Distribution chain

Dennis Bellanti_2

I work for a mega wholesaler.

These days all our lives move at a fast pace. You can have damned near anything you want delivered to your door in a day or two at a pretty cheap price. Just punch a few things into your phone and it appears. Maybe that has skewed our expectations. Plus things are more complicated these days.

It wasn’t that long ago that we used a stamp and envelope to place orders with the factory. We stocked a lot of inventory because it took a long time to get it. You couldn’t afford to run out. We also didn’t have 10 different kinds of pipe and fastener systems. There was copper and steel. There was sweat and thread.

Everyone seems to have a different preference today. Copper sweat, pro press, shark bite, Aquatherm, Mega press and PEX to name a few that we stock. Holy cow how many pex fastening systems are there?

There was also one kind of boiler back in the day. Cast iron. To service one, you would need the following on your truck. Thermocouple, Relief valve, B&G series 100, Honeywell zone valve, an auto air vent. Those parts would pretty much cure 90% of the problems on any hot water system.

Today there are 26 manufacturers of condensing boilers in the U.S. Don’t mistake that for 26 models. That’s 26 manufacturers and each producing several different models. To properly be prepared for a malfunction you need to stock a dozen parts for each model. (Yes, I believe wholesalers should carry the parts for the brands they sell.) So now we are stocking 40 boiler parts when we used to stock a few.

We have 22 stores in Colorado. We do that to make it convenient for our customers. There is a cost to rent the building and pay the staff. The inventory has to match the market size that store services. It is not feasible to carry every part and every fitting in each store. We could move all that inventory to one super store and have everything you might need or want but then you would have to plan ahead so we could deliver it to you. There’s not enough time for you to plan in today’s demanding pace. Your customer won’t wait.

The one thing that will not change is the human element. We will all have a place in the supply chain as long as we create value in ourselves. If the only value I have created is whether or not I have a product on my shelf, then I do not deserve your business. Might as well let the robot at the mega warehouse fill the order.

j a_2

JUGHNE said:

As an electrician, it was almost a relief to see residential customers buy their own designer type fixtures. Perhaps 25-30 years ago there might have some discount off retail for the contractor. Today very little discount available at a wholesalers. Some are dropping their fixture display showrooms.
I would still get the recessed can/trim and utility type light sales.

Even with a little mark up available it was not worth the hassle of dealing with selections, getting my prices and then HO changing their mind and starting all over again. Lately I had just sent them to the showroom and told the wholesaler to give them my price. They would be delivered to the job site, any damages or shortage the supply house would take care of the problem. HO was usually surprised that there little mark up for the contractor.
Some HO would order everything from the internet.....damage.....short parts.....wrong color.....pad fan fails in 6 months etc. Not my problem but just holds up job and sometimes final payment up.

30 years ago the only place to get quality residential plumbing faucets was thru the plumber. Today it seems they are hardly available at all
People want "bling" faucets that seem to lose their luster pretty fast.

Man,you hit it dead on..

BobC

Not stocking parts has been a problem in all industries for a while now.

I worked for the post office repairing the sorting machines for 8 years. In training we were told they expected a machine to be back up 14 minutes after we were called to the machine, the fact it took 20 minutes to get down to the stock room and back was not supposed to be a factor.

When I first started going down to the stockroom they had 90% of the parts I needed (computers, hard drives, belts, bulbs, sprockets, brackets, etc); if they had the part in stock I usually had the machine back up in about 40 minutes.

At the end of my 8 years they had 10% of the parts I needed; that meant the machine would be down anywhere from 4 hours (if part was in stock at local sorting facility) to 48 hours if it had to be shipped from Topeka. That machine would not be sorting mail till the part was replaced.

All was good though because the manager of that stock room was getting a nice bonus for not stocking parts. The bean counters were very proud of her, the customers were not quite as happy.

Bob

Ironman

"All was good though because the manager of that stock room was getting a nice bonus for not stocking parts. The bean counters were very proud of her, the customers were not quite as happy."

Let that sink in: the stock room manager getting paid more for NOT stocking parts.

This is the kind of insanity that's driving the business world.

Robert O'Brien

Dennis Bellanti said:

I work for a mega wholesaler.

These days all our lives move at a fast pace. You can have damned near anything you want delivered to your door in a day or two at a pretty cheap price. Just punch a few things into your phone and it appears. Maybe that has skewed our expectations. Plus things are more complicated these days.

It wasn’t that long ago that we used a stamp and envelope to place orders with the factory. We stocked a lot of inventory because it took a long time to get it. You couldn’t afford to run out. We also didn’t have 10 different kinds of pipe and fastener systems. There was copper and steel. There was sweat and thread.

Everyone seems to have a different preference today. Copper sweat, pro press, shark bite, Aquatherm, Mega press and PEX to name a few that we stock. Holy cow how many pex fastening systems are there?

There was also one kind of boiler back in the day. Cast iron. To service one, you would need the following on your truck. Thermocouple, Relief valve, B&G series 100, Honeywell zone valve, an auto air vent. Those parts would pretty much cure 90% of the problems on any hot water system.

