Week One Recap: Great Response and Meaningful Results
By Frank Hurtte
River Heights Consulting

All of us are fierce competitors. Some take a close-to-the-vest strategy with business levels; others routinely skip over surveys; but when a crisis strikes, AHTD members band together. This survey demonstrates such a commitment. In a tight time frame of a couple of business days, more than 150 AHTD members responded. This included members based in 29 states, Canada, and Europe.  

What’s Happening on the Sales Front
When we asked about the business levels, at least 45 percent of the group reported business was holding through what most considered the second week of the shutdown. Here are the levels reported:
According to personal interviews conducted with several distributors, business levels were sporadic but mostly positive across the country prior to the onset of the COVID-19 outbreak. One AHTD member said, “We had a record first quarter, but incoming orders this week tracked about 80 percent of our average.”  Another reported that orders are flowing at a steady rate with most established customers, but orders from expansion territories are dropping down significantly.

Rick Howe, president of New Jersey-based The Knotts Company, reported his company has experienced an uptick in business and a growing backlog based on additional orders from the medical device industry.

Rick Slaugh, president of greater Philadelphia-based Shingle & Gibb Automation, relates changes to CRM sales activity tracking. He commented, “Until the Coronavirus hit, we asked our salespeople to track meaningful customer visits; all were face to face with the customer. We shifted this to track phone calls. Now we measure numbers of sales-related phone calls to customers. We set a goal of 10 phone calls per day which does not include messages on voicemail.”

 Survey Question: Under What Governmental Guidelines is the Group Operating?
Most of our respondents operate under governmental “shelter in place” orders. Distributors have been deemed essential businesses. The guidelines for essential business are defined her: https://www.cisa.gov/publication/guidance-essential-critical-infrastructure-workforce 

Several distributors have received letters from customers which further explain the rules. Steve Deas of AHTD member E&M of Healdsburg, California, relates several customers have sent letters to his organization which allow service and support work and serve as “credentials” should a worker be stopped in route to the company.  

A recent conversation with the procurement operations manager at an Arconics facility indicates a similar approach with their suppliers. They sent a letter to all their suppliers and contractors informing them of the need to continue operations, as Arconics materials are key components in medical devices, like respirators.

Even the areas with the tightest shutdowns continue to see manufacturing activity. According to Rick Howe of The Knotts Company, “It appears nobody is completely shut down. Many of our customers have changed the way they work but continue to keep workers in place.”   On this same topic, Shingle & Gibb Automation has established an internal system of measuring customer activity. During each phone call, the team member asks the customer about current operational capacity. The current results show approximately 85 percent are still operational.

Survey Question: Have You Seen any Product Shortages?
While the number of members reporting product shortages was low, the list is worthy of discussion. There were many mentions of products produced in Europe followed by India and Asia. A couple of manufacturers outlined potential shortages of sub-assemblies.

During an interview, one distributor member commented, “We have had a couple of orders for components made in Italy. We were concerned on potential shipping problems because of all the news. However, our supplier was able to ship what we needed and commented the slow-down in Europe has given them extra inventory for us.”

Worthwhile Advice From Our Interviews 
We are all struggling to keep our warehouses and value-add services groups going. In some states, if one person tests positive for the virus, all those working close by are at risk. If that person works closely with everyone on the team, you could be out of business.

Why not pair workers in groups of two? If one becomes ill, you’re not shut down. This applies in the warehouse, shipping and receiving departments, and panel shops.  

Moving Forward With the Week Two Survey   
Short, sweet, and to the point--less than four minutes to complete. For the sake of better tracking, we have added a question covering your type of business:
• Distributor/Automation Solution Provider
• Supply-Partner/Manufacturer
• Strategic Business Partner

Once more, we will ask a question tied to incoming orders but have added a question on accounts receivables and cash-flow. We have also asked a question tied to partnering between suppliers and their distribution channel.

A Personal Note from Frank Hurtte
I have been involved in AHTD since 1992. During this time, the organization witnessed the explosion of the internet, the bursting of the dot-com bubble, an attack on the World Trade Center, the Great Recession of 2008-09, and dozens of local disasters. We survived each iteration of bad luck and trouble through the power of networking; I know, I was there. This crisis is no different.  

I am totally blown away by the participation in this survey effort. You can make it better by sharing the results with your team, your suppliers, and your friends in our industry. When they ask where you got the data simply say, “Through the Power of AHTD.”  
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