rhe $Tl;fiJitl.'ses to howwe do business

f, s we sloc ouR wnv through the fa.recession of 2008-2009, hoping for an end some time in 2010, there's no question that the downturn has changed the way most of us do business. We have reduced inventories to the bone, cut staff to bare minimums, squeezed efficiencies from thin air, and worked harder than most of us are accustomed to. Staying profitable has taken a lot of blood, sweat and tears.

The truth is, though, the lumber business has gone through many changes in the last 25 years and we have been forced to adapt or fail. Lions are always waiting to thin the herd by taking down the slow and the weak. Our industry is littered with the carcasses of producers, distributors and retail suppliers who failed to react to change.

Some change is positive and helps us do business more efficiently. Some change is threatening and forces us to question how we do business. And some change is benign-you can watch it and react appropriately when the time is right. Identifying change after the fact is usually pretty easy. Recognizing and reacting to change early in the process is more difficult.

The following list of changes have taken place in the past 25 years and each has changed the way we do busiNESS.

I. th" spotted

Owl. When the recession of the early 1980s finally burned itself out, we enjoyed a decade of favorable conditions in the lumber business. New construction and remodeling had rebounded nicely and the material pipeline remained full. In the late '80s, we began to see newspaper accounts about the plight of the spotted owl-a plight that was increasingly being played up by environmental activists.

In 1991, District Court Judge William Dwyer cancelled l57o of Forest Service timber sales, a move that would constrain or eliminate much of the timber supply our industry was dependant upon. Many mills were forced to find new sources of raw material and those that could not closed their doors. We continue to feel the repercussions some 20 years later. at Z.The FaxMachine.

The first commercially viable fax machines began to dribble into the market in the early '80s. They were big, slow and noisy, and they smelled like a small electrical fire as they laboriously cranked out text-covered pages that came mysteriously through the wires. The print quality was horrible, but even a bunch of lumber guys could recognize this new machine as gamechanging technology. Our industry, to its credit, was an early adopter of fax machines and the efficiencies they brought to communication. at J. BigBoxStores.

Lowe's and Home Depot began to rapidly expand in the 1980s and can now be found in nearly every market. The one-stop-shopping model for the do-it-yourselfer was embraced by many customers and it wasn't clear how this would affect the traditional lumberyard. Many retailers were forced to find ways compete, and those that could not are no longer in business.

Wholesale suppliers, too, had to learn how to deal with a new breed of hard-nosed buying and supplier policies they were unfamiliar with. Many wholesalers were forced to make a decision: do business with the big boxes or do business around them? Companies came up with a variety of strategies to survive and thrive in the big box era.

A

41. Cell Phones.

Like the fax machine, we lumbermen embraced the cell phone as soon as it was small enough to slip comfortably into a pocket. Many of us remember the days of circling the block and looking for a parking spot near a phone booth in order to call the office. Todav. if four lumbermen are traveling together in a car, it is not unusual for all four to be on their phones.

We often buy material we have never seen and we often sell it to someone we have never met. Our business is truly a business of communication and the cell phone has allowed us to communicate better.

? C. Email.

Most of us use email today and recognize it as another communication tool that has changed the way we do business. (I do. however, know of some curmudgeonly holdouts who prefer to communicate on the phone.)

For many things, though, email is the best tool available. Suppose you have a truckload of very expensive clear cedar arrive in your yard and you discover that the side of one unit has been raked and pillaged by an errant forklift driver. You can take a digital picture and immediately send it to your supplier with a note that says, "What's up with this?"

6. rnu Internet.

Generally speaking, other than a few cutting edge, spike-haired, tattoocovered geeks, we lumbermen have been slow to adopt the Internet as a way to put deals together. One reason for this is there are a lot of moving parts in most lumber transactions. Putting together a good deal for buyer and seller works better when both parties are fully engaged. It's pretty hard to add a truckload of lum- ber to your "shopping cart."

However, most of us have company websites, and this is another great way to communicate and share information.

7' / . Shrinking Producer Base.

One of the biggest changes affecting the way we do business is the continuing shrinkage of our producer base. As mills grapple with environmental constraints, lack of harvestable timber, and the current lackluster economy, many have been forced to curtail or close indefinitely. Traditional supply chains have been disrupted, and many suppliers ilre gone forever. This change is ongoing, and we all need to navigate through this minefield.

B. Youngeeople.

For many years we had few young people coming into our industry, but this trend has changed. You need only attend a show such as the NAWLA Traders Market to see the change. Some of us older guys are slowing down or calling it a day, and we have a new generation of lumbermen joining our fraternity. This group is bright, ambitious, aggressive, technologically savvy, and not afraid to work. They have chansed-and will continue to

change-our business.

9. ffr" 2OOB-2OO9 Recession.

Although no group has escaped entirely, retailers and contractors have been hit especially hard during the recent downturn. Companies have closed their doors in record numbers, and many of the survivors have circled the wagons, hoping for a 2010 recovery. There will tremendous opportunity for the survivors.

So, get ready for the next 25 years. You can look forward to changing technology, changing supplier bases, changing customer bases, and a constantly changing economy. You'll see competitors go out of business and new companies take their place. New products will come. Old products will go. Personnel changesyour own as well as those of your customers and suppliers-will affect your business.

Don't be caught like a deer in the headlights. When change happens, make decisions.

- Loren Krebs began his career in the lumber business in 1969 and recently retired as purchasing department manager after 25 years wtih Disdero Lumber, Clackamas, Or. He can be reached at krebs@oregoncoast.com.

By Patricia Fripp