Efficiency Will Be Key To Making 2017 A Success

You won’t need reminding that 2017 will be a tricky year for the UK glazing market to navigate. Brexit negotiations, a Trump presidency, staggeringly fragile German and Italian banking systems. All will combine to create some pretty hefty economic speed bumps for our industry to navigate.

One thing you can bet on is another round of price increases. It’s Christmas time so many might not be paying much attention at the moment, but the Sterling vs Dollar rate has dropped from $1.27 to $1.22 since we all broke up for the festive holidays. There are some predictions that it could drop further into the New Year. Many accept that if this does happen, it’s an overreaction. However, it will still have it’s effects, and we won’t be excluded.

Costs for all companies in the supply chain who import products priced in the Greenback and the Euro will see their prices rise, and subsequently rise further down the supply chain. Installers will inevitably have to pass some of that on. It would be a bad decision to absorb all of it and let it eat away at profit margins. It has to be passed on to the home owner.

Still, even if the price of windows and doors to the home owner were to rise during 2017, I cannot see this derailing what can still be a good year for our industry.

Consumer confidence

As of this moment, UK consumer confidence remains strong. Retailers are already reporting very strong, if not record ends to the year as home owners splash out on Christmas. It’s worth bearing in mind that wage growth, whilst not sky rocketing, has risen more than inflation for quite a while, which means more disposable income for most spenders.

Consumer confidence is key to the UK glazing market. Our good are classed as big ticket items. Not the usual things on a typical shopping list. Strong consumer confidence equals home owners feeling good about parting with often significant amounts of cash for our goods. As we saw during most of 2016. Weak consumer confidence equals home owners holding on to their cash as they worry about the immediate future. It’s not just windows and doors they stop buying, purchasing in general dips.

So, even if the price of windows and doors do rise in 2017, I don’t believe it will be enough to erode consumer confidence to the point where we see a negative impact on our sector. Still, even if sales still come through the door, on the industry side there still remains the issue of higher production and sales costs. What should be the course of action to tackle that?

Efficiency.

Be lean to stay strong

The generally accepted commentary coming from the industry at the end of this year is that 2017 will be another year of growth. How strong will remain to be seen. So, if sales are to rise, but costs too, it is going to be efficiency that negates the effects of material cost increases.

When I mean efficiency, I don’t mean getting rid of staff and asking the remaining amount to do even more work. That is never a successful policy and only leads to quality control problems and major customer service issues. If anything I would like to see more hiring and training throughout the sector over the next 12 months. When I mean efficiency, I mean for us all to become more efficient in the way we conduct our business, be it installers, fabricators or systems companies.

We’re going to need all our personnel to be firing on all cylinders from day one next year. It should still be a busy one. But we need all our personnel, guided by management and CEOs to be operating a business model that seeks to become as efficient as possible at all times. It could be fabricators working to get their quotes to installers out quicker. It could be installers using email to send their quotes to customers more regularly and therefore faster. It could be systems companies working with fabricators on seeking new supply and stocking methods that are more adaptive than reactive depending on the demand.

It’s areas where we can fine tune to become more efficient where we can squeeze out more a few more pounds of profit during 2017. I also want to reiterate that I believe the next year will still bring plenty of good, profitable opportunities, for those who wish to seek them out and work at them. But we in doing so we have to go about in an an efficient manner. Costs are going to be on the up next year. It won’t dampen consumer spending I don’t think, but on the flip side of that coin we shouldn’t be allowing those rising costs to eat into profit margins where we don’t have to.

It’s a balancing act, but it can be done.