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Supplying the Housebuilder |
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The Government's commitment to increase housing and Kate Barker's report on 'Housing Supply', means there is a pressure on house builders to create a better functioning housing market. But house builders were already changing the way they purchased products before the recent increase in government interest.
In the last few years house builder focus has been changing, with increasing government pressure they will be looking to suppliers to help them improve the design of homes, build quality and productivity.
One major change amongst the larger house builders has been the adoption of procurement processes from the automotive industry. No longer are they just looking for the lowest cost product, instead they want suppliers to help them take cost out of the supply chain. Key product groups have been identified and buyers are looking closely at how these can be rationalised and improved. These will often be sourced on a national basis, with regional co-ordinators to minimise local issues. This is a major opportunity for manufacturers who can maintain, or even improve, their product margins by developing creative solutions.
Shortages of site labour are a major problem. Push-fit plumbing fittings are probably the most quoted example of a product development which has been widely adopted by house builders because it has de-skilled a trade. But there is a shortage of all trades and many other products could benefit from a similar approach.
The channels to market are also changing, with the larger builders merchant groups promoting the benefit of single sourcing. Presenting themselves as the experts in sourcing and supplying products, they are persuading house builders to let them take responsibility for this aspect of the supply chain so that the builder can concentrate on what they do best - building houses.
Developers like Miller Homes are also trying to differentiate themselves by addressing what they call the "Homebuyers Emotional Rollercoaster". They want to reduce the stressful aspects of buying a home. By understanding these issues and proposing solutions, product manufacturers could help Miller to make life easier for the home buyer.
Become a Partner to Change in the House Building Sector
Building product manufacturers and suppliers can contribute to the improvements in logistics happening to the house builder sector. But it means working beyond the traditional boundaries. This means understanding the issues customers face and then looking at how your product is specified, manufactured, supplied and installed. What can you do to make things easier and better? It may also need the participation and co-operation of other members of the supply chain, with their practical experience, to develop a workable solution.
Manufacturers need to recognise these changes and the impact they will have on the business. If ignored it could become a major threat, but by recognising it as an opportunity and applying an innovative approach it could provide significant new business, and profit, opportunities.
House builder focus
· Benchmarking to increase supplier performance
· Evaluate total cost
· Improve product quality
· Reduce post-occupation defects
· Use of innovation
· Simplified procurement and installation
· Cost reduction
Achieved through
· Group wide sourcing strategies
· Specialist commodity groups
· Reduced number of suppliers
· Partnerships
Chris Ashworth 2004
© Competitive Advantage Consultancy Ltd
For more information see:
Case Study 9 Understanding Housebuilder needs
Housebuilder Watch quarterly survey of housebuilder activity
Residential Architects Omnibus Survey
Selling to Housebuilders training programme
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