Big-Time Changes Are Not Coming, Because They Are Already Here
By Lyle R. Hill
I am not a big fan of change. This may have something to do with my age. In fact, now that I give it a bit more thought, it probably has a lot to do with my age. For a long time now, I have considered myself a rut dweller. I have my favorite foods, places to vacation, cars and even friends that I like to spend time with. So if I am happy in my ruts, why not stay there … be comfortable and enjoy the ride? In your personal life, you can do this and be quite content. In your business/professional life you cannot. In the world of commerce and industry, change is constant, and not just in the arena of technology. And if you don’t pay attention to it, it will not only pass you by but also bite you on the backside when you least expect it.
This past May 31 I had the pleasure … and indeed it was a pleasure … of speaking at Glass Expo Pacific Northwest™ in Bellevue, Wash. I was joined in this presentation by Attila Arian, president of Schüco North America. I have known Attila for a few years now and I have developed a high degree of respect for him and his company. We have discussed regularly the glass and architectural metal industry, and over a period of time have exchanged ideas and concerns about where the industry is headed. I appreciate his insight and analytical objectivity, so when I was originally asked to speak at this event about trends in the industry, I asked Attila to join me, and he did. My perspective is mostly that of a glazing contractor, while his is mostly that of a manufacturer. We don’t always agree, but often we do. With this in mind, the following are my opinions … you’ll have to get Attila’s opinions from him.
Both of us, in preparation for the event, did our own research on the topic, and it was pretty extensive. Our presentation was apparently of interest because I received a number of e-mails and calls from people who attended wanting to discuss the topic further. And we have been asked to repeat the presentation in November at Glass Expo Midwest™ ’18 in Indianapolis (www.usglassmag.com/gems). Knowing that it’s sometimes difficult to get to these regional shows, I thought it might be worthwhile to share some of what was presented based on the review of an incredible amount of data as well as some very open and candid discussions. So here is a sampling:
For the past several years, foreign manufacturers and glazing contractors have been “invading” the North American glass and architectural metal industry. I feel it is fair to say that overall, the “initial invasion” (mostly from Asia) did not go well. Now, however, led by the very progressive and aggressive companies from Europe (Germany in particular), size-able market penetration has occurred. In fact, companies that were non-existent in North America ten years ago are now starting to play a major role … soon to be a dominant role … in some market segments. And their business model is substantially different from past models. The early “market invaders” got work based on price and often performed poorly. This new group is getting their work based on quality, performance and their willingness to carry the complete contract. You may say “this is not new,” and you’d be right. It is not totally new, but the execution of the initial approach was poor in my opinion because of the lack of qualified installers, poorly engineered and produced systems and a general lack of knowledge about how business is done in North America. There are some industry pundits who feel that this approach is doomed because of the poor past performance of the “initial invaders” and the incredible number of lawsuits created.
It’s not doomed. The future will be driven by highly sophisticated, performance-driven manufacturers who will not be selling on “price” but on performance. And they will succeed where the original group did not.
Developers and owners (particularly on large projects) have now become accustomed to and are comfortable dealing directly with system manufacturers who take the primary façade contract and sub out the erection labor. The single-source responsibility role and warranty provision will be carried by the manufacturer, which means they will now be much more selective in who they allow to install their materials. This trend is not necessarily new, but it is growing. This will be the primary delivery model in the future—and not just on highrise projects. The glazing contractors of today will become primarily labor suppliers or will migrate into specialty niches (storefronts, interiors, service/replacements and so forth). Multi-faceted shops will fade away, and the era of the specialist will be ushered in. I could expand on this a great deal more, but you’ll have to come to Indianapolis for that.
ALUMINUM STAND OUTS
The aluminum system manufacturers will become not only the “big players” in the industry but the only players on highrise work. Prices will increase to allow for recruiting and training of field personnel. The manufacturers will drive this and will certify installers who work on their systems. Manufacturers will also make inroads into the midrise and lowrise fields. A project’s complete material needs will come through one primary manufacturer: the metal system supplier.
MOVE TO MODULAR
Storefronts will become highly modularized. This is actually long overdue. It will become quite easy to order a pre-glazed storefront out of a catalog just as you do residential pre-glazed doors and windows. The commonality of storefront construction is begging for this, and the need for cost reductions in the construction industry will make it happen. There is a strong possibility that in the future, it will be possible to pick your storefront up at Lowe’s, Menards or Home Depot … on the day you need it.
All of this is happening, and these trends will continue to dominate the glass and metal scene. For the details and even more, we’ll see you in Indianapolis in a couple of months.
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