SUMMER 2020 EDITION

PROCUREMENT AND OPERATIONS

EXECS KEEP PRODUCTS FLOWING

OUR EXPERT PANEL
Wayland Boozer manager of purchasing & operations, Walters Wholesale Electric
Kim Johnson chief operating officer, Chancellor Inc.
Craig Melton CDC purchasing manager, Womack Electric Supply
Kevin Reed director of purchasing & analytics, ParamontEO
Larry Worthington purchasing manager, Mathes Electric Supply

IMARK Electrical Now: What was the biggest challenge your purchasing and operations teams faced during the public health crisis and business upheaval? Were there any big surprises?

Wayland Boozer, Walters Wholesale Electric (Signal Hill, California): We normally keep a healthy inventory in our distribution center to serve our customers and replenish our branches. First, our buyers had to proactively review their lines to stay ahead of supplier shortages and logistics issues. Beyond that, it was important to be nimble relative to identifying substitutes and equals so as to keep our inventory levels where our salespeople and customers expect them to be. We’ve been proud of the efforts our team put forth. Though they’re working remotely, our buyers have done a great job working together to support each other, share information in real time and go the extra mile to get the job done.

Kevin Reed, ParamontEO (Woodridge, Illinois): While we were able to stockpile material at the beginning of the pandemic, the degree to which factories shut down and shipping was impacted created some gaps in our inventory that required second, third, fourth or even fifth sourcing at times. Lead times were often extended, and many vendors stopped guaranteeing delivery dates altogether—try telling that to a customer waiting on product to complete a job! We also saw atypical buying behaviors with customers purchasing significantly more of certain product types and not as much as usual of others as various jobs were either shut down, allowed to continue, or made new priorities. Internally, concern for our own staff safety and continued ability to operate transparently from home offices while implementing CDC guidelines for our warehouse workers and drivers led to new practices such as split shifts, curbside pick-ups, virtual showroom visits, Zoom meetings and more. Fortunately, we had the technology in place to enable remote workers, but we had never implemented the practice for all of our employees to do so simultaneously. Additionally, at-home workers were at the mercy of their own internet connections and lines often shared with kids who were also home e-learning during business hours, which usually didn’t measure up to the fiber connections they were accustomed to in our facilities. We did our best to ensure that the customer experience was seamless, and most didn’t even realize we weren’t operating out of our offices as usual, at least until they heard a dog bark or a kid in the background. The social/emotional impact of the shelter-in-place was a serious concern for us as well, so we stepped up our internal employee communications, offering words of encouragement, hope and support to keep our team in a positive frame of mind as much as possible.

Kim Johnson, Chancellor Inc. (Laurel, Mississippi): For me, the challenge of balancing inventory management and efficiency with customer service was even more difficult during the pandemic. Our company generally tries to maintain a heavy inventory for superior customer service. With the COVID issues, we had to adapt our buying habits and adjust our mindset to keep from having an extreme excess of inventory, but with the unknown effects on manufacturing it was also challenging to keep just enough inventory in stock as well. We managed better with some manufacturers than we did with others and had a few problems with low stock levels on some common items from major manufacturers. Surprisingly, it seemed that COVID was a big equalizer for manufacturers as well as distributors; we were all caught off guard and had to scramble to adapt and recover.

Craig Melton, Womack Electric Supply (Danville, Virginia): There have been a number of changes that we’ve had to adjust to in the past several months, from changing the way we handle material (incoming or outgoing) to social interactions with employees and communicating with and effectively leading staff members, all while keeping the promise to our customers to be the distributor of choice for their material needs. In the purchasing realm, we have dealt with vendor partners’ hardships when manufacturing plants have had to close due to an outbreak in their facilities. In the CDC model my company uses for branch stock supply, we’ve had to alter buying patterns to keep product on the shelf. All in all, the biggest surprise in my mind is how well our team has adapted to all the challenges that have been thrown their way.

Larry Worthington, Mathes Electric Supply (Pensacola, Florida): The biggest challenge has been getting materials from suppliers outside the United States (e.g., Mexico, Puerto Rico and the Dominican Republic). Getting freight from states that have been in the quarantine has also caused some delivery delays.

"Contractors, distributors, manufacturers and agents all had to figure out new ways of doing business overnight—and with great success in most cases. By and large, everyone rolled up their sleeves and made the changes needed in order to keep customer service levels as high as possible."

Wayland Boozer, manager of purchasing & operations, Walters Wholesale Electric

IMARK Electrical Now: Please share an example of new customer behaviors or demands arising from the crisis as well as an adjustment your company has made that may evolve into a standard sales/service offering.

Reed: With the world more focused on personal protective equipment (PPE) and jobsite health safety, we’ve increased our quantity-on-hand and variety of safety products such as CDC-approved face masks, hand sanitizer, face shields and job wipes, and also more heavily promoted touch-free solutions such as sensor-enabled and voice-controlled devices. We began offering contactless deliveries, curbside pick-ups and virtual sales calls and rolled out a new logistics platform that provides real-time order tracking and delivery status for additional transparency and peace of mind, not to mention enhanced jobsite efficiency. The company-wide use of Zoom made working remotely less isolating and, in anticipation of further extended social distancing rules around sales visits, we are focusing on building out our CRM capabilities to make customer engagements more meaningful and productive.

