OPERATING

WALLY LYNCH Paid Associates

PO. Box 741623 Dallas, Tx.75243 common thrcad in their operation cube util ization.

OST LUMBER and building material dealers who have been around long have either faced a space problem or soon will. The dilemma is generally whether to relocate or expand at the present location.

Just after the decision to do something has been made. but before it has been determined just what will be done, think "cube" and "cube utilization." A good way to do this is to get out thc plat plan ofyour location now and see how many square fbet are being occupied. Frorn this total deduct deed restrictions. or other incumberances such as utility easements. parking area requirements. construction oti scts, rail access, etc.

For our purposcs hcrc. let's say thal you currently have 87.120 uncncunrbered square lbct. This is two acrcs. There are dealers and rctailcrs at this timc gcncrating tiom $1.000.000 to $2,500,000 monthly f'rom this amount of space opcrating within onc of the ditferent marketing configurations of the industry. The warchousc opcrator. in csscncc. has built a 20' high building over the two acres. cquipped it with 12' racks and air conditioned it.

At the other end of the spectrum is the all. or mostly all, contractor oriented dealer who is turning inventory once a month. Somewhere in the middle is the 40-60 dealer with a drive through servicing both the professional and the consumer. All three are capable merchants servins their different clientele. but have a

[-et's look at such cubc utilization in rclation to thc three 2 acre dcalers just described. First. the new homc center. 2 acrcs times 4.5'. or 392A40 cubic feet. Second, the warehouse, 2 acres times 12', or 1M!440 cubic feet. Third. the contractor yard, 2 acres times 80% in 12' racks and 20% in 4 .5' gondolas. or 914.760 cubic fbet. Fourth, the drive through 40% contractor. 60% consumer dealer. 2 acres times 40% in D' rack and 60% in 4.5' gondolas, or 784,O/0 cubic feet.

Granted, these are fictitious and arbitrary figures and configurations considering neither aisles nor ceiling heights, but they servc to illustratc thc need to consider cubc use in the decision making processes.

Daily the people in this country shop tbr grcccrics in storcs f'caturing 6' and 7' gclndolas. s<rme 33h% to 55.5 % more cubc utilization than with4.5'units. In fact. just raising gondolas fiom 4.5' to 5.0' provides ll% morc cubc. Thc same grocery stores havc 6' to 7' aislcs, but if 4' or 5' aisles would do. the gain in cube use is enormous.as it iswhcn you can add ntorc fixturing. It will vary all over the lot. but a rcasonable rule of thumb is that aisle area and fixture area should be solit 50-50.

There's also something to be said for housekecping when it comes to cube usc. The best way to visualize its impact is to recall the messicst closct you've ever seen and thcn think of illustrations ofien shown of closet organizers where everything has a place and is in its place.

Gondolas and housekeeping discipline

aren't thc only characters in cubc utilization. Thke a polaroid picturc cach wcck for a month ofthc shcds in your yard. On the back ofeach writc the date takcn and a cube use cstimate. Do the samc if you have a warehouse with the racks and estimate their utilization. At thc samc tinrc as thcsc evaluations are bcing madc, look tur opportunities to movc upward ur outward in thcsc arcas as on thc sales floor.

Rccent surveys have indicated a willingness on thc part of some consume rs to drivc fronr 50 and 6O milcs away to shop.

It cosls about 50c a mile to own and operatc a car. If a customcr comes from l0 rniles away, it costs $10 to come and go. At 50 miles away. it's S50. etc.

Ifyou are a delivering dealer it costs you about S1.75 a driven mile to make deliveries. Every l0 mile out delivery trip costs $35 to make. At the 20 milc out point, the trip costs $70 to make.

The whole point of mentioning such numbers is that what may be gained through rclocation may be lost in customcr participalion and profitability. You must bc prepared to rctain your customer base fiom the new location or suf-fer the costs of rebuilding it ancw.

