Will the web kill off merchants?

It's worth a try and you're in luck – a merchant just 10 miles away stocks the right brick. Fortunately, one of your trade contractors has a flatbed truck you can borrow and by the end of the day you have some replacement bricks.

It turned out all right this time, but what if you could not find matching bricks or your friendly subbie didn't have a truck?

Barry Jackson, chairman of one of Britain's best-loved regional builder's merchants, Jackson Building Centres, says that the internet will be able to solve these problems in the next few years. He says that construction managers will be able to use it to find the bricks they want, order them and get them delivered.

After 52 years' supplying the construction industry, the plain-speaking Jackson describes himself as being "far too past it" to be computer literate. He is, however, all too aware of the possibilities and drawbacks of IT for his industry.

Jackson says that construction managers' expectations are already changing. "The balance of business is already swinging from 'collect' to 'delivered' because of the IT revolution," he says.

Although you cannot buy products online from the Jackson website (www.jacksonbc.co.uk) yet, the consequences of the internet are already apparent. Jackson says contractors are buying supplies online, sometimes directly from the manufacturer, eliminating the need for the builder's merchant.

Removing the link

Contractors and clients are aiming for shorter and more efficient supply chains, and website buying and selling offers them a way to cut out builders merchants. Jackson says: "There are agreements being made. End users such as larger developers and clients like British Gas have such buying power that they can turn the screw on manufacturers. They can say, 'if we use your product throughout the UK, what kind of a discount can you give us in return?'.

"It is removing the links in the chain between users and suppliers," says Jackson, "and as the vital link in that chain, it worries me." Jackson says his industry is up to the challenge, but is still wary about the future. "I don't believe it's the end for builders merchanting, but it will definitely be harder," he adds.

Developments in IT have not all been bad news for the builders merchant. Jackson has been able to improve the way products are tracked by widespread use of bar codes. "Bar coding is an enormous benefit. The industry hasn't got it yet, but there will come a time when merchants won't accept goods that aren't bar coded."

Jackson's vision is that bar codes will give him the same knowledge and control over bags of cement as supermarkets have over bags of sugar. He wants products to be bar coded by manufacturers and checked in on site (and by the builders merchant if applicable) with a handheld scanner. This will be fed into a main computer system, so there will be an electronic record of everything that arrives. It will mean fewer errors, enable automatic ordering of goods and just-in-time delivery.

Despite all this technology that provides the merchant with more control over goods, Jackson's business thrives on the unexpected. "However sophisticated you might be, something always goes wrong. Business that I consider extremely valuable to us is what I call 'whatabouts'. This is when a senior figure goes on site and the joiner says 'what about this?', or the customer changes their mind. That's significant and is still good business. It will always be important to have somewhere near site to supply that need."

How you supply that need is a key issue for the builders merchant of the future, as Jackson explains: "Logistics is going to be at the heart of it all. Over the next few years we will have more central warehousing and distribution, as you see in food retail. Some of our larger competitors are already extremely switched on in that area."

And while other builders merchants may be tempted to capture the consumer market, Jackson remains a dedicated trade supplier. "Most of our stores (18 throughout Lincolnshire and the East Midlands) close on a Saturday afternoon. We want to keep up the quality of service we provide, which we can't do by opening at the weekend too."

Jackson may be worried about his prospects, but the construction manager's changing relationship with the builders merchant seems to be another area where IT is creating greater efficiencies and saving money and time.