Universal Becomes Largest U.S. Truss Producer

Universal Forest Products reportedly has become the nation's largest residential truss manufacturer with its acquisition of Shoffner Industries, Inc., Burlington, N.C.

Universal exchanged 3 million shares of its stock and approximately $41.2 million in cash for all outstanding shares of the privately held company.

"Our goal is to be the #l supplier of engineered components to this industry," said Universal ceo William G. Currie. "With 1997 truss sales of over $90 million, we believe Shoffner Industries is the nation's largest supplier of roof and floor trusses to the site-built residential housing market."

Founded in 1953, Shoffner began manufacturing house trusses in 1964 and now has 14 facilities in North Carolina, South Carolina, Tennessee, Alabama, Georgia, Virginia and Delaware.

All senior management will remain, including pres. Gary Wright and founder, ceo and chairman Carroll Shoffner, who is expected to serve on Universal's board of directors.

Shoffner becomes the fourth truss manufacturer Universal has acquired in as many months.

Gustoms May Expand Quota

The U.S. Customs Service has proposed to remove pre-drilled studs' exemption from quotas under the U. S.-Canada Lumber Agreement.

Customs has until mid-May to finalize its decision, but rarely reverses such proposals. Nevertheless, the reversal likely won't take effect until late May or into the summer.

Rumors of the proposal started lumber prices rising, with further hikes expected since reclassifying pre-drilled studs as lumber could deter up to I billion fewer bd. ft. of lumber a year from flowing into the hot U.S. housing market.

1st Pro Depot May Be Only

Home Depot insists that its first contractors-only store, just opened in Colma, Ca., will be its only.

According to spokesperson Amy Friend, Home Depot would rather have opened a traditional home center in San Francisco, but in two years hasn't located a suitable site. "If you have one store where both contractors and home do-it-yourselfers feel they are getting good service, you're going to have a more efficient business" than by operating separate stores, she said.

The situation in Colma, though, was unique. The home center is one of the chain's busiest on the West Coast, resulting in taffic problems so severe that the city demanded a solution.

In addition. contractors account for S-lOVo of the average Depot's customers and 25-3OVo of sales, but Colma's percentages are much higher. Also, the chain was already leasing the 89,000-sq. ft. pro store building, vacant since 1995 when Depot relocated the home center to a 100,000sq. ft. building at the opposite end of the shopping canter.

Opened April 30 as Home Depot Pro, the new store rents tools, offers large quantity package sales and onsite delivery, but is without lawn and garden and home decor departments, according to store manager Lorenzo Ormond.

INTEGRATEP DECKH{T*

IVlserving the building products industry are readying their latest releases, packed with additional features.

While the existing software from some companies, such as Advantage Business Computer Systems Inc., Big Sandy, Tx., is already year 2000 compliant, many of the new offerings from other firms were specifically designed to get users past 1999 without unexpected glitches.

The newest releases include: order ac document of logo on storage files, faxed documents. r Systems, ing Spruce Interface, a softpermits a lumberto access information and orders on line. Users can tap into customer-specific information such as invoices or accounts, check dealer inventories, build and place orders, and get quotes.

Written in the C programming language, Version 2.4 of the Dataline 8000 system from Dataline Corp., Wilton. Ct.. features an Informix relational database file structure that allows virtually unlimited data storage and information retrieval. Another new feature is bar code receiving of products, which keeps inventory upto-date through links to the inventory and purchasing systems. Out this month, it is year 2000 compliant.

Dimensions, Salt Lake City, Ut., will be year 2000 compliant with its upcoming release, Dimensions98, slated for distribution in June.

The point-of-sale and inventory management system has unique special order tracking features, unlimited payment history in accounts receivable, related items selling at POS, ability to copy and combine past invoices, financial reports that include prior year comparatives and comparative budget reports, nine ways to look up inventory, time/attendance module, and a rental package.

Enterprise Computer Systems, Inc., Greenville, S.C., offers four distinct point-of-sale systems for building materials retailers and distributors, plus plug-in products such as the Executive Information System, Document Management, Professional Estimating, Credit Card Authorization, and EDI/Vendor Communications.

The ECS 4GL's 3.8 release, scheduled for early summer, allows users to customize all main menus, submenus and strip menus; define their own hot keys; specify how the software stores, sorts and separates transactions, and set defaults or switch screens on or off for any customer, operator, product or supplier.

Also available are the Enterprise Notepad, special pricing features, unlimited product synonyms at POS, and a recommended replenishment action function.

Precision Estimating-Extended Edition from Timberline Software Corp., Beaverton, Or., combines advanced estimating capabilities with point-and-click, drag-and-drop, and other ease-of-use features to speed up estimate creation and analysis. The 32-bit system offers three takeoff methods, an Explorer for sorting and viewing estimates by client, location, project type or other criteria, and Smart Assemblies. allowing coverage of hundreds of item variations and calculation methods in one assembly. The new edition also offers more type font choices and sizes, colors and other graphics.

