SHELTER

May 2003

Distribution Channels
Inner Workings of the Millwork Industry

New Supply Chain Models
The Value of the Local Dealer
by Allen Dyer

From computer-aided manufacturing and state-of-the-art online ordering to the mainstays of voice mail, e-mail and fax, today’s technology keeps operations at window manufacturing companies running smoothly. However, all the technology that is in place can’t replace the essential value of local distributors in the window business. Distributors are the vital, glad-to-help-you link that provides the knowledge, service and logistics between window manufacturers and end-users.

Manufacturers’ Duties
Along with these distributor traits is the responsibility of the window manufacturer to provide a complete package of products, training and service to support distributors’ efforts and complete the teamwork equation that will mean success for the company, the distributor and the end-users. The relationship described has been under considerable strain as a major segment of the window business migrated from providing a commodity item that dealers and distributors inventoried to offering highly detailed products that are made to order. The upper end and lower end of window products have been affected less in this transition. High-end windows always have been made to order, while less expensive windows (typically vinyl or aluminum products), continue to be inventoried in warehouses for the production builders. Technology has not replaced the value of the window dealer or distributor, but it has enhanced his role in the supply chain.

Communicating an order from a distributor and processing it to manufacturing is the most important step of any made-to-order window business. If this order communication does not work like it should, it will result in not only a service failure, but also will guarantee added cost to the transaction for both parties. In recent years, several window companies have developed electronic tools for quoting and ordering products. However, like most software technology, the speed of technical enhancements has outpaced the development pace of most quoting and ordering systems.

Getting On-line
New on-line technology offers features such as automated updating of product knowledge and electronic transmission of certified orders with auto-messaging and fax confirmation. Window manufacturers can make product changes and have the information delivered immediately to their distributor networks without any added time or expense. Systems have become more mobile to allow distributors to sell at any location and submit orders when they return to their offices. The next step in processing an order requires passing the information to production. A quoting/order entry system that allows delivery of information directly to the manufacturing floor without intervention or translation greatly reduces the chance of error and can take precious days out of the order-to-delivery cycle. All of this adds up to a winning combination of improved efficiency and a streamlined process that saves time.

The made-to-order trend began when builders and homebuyers began to demand more flexibility of window features and design. The window business once offered fewer features and was a relatively simple business compared to today. There were so few product options that many distributors built windows at their own locations. Or, they stocked finished products in relatively few variations so they were able to turn inventories in a reasonable amount of time. A limited offering provided little risk to their investment of inventory and space and provided builders with windows quickly.

Things began to change dramatically several years ago. Proliferation of glass type and grille design options helped to drive window manufacturers to consider made-to-order manufacturing processes. Now, window components are being produced out of a variety of new materials. Even though most of the newer materials are improvements to existing components, techniques in assembly processes have been altered as a result. Capital investment in assets to build this wide variety of options has proved prohibitive for most distributors. Window manufacturers that produce windows to order with a consistent lead time must carry a little more inventory, have extra equipment capacity and a heavier production staff. And, the lead-time of products to builders could not be extended. All of this does impact the supply chain and how business is carried to completion.

The windows supply chain has been challenged to meet regional demands of higher performing products. New energy and structural codes are being enforced at local and state levels. Dealers and distributors not only have to possess key knowledge about the products they are selling, but also they must know where the products are to be used. For example, areas along the East Coast require a durable and weather-strong window that can withstand possible hurricane-force winds and extreme rainfall. 

Increasing Options
One alternative is for window manufacturers to provide high-performing windows as their standard and not as an option. This practice eliminates the question of whether or not the product meets building codes and ensures a window product that is well-suited to coastal applications, as well as any other location. Many states are implementing new energy codes that will require high-performing glass in all new construction. Manufacturers rely on distributors to provide them with the specification of product and distributors rely on manufacturers to be prepared to meet these market demands backed by valid testing and certification. Again, this requires partnering to provide the most appropriate product to the end customer and add value at each step in the process.

The window supply chain will continue to offer opportunities and inherent challenges for window manufacturers and their distributors. In order for both to survive, this will require identifying the needs of the market, leveraging technology to process transactions and providing high-quality products and services that meet or exceed expectations.
The local distributor part of the manufacturing equation can never be underestimated. For a window manufacturer to succeed, it requires a balance of people, products and technology that provides the end-users with not only the best product, but also the best service.

Allen Dyer is president of ECMD Inc., a building products manufacturing and distribution company headquartered in North Wilkesboro, N.C., with production operations that include EastCoast Mouldings, Crown Heritage Stairs and A&H Windows.


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