Knowledge & Insight

Meeting the challenges of the building products sector

Tue 24 June 2014

The Home Builders Federation has reported that housing planning permissions for Q1 2014 has risen to its highest level since 2008. It’s just one of a number of positive indicators suggesting that recovery in the UK construction industry is gathering pace, which is of course very good news for the building products sector. Yet as the growth in commercial construction and housebuilding gathers momentum, building products companies must focus on overcoming some critical challenges if they are to profit from the recovery.

Complying with new building regulations

As issues around climate change and sustainability remain at the top of the Government’s agenda, the pace of change of building regulations has never been greater. And it’s not just new legislation that suppliers have to comply with. The demands of environmentally-aware end-users must also be a consideration in product development and production. Building products companies must therefore have a clear stance on sustainable development, and they must be able to communicate their vision to customers, stakeholders, investors and the media.

Remaining price competitive

In an environment where cost inflation and downward pressure on pricing are increasingly the norm, buildings products companies must keep a very tight control over margins. A low-cost procurement strategy can play a critical role in helping companies to remain price competitive, but careful consideration must be given to how such a strategy can impact the business in other ways. Sourcing products and raw materials from new overseas suppliers carries inherent risks which should be mitigated by in-depth new supplier assessments and efforts to build strong relationships to ensure reliability, flexibility and quality of supply.

Leveraging the supply chain

A recent government report entitled “Supply Chain Analysis into the Construction Industry” found that construction industry supply chains tend to be highly fragmented, leading to high transaction costs, increased need for management input and fewer opportunities to drive out waste or reduce cost. The challenge for building products companies therefore is to develop a clear understanding of the needs of their end-users, even when they are separated by distributors or other procurement decision-makers. By managing the supply chain more effectively, it is possible not only to identify cost reduction opportunities, but also to build stronger and more profitable customers relationships.

Building products executive recruitment

It’s clear that despite renewed growth in the construction industry, firms in the building products sector face some serious challenges if they are to reap the benefits of the recovery. Faced with intense price competition, firms must find ways to reduce costs without impacting quality or weakening their balance sheet. They must have the flexibility to respond to fluctuating short and medium-term demand, and they must do all this within a rapidly changing legislative framework.

Meeting such complex challenges demands extremely talented leaders, and finding such people requires the servicers of a specialist. Stone Executive is a well-established building products executive search firm with an outstanding track record in building products executive recruitment. Our building products headhunters are experts in building products executive search, boasting a professional network that spans the biggest names in the industry, plus a great many niche providers.

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