Distribution Management Systems, Inc., Omaha, Ne., recently released its latest software update, DMS+ Release 7.3, business management and accounting software for building product wholesalers and distributors.

Among the 40+ new software features are: the ability to run sales reports by sales rep code, inventory description keyword search, auto fax our-store Elliott Ace Hardware, Milwaukee, Wi., is typical of building material dealers on the Web. Despite stocking 65,000 items in each store, it limits its Web site to customer service: answering product inquiries, allowing customers to subscribe to its newsletter, inviting feedback on the stores. As a test, the chain has recently begun on-line sales of books on home improvement, gardening and woodworking.

The latest release of LumberJack Software, Version 6.0, runs on a Microsoft Windows NT Operating System. It includes the basics (accounting, credit, inventory, notice to owner, sales analysis, POS/order entry, purchasing, and ad hoc reports) and specialty features (remanufacturing, the cut program, ProJob for lengthy contracts, wood treating, lot and unit processing, block manufacturing, vehicle maintenance), plus specialty modules (prehung door and trim, millwork, garage door, block manufacturing, Redi-Mix).

It is year 2000 compliant and accommodates four to 1,000 system users in single or multiple branch locations.

The newest software release from WoodWare Systems, Memphis, Tn., includes Formula-Driven Order Entry capabilities to handle dimension-driven products such as specialty millwork and vinyl windows. Year 2000 compliant, it also features bar coding solutions for physical inventory, receiving label printing; auto-faxing, and a Var-I-Frame Configurator permining prehanging doors or mulling window units with needing a bill-ofmaterial.

WoodWare Visions, a customized electronic catalog for millwork, is a graphical Windows-based quoting tool for users to provide access to all or part of their product catalog.

TWO,THREE years ago, with the I- cyberspace race at full speed and full paranoia, executives were rushing to get their companies on line, even though they didn't know what "on line" meant. They just knew they had to be there.

Technology experts promised that there were millions of potential customers around the world lined up outside your computer screen door, and speculated about the day when the physical retail store would be obsolete----everyone would do all his shopping on line.

Yet, even today, the largest "e-tailers" (Shopping.com, bookseller Amazon.com) are losing millions of dollars each year. And most building material dealers' Web sites look more like on-line brochures than order desks. The question remains: Is anyone in the building products industry actually selling anything over the Internet?

James Lumber & Ace Hardware, Poulsbo, Wa., has been conducting online sales to the government since 1989, and launched its Web site in mid-1995. The site has provided new contacts and inexpensive advertising, but limited actual sales of a few trial items (Dewalt power tools, barbecue accessories).

"You have to have a reason for people to continue to come back to your site," says Mitch James. "Web site content about building materials is kind of dry and slow to evolve, compared to an industry like computers. My primary business is not publishing, so I can't devote all my time to adding content to it. The one draw I use is a Price Estimating page that I update every one to three weeks, depending on market conditions. I have received many comments from folks around the country who use it regularly and adjust for their local market."

Other sites, such as Columbia, S.C.-based Boozer Lumber Co.'s, feature a local weather icon, with suboptions for weather in nearby towns. Boozer's site has helped potential customers find the store (maps can be printed out) and helped the store find prospective employees. Potential vendors can check the business out before making a cold call.

On-line sales, though, are "a ways off," says Dale Boozer. "We can only deliver to about a 100-mile radius. and without a large order, even that would be hard to do profitably. If we had an exclusive product that would ship easily, we would consider it. A me-too product, available everywhere, could hardly be justified as an on-line sales item."

He sees certain products as Web friendly: power and hand tools, arts and crafts, especially one-of-a-kind or hard-to-find items, spindles, some stair parts, cabinet hardware hinges, swing and slide kits (without lumber), and yard items such as pots, park benches and fountains, things that are one-time buys and allow room for innovative design.

"I don't think lumber, siding and plywood will ever be sold on the 'net to consumers," Boozer says. "Maybe contractors would buy it that way, under certain circumstances, in local areas. But the bulk and shipping costs make most commodities, like drywall, totally unfeasible."

That's why Home Lumber Co., Whitewater, Wi., operates its Web site as an extension of its successful 13year-old mail order program. It has been selling tools via the Internet since late last year, and hopes to expand to accessories, such as leather cases and special router bits, and post tops, all items which also should be easy to ship long distances.

According to Jay Savignac, v.p.- operations, it comes down to "can I get you the correct product in a timely manner for the right price?"

Page advertising, only on a much broader scale."

"Sometimes it's something off the wall," says Dale Bernard, v.p., George Kellett & Sons, Inc., New Orleans, La. "The first call we got was from a contractor in Virginia who was looking for old timbers to renovate a 30O-year-old church. We got a call from a craftsman in Ohio looking for some southern yellow pine boards, because his local lumberyards were charging too much for it. We also sell a lot of our fire retardant product, while the export stuff can be steel, lumber, anything."

