December 12th, 2013
Optimism Abounds For 2014
Well, only two more weeks and 2013 will be in the history books. One thing that impressed me about 2013 is that despite market conditions that are still challenging, customers found a way to grow their businesses. While a few manufacturers are reporting a flat year, most are reporting growth for the year of anywhere from 5 to 20 percent. According to the recent DWM survey, 35 percent are reporting growth above 20 percent for the year! How did they do it?
Some grew their business by offering a lower cost window to participate in the growing demand for multifamily housing. Still others grew by expanding their geographical territory. For example, instead of marketing product within a 100-mile radius, one manufacturer decided his new market would extend to dealers within 200 miles of the factory. Others added higher end window products choosing to upgrade the thermal performance of their windows by employing warmer-edge spacer systems or even triple-pane windows. Many decided to go beyond the vanilla-only approach by offering a wide variety of colors. I have also seen more paint booths being installed so that manufacturers can offer their customers these color options with shorter delivery times. Rather than having to send their windows out to be painted, they are painting doors and windows in-house. Also, patio door systems are being upgraded with options such as multipoint locking systems and beautifully plated handle finishes.
As we turn the calendar into 2014, what new challenges and opportunities will we see? As you can see from the above discussion, product lines are expanding. Low cost doors and windows may be needed for the new construction market on one end and high-performance products will be needed on the other end of the spectrum to take advantage of the marketing opportunities presented by the Most Efficient Energy Star category. According to the DWM survey, 71 percent of manufacturers are planning on adding new product lines in 2014. As manufacturers bring in additional equipment and set up new production lines to run these new products, floor space begins shrinking. So, one challenge becomes how to make the most out of every square foot of factory floor space. For this reason, vertical production lines may become more attractive to many fabricators. When floor space is limited, management must analyze how much revenue each square foot of floor space is generating for the business. If a fabricator can farm out a process and free up that floor space for a new product line that generates greater revenue dollars per square foot of factory floor space, he can significantly improve profitability. It is all about maximizing the assets of the company.
One thing is for certain—optimism for 2014 is running high. DWM’s survey reports that nearly four out of every 10 manufacturers and dealers alike are expecting to grow their business next year in excess of 10 percent. This is definitely a brighter outlook than we have seen the past few years, and as many great leaders have said in the past, “Optimism Breeds Success.”