Inventory? (Dan H.)

Jim_64

You really think so? That would mean a return to somewhat normal sales levels,I hope you're right!

DanHolohan

I'm watching everyone cutting back

on what they're making and what they're putting into stock. Seems like everyone is expecting everyone else to carry the burden of inventory right now.

When it gets cold, I'll bet there's going to be a long wait for equipment.

Thoughts?

Unknown

Been having

a hard time locating some equipment on the day of an install ( alot of work comes in the day before or in the morning ) . Where you could do one stop shopping at the closest supply house last year , now you have to drive 30 , 40 , 50 miles to get a specific boiler or heater . And relatively speaking , Long Island has a glut of supply houses . I could only imagine how it is for contractors in more rural areas .

Home Depot Employee

You may find the supplier that doesn't always have the lowest price may have the inventory.

BoilerBilll

As a major \"heating only\" supply house

We are still maintaining significant inventory amounts in spite of the economy. We are selling a ton of mod-cons at the expense of the cast iron market. It is our receivables that scares us a bit right now.

Peace,
Bill

DanHolohan

How far out

are they stretching you, Bill?

DanHolohan

Any talk

of the company stocking more, Ron?

BoilerBilll

Dan,

Sadly enough, current receivables now equal monies over 90 days. It does make paying for truckloads of equipment a bit difficult. All the politicians much smarter than us keep saying this should be over by 2010........I will hold my breath.

Keep up the good work,
Bill

DanHolohan

That is

scary. You're suddenly in the banking business, and without any help.

Mark Custis

Bill and Dan

Stephanie and I are the entire company. We got our kid through college and into grad school before we lost our real jobs. So we started our own company. What I/we have learned her over the years can never be taken from us. We did not really like that house anyway.

We are cash and carry Bill, so if you are not the lowest price is not important to me. I need service as my inventory is a 5 gallon pail with sorters for various fittings. I will pay now and in cash for service and availability.

We have lots of supply folks in Cleveland and I shop service not price. Dan taught me that with help from his friends, and I charge accordingly.

Steph and I , Dan are with you and TLM are not playing in the recession, there are days cash flow stinks, but we are not playing.

Unknown

Probably not

They laid off quite a few workers due to the slowdown . For the most part they have what we need on a daily basis though . But just walking around outside you can see the pipe racks are 1/4 full . Inside there are boilers stacked 2 high instead of 4 .......... It's gonna be a fun winter .

Alan Welch

inventory

Been cleaning house lately while things are slower.Thrown out many parts for flair, thrush, b&g zone valves.Need any arcoflame or abc sunray transformers , pyrostats, detroit stack switch,lennox burner parts,1725 j pumps, thrush bearing assemblies?Found a m/h c700-3a photo cell assembly big as a propane bottle n.o.s. Have a box in my van with old electrodes (Iron Fireman etc.) and transformer wire and connectors for them. Am I really doing the customer a favor repairing something that should be replaced? It all becomes obsolete eventually,why should I get stuck with it. Should it be my problem if the supply house doesn't stock it ?

DanHolohan

A friend at a big boiler manufacturer

recently said to me that they're building far less because wholesalers are stocking far less. I asked about what was going to happen when it got cold. "They think we can just pull this stuff out of our butts," he said. "They're wrong."

As Ron said, it's going to be an interesting winter.

CC.Rob_15

across the board

It's not just boilers. It's throughout. I do a fair amount of finish carpentry. Local yards aren't stocking nearly what they were two years ago. Things like flooring, stair treads, railing systems that they would have had on hand, they no longer stock. In a couple instances, even the wholesalers didn't have the stuff, so it's coming straight out of the factory. And some of the delays getting stuff can set a job back several days, even weeks.

Unknown

Funny, during the boom I remember long long lead times on all kinds of items in the fall anyway.

Can't win for losing, can you!

DanHolohan

On what specifically, Rob?

For which products did you have to wait?

Unknown

Since I got involved in this industry, I've seen backorders right through the supply chain on multiple manufacturers' tubing, manifolds, boilers, radiators.

At the end of the boom, recently, only Triangle Tube Prestige and Biasi radiators springs to mind... last winter they both had major backorder issues for months. the tubing manufacturers finished gearing up and the suppliers finally stocked enough to make it through a fall starting just a few years ago. Heck, I remember we could count on Wirsbo to have month long backorders in fall every year, for years.

Change is hard, no matter which way it goes, I think. I don't mean to imply that this is the same, it's worse, because I wager everyone is scaling back, so even jumping product lines might not be an option. whole different ballgame for sure... glad you're calling attention to it!

