For Many, Business is Booming
According to recent HARDI research, the association’s HVACR member distributors have experienced annual sales growth of 24.3% for the twelve-month period ending in July 2022. But on the other hand, HVAC contractors and distributors alike are struggling to hire new employees and pay those employees enough to retain them, forcing them to turn away jobs. Adding insult to injury, they can’t even get materials and supplies in a timely manner (or at all) to complete the jobs they have booked.
Challenges like these are enough to test the fortitude of most any business owner.
To make matters worse, human errors are all too common because many HVAC distributors still rely on paper-based processes or the team’s institutional knowledge. A hunch may not be the most effective way to make a business decision, and it can have a cascading effect in today’s economic environment. While it’s no secret that automating manual processes with a warehouse management system provides greater control over inventory and labor costs in the warehouse, the right warehouse management system (WMS) will also help HVAC distributors address several common pain points in the warehouse.
Here are three scenarios HVAC contractors and distributors routinely face and ways a WMS can help avoid them.
It’s Not Ready When You Said It Would Be
I was recently talking with an HVAC distributor that was still using 2-way radios to notify team members of “hot” will call orders that needed to be picked. This would require their team to watch a printer all day long for orders to come through and then call them out as they arrive. This was an antiquated process in desperate need of a solution. Unfortunately, many HVAC contractors have been on the receiving end of this manual process at one time or another.
The scenario plays out like this. Let’s say a contractor called ahead or submitted an order online, only to show up and find that the order wasn’t ready for pickup at the time they were told. Or maybe that contractor stopped by the distributor’s front counter to grab a few items and proceeded to ask if some larger items were available. The computer shows the items in stock, but the worker can’t find them. It’s anyone’s guess whether it was sold earlier in the day or sitting on top of the pile where returns go to die. That contractor has now wasted a good bit of time and still doesn’t have the supplies needed for today’s job schedule.
Stressful scenarios like these can be avoided with the help of a WMS that gives priority to will call and front counter orders. To minimize wait times for contractors at the front counter or will call area, the WMS can assign a picker or a group of pickers to always handle incoming will call or front counter orders as a top priority. Now picture a customer glancing at a monitor near the front counter or will call area where they can see the progress of their order and know exactly when it’s ready to be loaded onto their truck. The integration and coordination of front counter / will call and warehouse order fulfillment is important to the mission of getting customers in and out as smoothly and efficiently as possible.
It Didn’t Arrive When You Said It Would
Here’s another situation that may sound familiar. Let’s say you’re a contractor at the jobsite anxiously awaiting a delivery. The truck arrives with your order but part of it is missing the items you need to complete the job. Now what? Send someone to the warehouse to pick it up? Wait until they can send another truck tomorrow – or next week – with the missing materials? There are no good option here and you, as the contractor, just lost confidence in the distributor.
This predicament isn’t unique and often happens when orders are picked, staged for delivery, and then loaded on a truck because the distributor was using printed sheets of paper to manage the order or relying on their workers’ instincts and “best practices” to handle these tasks. It’s a recipe for disaster and just one or two of these mistakes is enough for a contractor to reconsider their relationship with that distributor.
On the other hand, pickers using a WMS benefit from a system-driven process to stage orders to routes or stops throughout the day, plus the ability to combine the various parts of these orders into “master loads” that are then labeled. This makes the work of gathering loads by customer and jobsite a much more exact process for drivers and helps ensure all picks are accounted for and loaded onto the truck before the driver leaves the yard. Because order staging is directed and tracked by the WMS, staging picks for the wrong route or stop is nearly impossible. If a truck needs to leave by a certain time, then those orders become a top priority in the system until they are completed.
We Ran Out of Consignment Inventory and You Didn’t Notice
Most everyone is familiar with Amazon’s “Subscribe & Save” service where you can schedule a recurring order for the items you frequently consume so they show up at your door when they’re needed on a regular basis. Thanks to an increasing demand for just-in-time materials supply at a jobsite, this concept is drawing increased interest in other industries as well, HVAC included. Unfortunately, maintaining proper levels of this consigned inventory is becoming a pain in the neck for contractors and distributors alike.
Consigned inventory, or vendor managed inventory, at contractor sites is often managed via spreadsheets and printed paper, which is both cumbersome and time-consuming. Maintaining sufficient supply levels requires the HVAC distributor’s field service representatives to call or physically show up and count inventory levels to ensure that sufficient quantities are on hand.
Software that is designed to handle vendor managed inventory takes the guesswork out of monitoring supply levels and restores healthy balance to warehouse operations. When a contractor begins to run low on inventory, the WMS creates an automatic replenishment order. The HVAC distributor then receives the order electronically, which is then typically approved, picked, packed and shipped right back to the contractor. The system will trigger automatic advanced shipping notices the contractor can reference when the shipment arrives and is ready to be received into inventory.
The current business environment is challenging enough. Old practices can inadvertently make it even more cumbersome to keep your head above water, increasing the risk of letting down a customer waiting for supplies. Expectations have shifted in recent years. Any long-time customer feeling the pain of their order or materials that slipped through the cracks may walk and get what they need from a competitor next time. By automating manual processes, HVAC distributors can save face by ensuring contractors have what is needed when it’s needed.
If you’re an HVAC distributor or know of one who needs to get their ducts in a row, now is the time to seriously consider investing in a WMS.
This article first appeared in ACHR News on November 26, 2022. To access this article, click here.