How distributors should adjust to the new normal

Opening back up requires careful adjustments in order to operate in this new era.

Unfortunately, during this lockdown the vast majority of PHCP, PVF and HVAC distributors are suffering from reduced sales, and consequently are operating with fewer, part-time and remotely working personnel. However, hope is on the horizon, and many have been able to re-open. This doesn’t mean distributors should rush to bring everyone back to work at once, and begin purchasing like it was before the quarantine. Nor should everyone be brought back. Here are some guidelines for opening in a way that does not cause chaos in the office and ware house nor with inventory investment.

Quotations, sales order entry and customer service

Studies reveal that most home workers are more productive and accurate than on-site workers with the same responsibilities and tasks. The time not spent commuting allows telecommuters to adjust daily schedules so that they can do more in the same or even less time than if they had spent all day at the office. The money not spent on commuting results in happier employees, who are more dedicated to doing a great job. Obviously, employers benefit from increased productivity and accuracy, but they also save some money by reducing in-office costs, offset by the cost of supporting the telecommuters.

Many distributors have implemented telecommuting during the lock-down, for quotations, sales order entry and customer service. Once home-confinement ends, every one of these distributors should consider continuing telecommuting for at least some of those now doing it; those employees who are able to successfully focus on work at home, without too many personal distractions.

Doing this right means investing in secure, efficient, fast remote computer and telephone capabilities, including the ability for a telecommuter to access all authorized ERP system functions; and the ability for one telecommuter to instantaneously contact another employee (e.g., contact an on-site warehouse worker to check stock; e.g., contact another telecommuter with an extraordinary question about special purchasing).

Doing it right on a continuing basis means setting goals for telecommuters and monitoring their performance. Those distributors who have not used telecommuting should look into its costs and benefits for the distributorship.

In the warehouse

While allowing people back into the warehouse, consider bringing in a few people just to put away the items on any pallets or in boxes clogging the aisles, and otherwise straighten out shelves, pallet racks, etc.; perhaps on a weekend or at night − at premium pay if necessary.

If the ERP system contains a function for recommending where to store products, do not use it unless there is a way to ignore data points that represent activities that occurred during the period when sales were depressed; else the recommendations will be incorrect. If possible, right after the warehouse is straightened out conduct a physical inventory and adjust system data so accurate quantities are stored. Careful: Do not adjust quantities on hand without first looking everywhere for the ″missing″ quantities; and if the system shows too much, check inventory history to determine if a similar item was actually sold instead of the item with excess quantity on hand.

Returns

Some distributors have not accepted returns while some warehouse workers were sheltering in place, but hopefully have used their ERP systems to record data on customers who wanted to return items and the specific items. In getting ready for accepting returns, determine if the current returns area is sufficient to accommodate much more than usual; if not, define a larger but contiguous area. Determine if people know how to use the ERP system to record data as returns come in, and track the location where items are stored for evaluation (as to salability vs. returning to a manufacturer vs. scraping).

Purchasing

As sales hopefully begin increasing to prepandemic levels, do not use the system forecasted quantities to buy unless there is a way to ignore data points that represent sales that occurred during the periods when sales were depressed; or else the recommended quantities to buy will be too small. Some ERP systems allow the user to define the periods of data to use, which should be done. Regardless of which data is used in forecasting, a very knowledgeable purchasing person(s) must review the system recommendations, and if necessary, change the quantities in the data that would be transformed into a purchase order. The process of defining the periods of data to use must continue until there is close to six months of ″normal″ sales, and even then, set a parameter to look back no more than six months.

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