Dealers have always taken pride in being able to handle just about anything that comes their way, but natural disasters provide a whole different level of challenges. How do you operate if you lose power for weeks? What's the right way to treat employees who may be dealing with devastation on a personal level? When should you start? Here are tips on what to do both before and after the devastation occurs, from folks who know first-hand.
Being located just 40 miles north of Miami means Deerfield Builders Supply in Deerfield Beach, Fla., gets so many tropical storms and hurricanes that disaster preparation is a yearly task.
"We mirror our hurricane plan to [reports from] the National Hurricane Center," says Brad Wanzenberg, Deerfield's executive vice president. "We've got these little trigger mechanisms that kick us into certain gears in terms of managing our operation."
Depending on the size of the storm and where it is predicted to make landfall, Wanzenberg tries to close up 12 to 24 hours before the storm arrives, and he gauges his preparatory work accordingly.
Slow-selling commodities get tied up first, while more popular goods aren't tied up until the storm nears. Sheds that contain delicate materials or specialty items are locked.
Wanzenberg also tops off the fuel tanks of Deerfield's vehicles and storage tanks. Typically, he sets things up so Deerfield can operate for two weeks on its own power. Following Hurricane Wilma in October 2005, Deerfield relied on generators for several days.
"As long as you have fuel and [the generators are] running, you're in business," says Wanzenberg.
Deerfield also keeps on file agreements with municipalities, resorts, and hospitals in which those entities automatically buy certain goods if a disaster strikes. As part of his disaster prep, Wanzenberg calls each of those customers at the beginning of hurricane season to renew their commitments.
Wanzenberg also takes into account his workforce's needs. "We've got employees who live all over south Florida and they've got to manage their personal obligations," he says.
While Deerfield operates only one location, McCoy's Building Supply encompasses 83 stores in five Southwestern states. Its service area covers thousands of square miles, and the company runs some of its own distribution facilities.
McCoy's command center for handling disasters is tied to its IT department at corporate headquarters in San Marcos, Texas. There, chief information officer Dennis Strong can tap into a computer system that tracks, in real time, all inventory and transactions at every McCoy's store. As a result, when trouble hits, Strong knows immediately what inventory the affected store has and what it needs.
"I think that real-time information from all our stores is very critical to make [store managers'] job a little more tenable," Strong says.
Nancy Shroyer, replenishment manager at McCoy's, says the company also keeps a list of goods it expects a location will need because of a disaster. She says the company uses True Value and its distribution facilities to get the proper supplies to each store.
McCoy's computer system is supplemented at the IT department by a large screen that shows the weather patterns in Texas and surrounding states. "As soon as we know where a [storm] is going to strike, we're getting product there as quickly as possible," says Shroyer. Company officials say they even can reroute trucks so they'll be rolling into town just behind the storm.
SRS Acquisition Corp. is even more far-flung than McCoy's; it operates close to 60 locations under various names across 22 states. And because it's primarily a roofing supply dealer, SRS' business gets affected by hailstorms and severe weather as well as more serious events. Dan Tinker, SRS' vice president and COO, says each location has its own disaster preparedness plans for whatever natural events are common in that region.
Both dealers and manufacturers experienced heartbreaking devastation earlier this spring when tornadoes ripped through the Mid-Atlantic and South. Tuscaloosa, Ala., and Joplin, Mo., were two of the hardest-hit areas. Joplin was struck in May by an EF-5 category tornado, considered the most destructive type.
"There was no preparation," says Brian Lewis, manager of the Joplin, Mo., location of Herrman Lumber. "It was just a freak storm that happened over the town." Herrman's location didn't suffer a direct hit, but it lost three storage sheds and had the roof of its showroom torn off.
While homeowners do need building materials right after a natural calamity occurs, dealers based in several disaster-struck areas say business actually is slow in the first days after a calamity, and it doesn't revive until roughly half a year after the event.
"When you're wiping houses down to the foundation, you're looking at demand coming six months to nine months later," says Tinker, whose company had opened a Southern Shingles store in Joplin shortly before the tornado struck. "Joplin, I understand, is in a moratorium where they're not allowed to build anything." Post-storm decisions to overhaul building codes can slow the rebuilding process even further, he says.
Townsend Building Supply, a four-location dealer based in Enterprise, Ala., was part of the rebuilding effort after a 2007 tornado devastated the city. Mike Townsend, vice president of operations, says that immediately after the storm, the dealer sold out of products such as tarps and gas cans, but that was about it. (Many of those products also were given away by charities and the federal government through the Federal Emergency Management Agency.) Lumber, drywall, and vinyl siding didn't start selling until construction restarted.
When demand did pick up again, Townsend says many of his clients were moving into areas that they formerly had not worked in, mainly builders who were getting into remodeling. The change didn't have a big impact on his overall business, but it did mean he had to adjust to new product categories and work with customers who were in unfamiliar territory.
The tornado made Townsend realize the vulnerability of the company's data and information technology. He is upgrading the company's data storage and putting it with an off-site company that has multiple servers throughout the country.
"In theory, I would think that if we received a direct hit from a tornado, we could be probably operational, with all our data, the next day or two days later," says Townsend. "It's just a matter of getting a couple of computers up and running."
For others, the most important realization after a major natural disaster is that it can be a frustrating environment to operate in–not so much with customers, but with suppliers. "The supply chain gets very, very stressed out during [natural disasters]," says Deerfield's Wanzenberg.
He works with customers regularly to make certain that he knows their needs going into hurricane season.
"It's kind of a mix of marketing and risk management," Wanzenberg says of that prep work. "It allows us to get in early into [customers'] hurricane plans so it tells us where we stand on supplies."