News

Comeback!

BY Ken Clark

Salt Lake City — Near BMC’s West Jordan, Utah, facility, a builder is planning 177 new homes on a single plat. The project is expected to take place during a six-month window of construction.

For John Osborne, BMC sales manager for Utah, it’s BMC time.

“We have had multiple meetings with the builder’s engineer,” Osborne said. “We even brought in a new engineer who focused on reducing costs and designing parts of the project. We put in 200 man hours of time invested so far, well over 200.”

He added: “We don’t have the job yet, but we sure like our chances.”

The scenario reflects a couple of the key business concepts at play at Boise, Idaho-based BMC. First, there’s a we’re-in-this-together approach to business development. According to Osborne and a handful of other executives and customers, BMC has the ability to be more than just a supplier to its builders, and it intends to flex that muscle. On top of that is the optimism not only in specific sales opportunities like the one in Utah, but that the company — after emerging from bankruptcy in January 2010 — is heading in the right direction.

“We went through a challenging period in our company, and now we’ve come out of it and we’re excited again,” Osborne said.

BMC is the undisputed comeback story of 2012. And along with a checklist of best practices and customer-focused programs, it all adds up to BMC’s selection as the HCN 2012 Pro Dealer of the Year.

The lumberyard and building services company, which used to go by more than 20 names like BMC West and SelectBuild (and then a short stint as BMC Select), emerged from Chapter 11 bankruptcy protection in late 2010 and hasn’t looked back.

On the HCN Industry Scoreboard, BMC’s 2011 sales increased 7% to $644.4 million. And according to CEO Peter Alexander, the current year will show more dramatic improvement, with a forecast for $880 million in sales in 2012, up 37% from 2011.           

In Alexander’s words, the 88-unit pro dealer is “playing offense,” a description that played well during BMC’s newly initiated annual sales meetings keynoted in consecutive years by football quarterbacks Archie Manning and Terry Bradshaw. BMC has hired almost 1,000 people in the past 12 months.

The comeback hasn’t been easy — at its peak, BMC was a $3.7 billion company with 23,000 employees. Today, BMC has 4,638 employees and has honed its focus to 18 core markets where it believes it has a distinct competitive advantage. “We were humbled as a company beyond belief,” said Alexander, explaining the financial reengineering at BMC. “We used that opportunity to define a plan, determine the best people to drive the plan forward, and define the pace by which we execute. We discovered that bigger isn’t necessarily better, that better is better.”

Back at the yard in West Jordan, Osborne is showing visitors a stack of exterior wall panels, arranged strategically in a pile to be delivered to a job site and pieced together quickly.

“Here is the end result of our panelization equipment,” he said, referring to a stack of floor panels designed on the company’s Saphire software system and precision cut on the Virtek Laser MC saw. “It allows the customer to build a home faster and with less waste and a reduced amount of materials. The customer can essentially reduce their costs by building a home quicker. And it’s right the first time.”

Osborne also talked visitors through an area where floor beams were being etched with markings. “Instead of a carpenter with a tape measure marking up the beam, we’re doing the smart work for them,” Osborne said.

Around the corner from the computerized system, a 25-gun nailer was efficiently fastening wall frames.

Builders who can appreciate that kind of value-added service are seen as the bread and butter for BMC. “Not to put a label on them, but the customers who we want to go after are those who view us as partners who help plan and help the process and take the cost out of it,” Alexander said.

BMC executives say they are always looking for ways to improve their processes — materials, technique — and better serve customers. A recognized key to constant improvement is the ability to learn from each other and share the lessons from facility to facility.

“Over the last 36 months, we’ve shared much more information between our markets and people, and we’re discovering new ways to conduct business in the most efficient ways possible,” said Utah market manager Mike Hiller. “It’s a big plus, and people are taking notice of the new way we’re doing business, which is leading to new opportunities.”

Best-practice councils have formed to study a variety of disciplines — from millwork to credit to sales — focusing on every financial and operational aspect of running the business and meeting regularly throughout the year.

Another major initiative is the annual sales meeting in Las Vegas. According to VP sales Keith Costello, the field staff has overcome an initial resistance to being out of the office for a week. ”Now they’re looking forward to coming back and meeting everybody. They learn so much from not only other employees, but also the vendors.”

