Distribution will hit golden age

By Hawk Furman President Furman Lumber, Inc.

F OREST products distribution l- will hit its golden age in the 1990s. The lumber industry was radically altered between November

1979 and Octo- ,:t:n ly ly anq Lrcto:a:i, ber 1982 as a result of high interest rates, oversupply, transportation deregulation, transfer of inventory carry back from the retailer to the distributor and manufactu rer, and consolidation among manufacturers, distributors and retailers. These events led to a restructuring in our industry that places the stocking distributor in a very strategic role.

In the oversuPPlied global econ- omy of the 1990s, the successlul luniber and panel products distributor will be a low cost operator, provide quality products and unsurpassed service and work on a lesser gross margin than today. Thiswill.be made possible through size, buYing clout, maximum utilization of information technology, transportation expertise, better internal communications, staying closer to the customer, training and leaner management teams more fully immersed in hne tuning every aspect of the distribution process.

During the 1990s the auction market in forest products will continue to fade as partnership arrangements between distributor and manufacturer and distributor and retailer provide more efficiencY, lower costs and better returns for all in the dis- tribution channel.

The old rules that worked for manufacturers in an undersupplied market are changing dramatically in an oversupplied marketplace. More manufacturers like WeYerhaeuser will pull out of distribution and go back to their core businesses. Vertically integrated firms will find it harder and harder to compete against pure distribution companies. Egos will take a backseat to financial results.

More retailers are realizing that buying direct in all cases maY be eo6d tor the ego but not necessarily 6est lor their bottom lines. Retail companies like Home DePot will continue to set uP PartnershiP arranqements with distributors and eaii the benefits offreeing up inveniory dollars, assuring themselves of no stock outs, lessening Pilferage, saving on transportation, warehouse. and ieople coits while achieving a higher GM ROI.

Story at a Glance

Stocking distributor in strategic role auction market will fade manufacturers will Pull out of distribution.. value added services will cost retailer less.

The stocking distributor is playing a more strategic role in the distribution channel and his role will become more important in the 1990s. Manufacturers will be fighting for warehouse space in distribution Yards while retailers will keep pushing the burden of purchasing and merchandisine back on distributors. The stocklng distributor of the 1990s will be providing more value added services at a lesser cost to both the manufacturers and retailers.

Speciult.y Wood Praducts, Inc., a new redwood and cedar buildine material distributor. opened ; 30,000 sq. li. warehouse next to its Hq. in Commerce City, Co., Willianr Rehm, pres.

A. C. ItoLrston. Angel Fire, N.M.. redesigned its 3.000 sq. ft. showroom and renterchandised. .. Golden State Lumber. San Rafael. Ca.. is nroving to a new 5 acre location on Andersen Dr. with a 19,000 sq. ft. showroorTt.

Ganahl Lumbar Co.. Garden Cirove, Ca., is shopping for a new site within the city as part of a $3.4 million deal offered bv the city il-theyrelocate a*a1 irom the downtown redevelopment area.

Lunber Cilt. yo1.n.ia. Ca., has been remodeled and is now the largest store in the l0 unit chain with 42,000 sq. ft. . Builders Emporium, Valencia, Ca.. has been redesigned and expanded. .

lnland Supply, ElCajon, Ca,, is being closed after 25 years by the Hall family which has operatecl similar businesses since 1897. .

The Chico, Ca.. HomeClub offered a free fingerprinting and video taping identification and safety program for children. part ol'a chainwide communitv commitment...

WooclSourt'e 1nc'., Dublin, Ca., has opened a branch office in Santa Barbara, Ca., Todd Bybee, sales and purchasing mgr., according to Andy Haynes, v.p.

Cal-Statc Lurnber Sules, Inc. has moved lrom Chula Vista to 2704 Transportation Ave.. Suite C, National City, Cla. 92050.

Brazier Farest Inclustries, Seattle, Wa., new owner of Pacific Laminating Corp., Vancouver. Wa., will operate it as Pocilic Laninotittg Dir'.. Keith Shaw. sales nrgr.

Golclen berg/Allied Plywood, Lvnwood. Ca.. newly merged by parent co. Ply'Gem Industries. is opening i.r new plywood distribution center in National City, Ca., Todd Zintnterntan. branch mgr..

Toylor Lumber & Treating, Inc., nroved its sales oflice to Portland. Or, . . Timber Mountain Forest Industries is a new Portland, Or., wholesaler, Richard Hannam and Ed Schulmerich, lounders.

Wi Ila mette Indust ries' industrial wood products div., Woodburn. Or.. has been acquiredby [/niversal Forest Products Reeb Millwork, lnr'., is a new wholesale distributor in Kent, Wa., John Kerr, v.p./gen. ffigr., Tom Snook, sales mgr.; the firm has 2 other outlets in the East.

Capital Lumber Cb.. Phoenix. Az.. rrnd Wt,.vtrhaeu.scr Co., Salt Lake City, Ut., are new distributors for Perlbrmance Coatings' Penofin line.

The Merchant Magazine ville area with seven Francisco, $10,000 to earthquake

The Home Depot, stores in the San Ca., area, donated the Red Cross for victims.

Morgan Products Ltd. will consolidate its West Coast fir door production at Springfield, Or., closing the Weed, Ca.. door plant the Weed veneer plant continues operations. .

MacMillan Bloedelis opening a new DC in Denver, Co.. Kevin Seward, mgr.. Michael O'Malley's Renrcdeling & Building CenIt,rs, Scottsdale. Az., and its reIated construction company, are winding down operation and completing projects as the firm ceases operations.

Wendling Natlnn Co., Kentfield, Ca., founded in 1914. has celebrated its 75th anniversarvl the company is the oldest advertiser in The Merchant Magazine. having advertised every yeai since 1922 when the masazine was founded.

Peterman Lumber Co., Fontana, Ca., plans to close its National City (San Diego), Ca., facilities by Feb., opening a sales office in metro San Diego, possibly supported by a small holding yard.

A partnership between venture ciipital group Sequoia Associates and Don Graves is negotiating the purchase of Snow Mountain Lumber Co., Hines. Or.l the deal was set to close Nov. 30.

Higgins Lumber C-o. Montere.v Bay warehouse, Watsonville, Ca., raised more than $4500 for earthquake relief in the Watson-

Housing starts .lbr Ocl. (latest figs.) jumped 12ok from a seven year low to a seasonally adjusted annual rate of 1.42 million units single lamily construction was up 6.90h, multi-family, 28oh .. bidg. permits rose 0.7th.

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