Supply chain reaction

With customers demanding more and more high-quality cleaning products than ever before, cleaning industry suppliers are having to navigate global supply chain disruptions to deliver the goods, writes Cameron Cooper. 

When looking after his clients’ needs, Specialist Cleaning Supplies manager David Berry makes a point of ensuring that he always goes to them with solutions rather than problems.

The approach is paying off for the business at a time when pandemic-related procurement challenges are often making it difficult to deliver some popular cleaning products.

“The ability to think outside the square in procurement is really important,” Berry says. “It’s not good enough for us to say we don’t have a product. We must have already thought of an alternative that will do the same job and have that available. It’s our job to find what clients need.”

Based in Palmerston North, Specialist Cleaning Supplies provides everything from commercial vacuum cleaners, scrubber dryers and sweepers to cleaning equipment, chemicals, paper products and even tea and coffee supplies.

Berry says the business has been prepared to hold much higher levels of stock than normal to act as a buffer against import delays.

“You’ve just got to have stock and in some respects, irrespective of what you have to pay to get that stock, you still have to have product to supply.”

Specialist Cleaning Supplies has also been quick to respond to market trends. A case in point is the decision last year to purchase considerable stocks of gloves at a time when they were in demand because of the COVID-19 outbreak.

“We bought all the gloves we could, so we had stock and it meant that our prices weren’t as volatile as some others.”

Testing times

Supply chains and procurement processes have been seriously tested during the pandemic, with border closures and lockdowns leading to more red tape and, in some instances, complex customs clearances.

Some freight-forwarding organisations have also reported five-fold hikes in freight prices as a result of container shortages and bottlenecks out of nations such as China and the United States. However, smart players in the cleaning industry have prided themselves on being able to deliver.

Craig Newton, national manager of RapidClean New Zealand, says strong local networks and knowledge have allowed the business’s members to keep reliably supplying innovative and alternative product choices as required during COVID-19.

RapidClean, which has 14 owner-operated outlets in New Zealand, sells a range of cleaning equipment and accessories, chemicals, hospitality supplies, paper products and safety gear.

Newton says there has been a conscious decision to supply more New Zealand-made cleaning products in the past 18 months so that product stocks can be quickly replenished.

“Nationally, RapidClean members have the ability to act with speed and make decisions on the spot given that they are in their own businesses, which are heavily stocked, whereas some of the larger businesses are a little slower to the coalface.”

The pandemic has highlighted the fact that southern-hemisphere nations such as New Zealand and Australia can be exposed to significant distribution delays as suppliers focus firstly on larger northern hemisphere markets.

“We’re in a long delivery chain with some international brands, so it has been a fantastic time to engage a lot more with local manufacturing,” Newton says.

As a renowned New Zealand tissue converting company which manufactures and distributes leading brands of high-quality toilet and tissue paper, Cottonsoft has been caught in the maelstrom of supply chain challenges.

Its leadership team has watched on as panic buying has unfolded across the supermarket retail sector, with consumers stockpiling toilet paper, hand sanitiser and canned food.

Similarly, the business’s B2B channel has experienced unprecedented demand for all of its commercial toilet paper, soap, sanitiser and antibacterial cloth wipes.

“Sales hits record levels never seen previously, which in turn directly impacted the supply chain with stock inventory levels reduced significantly,” says Murray Gale, National Sales Manager – AFH for Cottonsoft.

However, he says careful planning meant that Cottonsoft was not caught off guard.

Our team had been watching COVID developing overseas in the months prior to any cases reaching NZ.  We had watched our affiliates overseas begin to be impacted by COVID changes, and had taken early precautions with our team and in our sites, in addition to restricting travel from early February. Of particular note was an armed robbery in Hong Kong for toilet tissue, so we were very aware of the implications for New Zealand.”

The business also transferred its packaging orders to only the products it expected to keep making, letting others slide, and brought more raw materials such as adhesive, packaging and coreboard on site from suppliers rather than having just-in-time deliveries.

“We got extra orders under way from our mills as the panic buying started, rather than waiting until things got bad,” Gale says.

Micro-managing and reviewing every order received into the business on a daily basis meant Cottonsoft was able to effectively control what was supplied to customers.

“Communication was critical as we worked through periods where we were faced with short-term out-of-stocks of a particular product,” Gale says.

“In most cases we were able to offer a ‘like for like’ alternative product as a substitution to void gaps in the market. Having the ability to source from multiple vertically integrated supply partners enabled us to rebuild inventory levels to give ongoing supply security to the market.”

Smart response

As a result of supply chain disruptions and the unavailability of some established brands because of COVID-19, cleaning companies have to communicate closely with customers and educate them on alternative solutions.

Newton says RapidClean’s clients have been receptive to such changes and have in many cases embraced the purchase of superior products.

“There was a degree of complacency in some cleaning organisations in the past. The products and manpower were not considered to be so important – they just wanted to do the job quickly and save clients some money.”

Now, cleaning companies, facility managers and private cleaning contractors are becoming more aware of maintaining the loyalty and trust of their customers through collaboration and a commitment to high standards.

“All parties are pulling in the same direction,” Newton says.

He is encouraged, too, that some global partners are now establishing a manufacturing presence in Australasia to shore up supply lines.

“That’s good to see. It’s a smart move to have the ability to manufacture closer to the source of use.”

Gale says because New Zealand is remote from the global supply chain, Cottonsoft has always held a good buffer against supply variations.

“And with local manufacturing, were able to flex our product manufacturing to meet customer needs almost immediately. Our supply chain remained very strong and our supply security practices enabled us to replenish from multiple sources.”

He notes that the current logistics situation triggered by the pandemic is unusual as all elements of supply are simultaneously under stress.

“Shipping issues are a common occurrence, but they are normally temporary and limited to one link in the chain – a holiday period, a port strike, or peak-season restrictions. Currently most if not all pieces of global supply are stressed at the same time.”

Cottonsoft expects the disruptions to continue into next year.

Opportunities and challenges

Supply chain trials notwithstanding, Berry is confident Specialist Cleaning Supplies will have a strong year in 2021 and next year.

“There’s a lot of opportunities out there,” he says. “And using our own connections in countries where we can import stock and take advantage of shortages in the market will give us an edge.”

Apart from New Zealand suppliers, the business imports a lot of products from China and the United States, both of which are experiencing distribution delays. In one instance, a container of products from the US took about seven months to arrive in New Zealand from the time of the order.

“It’s very difficult, but everybody’s in the same boat,” Berry says.

“You just have to plan for it and order stock more frequently and manage your stock holding.”

Despite the rising cost of importing some products, Berry says Specialist Cleaning Supplies has tried to absorb price increases where it can.

“We want to remain competitive. There’s always that balance between losing a sale because you’re so expensive and keeping a long-term client. We’d rather keep the client. Our relationships are for the long-term.”

At RapidClean, Newton says turnover has risen just under 25 per cent in the past year, despite its product segments such as paper products and chemicals being at the mercy of city lockdowns that have affected sales.

He is pleased that there have been fewer restrictions of product supplies this year and expects RapidClean’s New Zealand presence to keep growing on the back of demand for superior products, innovation and customer education.

“Cleaning companies and contractors are looking for higher-performing products and alternatives to cheaper run-of-the-mill products,” Newton says.

“We are well placed to support, educate and partner with our customers to retain their loyalty.”

This article first appeared in the August issue of INCLEAN NZ magazine. 

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