Pandemic Planning: Where’s my stuff?

Keeping up with demand during COVID is delicate balance

 

After the March 2020 shutdown, essential businesses − including HVAC/R and plumbing suppliers − had to scramble to keep things up and running.

“There was no playbook for pandemic planning when this started,” says Chris Choquette, vice president of Western Canada for Wolseley Canada in Vancouver, adding that about 80 per cent of business was done through its branches versus online. “We had to learn on the fly.”

Suppliers had to repurpose showrooms to allow for curbside pickup, move to virtual collaboration between staff and customers, invest in barriers and distancing signage, extend delivery hours, and leverage whatever technology they could – from text-based ordering to ecommerce upgrades.

Some of these measures have unlocked potential benefits that will help them in the long term. “The lockdown brought out some areas we needed to sharpen up,” says Diana Di Carlo, marketing and retail manager at Desco Plumbing and Heating Supply Inc. in Mississauga, ON. “It led to a technology revolution for us, which is great.”

Wholesalers also pivoted to virtual meetings and showroom visits to various degrees. Some extended delivery hours. Many implemented text-based ordering capabilities to streamline processes. And almost everyone turned to Zoom or other platforms to connect with staff.

 

The Supply Chain Dilemma

The biggest challenge that has impacted short- and long-term operations has been supply chain disruption − from shipping delays and manufacturing shutdowns, to labour shortages and construction delays. As a result, wholesalers have had to figure out how to manage inventory levels without over- or under-investing while keeping pace with fluctuating demand from their customer base.

The eastern part of Canada was particularly hard hit, says Neil McDougall, president, The Master Group, in Boucherville, QC. “Quebec and Ontario were the hardest hit as construction sites were closed at the request of the provincial governments.”

Everything paused during the initial lockdown, but when construction activity came back, the backlog in demand for products was overwhelming, Di Carlo says. “It was like turning on a hydrant. Everyone was scrambling to get things done. The frenzy depleted stock levels at manufacturers.”

At the same time, manufacturers themselves were struggling to get the components to complete fabrication. Bill Davis, vice president and general manager at Ecco Heating Products Ltd. in Langley, BC, says even with their own production plants in Calgary and Langley, it wasn’t easy. “Absolutely there were issues on the supply side. It wasn’t as bad at first. It became worse later on. A lot of manufacturers were able to pre-build for the cooling season, but as we got further into COVID, we saw more and more supply chain issues downstream with furnaces. Manufacturers weren’t getting components, and didn’t have enough people in the plants to make them.”

August through November was the most affected period for Ecco, notes Davis. “It was challenging getting furnaces, even from our own plants because of delays in shipping steel. Like other vendors, we were at lower capacity output, which affected wholesalers, including ourselves. We’ve rebounded a bit, partially because vendors are bringing in far more than we normally would at this period. But we still can’t predict whose plant will go down.”

A bounce back in demand in June moved orders up past historical levels, says Davis. “That was really tough. We missed being able to supply at the level our customers have come to expect over the years. It put a lot of strain on them. They were accustomed to supply when and where they needed it.”

It took a lot of calls and rush shipments to get products in, which incurred additional costs, he adds. “It was worth doing to maintain those relationships.

There is a silver lining to the challenges, according to Davis. “These unusual times has shone a light on how to improve inventory management.”

Moving forward, DiCarlo says wholesalers are being especially cautious about how they are handling inventory. “We’re keeping an eye on rogue pirates buying all the inventory in one order. We have to make sure we are monitoring the jobs and working closely with customers to keep them up to date. I think we’re heading into more difficulty before we see inventory management getting better, including increased production and shipping costs. All of that will be handed down at some point. We will be monitoring things really, really closely over the next few months.”

 

What’s in demand

COVID hasn’t just put a strain on the usual items in stock. It has also driven demand for anything related to indoor air quality – filtration systems, sensors, thermostats, purifiers – the whole category is moving, says Choquette.

Other items in high demand include touchless faucets, foot controls, and dispensers, reports Di Carlo. “Air exchangers is also a big one. There has been tremendous demand from hospitals and services like dentistry to meet compliance requirements.”

With the growth in teleworking, there’s also a marked growth in residential comfort solutions, notes McDougall.

 

What will stay

When things become more stable, wholesalers are finding that some of the measures they have had to put in place throughout the pandemic are here to stay.

The first shutdown solidified Wolseley Canada’s belief in investment in the omnichannel environment, Choquette says. “Our business can operate seamlessly between brick and mortar, digital and phone. That’s something that we will continue to invest in moving forward. We didn’t have texting capabilities at the branches before for example. Now we absolutely will keep that moving forward.”

Meetings will continue to be hybrid and face-to-face, he adds. “There’s an enormous amount of productivity gains from not having everyone fly around. I don’t think that’s unique to us.”

It took time for customers to embrace the conversion to online and text-based functions, says Di Carlo. Customers are now enjoying being able to check availability and posting their orders on the site. “We had the texting and online service for over a year before the pandemic and it wasn’t getting any traction. Now they’re open to anything so they can get their products.”

“The pandemic has required us to look at how different tools and technologies can provide greater intelligence and efficiency and many of those will carry benefits going forward,” McDougall says. “Digital tools are definitely part of the landscape and will become even more prominent in the future.”

As for curbside pickup, customers are loving the efficiency, Davis says, “Early feedback from contractors showed that curbside pickup was actually a plus. They liked the fact that all parts, accessories and equipment were ready for them outside. They can pick up what they need and go directly to their job site in a more time-efficient way.”

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