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Construction Supply Logistics Leaders See Conditions Improving After 2 Fraught Years

Consultant Jim Inglis (standing), moderated a panel of supply chain leaders Feb. 1 during World Vision's Crystal Vision Awards breakfast. Participating were (from left): Jeff Kinnaird, EVP Merchandising, The Home Depot; Shawn Oldenhoff, President, Kitchen & Bath, Kohler; Joe Barnes, EVP for Sourcing and Supply Chain, Builders FirstSource, Zach Elkin, President, Beko Home Appliance; and Jeff Carter, EVP for Purchasing, Orgill.

The supply chain will have far fewer kinks this year than it suffered the previous two, but challenges remain, particularly in finding talent, a panel of supply chain experts said at a Feb. 1 panel during the International Builders Show.

"We think we can get back to 95%-96% fill rates by year end," up from 75% at the worst point in 2021 and 85% by the end of 2022, Jeff Curler, the EVP for Purchasing at Orgill, said during the panel, part of World Vision's Crystal Vision Award Breakfast. Fill rates for the company's private-label brands already are near 97%, he said, but paint and plumbing products--especially products made from resins--remain trouble areas.

Zach Elkin, President of Beko Home Appliances USA, said his company had to quadruple its parts inventory to make certain it had readily available replacement and repair parts for its machines. The company also tripled its warehouse space in Chicago and added distribution centers in Florida and Texas. Ultimately, the company aims to have a manufacturing facility in the United States so that it's less dependent on ports and long supply chains, he said.

Joe Barnes, EVP for Sourcing and Supply at Builders FirstSource, said he is focusing on helping customers reduce overall sourcing costs. For instance, BFS shares information with suppliers and customers to help all parties recalibrate to the right demand levels.

Kohler's 160-year history helped Shawn Oldenhoff, President of the Kitchen and Bath division, draw upon lessons in resiliency, SKU rationalization, product choices, and continued investment. "You need to continue to build vitality in your portfolio," he said. But he also admitted life hasn't been easy, remarking: "In the past three years, I've gone through a 30-year career."

Jeff Kinnaird, The Home Depot's EVP of Merchandising, voiced similar sentiments. "We're thrilled that we're not leasing or chartering vessels any more," he quipped, referring to the extreme measures THD used to bring products to America. The Home Depot long engaged in Just in Time shipping practices, but during COVID had to move to a Just in Case scenario that filled its warehouses. Now the trend is swinging back, he said.

All agreed that finding good employees is hard but necessary work. Using remote workers has become "a way of life," Kinnaird said. Barnes said he devotes half of his time working with current staff or finding new ones, and he noted that BFS has adjusted its policies and pay to keep up with the times.

Jim Inglis a consultant to Do it Yourself stores worldwide, served as moderator.

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