In fact, one of the advantages I had covering PVF (pipe-valves-fittings) was watching the development of "integrated supply" in that segment of the business. It's a complex process, but defined simply, integrated supply is one supplier providing everything the customers needs to run their plants -- piping, abrasives, fasteners, tools, janitorial supplies -- anything besides the materials used in actually manufacturing their products. One supplier covers the entire maintenance/repair/operations (MRO) line of products.

The advantage: The customer gets only one invoice and pays only one invoice for MRO materials. That saves them a lot of money; any manufacturer that has been in business for any length of time knows exactly how much it costs to process an invoice. (The numbers I saw back then generally ran about $75 each, mostly the cost of the personnel needed to shepherd an invoice from accounts payable through accounting and into the archives.)

My point is that the concept of integrated supply could help cut costs for builders, too. I suspect it's on its way, too -- an idea that hit me when I discovered that Wolseley, a British conglomerate that owns Ferguson -- the largest distributor in the PHC business -- also owns Stock Building Supply, the largest building-materials distributor in the U.S. The result is that between the two companies, they can supply just about everything necessary to build a house -- from the concrete for the foundation to the knobs on the cabinets to the shingles on the roof. And they could do it all with only one invoice to the builder.

In this time of crunched margins, builders are looking for ways to cut costs (or they should be). Establishing a streamlined supply chain with a really good distributor is a great way to do it. You have one point of contact if, for example, the plumbing hardware doesn't arrive before the plumbers need it or the custom-ordered tile for the kitchen is delivered before the framing is finished. (Yes, it's very possible for deliveries to be too early. Where will you store it?)

I know most builders already have relationships with their suppliers. But how could it save you money if you only had to make one phone call to order everything you'll need for the next two weeks? Or the next month? Forget about that $75 invoice; think about the time you'd save.

Does integrated supply sound like something that would work for your construction company? What kind of concerns would you have about doing business this way? What advantages do you see -- or disadvantages? Let me know; I'm interested in finding out where this might wind up.