DanHolohan

Thanks for the insight.

It seems to me that this would be a great time for a smart manufacturer to get a jump on the competition. It's going to get cold, and equipment will break down, regardless of the economic conditions.

I think we will see shifts in brand loyalty to those who have the goods on hand.

This is going to be interesting to watch. Thanks, Rob.

DanHolohan

Do you think

that in every market, there will always be someone willing to repair it? And if so, will you lose that business?

And is it worth getting that business?

Is it a good thing not to have an old-parts inventory?

Thanks for the perspective. Any other thoughts?

Charlie from wmass

I find the less desirable parts and boilers are always in stock. I have not seen a time when I could not get a good boiler that was the right size for a given job. Most of my calls are we need it now. I also do not do the volume you guys on the Isle of Long do I am sure. We have a 2 story 30 by 62 shop with one and a half of it for parts we stock. It used to be hard to get parts easily around here now it is important to have the parts on hand at a good pricew for ourselves to make sure we stay in the black. you will wear out your truck patients and customers if you have to spend half your day searching for parts. I also realise on burners it is often better to upgrade the unit than repair an old one that next week could need 2 more parts. The total of the sum is much higher than the cost of a new higher efficent unit. Just my 2 cents.

Bob Bona_4

If you think

it's nerve wracking times in hydronics, it's even worse over in the A/C side.

2010 is just around the corner, and R22 equipment is vanishing fast, never to be seen again. Quotes from 6 months ago for R22 stuff are null, distributors are selling what they have and that's the end. That's putting the squeeze on 410A inventory that is a little sparse to start with.

Then there's the whole bugaboo with pairing up 410A condensers w/ R22 coils or vicey versey

The only saving grace is that we are having a cool start this summer and the annual A/C fever hasn't set in yet, but when it does..oh boy!

Bob Bona_4

I think 10 years

of sitting on those old Trol a Temp panels, J pumps, T87 stats and subbases, even HW 845 switching relays marks a milestone. And by milestone, I mean dumpster bound, or Ebay

I find that people that are too frugal to upgrade to 2009 are usually the ones that are too frugal to pay the bill when you have "saved" their equipment, yet again.

Mitch S._2

Now I'm a supplier and a banker

I have to stock most of the vital parts for the boilers we've installed over the years. I can't wait three or four days to get a blower when it's -20. It sounds like the waiting time might increase on all equipment. We still get to wait 30, 60, 90 days for payment though. Always been in the banking business, interest free loans are my specialty.

Steve Gates_4

very interesting ?

My closest supplier is an hour away. My truck inventory is down about 6 grand. Due to some serious finacial cutting starting two years ago...and now that it is paying off we would like to build it back up...but of course that would mean we need new bizz...and have no new starts lined up...

What this means is we have to rethink what we stock and how much. What will we charge to make it worth while ect. We look at who has a fireplace and who doesn't.

And looking at the bright side surely I'm getting better milage from the lighter load...

burnerman_2

Repair Old Furnace

Dan Just As You Know If We Don't Fix It A Friend Always Knows A Guy Who Will I Told A H/O Thier 30 Year Old Trailer Furnace Was In Need Of Replacement They Had A Fan Disc I Could Not Find Another Guy Rigged It Up Hope It Runs All Winter I Will Not Work On It A Limit Is There For A Reason.

tim smith

Good thread, you guy's mention suppliers stocking parts????

what's that. None of our suppliers stock parts for their equipment. There is one Rep who stocks parts for some of their lines but that line really needs parts stocked. Regarding the AR situation. I was concerned about what our aged AR was doing and sometimes I tend to not track it closely as business gets flying. I was watching fairly close this winter and felt pretty good, we are at appx 8% over 90 days. Rest pretty current. I feel fortunate. Tim

RonWHC

Not just HVAC.

Nurse, in an Expedition, tore up rear of our '08 Express Van. I nixed junkyard parts. Didn't do much good. Major component not available new, from any source. No manufacture date scheduled. So, junkyard it was.

Body guy (I put his kids thru College) said problem is becoming more frequent. Even junkyards are running out of some pieces. Then again, we've been scavenging burner parts for years. Makes us look real good nites, weekends, & when the supply house(s) says "nope."

Steve Ebels_3

There's a reason

I purchased 6 wall hung, gas fired unvented heaters last winter. Folks with an old furnace, no parts anywhere or BO'd for weeks. I give them a CO detector and temp in the heater to keep them from freezing until we can get it fixed. The customers are very grateful. Saved a few houses from freeze up that way.

