Distributors Point of View February 2009:
The Times They Are a Changing

Inauguration day was this week. It started out like any other ordinary January day. I headed for work and went about the business of doing business in the roofing business. It so happened I had a lunch appointment and found myself driving down the highway listening to the swearing in of our new President on the car radio.  At the precise moment where Senator Obama became President Obama, I looked out the car window. I was somewhat amazed that everything looked the same. Cars were still heading here and there, buildings were all where they were a minute before, people were still scurrying about as usual and it was still awfully cold here in Minnesota. Nothing had changed except the stop light. Yet President Obama promised change! Feeling somewhat bemused, I took my foot off the brake and continued going about my business of doing business in the roofing business.

Yet, one thing is for sure, change is coming.Heck, change has already happened. Looking back at the events of 2008, who could have predicted the changes that took place? A year ago this time, there was uncertainty on the horizon. The housing crisis was in full swing yet the common thought was that by spring or summer, things would bottom out the construction business would get back to normal. Gas prices were hovering just under 2 bucks and the goods we buy in the roofing business were plentiful and pricing stable. As the year progressed, we all know what happened. A few may have seen it coming. Many more claim they did. But in reality, no one could have predicted all that happened last year.

And far be it from me to predict what will happen in 2009. I get asked just about every day what I think is going to happen with roofing material pricing, particularly shingle prices. Truth be told, there are just too many variables and scenarios to consider. It is kind of like predicting just where and when the next big hurricane or hail storm is going to hit. But, change is coming - but what change and where?

The events of 08 brought a new level of stress to the roofing distribution community. We were in uncharted territories and struggled to keep on top of the fast moving marketplace. From where I sit, I think the roofing distribution industry did a pretty good job of keeping our customers informed of the rapid price escalation and supply/demand issues. The turbulence of 08 has made distributors examine how they traditionally do business. To keep pace with the changing business climate and unpredictable roofing marketplace, distributors are going to have to adapt - and quick. Their survival may depend on it.

Some fairly new words have crept in to my discussions lately. Downsizing, rightsizing, and consolidating are the new buzz-words. Finding the right balance where costs are kept in line, inventory is kept at just the right level to support the customers' needs, cash flow keeps flowing and employing the best people to provide all the services that are expected is going to be tricky. Our customers are going to be even more demanding as they too are looking at ways to keep their businesses in balance. The relationship between contractor and supplier will be more important than ever as we all try to stay on top of industry changes in pricing and product availability.

What worked in the past may not work in the future. Yet, the fundamental principles of running a succe