Forecasting the Future
It May Be Difficult to See What Lies Ahead
by George W. Lorenz
This year finds the millwork distribution industry deeply affected by consolidation, supply-chain disruptions, the impact of imports, price stagnation and, in some cases, price deflation. Combine these factors with the escalating cost of doing business and millwork distribution managers are faced with the critical question, “What does the future hold for our business?”
During the 1980s, Chrysler Corp. began the process of designing and developing a new vehicle. The product launch was a tremendous success that changed the entire automobile industry. At a news conference, a reporter asked how they discovered that the consumer wanted minivans rather than station wagons.
The answer he received was unexpected. After examining all of the material collected by the focus groups, the Chrysler research team found that not one person was asking for a van.
How did Chrysler come up with this vehicle? The answer goes back to the basic principles of good marketing.
When they identified all of the customer needs that were found in the focus group reports, the minivan was the best solution to meet those needs.
The rest is history.
How does this story relate to the millwork distributor? Enough change has taken place already to give us a picture of what the millwork landscape is going to look like in the near term. The consolidation of lumber dealers who focus on serving the nation’s top builders continues. The retail side of our industry is now dominated by the big boxes and the major, name-brand window and door manufacturers have established direct alliances with them.
Domestic millwork manufacturers have increased their reach into the international market, which is reducing the cost of some products. All these changes have resulted in a reduction in the number of customers available to the traditional millwork distributor.
Early in 2004, the Association of Millwork Distributors (AMD) launched its Strategic Planning Initiative with the goal to complete its planning process during the February 2004 board of directors meeting.
We, as an association, recognize the need to reinvent ourselves and create excellent, high-quality programs and services that meet the needs of our members. The planning process is structured to identify the needs of our members so AMD will be in a position to provide the programs and services required to fit with the way millwork will be
distributed in the future.
We all are familiar with the names of the distributors that have gone out of business over the past few years. Some didn’t see the changes coming, others refused to change and, in some cases, they just were not needed anymore. How can you keep this from happening to you? Is it time to dust off your current plan and create your future?
The strategic planning process takes time, but it is worth the investment. A well thought-out plan will result in action plans that allow you to better understand your customer needs and what is required to meet them. Your plan also will give you a clear picture of those things you can stop doing for which your customers are unwilling to pay.
A few highlights of the process are:
• It establishes an ongoing means to succeed in, cope with and respond to our industry’s rapidly changing environment;
• The use of a professional facilitator provides the discipline and structure to ensure a successful result;
• The strategic planning process asks you to project into the future, examine the options available to you and determine what choices you are going to make to create your individual success. It means you make the changes rather than being changed;
• The best planning process includes all the stakeholders involved with your organization; and
• The final version of the plan will be a document that gives your entire organization a clear picture of what it will take to meet the goals and reach the objectives that are identified. It will be the road map to your future success.
Look for the next AMD newsletter. In it I will write a recap of AMD’s strategic planning process meeting.
Yes, you can create your future. All you need is the will to make the decision and to do it. It is an exciting adventure that will reenergize your entire company. Your customers will love you for it and reward you beyond your wildest expectations.
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