Dcmographics havc long played a major role in site selections by retailers but, short of this. draw a circle with a 30 mile radius on a nrap around your current location. Then cxamine what is within the area. If it's all concrctc. ncw construction will be minirnal and sluggish. Do thc same for any ncw or proposed sitcs. Then work your current customer basc into the picturc. Will thcy pay $50 to tradc with you'l Can you affbrd to pay fiO for each delivery'l Are you likely to grow or losc ground whcrc you are currently located even if vou have enough cube?

These few simple checks and evaluations by management will very often indicate that thc nccdcd spacc/marketing relationship is best achieved right where they are. lf you can incrcase housekeeping discipline and cube utilization. you're better off to re-do than to move if the customer base is indicating continued viabilitv.

WE SPECIALIZE IN PRE-STAINING ''YOUR MATERIAL" IN ALL OLYMPIC COLORS. COATING ALL 4 SIDES OF EXTERIOR SIDING AND DIMENSIONALTRIM. PLUS 4 COAT APPLICATION ON ALLSIZES OF PLWVOOD. ENCLOSED WAREHOUSE FAOLW.

Oak & Cherry Gain In Survey

In the slow summer furniture markets. oak and cherry show gains in showroom tabulations.

In actual percentage of increase, the close grain woods of cherry, maple, birch and alder edged up 15 % over July 1985 figures to comprise ll.8 % of the total market presentations, according to Arnold Curtis, president of Northwest Hardwoods. The combined oak. ash and pine (bold figured woods) accounted for 27.4% of all tables. This closely paralleled the combined glass, metal, marble, rattan, wickeq and fabric units at 27 .7 %. This non-wood base group is down slightly from last year.

The color trend was to lighter tones, in part due to the increased use ofbleached oak and pine. Rather than the scrubbed look, the blond treatments were slightly warmed toward honey tones, rather than the grey, flat appearance. The cool, oiled medium or "walnut" browns aeain led all wood colors.

HomeClub Founder's New Biz

Robert J. McNulty, former president and c.e.o.of HomeClub, Fullerton, Ca. plans to open a chain ofsporting goods stores using the club membership, deep discounting and warehouse sales techniques responsible for HomeClub's success.

McNulty plans to open four All American SportsClub stores during a six-week period beginning October l, in Long Beach, Burbank, South Sacramento and Torrance, Ca. Next year he wants to open l8 more stores in Califomia. Arizona and Colorado.

Wood Preservers Meeting

The Western Wood Preservers Institute's summer meeting at the Inn of the Seventh Mountain in Bend. Or.. was the largest turnout in the history ofthe organization, according to Chad Niedermeyer, president.

John Hall, president, American Wood Preservers Institute, reported on the Consumer Information Program being carried out by the industry on a national basis on the care and handling oftreated wood. District engineers Ken Jurgens and John Culp described technical field services activities.

Market information on transmission poles was reviewed. Tom Peterson, promotion chairman, presented new literature for landscape architects and the new guide specifications for architects and engineers.

Record lumber Use Seen

New high records for consumption of lumber and panel products in the U.S. may be reached this year, based in part on expectations for 1.9 million housing stans.

Domestic lumber production in the first half of 1986 was ll.7 % ahead of the same period last year, according to Westem Wood Products Association. The American Plywood Association reported plywood and non-veneer panel output up t2%.

However, Bob Anderson, APA economist, said "it's a profitless prosperity," due in large part to the glut of lumber flooding the U.S. from Canada.

"With demand this strong," said Anderson, "you would expect plywood mills to be operating ar95% of capacity, but they're at only 85%;'

Lynn Michaelis, Weyerhaeuser's chief economist, said, by way of example, that the price of green Douglas fir studs shipped from Portland, Or., was $257 per thousand board feet in June 1979, $229 in 1983 and $174 in June ofthis year.

Keep The Noise Down, Please

Tighter new truck noise standards have been deferred to Jan. l, 1988, by the U.S. Environmental Protection Agency.

After that date a stringent 80-decibel low-speed noise standard for newly manufactured medium and heavy trucks will be enforced.

Noise emission limits for 1986 and later model year trucks engaged in interstate commerce will be 83 decibels at speeds of 35 miles per hour or less; 87 decibels at speeds above 35 mph, and 85 decibels when the truck engine is accelerated to maximum engine speed with the vehicle stationary.