Labor Savers: Solutions for speed, efficiency and sales
Even when labor is plentiful, construction teams place a high demand on products and services that speed up the project, cut time out of the cycle or allow one worker to expand his efficiency without the loss of quality. But in a period of tight labor, these qualities take on a holy grail-type allure.
And make no mistake, there’s a labor crunch in the home building and renovation industry. The shortage was a major talking point at the recent International Builders’ Show in Orlando, Fla., and it’s a talking point at just about any other show where LBM pros come together.
Builders are confident about the growth prospects of housing, said NAHB chairman Randy Noel, a custom home builder from LaPlace, La.
“However, they need to manage supply-side construction hurdles, such as shortages of labor and lots and building material price increases,” he said.
It’s not just the unemployment rate holding steady at an ultra low 4.1% for four consecutive months. Dealers and builders bemoan the loss of labor — skilled and otherwise — that left the construction industry during the massive downturn of 2007-2009 and didn’t return. Further tightening the labor supply is the overall age of many in the home building industry and the difficulty in filling the retiring tradesmen with younger recruits.
At Franklin Building Supply, a 14-unit pro dealer based in Boise, Idaho, president Rick Lierz recently told the Idaho Business Review that framers and plumbers and tradesman are in short supply on job sites throughout the valley. Another shortage is seen behind the wheel.
“There aren’t enough truck drivers out there,” Lierz said. “It’s one of the real labor pinch points.”
Lierz, who is also the 2018 chair of the National Lumber and Building Material Dealers Association, is far from alone in voicing concern about job-site labor.
Statistics from SkilledLaborFund.org show that 93% of builders agreed that the availability of trades is a critical issue.
With the unemployment rate hovering just above a historically low 4%, the tight labor market is infiltrating human resources departments around the industry.
A recent HBSDealer poll question finds dramatic solidarity behind the idea that the tight labor market is either directly or indirectly affecting business. HBSDealer specifically asked: “How is your business affected by the tight labor market?” More than 100 respondents generated the following breakdown:
- 61% — Directly. It’s hard to find good employees.
- 9% — Indirectly. A slow construction industry hurts sales.
- 20% — Directly and indirectly
- 11% — What tight labor market?
At Builders FirstSource, one of the nation’s largest pro dealers, the labor shortages are influencing business strategy and product mix. In a recent presentation to analysts, the Dallas-based company said labor shortages and extended building cycle times increase the relative value of the dealer’s services that speak to that shortage. Therefore, the company has seen growth in its “high-margin, value-added products.”
Through its past three quarters, these added value products of manufactured products and windows, doors and millwork have seen growth of 8% overall, and growth of 10% in manufactured products alone.
The industry’s other national publicly traded lumberyard company, BMC Stock Holdings, has regularly made a similar point to investors about the ability to profit by providing services that speak to the labor shortage. In its most recent earnings report, BMC celebrated “significant growth in structural components and Ready-Frame sales.”
In its third quarter — the most recently available at press time — the company described a 17.5% increase in its higher margin structural components product category. The company’s proprietary Ready-Frame system was described as “a cost-effective and timesaving alternative as they face a very tight labor market,” according to former CEO Peter Alexander, who stepped down in January.
At events like the International Builders’ Show, vendors are aggressively promoting their products and services that save time on the job site — or allow one worker to do the job of two. Such efficiencies were a major talking point at the MiTek booth in Orlando during IBS. “Builders, subcontractors and suppliers are all striving to overcome the current skilled labor and cost constraints and bring market leadership in responsive technology and efficiency,” the company said.
In addition to its software solutions, the company pointed to its new Pro Series structural fasteners, which is double epoxy-coated for speed and ease of installation and has a versatile range of uses.
On the following pages, several companies take aim at job-site efficiency and the labor situation. The building products industry can’t solve that problem. But it is trying to help. There’s a clear need. And filling it with efficient solutions and timesaving products is going to separate winners from losers in 2018.
Stay Tuned: HBSDealer will be publishing one Q&A every day next week with someone from each of the following companies regarding its labor-saving product: Hyphen Solutions, White Lightning, Georgia-Pacific, Epicor and E-Z Gutter.
When looking at a total cost of the Job quote, people used to only look at the cost of the products. So cheaper was better and they would slam and cram those low margin "cheaper" items. Now builders are begining to add the product cost and labor cost together and finding that a higher margin product that may cost 10-15% more will actually save them money because they are cutting their labor down by 50% along with smaller size crews as well. They can charge same price lower rates but profit more. Westbury railing comes to mind for a metal railing. They are boxed kits or even preassembled for larger jobs.
Roseburg names new director of chip business
Roseburg Resources, a division of Roseburg Forest Products, has promoted Keith Eibel to the position of director of Roseburg’s chip business and the company’s Coos Bay Shipping Terminal.
“Keith has been instrumental in establishing Roseburg as the largest exporter of wood chips in North America,” said Scott Folk, senior VP of Roseburg Resources. “He has spearheaded our strategy to successfully grow and diversify our chip business, and under his leadership, we have become a major player in the Japanese chip market.”
Eibel joined the company in 2008 as the manager of Roseburg’s chip business. His expanded duties now include the procurement and sale of chips to both international and domestic customers, the operations of Roseburg’s Coos Bay shipping terminal, and responsibility for Roseburg’s western fiber business including sawdust, shavings, and woody biomass.
Prior to joining Roseburg, Eibel spent six years as chip manager for Weyerhaeuser and managed chip procurement for the company’s Albany and Springfield pulp mills. He worked for Willamette Industries for 23 years, primarily as fiber procurement manager.
Based in Springfield, Ore., Roseburg Forest Products is a privately-owned company and one of North America’s leading producers of particleboard, medium density fiberboard and thermally fused laminates. Roseburg also manufactures softwood and hardwood plywood, lumber, LVL, and I-joists. The company owns and manages more than 600,000 acres of timberland in Oregon, North Carolina and Virginia, along with its export wood chip terminal facility in Coos Bay, Ore.
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PLM partners with Samba Safety
Pennsylvania Lumbermens Mutual Insurance Company (PLM) has partnered with an industry leader in driver risk management, Samba Safety, to offer continuous motor vehicle registration (MVR) monitoring.
Based in Greenville, Colo., Samba Safety provides driver risk management software in North America. The company and its software collects, correlates, and analyzes MVRs while identifying driver risk.
The company claims its program allows customers to modify drivers’ behavior, reduce accidents, ensure compliance, and lower costs while ultimately improving driver and community safety.
PLM cites that driving is one of the most hazardous tasks performed in the workplace. There were 42,000 motor vehicle collision deaths in 2016, according to the National Safety Council, and the Bureau of Labor Statistics reports that vehicle collisions have been the leading cause of deaths at the workplace for many years. About 94% of vehicle collisions, or accidents, are caused by driver error according to the National Highway Traffic Safety Administration.
“Continuous MVR monitoring goes a step ahead of simply pulling MVRs at one point in time by monitoring behavior in real time, so it can be addressed as soon as possible,” PLM said in a prepared statement.
Through this partnership, PLM is offsetting the costs by paying the one-time base enrollment fee for all customers who sign up, and Samba Safety is offering a 20% discount to PLM customers that purchase their services.
Based in Philadelphia, Pa., PLM is the oldest and largest mutual insurance company dedicated to wood products and building material industries.
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