Summary
• Builders merchants are adapting to the oppor-tunities offered by lean construction.
• They are making direct materials supply agreements with local authority and housing association buying clubs.
• Builders merchants are embracing engineered wood products.
• The BMF launched its environmental code for members last autumn.

Marking its 100th anniversary this year, the Builders Merchants Federation is witnessing a change in traditional business models, according to its managing director Chris Pateman.

Merchants are swiftly adapting to the opportunities offered by the lean construction agenda. “Working together, suppliers and their builders merchant distributors can influence the pace of change, and by doing so, create synergies that benefit all our businesses,” said Mr Pateman. “Suppliers have always been intimately connected with their merchant outlets, and today’s market calls for even closer co-operation.”

Increasingly, builders merchants are entering new territory through involvement in direct materials supply agreements with local authority and housing association buying clubs.

“The driver here is the push from within the social housing and local authority sector for supply chain cost-efficiency. Instead of buying parts-plus-labour bundles, public sector specifiers are splitting the materials from the labour element to give themselves greater visibility on price – which means new ways of doing business and new disciplines for the merchants who supply them.

“Working with organisations like Procurement for Housing, merchants are assisting public sector purchasing consortia with delivering ‘best value’ to their client base. This is new ground and business models will continue to evolve as these relationships expand. Once the dust settles, we might expect to see as much as 80% of the market settle into planned, visible and fully-auditable refurbishment and maintenance work, the remaining 20% being responsive – and therefore representing a higher cost.”

Cross-materials platform

To help foster opportunities in a changing business landscape, the BMF views its cross-materials platform as a “parliament of all the talents”, bringing together and sharing best practice amongst many differing building materials suppliers and their outlets.

Engineered wood products is one area in which the pace of change is increasing rapidly. “It’s a sign of a maturing marketing that builders merchants are embracing engineered wood products and offering their local housebuilders a variety of solutions. The merchant is providing value by offering direct to site deliveries from, say, the roof truss manufacturer, acting almost as a franchisee. With the pressing need for swiftly-built housing, it benefits the builders merchants to have something in their arsenal with which to respond,” said Mr Pateman.

Environmental issues

Environmental issues are also key to the future of the construction sector, and the BMF launched its first Environmental Code for members last autumn. Watching carefully the progress of the Carbon Trust’s carbon labelling trials, Mr Pateman feels the time will eventually come for such labelling, but it will not be soon. “Markets only move at the pace of their customer base. When carbon labelling is regularly demanded by end clients, it will then be in builders merchants’ commercial and competitive interests to demand the necessary information and assurance from suppliers,” he said.

“In relation to timber and wood products, there is no appetite in the merchanting sector for more environmental labelling than is already provided by acceptable chain of custody certification. No monitoring system is without its costs, and any cost element will have to be justified throughout the supply chain.”

The BMF is heavily engaged in environmental issues which have an immediate operational and environmental impact, such as the pan-European research into the types, uses and movement of pallets, the results of which will be announced in September. It is also looking at transport and road pricing which Mr Pateman feels, compared with carbon labelling, are “less sexy and headline-grabbing” but extremely relevant to climate change and the builders merchant supply chain.

Although the majority of housebuilding, maintenance and repair activity still operates through traditional supply routes, Mr Pateman sees a widening array of opportunities for innovative co-operation between timber and wood products suppliers and builders merchants. “Distributing merchants are the natural partner to producers and suppliers in developing the construction markets of the next 100 years,” he said.