Some 140 vendors will be participating in the event in Las Vegas in January, along with 400 BMC employees, and more than 300 customers and architects.

One example of an idea that has worked its way across the BMC enterprise can be seen on a flyer titled, “Optimize your next build.” The flyer explains the pre-cut framing lumber program, while pointing to the advantages of better, faster, safer and greener.

BMC is also improving communications — both internal and external — through the use of iPads in the hands of “generalists,” (the BMC term for outside salespeople). While apps such as “Dude where’s my truck” — designed to remotely track deliveries — have obvious appeal, the iPads also help avoid errors from the field. The dropdown tools and direct contact with the inside sales group have shown to improve efficiency and accuracy, which help drive customer satisfaction. “One thing the iPad has done is enabled them to communicate more efficiently with customers and the inside staff here,” said Utah’s market manager Hiller.

Better communication — both internal and external — fuels another BMC priority that has driven the comeback: local decision-making.

“One of the best things about our business is we get to make the decisions that make sense for our market,” Hiller said. “We don’t have to ask for permission to hire a cabinet designer, or take a chunk of business here or there. It’s our decision.”

He added: “But we’re responsible for that decision, too.” 

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Strange brew in Indianapolis

BY HBSDEALER Staff

Sullivan Hardware & Garden of Indianapolis is no stranger to recognition in the local media. But its latest “best of” Indianapolis title marks what might be considered a strange departure.

The store won the Indianapolis Monthly’s “Best Retro Soda Pop” award.

After discovering the niche at the Do it Best Market, and under the encouragement of the Chicago-based supplier Real Soda Midwest, store owner Pat Sullivan decided to pop the top.  “The rep told us stories about a couple of other retailers who had retro soda, and so we went with it,” said Sullivan, who is also a board member of the Fort Wayne, Ind.-based co-op.

The store’s soda revenues average about $2,500 a month, selling both cold and warm bottles of old-fashioned soda flavors, including Cheerwine Longnecks (Sullivan’s favorite) and Leninade, a lemonade derivative with a hammer-and-sickle logo, and the self-explanatory Dad’s Blue Cream Soda.

Real Soda Midwest specializes in creating a store-within-a-store old-fashioned soda niche. At Sullivan, the niche is working as planned. “Not only does it work for impulse purchases, but people come back to buy specific brands,” Sullivan said.

The margin story is also positive, he said. His cost for a bottle is $1.03, which sells for as high as $1.79 plus tax for a bottle. 

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One e-zine, many products, 5 questions

BY HBSDEALER Staff

Residential Building Products and Technology is the title of the latest digital venture of Lebhar-Friedman’s Residential Products Group, which also includes HCN and homechannelnews.com. RBPT editor Nigel F. Maynard is no stranger to building products. Learn more at Residentialbuildingproducts.com.

How did you get into this business?

Did construction for five years during junior and high school; covered Congress for four years after college; worked as a products editor for 14 years, dabble in renovation during the weekends. I also read every architecture magazine and watch an inordinate amount of “This Old House” and “The New Yankee Workshop.”

What’s the best new building product out there?

Tough one. I really like linear drains (which we will be covering in the first issue of the magazine), and the new high-efficiency toilets that are coming out are pretty nice. What manufacturers have been able to accomplish with toilet functionality is nothing short of amazing. I also think triple-glazed windows are cool (though pricey).

What’s the worst?

Personally, I’m not a fan of laminate flooring. I can say that because I had it in my house, and I wouldn’t do that again. I think it’s fine for a rental apartment, but there are other pretty good options out there.

What do you think builders want most out of a pro dealer?

Consistency. Expertise. Timely delivery. Efficiency. Quality products — this might be No. 1. I’m not a builder, but I can’t tell you how many times I’ve been to a yard looking for studs and can’t find a straight one in the bunch. I’m sure professional contractors hate that too.

What’s the idea behind RBPT?

You can’t have architecture without products, and you can’t have houses without products. I think building products can be just as exciting as anything else. The new magazine will prove that.

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