G.W. Smith logoG.W. Smith Lumber Co.
... Since 1905
 720 West Center St, Lexington, NC, 27292
 ph 336.249.4941, fx 336.249.4913 Hours: M-F 7:00-4:00
G.W. Smith Lumber Co. Newsletter
September 2010
Greetings!
 
 
 Craig Davis  
  Cooler air temperatures aligning perfectly with the Labor Day holiday provided most of us with a nice break from the summer grind and a preview of the oncoming Fall season.  Activity in construction historically picks up betwen now and the Thanksgiving holiday and we look for the trend to continue this year.  Taking advantage of any increase in demand while performing to quality standards can be a daunting task in today's business climate.  Most of us in the industry today are having to do more with less in terms of job duties.  Last month's newsletter spoke about the "business as usual" model being a poor model in this economic environment.  I recently an article by Peter Bregman from the Harvard Business Review which expands on this thought.  Here is an excerpt:

  "To really think out of the box - you might be better off starting from a different box than you're in. But that's easier said than done: how can we escape the confines of our own history?
Michael Newcombe is the general manager of the Four Seasons in Dallas.  The recession has hit the hospitality industry hard.  Yet, when I stayed at the hotel recently, I was pleasantly surprised by how little the downturn seemed to affect the hotel's atmosphere. The quality of everything was impeccable, the staff were warm, and morale seemed high.
So I sat down with Michael again, this time to discuss how he's managed to keep morale high in the midst of the downturn. What I learned was a lesson in out-of-the-box thinking.
In the hotel business, jobs are specialized: maids clean the rooms, golf attendants prepare the golf carts, and gardeners do the landscaping. Historically, in a downturn, you cut each of those positions to the minimum necessary to keep things moving at normal demand.
But demand is rarely normal. During a golf tournament, you need more golf staff; during a corporate event, you need more dining staff. When there's a spike, the skeleton staff in a particular area get overworked, and performance, as well as morale, suffers.
Entering this downturn, there were two things that were most important to Michael and his executive committee: remaining fiscally responsible and maintaining a high-quality guest experience. So their goal was to reduce staffing costs while keeping morale high - an almost impossible combination. Almost.
That's where they got creative. Rather than following history, they started from their goal and worked backwards, questioning everything else.
Which is how Michael and his executive committee decided to ignore the silos. They focused on retaining their highest performing core staff - the ones who'd been with the hotel for 15 to 20 years - no matter what department they were in. That left gaps in certain departments. Then, they aggressively cross-trained their core staff. The people in laundry learned to clean golf carts. Housekeeping learned to landscape. And room service learned how to work in the restaurant.  Initially there was some resistance as people moved beyond their comfort zones, but they quickly adjusted. They were happy to maintain their hours, increase the diversity of their work, and learn additional skill sets.                                                       Instead of dipping, morale soared.  Michael didn't evolve his model from current practices. He broke the mold by questioning everything in the service of his objective.
Which, it turns out, is a powerful model for creativity: think backwards from where you're going, rather than forwards from where you've been. Identify the objective that's most important and then question everything else, especially standard practice."

Whoever thought backwards thinking could be an attribute! 
 
Sincerely,
Mark F. Smith
G.W. Smith Lumber Co.
 
 
Market Update:
 
SYP Lumber
 Most buyers are very reluctant in purchasing anything past there two week needs because of uncertain demand.
As we proceed forward production continues to be reduced on the mill side. We will see a leveling of print as the demand come in balance. There have been a couple of 2-4 week production shutdown announcements this week. Plan on deliveries to be 2 weeks and keep inventories at 30 days.
SPF Lumber
Activity was about the same yesterday as it has been. Eastern mills are mostly relying on 2 week order files hoping buyers will return before the files disappear. Price levels are soft in comparison to western spruce pricing which is on the rise. Buyers are mostly covering immediate needs or striving to hit margins required for pending jobs.
 
OSB Panels
 The OSB market ran flat this week as sales weakened. Order files extended to 2 weeks at best, and higher asking levels were met with indifference. With the Labor Day holiday approaching, prices will likely head sideways. Dissapointing home sales data dealt a blow this week. Clearly, further production curtailment and/or hurricane activity are required to raise prices from this point.
 
SYP
The Southern Pine Plywood market continues to struggle to gain ground. Suppliers firmed their price levels and took the opportunity increase the spread between 1/2 4 ply and 5/8 sheathing on the westside. What remains noticeably absent, is the activity necessary to keep prices firm and extend order files. Keep in touch with your LMC Plywood Buyer for up to the minute market information.

Roofing
 Roofing activity and pricing are quiet for the time being, with no prices increases posted at this time.  Distributor inventories are ample right now with product readily available.
 
Gypsum 
     The major gypsum manufacturers had announced increases for August ranging from fifteen to twenty percent. However activity and pricing are soft right now, so the increase has been postponed until next month. It's a wait and see game right now.
 
