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Forest Products Society

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Publication: Journal of Forest Products Business Research
Authors: 0
Reference ID: Volume 3, Article No. 6
Publish Year: 2006
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Title: Procurement Strategies in the Homebuilding Industry: An Exploratory Study on the Largest Builders in the United States
Description:
In a context ofmarket orientation, the softwood lumber and composite panel industries have little choice but to consider the needs of homebuilders. In view of the consolidation of the homebuilding industry and of their position as leaders, large homebuilders are considered to be gaining particular purchasing power, as well as influence over building techniques and preferred business relationships with suppliers. Increasingly , large builders are looking for easy -to-install products, engineered wood products, and more off-site construction solutions. However, their
strategies regarding business relationships with their suppliers are not y et well understood. This exploratory study investigates the large U.S. homebuilders with respect to changes in procurement sources and arrangements, collaborative practices, and information technology use. A survey instrument was implemented within the population of the top 100 builders in the U.S. residential market. Twenty -four of the top 100 builders completed the questionnaire. Observations suggest that purchasing agreements are currently short-term based and that pro-dealers are the preferred procurement sources. Nevertheless, more direct, cooperative, and long-term oriented relationships with suppliers supported by information technologies are expected to develop over the next five years. This study underlines a need for further research to focus on interfirm relationships and the
possible emergence of value-creating networks for structural wood products.

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