Distributors Keep Ahead of the Supply Chain

In this section, Sanitary Maintenance reached out to the editorial advisory board of professionals for comment on supply chain issues that are still plaguing the industry. Here, each representative provides suggestions distributors should consider on the road to success.  

 

Supply Chain

What are some of the major challenges distributors face in managing supply chains effectively?

Moody — Of course we know that many factories are or were shorthanded coming out of the pandemic. Some of the manufacturers that produced products for us in three weeks were running as long as eight weeks. Luckily for us more than 95 percent of what we sell is made in the USA, so we don’t have to deal with containers coming from China. 

Scoles — Rising costs have been our biggest challenge. Therefore, being attentive to our inventory levels while accurately forecasting the needs of our customers to keep costs as low as possible for them has been a priority. 

Schneringer — While the majority of supply chain chaos has settled since the craziness of the last several years, at the moment the major challenges are primarily related to cleaning equipment. 

Grego — Lead times are often miscalculated. We typically rely on our manufacturers to give us information to pass along to our customers. Nowadays we must account for miscalculations and prepare our customers for possible delays. Most of the issues today are related to cleaning equipment and parts. 

Abiaad — Precise communication and transparency on needs and capabilities has eroded post-Covid because of the overall uncertainty.

In what ways should distributors be prepared to mitigate potential supply chain disruptions? 

Abiaad — Know your customer and continuously collaborate with them in a forthright manner to develop back-up options, should they be needed. 

Grego — We typically set up meetings with top-tier management at our largest suppliers. We set our expectations and have alternative solutions ready when deadlines aren’t met. 

Schneringer — Building in resiliency is a key. This can be accomplished by maintaining good/strong working relationships with your vendors. 

Moody — I think it boils down to good communication with your vendors. You have to ask what the e.t.a. will be for new orders and plan accordingly. It’s also important to review your product offerings and see if there are products that you can discontinue or merge their lower volume to another SKU that has a stronger following. I’d rather sell 1,000 cases of one item per quarter than 350 of three similar items.

What strategies can be employed to optimize inventory management and ensure sufficient stock levels while avoiding excess inventory? 

Grego — Do not over order. You may consider placing an order earlier than usual, but when companies begin to place unusually large orders in hopes of not running out, they end up writing off the excess at the end of the year. It’s a balancing act. When companies over order, it throws the entire supply chain into chaos. 

Abiaad — The purchasing and procurement teams should be involved and aware of the customer dynamics and the bigger context as it all germinates from there. 

Scoles — This is always a challenge, however, routine meetings between the sales department and purchasing department to generate future inventory projections has allowed us to not only stay on top of the needs of our current customers, but also allows us to quickly fine-tune our inventory control for new customers as well. 

Schneringer — Consolidation and standardization of inventory, and harmonization between procurement, sales, and marketing are all important strategies to employ for inventory management. 

Moody — This has been difficult to do without having excess inventory. Although our inventory software can help to calculate the right sized order, we really had to update the “average days of arrival” to reflect the drastically longer lead times after the pandemic. Of course, having items on backorder is not only bad service to the customer but also a loss of revenue that is gone forever. If a customer had to go without an odor control item for a month, they don’t necessarily use more next month. It’s better to have excess “current” inventory while supply chains catchup.

How can distributors build stronger relationships with suppliers to improve reliability and reduce lead times? 

Moody — I think that showing your vendors that you’re also out for their success is important. We appreciate the factories that produce quality products for us. We thank them especially when we see innovation that allows us to market a product that is profitable and helpful to our clients. We have also always paid our vendors quickly to ensure that they know that we respect their cash flow and that there are no financial risks in working with us. 

Scoles — I think the answer to this question is through simple communication. Just communicating to the manufacturer what your specific needs are as a distributor to be able to service customers at the highest level possible allows manufacturers to tailor their efforts to support your operation. Constant communication also creates efficiencies that benefit both parties.  

Schneringer — Being a good distribution channel partner during good times helps to bridge the troubled waters during challenging times. 

Grego — Communication is key. We must agree to both provide necessary information to effectively prepare the end user with an acceptable lead time that the manufacturer can meet. Never overpromise and underdeliver. That’s a recipe for failure. Be honest. 

 

Abiaad — Treat the supplier as your customer and partner and not just as a means to an end. 

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