Sharing Files With Customers

Over the past several years email has replaced paper mail and telephone calls as the primary method for communicating with customers. Email is fast and easy to use, but there are many drawbacks. The larger your organization, the more likely it is that your company has a serious problem with the time it takes to read and respond to emails. Many of your customers have the same problems.

An article in the August 2012 Macworld magazine by Joel Mathis suggests we Stop Using Email for Everything, and talks about some alternatives.

Let’s look at one area where email is not the best tool. Many companies associated with construction business want to exchange large files and have a place to share files with their customers. One software that I’ve been looking at seems to “have it all.”

ShareFile by Citrix really seems well thought out and easy for “mere mortals” to configure and use. Pricing begins at $30 per month, and each pricing level includes a 30-day free trial. I signed up to try out the most basic level, and found that it was not only easy to use, but I was happily surprised with the level of personal attention I got from the representative assigned to my account. My account rep went so far as to look up my company, download the logo, and customize my “site” with it – all without my having to ask.

The ShareFile website has “what you can do” videos customized to many industries – including construction. I strong suggest you check this video out when you have 7 minutes… it provides a good overview of the product as it might apply to a component manufacturer - or one of your customers.

Let’s say you want to set up a “space” for each of your customers you regularly do business with. In that space, you want to see individual folders for each project you are working on, and in those projects, all the files for that project. You want the customer to be able to download files, upload files, and you want to be notified anytime they do either. You want to be able to see all of your customers’ “spaces,” but you want them to only be able to see theirs. All of this is possible with ShareFile.

You want to be able to limit the number of times a file can be download? Set an “expiration date” after which a file can no longer be downloaded? That’s there too. All in all, it seems to be a very impressive and easy-to-use collection of tools for managing the files we share with our customers.

Going to BCMC?

My conception of what BCMC is and why a person might want to attend has changed. In past years, reasons for going included shopping for new equipment, seeing what new ideas were being introduced, attending a seminar on the economy or a part of the business you wanted to get to understand better, seeing old friends or simply sharing problems with other component manufacturers.

The manufacturing machinery 'side' of the show is clearly not the centerpiece anymore. The technologies offered are now well established, and although you will be able to find something new, it is unlikely that these "new" things will justify the trip.

The primary reason to attend in 2011 is education, to make an investment in yourself and your company. With 2-3 days and perhaps $1000 you can immerse yourself in many of the things you didn't have time for this year, like learning about some additional capabilities in the software you are currently using, or finding out how other CM's are doing 'more with less.' Although overall attendance is down significantly from a few years ago, BCMC still represents the largest congregation of CM's anywhere.

Have a passion about the details of truss design? Several senior engineers will be there to talk over whatever subject is a 'hot button' for you. Have a machinery maintenance question? Want to know how other people assign work to their designers? Whatever the subject, there will be CM's and MiTek 'experts' there, on the floor, ready to discuss anything you're interested in. This is a great time (before the crowds return) to spend as much unhurried, 1-on-1 time as you want.

Margin Discipline

Starting in early 2009, my discussions with fabricators in the Northeast began to include our guesses as to the timing of the “recovery” that surely was coming. The last half of 2008 saw a shocking drop off in orders, coupled with a shattering of confidence in where it would all end. But by Spring of 2009, the worst seemed to be behind us, and we started speculating on when things would get back to ‘normal.’ Conversations about when the economy would improve, banks would begin lending, and people would again be buying new houses have continued from that time right up until this Spring.

Now, over two years later, these speculations don’t seem “right” anymore.  It’s a feeling that, “Yes, there is indeed a problem, but waiting for time to pass isn’t going to fix it.” Why would I say that? It seems to me that since about May of 2009 that a new “level” of demand for building components emerged and for the past two years (and taking into account some seasonal and regional fluctuations) things have been pretty consistently at this ‘new level.’ If that’s true, what are the implications?

Excess Capacity

Let’s make an assumption that may not be too unreasonable. Specifically, let’s assume that in mid-2008 the market (or “demand”) for components in the Northeast was about equal to capacities of the fabricators in the market. If it was in fact only about 90% of the capacities of the fabricators, it won’t make a whole lot of difference to our analysis. The market then plunged and I’ll suggest that the new demand level is roughly 35% below the old level. During this same period several component manufacturers closed their doors, which may have taken about 10% of the production supply out of the market. This leaves roughly 25% additional unused capacity in the Northeast. After years of having the problem of ‘getting the work to  and through the shop,’ things have changed drastically. Having built and run our businesses in one market, we found ourselves competing in a completely different one.

The Response

Cutting costs and lowering overhead were the logical responses to the relative lack of work. Everyone made adjustments over time. The decreased demand means there is much more volatility, and often fabricators are busy for a few weeks, and then orders drop off to almost nothing. Staffing for the “valleys” while coping with the “peaks” has been a feature of life in this new market. When there wasn’t enough work to go around, a sense of desperation caused many to lower their margins – to “give it away” in order to meet sales objectives or “give the shop something to do.” The market understood this, and took further advantage – waiting longer to place orders and demanding unrealistic delivery schedules.

Reduced margins are expected when supply exceeds demand, but market forces have not put things back “in balance.” Not enough fabricators have closed down, in part because of a belief that things will “come back,” and in part because many have the resources to weather the storm, and in part because quitting is just not in our nature.

Changing

If demand for components continues to be considerably less than the supply for the foreseeable future, is there any way to be profitable, or more profitable – doing a lot better than ‘breaking even?’ I think there is, but it will require changing the way we look at things. I think margin discipline is the best hope for a profitable component manufacturing industry in today’s ‘buyer’s market.’ How to do it?

1. The key to margin discipline is understanding your costs, including overhead. Once you know your costs and decide on your minimum margin, stick to it. Get more if you can, but don’t sacrifice margins to get the job.

2. Coming to the realization that you and your competitors are all in this boat together. You are part of a community of suppliers in a market with excess capacity. You can continue to fight for the work that’s out there by sacrificing margin – or maybe do something different. An outward reflection of this realization would be to reach out to your competitors more. Get to know them, sharing your common struggles and questions. Doing this will help to build the sense of community this initiative requires.

3. Respect the product. This ain’t lumber, and not only is it custom designed and manufactured, the design work you do it still the best quality control check your customer has prior to construction. The services and products supplied by component manufacturers is worth every penny (and then some) you charge for it. You demonstrate your respect for the value of what you provide each time you price a job.

4. The fabricators that consider themselves leaders in the market can demonstrate that leadership now. Lead by example. Encourage and help others to follow.