In the January issue, part one of the annual ASA-Supply House Times distributor roundtable discussion covered supply chain disruption, the shift to virtual communication, PHCP-PVF company consolidation concerns and ASA’s continued efforts to help distributor members succeed.
The 11th annual discussion, which took place virtually for the first time, included:
- AJ Benton, branch manager for Fountain Valley, California-based Smardan Supply;
- Kyle Cline, vice president, operations at Oklahoma City, Oklahoma-based Locke Supply Co.;
- Mike Plasier, CEO of Sioux Center, Iowa-based Plumbing and Heating Wholesale;
- Jack Bell, president and CEO at Louisville, Kentucky-based Masters’ Supply; and
Josh Aberman, executive vice president at Miami, Florida-based Lehman Pipe and Supply.
Are you experiencing a shift with customer buying habits due to younger people entering the industry? If so, is it affecting how business is conducted?
The majority of distributors agreed that while they know the workforce and customer base are aging, they aren’t yet feeling a prominent shift related to business practices and customer habits.
“The aging workforce has been discussed for probably 10 years at ASA and buying group meetings, but we haven’t seen the drastic shift we anticipated,” Cline said. “I don’t think we will see a shift as quickly as we thought, but as the millennial generation and Gen Z take over, we definitely need to be prepared for how they do business.”
Distributors discussed e-commerce platforms quite a bit when speaking of that younger generation. “The vast majority of our customers are one-and-two-truck contractors, and they haven’t shifted their buying habits over to e-commerce yet; we still have customers who fax in orders” Cline explained. “But as the shift does begin to happen, distributors need to be offering solutions for all facets of their customer base.”
Aberman shared perspective specific to the PVF side of the industry. “While it’s inevitable we will see the shift to noncontact buying and the instant gratification the millennial generation is known for, the PVF side is a little different,” he said. “Most of these guys are still taking pictures of hand-written orders in the field and texting it to us. There aren’t necessarily manufacturer part or model numbers, so customers have to call or visit us to find what they need.”
While the panelists agree that e-commerce is vital for future success, there are certain market sectors that are more affected by new consumer buying habits than others. “Distributors heavily focused on fixtures definitely need to be upping their e-commerce game,” Aberman said. “But with PVF, selection and shipping play a huge role; it's tough to ship bundles of pipe on common carrier for crane deliveries.”
“A lot of what we do is application specific, and we seldom get an order that is without questions,” Aberman added. “We still have plenty of long-time customers who expect us to know what they need and help them find it.”
How can distributors help bridge the labor gap?
Bell mentioned several actions distributors should be taking to help replace the aging workforce. “This issue calls us to do more than ever before; use our social media outlets to speak on the opportunities within the industry, visit schools to recruit students and focus on word-of-mouth positive promotion of the industry as a whole.”
Plasier agreed, saying finding talent is one of his main concerns for the industry. “It’s not one of those things you think about doing during your day, but you have to set aside the time to focus on finding new talent,” he noted.
Plasier also mentioned he has seen success when collaborating with local plumbing contractors who are also looking for talent.
Aberman agreed word-of-mouth is one of the best ways to recruit talent. “Since we are a strong staple in our market, we’ve benefitted from acquisitions by picking up some talent from within the industry.”
Several of the panelists mentioned how the PHCP-PVF industry is not seen as glamorous, and that breaking any stigma around plumbing is vital to intriguing the next generation.
“It’s a shame because people do incredibly well in our industry,” Aberman said. “Some of the most successful people I know are tradespeople, and that’s the message we need to get out there.”
Cline agreed, “We as an industry need to do a better job of letting young people know how great this industry is, and that it’s not a ‘second-choice’ career.”
Benton brought up ASA’s new PROJECT TALENT recruitment program that will help ASA member companies solve the labor issue through the availability of robust marketing and social media platforms aimed at helping recruit the next generation of talent into the PHCP-PVF industry. “It’s great to see ASA being proactive and working to solve this issue,” he said. “As distributors, we need to be educating ourselves and others about the resources available within the industry that are making it easier to get jobs done.”
How do you balance serving your market with growing your market?
Plasier shared a specific growth strategy at Plumbing and Heating Wholesale, centered around its salespeople. “When we hire salespeople, we look to hire what we identify as ‘hunters,’” he said. “Our expectation is that these people are always looking for the next opportunity. It is important to remember though, that there are opportunities with the customers we already have, because all of them are buying some amount of product somewhere else. We tell salespeople to make sure they hunt at home as well as hunt for new prospects.”
Bell mentioned the importance of impression when moving into a new market. “We make sure that when we open a new location, moving into a new market, we have better services than the competition and can bring in all types of customers,” he explained.
Cline said Locke Supply’s growth strategy is slow and consistent. “Our growth strategy is wrapped around location,” he noted. “We have a lot of branches and will try to saturate one area. After the time it takes to get a branch up and running, we rely heavily on repeatable processes.”
Benton also discussed the importance of procedures. “For Smardan, it’s about being deliberate,” he said. “Delegating responsibilities is really important; sometimes if a few people are taking on too much, you aren’t able to grow as successfully as you would had you delegated out some tasks. This allows our team to continue serving our market while we grow.”
The distributor thriving in five years will succeed because of what?
Plasier stressed the importance of staying up to date with technology. “Successful distributors of the future will be embracing technology; both customer-facing and internally,” he said. “They are not going to be afraid to implement change, and they’re going to focus on becoming better business partners with customers.”
Bell said he believes suppliers need to focus on finding the needs of the customer. “I think successful suppliers will be finding ways to better serve customer needs through technology, ERPs and next-level services,” he said.
Cline mentioned the supply chain disruption that distributors have seen this year, and how focusing on inventory is key to success. “We are huge believers in having a large amount of inventory where and when our customers need it, which has been a huge benefit to us this year,” he said. “High inventory levels are going to continue to be important to serve customers as quickly as they need and want.”
Adaptability was a popular word when speaking to future success; no surprise after the year these panelists have just endured. “The willingness and ability to adapt quickly is key,” Benton said. “Over the past year, the companies that adapted well have had the most success, and I think we need to carry that mentality into the future.”
Benton continued: “Strengthening the relationships with employees is most important. Demand for plumbing supplies will always be there, so for us, maintaining a strong employee base is huge when thinking of the future success of our company.”