By Bridget McCrea
Rewind back to January 2014 and the business climate looked a lot differently than it does today. Not only were companies still shaking off the negative impacts of the national recession, but Mother Nature was being decidedly unkind to companies whose success is tied to outdoors-oriented projects. When winter subsided and spring climates kicked into gear, the outlook began to improve and with it came a backlog of work and projects that had been tabled during the colder months.
As electrical contractors’ workloads picked up, the pressure put on NAED members to deliver a steady stream of products and services to jobsites across the country grew exponentially. Those distributors, in turn, began ordering more from their own suppliers – not all of which were prepared for the onslaught. At Dickman Supply in Sidney, Oh., Vice President Doug Borchers says one of the distributor’s gear manufacturers pushed out its lead times to 2-4 weeks longer than usual. “Their plants were at capacity,” says Borchers. Cable tray manufacturers also found themselves behind the 8-ball, says Borchers, with most of them stretching their lead times out from the typical 2-4 weeks to new, 8-12 week timelines.
One product area that was hit particularly hard when business began to pick up in the spring of 2014 was LED lighting. “Some of the manufacturers in that sector got way behind,” recalls Borchers, “possibly due to the fact that some of that product is made offshore.” The problem not only impacted LED lighting manufacturers, he points out, but also lamp and fixture manufacturers. “All of their lead times really dragged out.”
Despite these glitches, Borchers says that manufacturers performed fairly well in light of the significant upswing in business that took place in 2014. “Overall it wasn’t too bad,” he says. And with wintery weather having already reared its head in November, now is a good time for manufacturers to begin shoring up their supply chains in anticipation of similar conditions for the 2014-15 winter season.
Borchers says a good first step in that direction would be improved communication from LED lighting manufacturers. “They just don’t seem to communicate very well,” says Borchers, who often doesn’t find out about stock-outs and other issues until after entering an order into a supplier’s system. “At this point, most of the communication is reactive versus proactive. It would be nice to see improvement in that area.”
Reading the Thermostat
When he thinks about how his company’s suppliers performed in 2014, and where they could improve in the year ahead, Rock Kuchenmeister, general manager at K/E Electric Supply Co., in Mt. Clemens, Mich., says he only encountered one manufacturer that couldn’t keep up with the unexpected demand. “Everyone else seemed to realize that winter simply brought a delay in business and that things would turn around.”
The sole manufacturer that bucked that trend took a knee-jerk reaction to the business slowdown, says Kuchenmeister, and wound up paying the price for that strategy all year long. “They suffered for it,” he points out. “We’re now in the fourth quarter and they’re still having to adjust to the demand levels.”
To suppliers looking to improve performance in 2015 – and despite any slowdown in business that may come during the first quarter due to weather or other conditions – Kuchenmeister says “look beyond the numbers and properly evaluate the situation.” In other words, just because a few weeks go by with less-than-satisfactory sales numbers doesn’t mean another economic recession is around the next corner.
“The numbers were really on the thermostat last winter. When it’s below zero across most of the country – and even in places that don’t normally get to below zero – that’s your indicator,” says Kuchenmeister. “The work was still out there but it was just delayed. You’ve got to look beyond your P&L statement and realize that there’s something bigger at work here.”
McCrea is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at email@example.com or visit her website at www.expertghostwriter.net.Tagged with tED