Notes from the Distribution Nation
With building supplies and hardware dealers designated as essential retail during the early stages of the COVID-19 pandemic, maintaining a steady supply chain became an integral component to keeping businesses running.
The essential designation allowed segments of the economy to surge, including residential construction and home improvement, as other industries suffered during lockdown conditions. Surviving and thriving during the pandemic was not without transformation and flexibility from distributors, however. During the past year, distributors turned to technology, safety, and increased manpower to keep the supply chain moving.
According to Weyerhaeuser, 2020 forced the forest products and building products distributor to change its routines while inspiring new innovations. That includes a greater embrace of technology so team members and customers could stay connected and keep moving business forward. “2020 really showed us and our whole industry that you can still be successful during great uncertainty,” says Amy Warren, director of business and sales development at Weyerhaeuser Distribution.
As COVID-19 hit, Weyerhaeuser moved its teams to work-from-home status in under five days. Because of the IT infrastructure the company had already invested in, the transition felt mostly seamless for customers.
“We continually listen to our customers and connect with our supply partners, then evaluate what we can do to best support their unique needs,” Warren said. “Working in collaboration with our supply chain logistics team, we were able to secure transportation capacity and quickly adjust plans given the market dynamics. Our builder and dealer customers rely on us to be the experts and support their specialty building product needs, so we are always open to doing whatever we can to strengthening our partnerships and service offerings when the right opportunity is presented”
At the same time, maintaining safety throughout the supply chain was pivotal in 2020. “Our number one priority was to ensure we kept our employees, customers, and suppliers safe,” says Donny DeMarie, president and CEO of Cameron Ashley Building Products. “We were successful in limiting business interruption while not compromising on safety.”
Cameron Ashley also embraced technology, enabling its employees to work from home and complete projects remotely. The Greer, S.C.- based building products distributor, with more than 40 distribution locations in 20 states, utilized Zoom and Microsoft Teams to engage employees, customers, and suppliers. The company’s transportation management system also saw heavy work while routing truckings and powering Cameron Ashley’s same-day/next-day service model, DeMarie said.
The past year saw Cameron Ashley launch a best-in-class B2B e-commerce platform as well. “Our team worked with our customers to make sure our platform included what they value as well as being extremely simple to use,” DeMarie explains. “It has the look and feel of a consumer site with full account management tools and visibility.”
At Emery Jensen, investments in technology were a critical complement to additional investments made in people. Technology allowed the distributor to help keep employees safe, increase their productivity while providing retailers with access to all levels of the Emery Jensen organization. This includes products, promotions, and programs that would enhance the profitability of retailers’ business. Emery Jensen made sure that it remained in front of its customers from a product and communication standpoint to ensure that the distributor was doing everything it could to help its customers’ businesses.
“This was critical considering the burden placed on our retailers and employees due to COVID-19, which created an unprecedented demand for product,” says Alison Dowell, president and general manager for Emery Jensen.
During the pandemic, Emery Jensen invested heavily in people, product, and process, according to Dowell. “We continued to hire new people, brought in more inventory than ever before and added efficiencies to processes in receiving and delivery to ensure the best possible on-time delivery and fill rates to our customers.”
A division of Ace Hardware Corp., Emery Jensen operates 17 distribution centers across the country while handling more than 90,000 regionally relevant and localized SKUs. The distributor serves the needs of hardware and paint stores, lumberyards, lawn and garden retailers, and grocery stores.
Near-term goals for Emery Jensen include more investments in people, products, more accountability with vendors, more communication with customers, and distribution center expansions to serve a growing customer base, Dowell says. “Our mission is to keep our customers in stock,” she adds.
Technology was also a critical part of Weyerhaeuser’s success in 2020. The Seattle-based company is always looking to develop or add new tools that could support its teams, Warren says. And in 2020, many of those tools involved helping its people stay connected to customers in a remote environment, and making sure it was able to maintain the same level of service without the normal level of direct contact.
“Anything we can do to help our customers be safer and more efficient helps us and very much aligns with our core values and key behaviors,” Warren says. “We originally thought that a COVID-related temporary pause on construction would mean our customers would have more time for remote product knowledge sessions and strategic sessions, but that never materialized. We have, however, easily shifted to virtual sessions to close new programs, solve field issues, and process warranty claims.”
Dealers and distributors alike have been stretched on many levels in the past year; and those challenges will not suddenly disappear in the new year. From record-high lumber and OSB prices, to unprecedented demand of wood products in every category, to shortages of lumber products, distributors and dealers faced hurdles through 2020.
“As inventories in the channel may remain tight, we anticipate dealers will continue to lean on Weyerhaeuser Distribution as their partner in success,” Warren says. Reflecting on the past year, DeMarie says Cameron Ashley embraced digital tools and learned to collaborate virtually.
“We learned the phone is our friend, and we can be effective working remotely,” he says. “We learned that some travel can be avoided, and demand can be created through virtual shows and training.”
Additionally, Cameron Ashley paid increased attention to customer feedback, and the company believes it is a more effective partner as a result. The distributor aligned its product demand more closely with manufacturers and partners creating efficiencies on both sides.
“We learned that a big corporate center might not be necessary, and that all corporate functions were effective working from home on a short-term basis,” says DeMarie, noting that Cameron Ashley opened six new locations in the past year.
Looking forward, DeMarie says Cameron Ashley sees multiple challenges in the new year. The CEO points to labor and transportation costs escalating while qualified applicants are difficult to find.
Although supply shortages could continue in 2021, DeMarie says that Cameron Ashley expects the first half of 2021 to be robust.
“We expect prices to continue to escalate with availability being as important as price,” he says. “We also expect a strong second half driven by low interest rates.”
The industry learned in 2020 that some of the biggest challenges can emerge from thin air. There are no certainties. But with the changes implemented across supply lines last year, it’s certain that many distributors are better prepared for 2021 than they were for 2020.
(This article originally appeared in the January 2021 edition of HBSDealer.)