Melton: Our customers have been loyal and resilient given all the changes that have come their way. Spurred by this public health crisis, taking pictures of product deliveries and requiring no signature at deliveries may be something that becomes a standard practice going forward. As a distributor, I also feel the need to offer our customers the ability to purchase PPE products that wouldn’t normally be items we would stock, such as face masks, face shields, hand sanitizer, etc.

Boozer: Unfortunately, one customer behavior we needed to react to was accelerated demand on our inventory—e.g., stockpiling. It has not been widespread, but we do monitor it and educate our sales teams on how to support our customers while being responsible with our inventory. In terms of an adjustment that’s become standard practice, I would say that contactless delivery (with photos) will likely remain a permanent option for our delivery customers.

Johnson: We never closed our stores during the pandemic. Customers were always able to call in, drive up and have

material loaded into their vehicle, and this was in addition to our daily delivery routes, which continued as normal with added precautions. More than ever, we encouraged call-in orders so that we could prepare and load material with minimal contact and one of our locations had a temporary canopy set up to help service customers outside. Some of our larger contractors seemed to prefer the call-in and drive-up method because their employees were not wasting as much time hanging out at our counters. We will continue to be open for counter foot traffic, but I think we may see a larger number of call-in orders from now on.

Worthington: Our customers have been very considerate/accommodating of the current situation and surprisingly our business has not suffered much, except maybe a little down on the educational side given that schools have been closed (though construction has continued). When we decided to close our counter area to outside personnel, we implemented a curbside service pick-up. This was accomplished by having our customers call ahead to place their order; once it was picked, we had a designated area outside the building where they could come and pick it up. This has worked really well. While we’ve re-opened the counter area to the public, we’re still encouraging our customers to utilize this new service. However, it’s still good to see our customers face-to-face and offer assistance where it’s needed, with our great counter sales team leading the way.

"Simple jobsite logistics support we’ve always promoted—like custom kitting, unpacking product and allowing pre-assembly services in-house—enabled clients to reduce the number of people in the field. What was originally envisioned as a labor-saving service turned into a social distancing facilitator."

Kevin Reed, director of purchasing & analytics, ParamontEO

IMARK Electrical Now: What’s the biggest lesson that you, your company and/or the electrical distribution industry learned during the COVID-19 crisis?

Johnson: Now more than ever, I believe this pandemic has taught us the importance of operating lean and efficiently so that we are better prepared when sales slow and margins run thin. When business is running smoothly and we’re busy, we overlook a lot of expenses and processes that could be managed more efficiently. Also, it’s brought out the need for new and updated ways to reach the customer beyond our normal face-to-face sales calls.

Worthington: I think that we need to depend on more U.S.-made products—e.g., keeping Americans at work and not depending on foreign materials, especially from China. If American-made materials cost more, we as a company just need to pay it, but I think that U.S. manufacturers could also find ways to be more competitive with their pricing.

Melton: Personally, I learned that you can never be too prepared for rapid changes. As a company, I feel that the importance of technology and employee training on that technology is one of the biggest lessons learned. This has been critical in enabling our team members to adapt to a work-from-home or social distancing work environment and maintain fluid business operations. In years to come, I think that the industry will look back on this experience as one of great employee development. The way technology has allowed us to adapt to a situation that left a lot of us feeling paralyzed has been amazing to me. If this happened 10 years ago, we would not have been able to maintain the level of service to our customers that we have offered.

Reed: While we always thought that the work we do is important, being labeled “essential” proffered a new level of validation and clients have come to rely on us for more than just electrical supplies. In addition to essential power and lighting materials, having bottled water and PPE in our inventory really helped us get much-needed supplies into the field. Beyond product, jobsite logistics support was also key. Simple services we have always promoted, like custom kitting, unpacking product and allowing preassembly services in-house enabled clients to reduce the number of people in the field to work on a job. What was originally envisioned as a labor-saving service turned into a social distancing facilitator, as an outbreak of COVID could shut down an entire project in a blink. More than anything, being flexible and quick to adapt to the new normal was essential, and our teams really delivered. COVID highlighted how sophisticated and complex our business really is. As an independent electrical distributor, it’s hard to unravel our business and simply furlough labor when we sell multiple types of product (from switchgear to material to lighting), employ a highly diverse staff with extremely varied skill sets, manage inventory, plan logistics, route deliveries and maintain warehouses, vehicle fleets, equipment, offices and more. The fight for business and reduction of margin just to close orders hurts us all. We run super-complex businesses that have more worth than the dwindling margins for which we seem to be racing to the bottom to secure.

Boozer: To be sure, the electrical distribution channel is comprised of a very resilient bunch of folks. Contractors, distributors, manufacturers and agents all had to figure out new ways of doing business overnight—and with great success in most cases. By and large, everyone rolled up their sleeves and made the changes needed to keep customer service levels as high as possible. That shows determination to succeed and overcome. We can, and will, answer the challenges.

Susan Bloom
Susan Bloom is a 25-year veteran of the lighting and electrical products industry. Reach her at susan.bloom.chester@gmail.com.