Feature the changes in the business environment due to global economic activity , it has surfaced that some new risks exist as manufacturers want to engage directly with end users . This is not a global trend and in fact is only a local scenario that wholesalers are collectively opposed to .
“ This is indeed occurring with certain suppliers . As wholesalers , we believe everybody in the whole supply chain from the OEM , to distributor , to contract , to end user has a role to play . As a manufacturer you have to be good at manufacture , as a contractor you have to be good at your role , as a wholesaler we have to be experts in our field including stock holding , sourcing , marketing , and logistics ,” says Taylor .
All role players have particular knowledge and areas that they are good at and should stick to . Unfortunately , situations come about of not ‘ staying in your lane ’ and this is very risky because you cannot be good at everything . Wholesalers cannot manufacture nor be a contractor that requires particular skill . Manufacturers don ’ t have the service to assist clients on breakdowns or where multiple products are installed in a plant or equipment set .
“ We monitor our normal stock holding , using various forecasting tools available .”
These types of risks can certainly be managed by wholesalers and again where strong relationships are maintained with both the supplier and client . Cutting role players out of the value chain are not considered long term solutions however , and generally don ’ t tend to sit well with the industry as a whole and further based on historical occurrence is an area of continual failure .
“ At the moment , globally , there is also a huge shortage of electronic components which is having a major impact on not only our industry , but industries such as the automotive industry and home appliances - basically anything that is made with electronic chip sets . This is not the first time this has happened , although today also sees many more products that contain electronic components . Availability of raw materials is thus also a major risk for all supply chains that rely on production or manufacturing and goes further to other raw materials such as steel shortages that we have seen recently , all exacerbated by the pandemic where many production facilities had to close and have not stopped playing catch-up ,” adds Taylor .
Counterfeit products are also on the rise and a risk for all businesses not only the suppliers but the contractors and clients as well .
“ Changes in the supply chain dynamics , including counterfeit products , has actually been happening for years , possibly decades . The current environment and the state of the global economy has also pushed several companies into a state of just covering expenses at any cost , and for several reasons too . This in itself holds much risk , but the reality is that the world is working though difficult and unprecedented times and therefore we should be wary of being over-opinionated as to other company ’ s strategies , however unethical business practices have to be avoided ,” Singh states .
CHANGES FOR THE FUTURE In terms of what we can expect to see in the future on the wholesale side is a big swing towards the incorporation of e-commerce solutions .
“ E-commerce is something that is on the rise globally and will definitely be something this sector adopts too . Today every supplier essentially has to up their game in terms of what convenience you are offering the customer . If you take the likes of an Amazon and see what they have implemented in terms of solutions to their clients as a member of the wholesaling community , you have to realise adding value to the customer ,” says Taylor .
Upping the game in terms of product knowledge and client service is also high up on the agenda . There is always going to be a need to interact with someone with knowledge around a product because ALL the information is just not available or covering every single aspect in a brochure or product information online is usually just too extensive . This also is a major factor in being able to advise clients what products partner well together , clarifying elements that may not make sense and the ability to troubleshoot which , when combining products in a system , can ’ t possibly all be represented .
This particular value will always come from people and therefore partnering with the correct wholesalers offers this benefit . Products can really be purchased anywhere , while product expertise and knowledge is another specialist offering of the wholesaler .
“ As financers / financial service providers to the industry for companies that naturally meet qualifying criteria , and with the legal and financial framework changes that have been implemented in the last decade , we will also continue to see the role of businesses such as wholesalers supporting clients with not only access to credit , but administrative and legal documentation and advisory that can be applied in their own businesses . We already have to comply with the terms of the various laws and acts in SA . This is also an opportunity to educate the industry but also to ensure they are protected legally and financially so that we are protected and don ’ t have to sit with a lot of bad debts on our books . That being said , offering and managing credit is a skill in itself ,” Taylor concludes . RACA
www . hvacronline . co . za RACA Journal I August 2021 29