DanHolohan

This winter

is going to be like the winters of World War II, where metal went to armament and not to pipe, valves, fittings and boilers. Contractors scrounged for material to keep old heating systems running, and plenty of people went without heat for a long time.

The heating manufacturers shifted their production to the war effort in those days and that saved them. Central heating was still relatively new then and people didn't expect the service they've come to expect today.

I'll say it again. I think we're going to see major shifts in brand loyalties this winter. Those who have the product are going to bury those who don't.

DanHolohan

Whether or not new construction picks up,

the old equipment is still going to break down, as more often as people put off preventative maintenance because of the economy. Mother Nature doesn't observe recessions.

I think that's when we're going to be waiting a long time for basic equipment.

Mitch S._2

Dan, do you think

a few of the new mod-con boilers might drop off the map? It seems everyone has added a condensing boiler to their line to keep up with the other guys. Finding parts for a discontinued boiler or one that has cut production could be tough.

DanHolohan

Your last sentence says it all,

and we've seen it before, but I think we're going to see it like crazy this year.

Jim_64

There were

shortages last summer/fall of certain German and Belgian boilers.It was attributed to higher than normal demand for high efficiency equipment due to high fuel prices. So,if business is good,you have shortages and the same if it's bad?

DanHolohan

What we're seeing now

are factories that are going to four-day work weeks, or taking furloughs, laying off people for a while and trying to not have too much inventory. It's an old game, where each link in the chain wants to pass the responsibility upward. This year, we have many of the factories saying No Thanks. And as one of my buddies in the boiler business says, "They think we can pull this stuff out of our butts at a moment's notice. They're wrong."

That's what's different this year. And I think that the manufacturers that are seeing this, and gearing up now, are going to be the ones to fill the gap, and that's where the brand loyalty is going to shift to.

I could be wrong, of course, but that's what I'm seeing, and that's how it's looking to me, Robert. Thanks for sharing the thoughts. These are unusual times.

Darrell_4

Would you care to prognosticate about which brands will go the distance for their installed product? I am making choices about what to stock on my truck for the coming winter season, and have decided that I cannot stock everything for everybody. Gonna have to go with my strong suite.

DanHolohan

Too soon to say, Darrell.

I think it's going to be all about who's building stock right now, and who's not building stock right now. Some are not going to have the product and they'll make you wait. Some will see what's going on right now, and what's coming, and they'll be there to satisfy your needs.

In your area, it's even more critical.

Mad Dog_2

The Inertia of economic realities and history

Not much really changes...does it? The People and folks WITHOUT debt and with capital - in hand - in liquid assets are able to not only ride out these storms, but prosper and grow. Personally, we are trying to drain down our overstocked inventory, buy JUST what we need, and keep it real tight. Yes, we are finding long waits on items we normally could get in a few days, not so long ago.. Everybody needs to get back to basics and pay as they go...this "credit-mentality" that we swallowed 50 years ago has led us to the current mess. Mad Dog

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Darrell_4

Yep...too far west here in Alaska. Some of the supply chains don't realize that over-night delivery means at least three days...gonna be cold in houses heated by equipment that isn't represented and stocked locally with a good and committed supply chain.

Going to the next town over...well that's 130 miles away.

DanHolohan

What's changed this year

is that the cutting-back mentality has moved up to the manufacturing level.

A large part of what keeps us in this recession is that everyone has decided to stop spending, and this feeds on itself. Look around at all the closed storefronts.

When the manufacturers decide to stop producing because everyone is cutting back on what they're willing to stock, then long lead times will follow, houses will freeze, and people will probably die. As my buddy in the boiler business said, "We can't just pull this stuff out of our butts."

Some manufacturers are seeing this and these are the ones that will have the greatest share of the market when all of this is over. Watch.

It's going to be a winter like no other.

leo g_13

2 years ago

when suddenly there were many more mod/cons available, i decicded enough was enough, and have selected 3 companies to service. i will be adding a fourth soon, as this is a local company, that is finally producing a mod/con.

it just seems to me, that if the mans. could standardize some of the more "fallible" parts, it would be a huge asset to the industry, but i am not holding my breath.

i will keep the usuall amount of flame rectifiers, 3 diferrent sizes for this company, 2 for that, spark ignitors, pressure sensors, etc. on hand, and will have ordered them by the end of this month.

of course, where i work, sometimes we are out playing golf in Feb. so most times if parts are a pain, a couple of oil filled heaters usually tides the clients over til the work is completed.

Leo G

Jim_64

\"It's going to be a winter like no other.\"

From your mouth to Gods ears! I'm hoping you're right!!