Delivery Expense Impacts On Millwork Companies

Delivery Expense Impacts On Millwork Companies

Millwork operations and customer expectations are changing... are you changing with them?

It's no secret why the past is usually referred to as "the good ol' days," especially in the millwork and building supply industry. Before 1960, there was less competition and product features weighed heavily in purchases, typically driving a pre-tax profit of over 10%! Fast forward to today where competition shares a fence with you and information is accessible with the click of a mouse. The typical profit now is 2% to 5%, on average. Some of this is due to challenges already mentioned, and some is self-inflicted, due to one oversight... the lack of delivery cost management.  

Customers want their product, and they want it yesterday. Not only that, when they put an order in they expect that order on time and 100% accurate every time. How are suppliers making this happen?

The only issue is, these "solutions" consist of expenses that decrease your bottom line even further. So what can we do to stop some of the bleeding while still achieving high levels of customer satisfaction? Two words, Demountable Concepts.

The Demountable system allows straight truck bodies to stand on retractable legs and be loaded independent of the truck. This enables suppliers to have a body on site at all times being pre-loaded for future deliveries. In the meantime, a second body is on the truck making deliveries. Once that truck returns with the empty body, it demounts it, picks up the pre-loaded body and is back to making deliveries in minutes.  

You no longer have to stage orders because you can load them right off the production line which reduces loading expenses and product damage (less handling). Overtime loading due to early or late warehouse shifts is eliminated because bodies are now loaded during normal business hours. The average loading turn time of 50 minutes is reduced to 10 minutes due to the easy-to-use Demountable process. Lastly, the need for extra power units is eliminated and they are replaced with less costly truck bodies. A Pella distributor in Maryland was able to reduce their fleet cost by 40% through the use of our system and the resulting reduction of the number of power units in their fleet.

As an added bonus, the improved efficiencies created by Demountables enabled some companies to increase the number of deliveries per day or per truck due to the uptime gained. A study done by Jim Enter at ProSales Magazine shows an average delivered sales-per-delivery-truck to be $1,750,000 for suppliers that delivered 80% of their sales. If you can turn that truck for a second round of deliveries per shift using the Demountable system, that $1.75MM could quickly turn into $3.5MM.

The next time you are doing a P&L review or simply evaluating the efficiencies of your operation make sure the Demountable solution is a part of your discussion. The only thing left to do after that is pick up the phone and call us. You'll be thankful you did!

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We’re always on the hunt for ambitious projects that push the boundaries of how products are delivered. Our account reps eat, drink, and sleep logistics. They will be happy to have a conversation about how Demountables will benefit your operation.