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The master distributor's role adds value to the supply chain by carrying products not traditionally on hand within a typical wholesale distributor's inventory. They are essential when a distributor needs to fulfill a customer's order in a timely and effective fashion.
With the change in climate happening due to the novel coronavirus covid-19 — the economy shifted on its axis, supply chains disrupted and companies switching to survival mode to ride the pandemic — what happens to the master distributor? We asked around to get the pulse on how these companies are working through this health and economic crisis.
"Utilizing the service of a master distributor allows wholesalers a distinct opportunity to expand their business and grow into new segments with their customers," says Ranson Roussel, president of The Distribution Point (TDP), a master distributor headquartered in Moody, Ala., with a focus on stocking all things kitchen and bath. "We want wholesalers to see us as an extension of their business and a trusted ally, allowing them to say ’yes’ to more business.”
Paul Neustadt, president of Neuco, agrees. His company is a master distributor of HVACR controls in North America, providing replacement parts to wholesale distributors throughout the United States and Canada. He adds that using a master distributor provides "the speed to fill a customer request with expanded breadth and depth of inventory to meet their demands.”
We were curious about how 2020 started and where it is headed for the industry’s master distributor firms. "We were bullish at the start of the year and had a strong first quarter,” Roussel notes. “Also, we opened our West Coast facility in Las Vegas. From our two shipping locations, we can reach the bulk of the U.S. population in two days or less."
Neustadt agrees: "As we looked to 2020, we predicted that an increase of 8 to 10 percent would be within our reach." But with the pandemic, and the price of gas and oil making significant shifts, "it dramatically impacted business in ways as most businesses can attest," he says.
With the changing marketplace comes new challenges.
"Keeping everyone safe and healthy is the overriding challenge that we all face today,” Neustadt states. “Being diligent and creative on how to accomplish that is our biggest challenge. The best way that we know of to ensure a strong future starts with our people. We are working hard to communicate where we are and where we think we are heading to keep everyone up to date. Being flexible and understanding with employees now will not be forgotten, in our opinion."
Roussel says: "Interactions with our customers, vendors and associates have all had a cataclysmic shift forward. We are taking the lessons learned and implementing them into our daily lives. We are a very agile company, so adapting to change while remaining focused on our mission and vision is part of our DNA."
Changes to the way everyone is doing business has required adaptation, from social distancing to customer ordering and fulfillment. We were curious as to how master distributors have witnessed their customers changing and adapting.
"A big part of most of our customers’ business models are countertrade sales, which was impacted once the virus arrived, Neustadt explains. “Wholesalers have been creative with implementing new ways getting customers their orders. Curbside pickup is one way to ensure order fulfillment."
"It's been fascinating to hear the stories of how our wholesalers have adapted, and I'll be curious to see how many of those adaptations become part of the standard operations moving forward," Roussel says. “Internally, we had to assess our technology infrastructure and adapt to many of our new working conditions. Fortunately for us, we invested in the technology a few years ago that lets us seamlessly move our customer-facing associates’ home without missing a beat."
With new requirements in place for all businesses, broken links in the supply chain have occurred. Master distribution is set up to be the go-to source when a product is needed — so how does it overcome broken links?
"Forced plant closures throughout the world have created several issues that will take time to resolve,” Roussel explains. “On a broad scale, our manufacturer partners had finished goods in inventory adequate to support the existing business as the economy slowed. We'll likely see some issues in June as factories come back online, and the country starts to open up.”
He adds that TDP invests heavily in inventory and carries a “robust assortment for our customers. While we may have a constraint from a particular factory, we typically have an alternative solution."
As the country — and world — moves through various phases toward a post-COVID-19 reality, we were curious if each company would be able to uphold and excel at its vision and mission.
"Our vision is: To be the most valuable part of every supply chain we touch,” Rousel says. “The opportunity to do this is larger than ever, and we intend to come through for our customers at every turn. Our mission is to "make every TDP experience a delight," and we want to be a reliable and delightful resource for our customers as they navigate the new norms and find new opportunities to grow. We are confident that our wholesale customers will come out stronger on the other side of this global disruption, and we want to be a part of that success."
At the heart of Neuco are two core values, "empathy for customers and thoroughness," and the company is steadfast in its assurance of continuing to uphold and exceed those values.
"We are an essential link in the supply chain for our customers,” Neustadt notes. “We pushed the boundaries of what we thought impossible two months ago — and continue to do so. To ensure our sales, customer support and purchasing teams would be able to handle all our customer needs, we shifted 95 percent of these departments to working remotely.”
He commends the IT department with finding a way to make it work and doing an excellent job in the transition phase. “We never thought this was possible,” Neustadt says. “With being able to pivot and shift, we have been able to continually assist our customers — who have told us we have not skipped a beat. This was wonderful to hear! This is how we will continue to uphold our values — by pushing the envelope to get the job done.”
While we will continue to navigate this new landscape for some time, what remains a consistent driver in master distribution is the upholding of core values and supporting its customers each step of the way. When challenges happen, solutions will as well.