It has been an eventful few years for the glass and glazing industry, with more changes to come as it emerges from the downturn. Mergers and acquisitions, increased expectations from the building community, technological developments and personnel challenges are shaping the industry of today?and tomorrow?according to GlassBuild America attendees.
Business closures, bankruptcies, and mergers and acquisitions have become almost routine, as companies with too much debt and too little cash-on-hand succumb to the lingering market drought, and those with adequate financing take advantage of the business opportunities.
“Mergers and acquisitions keep coming. For a time, every week [saw] another notice of a failure or M&A. We have seen this slow, but they keep coming,” said Oliver Stepe, senior vice president of sales & marketing, YKK AP America, during the State of the Industry panel at GlassBuild America, Sept. 13.
“We’ve seen the failure of some of the seemingly most successful companies in the industry. That creates a tremendous challenge,” he told attendees. “Think about the thousands of employees who have been displaced or feel uncertainty.”
“Eighteen months ago, you probably started to notice bigger companies coming into your neck of the woods,” added panelist Scott Clymire, vice president, United Architectural Metals, speaking to the contract glaziers in the audience. “You were being challenged with being competitive with companies that had different ways of doing things. We see now that some of those business practices were bad ideas. We have seen a lot of failure, and we’ve been dealing with a lot of things over the last 18 months.”
The result is a compressed market, with fewer companies, including some very large players. Additionally, the industry shake-up created trepidation among builders and owners, leading to tightening project terms. “People are nervous,” Clymire said. “We’re seeing the involvement of bonding companies, and additional vendor terms. We’re seeing things like ‘cash on delivery,’ and we are starting to be strict about 30-day terms.”
And, players in the glass industry report difficulty getting paid. “This is a struggle in our industry,” Clymire said. “Until you get paid, we don’t get paid.”
To help combat the problem, glass and glazing suppliers need to team up with the contract glazier on projects. “We need your help—we need to do these things together, not individually,” said panelist Garret Henson, vice president of sales, Viracon.
The technology revolution
Despite the slow construction market, several trends have put increased pressure on the industry, among them: increased adoption of Building Integrated Modeling and a push toward design-build scenarios. The industry has responded in kind by using new technology to meet customer needs.
“We used to just think about the technology of the building and the technology of the system. Now, we also have to think about the technology of the software,” Clymire said. “BIM, integrated project building, require us to be better about what we do. The business wasn’t set up [for these considerations]. Now we have to do 3D models. …. We are training everybody with this new approach, and our contracts are changing.”
Clymire added that BIM models are still behind for the industry, particularly for custom products. “We spend so much time with 3D models for the architect and then move back to 2D models when we’re in the plant,” he said. “We need to [improve] programs to the level where we need them to be.”
As the increased demand for BIM reflects, “It’s no longer enough to just be the expert on framing and glass,” Stepe said. “We have to be experts on the entire discipline, as everything is becoming fully integrated.”
The personnel challenge
Looking forward, companies are facing a three-tiered personnel challenge: to recruit, train and develop talented young people to become future industry leaders.
“We struggle with finding the right talent that is interested in getting into glazing,” Clymire said. With design-assist becoming more common, UAM is seeking architects and engineers that want to get involved on the manufacturing side of the building trade, he said.
As the glass and glazing business becomes increasingly more sophisticated, education and training on all levels at a company are critical. “Our employees are our assets, and the investment in people is important,” Henson added.
And new employees coming into the industry will expect these training opportunities. “More and more, we are hiring new people from outside of the industry, and they’re asking us, ‘what are you doing to train?’” Stepe said. YKK developed several training programs that it utilizes when necessary, including basic product training, one week of manufacturing training, a quick-start program to prepare new employees for customer service within 90 days, and career development training.
“One of the best things you can do is to use an employee to train other people,” Stepe said. “It’s a good motivational technique. Send employees to conferences and symposiums, and when they come back, have [him or her] speak to the team about it.”
“The young people coming in need to be embraced. We have to make the knowledge transfer happen.”
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