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Mark Clement: Measure Twice

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May 21, 2008

Supply Chain

There's a builder who lives near me. In his shop he stores something on the order of 8 million lineal feet of every stick of molding, 1-by, PVC and vinyl siding he's ever seen. It's spilling out like shrapnel from a lumber yard explosion.

And its money forever trapped in his supply chain.

Sure, he'll save a trip for a hunk of 1-by or drywall every now and again, but for the most part, there's 1000 pounds of profit he'll never see a dime of.

For a business like mine, I use Lowe's and The Home Depot to manage my supply chain. I know what some of your are thinking, but it works for me.

All of the homes I work on are occupied (including my own). Second, the scope of work usually amounts to room-by-room remodeling (kitchen, bath, or basement for example) rather than full bore gut jobs. Add to this there's often scant room to store materials on site -- never mind out of the weather.

The result is that I only want what I can reasonably store and install on-site at any given time.

So, I buy the job in stages: studs first, drywall next, trim after that ...you get the idea. It means I drive around a lot. But I get what I need, return what's extra, and no margin or shop space is tied up in inventory I don't need. Lowe's or Home Depot has it instead -- and they don't give me store credit: they immediately refund to my credit card.

How do you manage your supply chain? Do you battle with siding, trim or flooring warping outside under a tarp? Got any better ideas for me?Post 'em.

Posted by Mark Clement at May 21, 2008 6:24 PM

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