Communication is King
Communication is King
The lubricants business has, and a number of extraordinary challenges. Supply chain interruptions, cost and price increases, labor shortages, and shortages and disruptions in the transportation sector.
Many distributors, across nearly all brands, major suppliers and some independent lubricant manufacturers are falling short of keeping them informed about supply issues.
Supply of certain finished lubricants and greases has been extraordinarily tight for well over a year. Beyond deep allocations, the shortages have been so profound that some products are simply not available. Distributors can’t get the product and retailers are “out of stock.” The scarcity of products has been most pronounced with 15W-40 and 5W-40 HDEO, certain grades of full synthetic PCMO, some hydraulic fluids, way oil, synthetic gear oil, and grease.
Reasons for the shortages are tight supply of certain base oil and even tighter supply of lubricant additives. And also the supply of grease. Specific to these concerns is poor communications about product availability and the status of orders.
Finding a supplier is out of stock at the time and order is placed, or an order is cancelled by the supplier after the order has been placed. Some distributors site instances where an order was delayed or cancelled. Further, several distributors site examples where they called the trucking company to check the status of a delivery only to find, their order had been cancelled by the lubricant manufacturer.
Distributors are having to go back to customers with bad news and try to resell them on another product, distributors say some of their suppliers offer little to no clue as to when backordered product will be available. Suppliers say the supply chain should be worked out in 3 to 6 weeks. For grease, these estimates are already off by several months, and counting.
Distributors are asking for straight and honest answers from their suppliers concerning product availability, lead times, and the status of orders. Ideally, suppliers should be proactive in providing information in advance, and offer guidance on how to move forward when supply line interruptions are anticipated.
Trying to manage their business and customer expectations when left with no information, or offered inaccurate information can be costly to both the distributor and its suppliers. The most visible cost is loss of market share as customers switch to other lubricant brands in an effort to ensure they have what’s needed to keep their businesses running.
While good communications are fundamental to the success of any sales organization, it has apparently been quarantined by some since the supply chain was rocked by Covid-19 and other issues in the past two years. In the words of one large distributor, at times, it almost seems as if the majors are hiding when you In fairness to the majors, it’s possible the majors are experiencing the same challenges in getting information from their suppliers (i.e., base oil, additive, packaging, transporters).
But whatever the reason, communications, or lack of, has become one of the biggest challenges distributors are dealing with at this time. And it’s affecting sales and market shares because when customers fail to get answers from their suppliers at any point in the supply chain, you can be sure they will look for, and find other suppliers who can give them answers and direction they can count on to run their business.