How to Meet Housing Demands Amid Supply Chain Constraints

Demand for new homes isn't slowing down any time soon.

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As we enter the last part of 2022, the overall economic hardship coupled with supply chain issues has brought a sense of pessimism across consumers, historically sparking a change in consumer behaviors. Yet, for homebuilders – a slowdown is not yet in sight and may not occur until 2024. As of July 2022, the number of single-family homes under construction is 17% higher than last year and apartments under construction are up 25%. Meanwhile, builders continue to face similar supply chain disruptions, higher material pricing and labor shortages that other industries are seeing, resulting in a consistent, triple threat challenge to meet the needs of their consumers.

It’s common knowledge that the buyer’s needs should be a company’s first priority, but when supply chain disruptions start to feel out of the company’s control, it can feel almost impossible to meet those needs. So companies must be ready to focus on how to deliver a positive customer experience in the face of these challenges – and it begins with finding efficiency for the long term.

ERP Vendor Selection

A one-size-fits-all ERP solution isn’t effective for today’s dynamic world. Consider a solution that is informed by building suppliers and built by building supply experts with more functionality and capability out of the box, and less need for customization and add-ons. Advanced capabilities like streamlined workflows and more accurate reporting and forecasting will improve decision making and provide early visibility to potential challenges and opportunities. A seamless experience online, at the checkout counter, and in the warehouse, will also enable building suppliers to hit home on our top priority: building customer trust and loyalty.

Accuracy, control, and productivity are possible with the right ERP solution on hand. With visibility into these key business functions, businesses can conquer supply chain challenges, and competitively position themselves to better address the future needs of its building supply customer base.

Level-Set for the Future with Customer Stratification

Using customer stratification to help you identify and strengthen your best customer relationships - and limit the impact from unprofitable ones - can be a perfect first step to being strategic over the next five years. But note that those top tier customers are not necessarily the ones who buy the most or generate the most top line revenue; priority clients can be the ones who are most consistent in the amount of business they're giving to the building supplier and the most profitable when all things are considered (returns, frequency of deliveries, and consistent order modification or changes). Stratification can help you understand the gap between your customers’ transactional gross margin and your company’s true net profit. In addition, here are six other benefits of stratification:

  • Access profitability: Get a holistic picture of each customer’s value that includes both margins and gross profit.
  • Retain customers: You can analyze each customer category and develop customer relationship management strategies ideally suited to each category of customer.
  • Set expectations: For unprofitable customers who drain margins, arm yourself with the facts needed to redefine how you deal with these customers to improve net profitability.
  • Find opportunities: Uncover product categories or added services that deliver more value to your customers and profit to your bottom line.
  • Build relationships: You’ll be positioned to develop mutually beneficial relationships with your top customers and partners. Develop the right incentives and programs to keep them coming back.
  • Take advantage: Your business management software should already have the data you need to make strategic decisions – use stratification to maximize your return on investment.

Go Beyond ERP to Grow Customer Loyalty

With more work to be done and fewer resources, an effective enterprise resource management (ERP) system can help economize on time and dollars, allowing business owners to support customers in this booming industry while running a leaner operation. But going beyond just your ERP system to incorporate modules is something to consider when elevating your customer experience. Keeping key customers will be essential to moving forward when recovery takes place, and their loyalty may be the difference between long-term success and total failure. Consider incorporating two modules to enhance your customer experience:

  • Configure Price Quote (CPQ): CPQ helps companies quickly and accurately generate quotes for complex configurable items. It gives your salespeople the confidence they need to sell effectively while giving customers the level of responsiveness they expect.
  • Enterprise Data Interchange (EDI): By implementing an effective EDI solution, you can get closer to your large customers, conduct business in the way that makes them happy and introduce a platform that lets you grow quickly and cost-effectively as business dictates.

As homebuilders continue down the road of high demand and triple threat challenges, know that it’s possible to keep your customers at the forefront of your business while also staying strategic and efficient.