It was Service Dealer's pleasure to host another group video conference call this week. This time we were joined once again by a panel of senior representatives of manufactures, business service suppliers and trade associations.
We'd like to extend our thanks to all who took part for their openness and for sharing the experiences that their companies have been working through. As these calls have continued to prove all year, it's invaluable for a journal such as ours to keep in touch with those at the sharp end during this quite remarkable period. It keeps us informed, which in turn allows us to pass on information to you, our dealer readers.
Availability of stock
It also of course, affords us the opportunity to relate back to the suppliers the concerns and issues which we are hearing from our interactions with dealers.
You may remember last week that on our call with our dealer panel, we were told of the problems with stock availability currently. In fact from what we gather, many of you won't need reminding of what we wrote in here, you'll be experiencing it for first hand in your own showrooms.
We raised this to the suppliers on our call who acknowledged these are very real issues facing dealers currently. Clearly it's worse for some than others. It depends on where in the world the machinery and its component parts are sourced from - and indeed what type of machine we're talking - just how serious the situation is.
Ken Brewster md of Husqvarna UK for example, was up front in addressing that their company is experiencing delays in supply of some equipment right now.
Ken summed up three reasons why it's taking longer to get kit into the hands of dealers. He said 1) there's a shortage of components. 2) Manufacturing capacity in factories worldwide is down due to distancing procedures in place. And 3) there is an incredibly large demand globally for particular products - a demand which has far exceeded forecasting.
In particular this is hitting hand-hand products quite severely. Ken told us that back orders in the UK at the moment are multiple times higher than what they were at this time last year. He said how the situation is frustrating for them as a company, but how he knows it is even more so for dealers with customers waiting.
In general any one, or all three, of Ken's three point explanation for delays is likely to apply to many other companies who are experiencing similar. Added into this mix we were told, is the practical problem of logistics. Hayter / Toro's Craig Hoare mentioned that there's such a thing at the moment as a worldwide container shortage! There simply aren't the containers to put machines in to be loaded onto ships and planes (read more about that here and here). And in those ports and airports, staffing levels are down due to covid.
So it really is a perfect storm of circumstances which is leading to dealers' showrooms feeling barer than usual. It's a very far from ideal situation, but there are mitigating factors.
How long this will last for is unclear? Like everything at the moment, winter is undoubtedly going to be less than perfect.
Positives from 2020
Talking of less than perfect, the inevitable subject of Lockdown 2.0 was discussed. However, rather than wallow in the all-too-easy doom and gloom of it all, the conversation turned to what positive ways of working that had been enforced on all of us this year, would be continued post-covid?
We heard from several that the lockdowns this year had actually meant that the changed methods had improved the efficiencies of sales teams. Rather than gallivanting around the country or congregating for meetings, wasting whole days, the entire sales process has been tightened up. With virtual meetings work has been getting done - whilst allowing staff a decent work/life balance.
Also going forward digital tools such as enhanced websites, social media, video, all will continue be utilised as a larger part of the whole sales process. Clearly there is a need and a great desire for face-to-face contact - that will never disappear. But the unnecessary travel and time spent on the road will be cut right back. This time freed up should hopefully mean more time to communicate with dealers.
It's this adaptability of staff which has also proved a positive for many. The enthusiasm of teams to keep working in new and hitherto unusual ways has impressed during 2020. Also these companies are seeing significant savings in travel and expenses costs!
Looming changes
Also discussed were some societal changes heading our way which will impact on the sectors that Service Dealer covers - one a few years down the line, one imminently.
To address the issue which we're all going to be faced with in a matter of weeks, Brexit was touched upon. I think the good news for most dealers is that it's going to be more of an issue for your suppliers to address - because complex is the keyword here!
The advice from the trade associations on the call, was that dealers who did need have specific areas of Brexit legislation which they needed to address, it's probably wise to consult a specialist agent. There are government lists of such, but no indication of which ones may be better than others. BAGMA also said there are a couple of potential issues in the pipeline which could affect dealers which they will be keeping their eye on and would update where necessary.
It should be reassuring for dealers to hear though that their suppliers are keenly monitoring the legislation and how it will affect their procedures and ways of working. Some global companies have been attempting to mitigate any potential impacts by relying less on factories based in Europe and instead concentrating where they can on the UK, US and Asia.
Interestingly, unlike when Brexit was imminent before, we weren't hearing tales of companies stockpiling warehouses full of kit in anticipation.
The other forthcoming change which is a bit further off but will be upon us sooner than we realise, is the government's announcement of the banning of the sale of petrol-engined cars in the UK by 2030. It was interesting to hear our panel's take on whether this move would impact on the ag and groundscare sectors?
You can read today a battery-powered machinery maker like EGO's take on this. Also on the call were representatives from Makita who recently announced they will stop all petrol-engine product production in two years time and indeed Positec who haven't made a petrol product for nine years! So the move away from traditional power sources is clearly in the air in the groundscare sector.
Indeed electrification is very much on the agenda for domestic, commercial and agricultural machinery manufacturers. It seems that companies are putting battery-powered machinery out there and are hoping the market will make those decisions for them.
How quickly we'll see any potential complete phasing out of new petrol powered equipment in the OPE and ag sectors though is up for debate.
