AAMA Outlines Potential Changes to Product Certification Program

Changes in the American Architectural Manufacturers Association’s product certification program and a look at trends among big builders were major topics at the start of the organization’s fall meeting, which concludes today.

Updating the product certification program has been a big focus of strategic planning activity in recent months, Rich Walker, AAMA executive director, told attendees. The overall goals are refining the program to make it easier to promote as well as electronic upgrades that will differentiate the program from competing certification programs in the marketplace, he said. Another change, Walker noted, would be to make fees service-based rather than label-based, and the elimination of requirements for participating manufacturers to label products even when that label might not be required by the buyer or code jurisdiction.

MORE OPTIONS
Dave Moyer of Architectural Testing Inc., who serves on the committee focusing on the certification program, reported that the working plan now is to incorporate rating and listing flexibility that allows participates to include other product information that may not be part of AAMA’s certification program. “The goal is to use AAMA’s certification program as a clearinghouse for all the information related to their products,” he noted. The goal would be to create a program that could satisfy all jurisdictions. AAMA has been developing standalone programs for manufacturers to demonstrate quality assurance in their processes and for registered test reports, he said. Designed primarily to meet the needs of commercial and architectural product manufacturers, these are now being considered as new optional components of the new certification program.

Moyer emphasized that while the new program may have more options and levels, AAMA is working to keep its current or “legacy” program the same.

Rich Biscoe, also of Architectural Testing, followed up with a brief discussion of the “fenestration information portal” AAMA is looking to create on the Web. The idea is to create one place where all interested parties, ranging from code officials to consumers, could easily extract both AAMA and non-AAMA information. Manufacturers too, could use the site, he continued, to produce one temporary label that would incorporate all the information legally required for a specific product. In addition to air, water and structural information covered by AAMA, the label might incorporate the National Fenestration Rating Council label, impact resistance data and certifications or any other information necessary for a particular application.

Development and implementation of such a site would probably take at least 18 months, he noted. As far as an overall timeline, Walker noted that the AAMA board plans to create a final plan and vote on it by next summer.

BIG BUILDERS
Consolidation is continuing among big builders, but it may be slowing, according to Paul Deffenbaugh, editorial director for the Reed Building Group. He reviewed some of the significant changes at these firms over the past decade, but noted their market share is still not that huge. The top five builders now account for just more than 10 percent of the new home market, while the top 25 has about 20 percent and top 400 36 percent. Not too long ago, he said, a Wall Street analyst predicted that by 2011, 75 percent of homebuilding industry controlled by 20 homebuilders. “While they are growing, I don’t believe we’ll get there.”

With the growth and evolution of big builders has come a whole new supply chain focusing on their needs, Deffenbaugh suggested. Large pro dealers are focusing more and more on the big builders. In addition, they are expanding the number of services they offer these builders to provide services that once may have been provided by separate companies in separate trades. On the other hand, he continued, a separate distribution channel focusing on small and mid-sized builders is emerging.

This channel, and small and mid-size builder market in general, has a look and feel that’s more similar to the remodeling market, Deffenbaugh said. It is much more “service” oriented, and focuses much more on value than price.

Big builders have really emphasized cost reductions over the past decade, but their attitude is changing somewhat too. One factor in this is that material costs now account for a much smaller portion of their typical home. Big builders are also learning the value of “customer satisfaction” on profitability.

At the moment, the biggest builders in the country face some real challenges, Deffenbaugh suggested. One of the areas that has been most affected by the slowdown in new construction is the vacation home, which was up significantly in recent years because of speculative activity. Big builders went after that market, and now investors are pulling out.

Another market change they are grappling with is a shift away from huge planned developments, Deffenbaugh noted. They have been putting them farther and farther from metropolitan areas and people are deciding they want to live closer to their jobs and not commute.

Instead of huge developments, big builders are now seeing more demand in urban and suburban infill projects, he said. Many are also building on other people’s land. “Big builders are becoming much more nimble,” he said.