forward. He says they keep in constant contact with manufacturers
and other client groups, informing them about Horizon Builders’
current and future projects. He says this helps them secure pricing
so there will be no surprises down the road.
Like Orr, Kevin Marcin agrees. He is a store manager at McMunn
& Yates Building Supplies Ltd., a leading supplier of lumber,
building materials and professional services in the central prairies
building industry. Marcin says contractors who communicate
closely with their suppliers can have a better gauge on how pricing
will impact the cost of their future projects.
Horizon Builders already has a model that has worked well for
them since its establishment in 1973. Horizon Builders teams up
with a Buyers Group, which includes suppliers, to order lumber and
materials so the larger quantity gets everyone a better rate.
“We’re doing the Riverside Lifestyle Estates – a 42-suite condo
building right now – which is about a year-and-a-half project,”
said Orr. “So, we went to our suppliers and said, ‘Listen, here’s our
schedule, we are going to need material for each floor at a certain
date.’ So, we go to all our suppliers, including lumber suppliers, steel
suppliers and whoever else we need materials from, and we give
them a list of our needed quantities, our schedule and the pricing
they’ve committed to for the project.”
While many times, the manufacturers will pull from other stores
to honour the initial pricing, Orr says Horizon Builders has had to
cover costs when all the lower-priced lumber disappears, specifically
on smaller projects like individual houses or exterior and interior
renovation projects. In cases like this, Horizon Builders prioritizes
customer service and satisfaction over costs. Again, Orr says
coordination remains key to limit the fallout as much as possible.
“Right now what we’ve told our customers is that our suppliers
can guarantee this price today, but they can’t hold it for more than
10 days,” said Orr. “So, that’s what we have tried to communicate
with the customer – here’s our price, but here’s also the risk. We
also have got to communicate to our suppliers at the same time and
say, ‘Listen, we’ve got these interests committed, we need your best
effort to get us the best price and on time.’”
It’s not possible to cover these costs on large projects, however.
When the power of coordination runs out, many large-scale projects
have to wait. Usually, the client would then switch to Oriented
Strand Board (OSB), which is what people use on exterior sheathing
due to its stability. Yet, even though it’s considered cheaper than
plywood, the price of OSB has also increased exponentially. In fact,
across the entire construction process, whether it’s lumber or steel,
project costs have risen for everyone.
“Many of our clients have put their projects on hold until next
year,” said Marcin. “In the larger picture, we have had contractors
tell us the lumber and OSB impact was between $4,000 and $4,500
per house.
A guaranteed rate is hard to keep with large-scale
projects, causing many to be put on hold
Flynn-CFMD-v3.indd 1 2019-12-06 1:53:28 PM
Horizon Builders teams up
with a Buyers Group, which
includes suppliers, to order
lumber and materials so
the larger quantity gets
everyone a better rate.
FEATURE
CHRISTIAN DELBERT/123RF
40 | Issue 2 2020 www.carm.ca
/www.carm.ca
/