Factors Behind Construction Companies' Purchasing Decisions of Wood Products and Insight into how Local (In-State) Wood Product Suppliers can have a Bigger Market Impact

Abstract

Companies in the construction industry have a wide range of choices of suppliers for the company's needs in building materials. Local (in-state) suppliers within key southern states have issues gaining market share within the construction sectors. Construction companies often outsource their purchase of wood products from a different state or country, which adversely affects the local economy due to not purchasing from in-state or local wood product suppliers. Construction companies are often not aware of local suppliers due to lack of resources or general lack of knowledge. The primary research question of this thesis is: can construction company procurement decisions and supplier selection methods help local wood product suppliers gain more market share within the construction industry? Companies within the states of Georgia, Texas, Oklahoma, South Carolina, Florida, and Virginia were interviewed over the phone and in person to determine how the companies choose the wood product suppliers and what factors impact the purchasing decisions. Key factors included: cost, quality, delivery, flexibility, location, relationship, and payment options. A survey of construction companies was created and conducted after the interviews were concluded. Important factors highlighted by the survey responses included: cost, quality, relationship, and lead time in choosing a supplier. Suppliers were asked to differentiate their products using information the construction companies highlighted as factors they emphasized. Construction companies offered insight into how they purchase wood products, the factors they desire in their suppliers, and how often they purchase in-state. In-state wood product suppliers have an opportunity to gain market share within the construction industry using the factors those construction companies favored in interviews and survey results.