It’s surprising how much and how little changes in 25 years. Innovation, manufacturing quality, consistency and the performance of panel products are all scaling new heights. Our concern for the environment and sustainable resources has never been greater, while the impact of IT, especially logistics, would amaze anyone observing the industry in the late 1970s.
But before we get carried away on a tide of congratulation, there are aspects of our business which continue to limit success as they have throughout my quarter century in this industry.
Why do we always seem to operate in a “buyers’ market” when our products are so often best in class? Perhaps we have confused “marketing value for money” with “offering the lowest price”. Get this wrong often enough and it becomes self perpetuating. Despite our progress, many panel product prices are only where they were six or seven years ago.
I see 2005 as a watershed, with prospects for realigning the supply chain profit trail. While many panel manufacturers have been operating in red figures, end users, especially large builders, have been making easy profits. Some prices have risen recently, but the cost of oil is hitting manufacturers hard. Resin costs are rising and freight surcharges can only make matters worse.
Put simply, profits are being squeezed as costs rise. Yet sales staff seem reluctant to persuade larger customers to contribute. Say no to shaving margins, or customers will expect the same every time. Equally, say no to hiking prices at the front door while giving it back in rebates and discounts at the back door.
2005 needs to be the year we focus on the real value we offer distributors and end users, the year distributors endorse this message rather than believing some of the “competitive prices” quoted by customers.
Let’s put the commodity era to bed and wake up to a realistic valuation of our investment, skills, product knowledge and, above all, the potential of our industry to add value to our customers’ offering to end users.