Bernard attributes additional sales of about $100,000 to Kellett's twoyear-old Web site, mostly from out-ofstate or international buyers. It has also provided contacts with agents in Costa Rica and the Caribbean interested in reselling some of Kellett's products.

He created and maintains the site himself, and attracts interest to it by registering with various search engines and linking with as many other related sites as possible.

Bernard doesn't foresee the company ever having an on-line order desk, although sales should continue to grow as the Internet continues to increase in popularity. "To me, it's more like Yellow Page advertising, but on a much broader scale," he says. "We dumped a lot of our Yellow Page advertising to pay for the Web site, and it's been a whole lot more effective. It's like an international Yellow Page ad. We never would have reached customers in Panama, Costa Rica or Virginia, without it."

But as more potential buyers come on line, more hopeful sellers also will surface. Providing helpful information, such as installation instructions, warranty information, or Material Safety Data Sheets, may lure buyers to a site, but will not necessarily translate into a sale. "Internet commerce could be like a Brookstone's-a place to get tons of detailed information, more than a clerk in any store could possibly know," Boozer predicts. "Problem there is: what is to keep someone from using your Web site to get this great information, then going to his local store, armed with all the information he needs, and buying the product there----cutting out the person with the nice Web site. I see this as a real danger-stripping information and not reciprocating with a purchase. And, I don't see any way to prevent it. The Internet is a great information disseminator-but whose information is it?"

For manv. the most sensitive data are prices. Several dealers have considered a restricted-use database for approved contractors, with password access, to reach a dealer's pricing [iles and place orders.

But, cautions Boozer, "full service dealers might not be comfortable putting their entire price book on line, even with password access. Customers could become disgruntled, and give their password to a competitor lumberyard, who could have a field day downloading all the price files. A 'price' yard might not consider that a risk, and in fact already publish their commodity prices. Some might feel that the more potential customers that access their prices, the more sales they would make."

What about for service-oriented independents? "Selling 2x4s on line is going to be the exception rather than the ruIe," James predicts. "So much of our business is relationships. Look at Georgia-Pacific. They discounted the value of relationships and it cost them dearly."

He adds, "Many might think this is a way to automate the order taking process. I don't think we will get to that point for a couple of generations, if ever. It is and will be easier to pick up the phone and run off a list of items you want delivered because the person taking the order will know what grades and species you use."

Construction software developer Rod Giess agrees: "One reason Web sites typically do not work is that lumber vendors know they are selling a commodity, and can only justify reasonable profit margins by offering superior service and personal attention to their customer base. If you ask customers to order from a Web site, all of a sudden you remove that personal touch, and therefore the justification for that customer to pay higher margins for service he is not getting."

With that in mind, Giess is introducing an Internet-based, client/server package called SpeedBuilder that streamlines the trading process between lumberyards and their pro customers. Its purpose is not to locate new customers but to expedite the trading process with existing customers.

He designed the system to benefit both seller and buyer, since it eliminates re-keying order information and makes job costs easier to track.

"Contractors are a self-sufficient bunch, and while they expect vendors to deliver materials on time as needed, they won't : mind doing the work of keying items if it gives them the fast response they need, and saves them clerical effort later," Giess explains.

Over the last few years, other companies have developed software that would allow electronic buying and selling of forest products between retailers, wholesalers and manufacturers. Internet, Intranet (private server) and satellite-based systems have come and gone, usually with the epitaph: "They were ahead of their time."

More are coming. Set to launch in August, FpIx (Forest Products Industry Exchange), Dallas, Tx., is introducing a transaction-based platform on which buying, selling, and payment can be arranged. Through a private server, producers, wholesalers and retailers are linked together on a real time basis to conduct real time bids, offers and transactions. ln various forms, electronic commerce continues to increase in the building products industry. What form it will take and to what extent it will be used, no one can predict, exactly, even two or three years ahead. www,h0rnelunbercom. com

"Customers can select who they want to buy from, and sellers can preference whom they want .:.:,.:,. to sell to." explains co- .'o founder Johnny Ainsworth.

"General market price reporting will be available on a daily basis, but all transactions are kept private. The reason that we are not launching using the Internet is due to the instability of lnternet service providers and speed. As we regard the nature of information we will process as mission critical for our members, we want to make certain that our system is fast, secure and stable."

Nelr,x (North American Lumber Exchange), Guntersville, Al., already has signed up 52 mills and 165 buyers for its private server network, which started up earlier this year and will eventually be over the Internet. The service provides approved buyers with quick access to mills' offerings, but does not accommodate actual transactions.

"We're trying to expedite, not change, the process," says Nalpx's Mike Ferguson. "60Vo to 7O7o of the calls to a mill are querying what they have. This reduces shopping calls and increases buying calls."

James Lumber & Ace Hardware, www.hardware.com

Kellett & Sons wwwkellettlumber.com