 Dear ,
Welcome to this month's Supply Side News, the newsletter focused solely on providing critical information and actions for lowering costs in homebuilding.
The cost of lumber, plywood and drywall continue to rise. The cost of ready-mix concrete is 1.5% less then it was at the end of 2009. Prices for plumbing fixtures and fittings are up 1.4% from a year ago and wire and cable costs have increased 22.2% over the same period. Copper recently reached its highest point since late 2008 due to production interruptions caused by February's earthquake in Chile, which has the the world's largest reserves.
Drywall costs are expected to rise in the months ahead after steep declines in 2009. USG and National Gypsum sent letters to distributors in February announcing a 20% wallboard price increase. Slumping revenue and higher production costs were cited as possible reasons for the hike.
"Going Green" can not only be good for the environment, but it can also be good for lowering costs and being able to do more with less. Consider the adoption of a NO PAPER policy, help the environment AND gain the efficiencies that surround a paperless world. The key is the use of electronic signatures and online document centers. To learn more, see eSignatures Key To Eliminating Paper below.
Getting a new house plan right can be challenging when trying to see what something will look like without having built it first. It is also hard to sell options and upgrades when it is hard to visualize what the upgraded item will look like on a particular home. Check out this month's From The Supply Side. Owens Corning can help to make this visualization easier in challenging categories such as roofing and stone veneer siding. Please forward this newsletter to your colleagues who are also interested in managing and lowering costs. Sincerely, 
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In the News
Information On Costs & Actions To Lower Them |
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Every minute counts in today's climate - how to save time & money AND help the environment
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eSignatures Key To Eliminating Paper Every minute counts in today's climate - how to save time & money AND help the environment |
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"Going Green" has become important in homebuilding as is making "Green." Eliminating paper can help to do both. Something as simple as a buyer's contract can require printing a document several times, signing it, faxing it, waiting for a co-buyer's signature, scanning it, and filing it. All of that takes a lot of time and time is money. Not to mention that it can hold up a deal or hold up a commitment to options and can allow time to potentially undo "done" deals.
Purchasing also generates a lot of paper. Home specifications, scopes of work, purchase agreements, purchase orders, invoices, change orders, etc., etc., etc. Many of which require signatures, many of which are printed, faxed, and scanned which also take time and money.
All of this can be completely eliminated. Adopting a NO PAPER policy will create a dramatic reduction on your impact to the environment and will eliminate corresponding costs of printing, transporting and storing paper documents.
eSignatures, which are accepted as legally binding, can capture signatures from people when face to face or when sent over the internet. Once captured, documents can be auto-routed to others for review, signature and for filing. Paperless carbon copies are automatically generated and sent to all parties without requiring any personal intervention.
eSignatures can be incorporated into your existing systems and processes by simply using an eSignature "printer" in lieu of a paper printer.
Action: Explore the potential of a NO PAPER policy and evaluate what eliminating paper can do in terms of lowering costs and improving profits. To discuss this further, contact us.
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BSC Drywall Cost Tracker
Drywall cost increased in March on average 8.1%
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| The price of a sheet of 4' x 12' x 1/2" drywall is now $9.34, up from $8.64 in March. For an average house that uses 122 sheets, that is a current material cost of $1,140, up $85/home.
Both USG & National Gypsum announced 20% price increases to their distributors in February, so continued increases should be expected as dealers work through lower cost inventory.
Action: Try to hold the line on price increases, explore price locks.
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BSC Lumber Cost Tracker
Lumber prices are considerably higher vs. a year ago, industry capacity remains constrained |
| Lumber prices continued their climb through March, although at a lower rate than in previous months.
Source: Random Lengths, local market pricing, & BSC analysis for a sample house pack of dimensional, OSB & stud lumber for a two-story, 2,030 sq/ft home
Prices are expected to continue to rise on a "supply constrained" climb. The sentiment among producers is that they cannot justify an increase in production at current demand and pricing levels. Lumber futures pricing continue to indicate an expected continued rise to lumber costs. Action: Consider changing the purchasing model to a cost based one, and longer-term locks/commitments to buy on lumber purchases. BSC has saved builders 8% to 11% on lumber using these techniques. If you would like us to do an analysis of potential lumber cost savings based on your lumber purchase history, contact us.
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BSC Ready-Mix Concrete Cost Tracker
Prices end the first quarter down 1.5% from year end, and up only 2.0% over a year ago
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The price of 3,000 psi Ready-Mix was up a modest 0.3% this past month, up only 2.0% over a year ago and down 1.5% from the end of 2009. A slab on grade, 4" pad for an average size 2 1/2 story home and driveway costs $9,197 for 97cy, and is up $28 over last month, up $187 over the prior year, and down $140 from the end of 2009.
Action: Continue to look for labor discounts from foundation contractors as competition intensifies for work.
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| Cost-Saving Tip - Look at discrete items
Unbundling can be intimidating, focus on the easy to count |
Take plumbing for example. Many builders bid plumbing turnkey. Yet, in some parts of the country, it is common to bid plumbing costs on a price for the labor to install each fixture and faucet and a price for each of the easy to count and identify items such as a sink or a toilet. They price the rest on a $/square foot basis based on the type of construction - ranch, 2 story, etc.
What are the results? Lower costs, more controllable costs. When it comes time for options and upgrades, no longer is it a mystery on what the costs will be. When it comes time to price out the next house plan, purchasing can do it on their own and then bid with knowledge of what the new plan should not exceed in terms of price.
Action: Break down costs into those things that are easy to count and are high dollar and roughly estimate the rest. This applies nicely to plumbing, electrical & lighting, flooring, tile, cabinets, garage doors & accessories, and landscaping to name a few.
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From The Supply Side - Design Visualization
Owens Coring brings visualization to roofing & siding - allows for getting it right the first time & selling options & upgrades |
| Helping to visualize what something will look like BEFORE it is done would be useful in limiting costly trial and error. It would also be extremely useful in selling optional exterior elevations that include stone veneers and upgraded roofing systems.
 Owens Corning provides a solution that will enable a builder to upload an image or rendering of a home and allow for experimentation of various roofing and siding and stone veneer choices.
For more information on exploring the advantages of Design Eye Q from the experts at Owens Corning, contact us.
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About Us
Nation's Largest Cost Management & Information Technology Group For Builders
Builder Sourcing is a professional services firm that works with builders to lower costs, including understanding and removing costs from the supply chain & streamlining operations through the use of advanced systems and technology.
Builder Sourcing streamlines and increases value from manufacturers rebate and incentive programs, and lowers general and administrative costs.
For more information, visit www.buildersourcing.com.
877.367.2010
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Green Products
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Implement a NO PAPER policy in your operation, made possible with electronic signatures.
- Eliminate costs related to printing & managing paper
- Close more deals in minutes, not days
- Make it easier for customers & subs to sign & return documents
- Be more "Green", reduce environmental impact & make more "Green"
We have a new program for those interested in adopting a NO PAPER policy, affordable to builders of all sizes.
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| Discount Office Products |
We save builders $100s to $1,000s a month on office products & supplies. To learn more, click here. |
Rebate Program Management
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Builder Sourcing has increased money from rebate programs as much as $2,500/home.
For more information, contact us.
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Free Hertz #1 Gold
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A $60 value! To learn more, click here.
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"FREE" Discounts
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Try a discount program, and get to know us better, click a link below.
Office Depot
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