Relearning the Three R’s

September 16, 2022 / By Kevin Norcross

At the risk of sounding like a broken record, I think it’s safe to say we’re not facing business as usual. But unlike this time last year, I’m not sure I expect there to be any real return to normal, not as we’ve seen in the past.

I’ve worked through three recessions. I was around in 1982 when interest was 19% and inflation was at 12%. Back then, we knew there was an end to it. Today, there’s no looking back to navigate what’s ahead. We’ve never seen the combination of challenges we’re facing: pandemic recovery, the looming threat of global war, climate change and more.

How do you get past that? How do you navigate your business when today is the future and you can’t see any further than that?

Well, I’ll tell you how. You relearn the three R’s you thought you learned back in elementary school. Today’s ‘rithmetic doesn’t seem to add up anyway, what with energy surcharges pushing costs sky high even as material prices start to drop and with our trusted economic advisors providing forecasts in “today’s dollars” because there’s no telling what tomorrow might bring. Instead, it’s time to focus on relationships, room and retention.

Relationships

The importance of relationships gets talked about often enough that it may seem like something of a throwaway line. After all, you might like your vendor partners, but a good relationship won’t help you stabilize material prices. But having gone through plenty of recessions in the past, I’m here to tell you that relationships are the most valuable commodity you can have at a time when pricing doesn’t seem to hold still long enough to matter.

Your vendors may not be able to give you a deal on materials when they’re facing the same market disruptions as everyone else, yet trusted partners will do what it takes to ensure that you get the product you need at your plant or jobsite. They’ll communicate frequently so that you can help your customers prepare for any potential hurdles. They’ll support you in finding resources to get the job done right. It just might take a little longer than in the past to make it all come together.

Of course, this goes both ways. As a glass supplier, we want to be closer to our customers so that we can make recommendations on how to navigate material challenges, price fluctuation and end-user demands. Recently, we were contacted about a project in California where a doorframe wasn’t prepped for the site. We gave our usual response, “Don’t worry, we’ll take care of it.” Even as it became increasingly clear that our customer wasn’t able to take care of it and we started a search to find a subcontractor with the labor to handle this. You probably know where this is going: the availability just isn’t there. But this is the type of situation where it helps us to be close to customers. It allows us to all work together to pivot, satisfy our end-users and match demand to supply.

Room

What do I mean by room? Well, glass suppliers aren’t the only ones having trouble shipping products. These supply chain issues are hitting virtually every supplier around the world. So, by the time glass gets to a customer, there’s a fair chance other material delays or labor shortages have pushed their construction window further out. Now, what do you do with all this product? Where warehouse vacancy rates once averaged around 8%, it’s not unusual to see vacancy rates under 4%. There’s not a lot of room for suppliers to stretch as inventory builds up.

Perhaps the craziest thing is that projects aren’t being canceled. We’re all still moving full steam ahead. It’s just that “ahead” now means delivery four to eight quarters further out than we’re used to, according to the latest Dodge forecasts.

One of the biggest benefits of being a global company with more than 300 years of experience is that you have the space to build up your inventory. We’re helping our customers find the room they need to hold onto products until everything aligns.

Retention

Subcontractors aren’t the only ones hurting for labor. We’re all feeling the pain of the Great Resignation and all of the shortages that hadn’t been solved before it. We’ve all been faced with these challenges long enough to know that labor retention strategies are critical for keeping up with the promises we give to our customers.

While I can’t say we have the answer, I do know that Saint Gobain is doing everything we can to support our employees and develop new strategies for employee engagement. Whether it’s providing gas gift cards in recognition of those employees who show up to work every day or investing more into our newest employees to help them better meet the challenges of their job. It’s also things like working to be a sustainable, responsible company that has the types of values that make people want to come to work.

At the end of the day, I’ve got to believe that’s what it’s all about. Because despite all the uncertainty, buildings are still going up. People may be leaving some positions, but they’re doing it in the hope of something better on the other side. We’re all showing up and moving forward. We just need to do the best we can to look out for one another as we see what tomorrow brings.