis to injuries in the workplace, to unsafe buildings occupied by the public. In response to these issues, the Foundation of the Wall and Ceiling Industry was formed in 1977 with the following mission statement as an IRS designated non-profit 501(c)3 corporation to pursue educational and research activities benefiting the industry and the public at-large: “The Foundation’s mission is to be an active, unbiased source of information and education to support the wall and ceiling industry.”
To fulfill this mission, the Foundation owns and maintains the largest independent library serving the wall and ceiling industry, provides educational scholarships for those pursuing careers in engineering, construction and design, provides research support to industry inquiries and publishes research papers.
For More Information
To obtain copies of Preparing for Tomorrow or to learn more about the Foundation of the Wall and Ceiling Industry, contact Debra Crawford at (703) 538.1615 or [email protected].