 
Fasteners  & Metals
   Price increase announcements have been made by Nucor (a major rebar mill) for a $25 per ton ($1.25 cwt) or about 4% to be effective on September 1, 2010.

Meet Your Service Partner

Calvin Payne 
   
      Calvin Payne is this month's service partner.  As an outside salesman for GW Smith, Calvin sometimes meets himself coming in as he's going out.  He logs a lot of miles in his attempt to keep his customers supplied and happy.
      Calvin is husband to Teresa and father to  Adam, Tiffany, Heather and Kristi.  On the rare occasions when he gets to have some free time, he stays busy with family, golfing and an ongoing remodel of his residence.
      Having logged thirteen years plus at GW, he is working on his next thirteen.  Calvin is definitely a salesman "in transit", but if you look quickly you can see him low-flying through the store. But you will have to be fast.
 
 T E S T I M O N I A L
 To whom it may concern:

G. W. Smith Lumber Company has been a business acquaintance of ours for the past nine years. We have been impressed with not only the quality of their products, but the quality and quantity of time they invest to be sure we get the best product for the job.

We have found them to be fair in pricing of their products, and willing to answer any questions we may have concerning any materials purchased from them. They have always served us with integrity, including treating warranty work with the same importance as new work.

We feel confident that G. W. Smith Lumber Company would be an excellent choice for getting quality service and products for other builders.

Sincerely,

Joseph Williams, President
LMI Builders, Inc.

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 If you are receiving this newsletter by regular mail and would like to receive it by e-mail please call Fonda Moser at 336-249-4941 or e-mail her at fmoser@gwsmithlbr.com.
 
Builder Helper 
Deadline to Apply for EPA Lead Paint Certification Fast Approaching
 
Remodelers and other contractors have until Sept. 30 to get their companies certified and to sign up for the training required to comply with the EPA's Lead: Renovation, Repair and Painting Rule. Under this rule, which went into effect on April 22, remodelers, window installers and other contractors who work in housing and child-occupied facilities built before 1978 are required to use lead-safe work practices unless those homes are tested and found to be free of any lead paint. They also must conduct consumer education and verify the clean-up of projects that disturb lead paint in such buildings. In addition, the EPA requires remodelers and contractors to complete six hours of classroom or online training and two hours of hands-on training to comply with the rule.
 
NLBMDA along with NAHB and other industry groups spearheaded efforts to make EPA aware that it had not approved enough trainers under the lead paint rule and that consumers in some parts of the country could not find certified renovators. As a result, EPA agreed to delay enforcement
of the certification requirement only. While remodelers now have until Dec. 30 to complete the training, they may be required to demonstrate that they have scheduled their training before this date. Contractors should be aware that fines for infractions of the rule range as high as $37,500 per violation per day.
 
TO APPLY

For a firm certification form, click here. A completed form and $300 fee must be sent to the EPA for approval. Once approved, your firm will receive an EPA Lead Safe Certified Firm logo. Your firm will also be added to the EPA's searchable database of firms certified to work in pre-1978 homes. A list of approved training providers for individual certification (certification that is required for the employee supervising the lead-safe work practices for your company) is available on the EPA website.
 
Builder Preparation For An Improving Market

Written By Edsel Charles, MarketGraphics Research Group
 
1. Recognize the changing demographics in the home buyer's market:
a. Baby Boomers are headed into a different buying pattern for house product, size and price.
b. The regular retirement market started changing and growing in early 2006.
c. There is a need for smaller, attached home product for first-time home buyers, older
couples and singles.
d. Price per square foot product is on the rise.
2. Plan on how to grow your business by borrowing little to no money. Yes!  There is a way.
3. Direct your focus on pre-sales, not spec building.
4. Focus on offering exceptional, but limited, product lines.
5. Use MarketGraphics' Risk Analysis Marketing (R.A.M.) Data to locate the best areas to build for specific price ranges.
6. Know the affects that the interest rates have on home buyers.
7. Well planned Merchandising.
8. Creative marketing.
9. Test Real Estate Agents on their closing abilities.
(9 Visible Signs of an Agent that will get Superior and Poor Results)
10. Surround yourself with correct business
advisors.
11. Refine estimating process.
12. Focus on advanced purchasing methods.
13. Focus on not just the big things but also the little things. Doing so could significantly increase your net (before tax) profit.
14. Know your weekly and monthly costs.
a. Budget vs. Actual (by Job)
b. Budget vs. Actual (by Company)
c. Reviews and Projections on Cash Flow
d. Reviews and Forecasting on Profit Margins
e. Variance Review
f. Fix Cost Before Buying
g. Profit Program Use
15. Surround yourself with those who can be open with you and your decisions.
 
     New in our warehouse, 1x6 v-groove decking, has a full v-joint face on one side and an edge and center bead on the other side. 
     "Ashton Lewis Southern Yellow Pine Pattern & Finish Work is precision milled with a Weinig moulder to an architectural quality. We are proud and stand by the quality and consistency of our millwork."

   
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