and Industry Trends are Topic of Discussion on Sanibel Island
"There are massive global trends that I think are sometimes easy
to ignore when you're out in the field," said Michael Collins of
Jordan, Knauff and Co. at the open of his keynote address at the
Insulating Glass Manufacturers Alliance (IGMA) 8th annual conference.
To bring his audience up-to-date, Collins, a columnist for USGlass
sister publication DWM
magazine, took IGMA members through some of those global and industry
trends impacting the door and window industry and commercial construction
With regard to windows, Collins noted that vinyl window suppliers
are being pinched by rising fuel costs and energy surcharges from
glass suppliers that they often aren't able to pass onto customers
because of the competitiveness of the marketplace. However, despite
these difficulties and the slow residential construction market,
he has noticed that many window manufacturers are searching for
acquisitions within the traditional door and window industry, "and
that's extremely positive." Several such companies have examined
an acquisition as a way to gain excess plant capacity, a positive
step, Collins said, that indicates that these manufacturers are
preparing to need that space once the market picks up.
While Collins says that consensus is showing that a bottom to the
residential construction decline is coming in mid- to late-2008,
the commercial construction market is expected to remain favorable
in 2008. As Collins commented, "You'll still be happier on the commercial
side in '08 than on the residential side."
Jordan, Knuaff & Co. anticipates continued strong interest in acquiring
commercial door and window companies. While he says that increased
consolidation in the commercial area is likely, he expects that
Pella's acquisition of EFCO in 2007 (CLICK
HERE for more) will not be the last instance of a residential
door and window manufacturer purchasing a commercial company.
Collins also touched briefly on building information management
(BIM) systems, which he explained will be the "replacement to 3D
CAD." This software is able to store a variety of information regarding
every part and component of a building, much like 3D CAD. However,
where CAD libraries were private, companies are being formed to
create these libraries for a number of manufacturers, allowing architects
to reference this information.
According to Collins, this is a trend that all commercial building
product manufacturers will be followingespecially because
overseas companies will be jumping on it. (CLICK
HERE to let us know if this is a trend that you're following.)
As he explained, the BIM library provides overseas manufacturers
an instant audience of architects. "I'm encouraging companies to
get ahead of this," Collins said.
And speaking of overseas competition, Collins also touched on the
topic of competition with China. He said that in his research on
this topic, "It became clear that different companies were at risk
and different companies were not at risk."
Product areas with a high threat assessment included architectural
flat glass, curtainwall, extrusions, door and window production
machinery and hardware, due to their long, uniform production runs;
high labor and materials content; and high ratio of value to weight
One member of the audience asked if the lower quality of Chinese
products was swaying customers from buying overseas.
"Companies that are outsourcing there will tell you that the quality's
there," Collins replied. "It didn't use to be, but now it's there."
In order to compete effectively, Collins advised his audience on
- Spend as much time as possible interacting with the end customer,
and their customers. "I'm always stunned about how little [manufacturers]
know about the people who use their product," Collins said. "You've
got to be a miner of data about your company." That data can provide
early indicators of market needs, he explained.
- Cater to those customers with "tough" requests. Customers with
frequent changes and short lead times will find it difficult to
switch to an overseas supplier.
- Support innovation. Collins noted that patents from small companies
are twice as likely as large companies to be among the top 1-percent
of high-impact patents. While large companies tend to focus on
making existing products better, or more affordable, innovation
will help keep companies ahead of Chinese competition.
- Embrace lean manufacturing. Shortening lead times and becoming
more cost-competitive will help give manufacturers an edge.
The IGMA conference concluded today with a meeting of the board
of directors. The next meeting will be held June 16-19, 2008, at
the Westin Resort and Spa in Whistler, British Columbia.
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