7 minute read
Operational Efficiency Isn't Optional
Building Smarter Businesses from the Inside Out
As the lumber and building materials industry grapples with shifting market dynamics – labor shortages, margin compression and customer expectations that seem to grow by the week – dealers are recognizing a hard truth: growth through sales alone is no longer enough. The next frontier for competitive advantage lies in operational efficiency.
Industry consultants Emily Overson and Jeff Tweten have spent decades inside lumberyards of all shapes and sizes. They identify a deeply ingrained industry blind spot that presents a significant opportunity for improvement. Dealers continue to chase volume while leaving money, time and morale on the table. In conversations with BLD Connection, both Overson and Tweten laid out a compelling argument: the future belongs to those who embrace disciplined operations, clear expectations and continuous improvement.
Efficiency Over Ego
“Everyone thinks sales are the answer,” said Overson, CEO of Emily Overson Consulting. “But for every extra dollar in sales, you’re lucky if you see 10 cents of it hit the bottom line. Save a dollar through efficiency, and you keep the whole dollar.”
She describes the three-legged stool of LBM businesses – sales, operations, and financials – and warns that too many dealers try to balance entirely on the sales leg.
“You wouldn’t stand on a stool with one leg to change a lightbulb,” she said. “But that’s exactly what we’re doing when we ignore operations.”
Tweten, CEO of WorkSafeWorkSmart. com and co-creator of the Lumber Buddy system, echoes the point. “We spend heavily on sales training and reward revenue wins, but operational training? It’s often nonexistent.”
This imbalance leaves businesses vulnerable to inefficiencies that accumulate quietly, including returned materials, missed deliveries, inventory shrinkage and unproductive labor hours.
“Most yards already have the equipment they need,” Tweten said. “What’s missing is a culture that values process improvement.”
The Cost of “We’ve Always Done It This Way”
Ask anyone in the industry why a certain task is handled a particular way, and you’ll often hear the most dangerous phrase in business: “Because we’ve always done it that way.”
“The founding generation usually knew the why behind their processes,” Overson said. “But over time, that gets lost. Now, people are just going through the motions, unsure how to adapt when something changes.”
That rigidity leads to costly errors.
Overson routinely finds yards with thousands of dollars’ worth of specialorder materials sitting in sheds – items supposedly non-returnable, yet taken back anyway. The reason? No clear return policy or failure to enforce one.
“Customers have unrealistic expectations because we’ve never trained them otherwise,” she said.
Discipline and Documentation: Small Fixes, Big Impact
Operational efficiency doesn’t always require high-tech investment. Often, it begins with discipline. Overson advocates for a simple but powerful rule: the work of today must be completed today. That means vendor acknowledgments are entered within 24 hours, purchase orders are matched promptly, and materials are received and documented as they arrive.
“When salespeople delay updating the system, it creates a backlog that snowballs,” she said. “The receiver can’t check in material. Accounting can’t pay invoices accurately. Inventory goes off-track. And we end up with financials we can’t trust.”
Poor receiving practices are another chronic issue. Without a dedicated person to inspect deliveries, materials go uncounted, damaged goods slip through, and discrepancies are missed.
“We’re paying for inventory we didn’t get or can’t use – and no one’s catching it because there’s no accountability,” Overson said.
Tweten adds that even basic tools, such as shadow boards – pegboards marked with outlines to show where tools should hang – can improve productivity. But their effectiveness depends on adherence to the process.
“The hard part isn’t building the system,” he said. “It’s standardizing and sustaining it.”
Centralized Operations: The Missed Opportunity in Multi-Yard Companies
Both consultants see enormous untapped potential in multi-location operations. As larger independents and regionals grow through acquisition, many fail to unify processes across locations.
“Too often, each yard is run like its own fiefdom,” Overson said. “You can’t benchmark performance, standardize pricing or move employees between branches if everything is different.”
Tweten recalls one instance where different locations of the same company were bidding against each other on the same project.
“That’s a race to the bottom,” he said. “It’s an extreme case, but it happens. You lose all the leverage of being a multi-yard operation.”
Centralized dispatch, unified inventory systems, and shared sales and delivery capabilities are emerging as best practices.
“It’s no longer about which store gets the sale,” Tweten said. “It’s about who can fulfill it most efficiently, regardless of which door the truck leaves from.”
The Value of Training and How to Do It Right
Employee training is one of the most overlooked and undervalued levers for improving efficiency. Overson points to the lack of training even after costly ERP implementations.
“Dealers buy the software, limp through go-live, and then stop,” she said. “Six months later, when everyone actually understands the basics, they should reinvest and go deeper. That’s where the real ROI is.”
Tweten believes training should focus not just on procedures, but on mindset.
“It’s not enough for employees to do the job,” he said. “They need to think critically about how to do it better.”
Hiring Smarter, Not Harder
Labor shortages have led some dealers to lower hiring standards – sometimes to absurd degrees. Tweten joked about one company using the “mirror test,” saying, “Put a mirror under their nose. If it fogs up, they’re hired.”
But that desperation often backfires.
“When we lower standards instead of raising our training game, we invite mediocrity,” he said. “The better path is to design jobs so more people can succeed.”
This includes creating roles accessible to more qualified employees, including women and people without brute physical strength.
“If the work is laid out properly and the equipment is right, there’s no reason women can’t thrive in every area of the yard,” Tweten said. “They often find smarter ways to do things, too.”
Efficiency as a Strategic Imperative
The most encouraging trend, according to both consultants, is the growing recognition that efficiency isn’t just about saving time – it’s about staying competitive.
“Dealers are finally realizing this isn’t about trimming fat,” Overson said. “It’s about building muscle. The ones who succeed in the next decade will be those who build disciplined, data-driven, process-smart businesses.”
Tweten believes the turning point will come when dealers stop viewing efficiency initiatives as burdens and start seeing them as competitive advantages.
“We’ve got the trucks. We’ve got the systems. Now it’s about using them to their full potential. That’s what separates the survivors from the leaders,” he said.
The Cost of Inaction
Across every aspect of LBM operations – from receiving to routing to return policies – inefficiencies add up. They drain profit, stress teams, confuse customers and erode morale. Yet the fixes are within reach: enforce standards, build consistency, invest in training and embrace a culture of continuous improvement.
“There are pennies from heaven falling every day in these yards,” Overson said. “But you only catch them if you’re paying attention.”
For LBM dealers serious about long-term success, operational excellence isn’t a luxury; it’s a mandate. The good news? You don’t need to reinvent your business. You just need to run it more effectively.
Four Simple Efficiency Fixes You Can Start Today
Implement a 24-Hour Paperwork PolicyRequire vendor acknowledgements and POs to be updated within 24 hours of ordering.
Create a Clear Return Policy Define what’s returnable, under what terms, and communicate it clearly to customers and staff.
Standardize Receiving Assign or rotate dedicated receiving responsibilities and insist on physical counts.
Reinvest in your ERP SystemSix months after implementation, revisit training and usage to unlock its full potential.