Today there are 26 manufacturers of condensing boilers in the U.S. Don’t mistake that for 26 models. That’s 26 manufacturers and each producing several different models. To properly be prepared for a malfunction you need to stock a dozen parts for each model. (Yes, I believe wholesalers should carry the parts for the brands they sell.) So now we are stocking 40 boiler parts when we used to stock a few.

We have 22 stores in Colorado. We do that to make it convenient for our customers. There is a cost to rent the building and pay the staff. The inventory has to match the market size that store services. It is not feasible to carry every part and every fitting in each store. We could move all that inventory to one super store and have everything you might need or want but then you would have to plan ahead so we could deliver it to you. There’s not enough time for you to plan in today’s demanding pace. Your customer won’t wait.

The one thing that will not change is the human element. We will all have a place in the supply chain as long as we create value in ourselves. If the only value I have created is whether or not I have a product on my shelf, then I do not deserve your business. Might as well let the robot at the mega warehouse fill the order.

I can't argue with anything you say and it sounds like you do a good job for your customers. Conventional retailers did a good job too and look what Amazon did to them.

Gordy

Harvey Ramer said:

It may become beneficial for manufacturers to allow direct sales to contractors for goods that can ship ups. I would like that.

Best answer so far.

BobC

@Ironman As i said this sort of chicanery has been going on for a while.

Twelve years before I hid in the post office I was a manager in a small manufacturing company that made custom power supplies. The market changed dramatically when China began to put it's thumb on the scales and that company was sold to a group of movers and shakers that were going to remake us from the ground up.

They came in and put a 50 million dollar management team on top of was then a 5 million dollar company - MBA's out the wazzoo. I was in the midst of getting our inventory on a computer system along with the old stockroom manager. The new management team included a new plant manager that decided we needed new blood in the stockroom so the old manager with 25 years of experience was pushed aside to make room for a new gal that was later found to be the new plant managers mistress - but she had her MBA so what glorious revelations would flow from this new font of knowledge?

At a company management retreat (where people gaze into their navels) the new stockroom manager informed me that the new part numbering scheme we had come up with (borrowed in part from Raytheon) could not be used because it used alphanumeric strings, the part numbers had to be 100% numeric. I told her that would be awkward because the engineers and technicians would have no idea what these numbers meant while our scheme would be instantly recognizable.

She told me she could not have her keypunch operators hands leave the number pad for any reason. I told her I could see that her $6 an hour keypunch operators were obviously a lot more valuable than my $50 an hour engineers were. i told her she take her keypunch operators and stick them where the sun don't shine. You won't believe it but she took umbrage at my comment.

When civilization finally crumbles, and I fear that will be sooner rather than later, you can bet there will be an MBA at the root of it all. For those that don't know MBA is shorthand for Makes Better Assholes.

Bob

Aaron_in_Maine

I like Harvey's idea. I say a manufacturer certification and then they let you order straight from them and have it shipped to your shop.

Harvey Ramer

So we need to build a centralized web portal that connects all participating contractors and manufacturers. That way you can select all the product in one spot and the orders and payments immediately get sent to the correct manufacturer.

Gordy

But then you are still in the same boat in that a part may take longer to get than a trip to the supply house. Only its with everything you want.

Gordy

Bottom line some here are intiment with a certain boiler manufacturer,tubing,manifolds etc, So that would make things easier for an installer to stock their own parts to service their installed equipment.

As been pointed out the ball game has changed as to what one needed on hand to tackle most issues to get the heat on. Now with so many different brands, and types of equipment that is a bit more daunting. Seems it would be easier to stick with specific manufacturers, and get parts direct.

Robert O'Brien

Gordy said:

Bottom line some here are intiment with a certain boiler manufacturer,tubing,manifolds etc, So that would make things easier for an installer to stock their own parts to service their installed equipment.

As been pointed out the ball game has changed as to what one needed on hand to tackle most issues to get the heat on. Now with so many different brands, and types of equipment that is a bit more daunting. Seems it would be easier to stick with specific manufacturers, and get parts direct.

It would be best if the wholesalers who sold the boiler, stocked the parts. That seems to be a pipe dream (pun intended) Manufacturers obviously don't have the leverage to insist on this and with 35 plus condensing boilers out there, that's no surprise. The market isn't large enough to support that many players, just not enough seats for all the asses. The big guys seem to have fairly good networks but what about the bottom 15? Not enough shelf space for all of them. Do they quit? Or look outside the box?

Gordy

If I were in the bottom 15, I would be looking outside the box before I throw in the towel.

Is it unrealistic for a supplier to stock all those parts on the shelves for the huge influx of product on the market compared to say even a decade ago?

I look at auto parts stores the quantity of stores in even one town, and their ability to have parts on hand, and or get it the next day. I know it's a different market. Everyone has at least two cars, but everyone has a heating system of one type, or another too.

Seems there is internet auto parts in abundance, but most will surely go to autoxyz down the street for the more basic repairs of shocks, brakes etc.

Honestly suppliers need to dig deep if they want to be in the chain, listen to their customers. Start tracking what they need now that they can't get for a day, or two, and start stocking it.....