Sector expert Sheila Mullan shares actionable tips to ensure business continuity
With one of two national wholesalers exiting the traditional office products dealer channel; this usually staid sector is undergoing an upheaval. The shakeup caused by Essendant pulling out of the channel; coupled with the sale of Office Depot; will have an outsize effect on the office product supply chain — and the businesses they serve. We sat down with office products expert and ERA Senior Consulting Partner Sheila Mullan to find out what steps businesses should take now to ensure they are equipped to continue operations with minimal disruption.
ERA: Why is this such a big deal in the office product sector?
SM: "Essendant sells more than $5 billion of office products; janitorial supplies; and breakroom supplies in the United States. Thousands of small and mid-side suppliers who depended on Essendant for fulfillment need to shift to other sources — quickly. On top of that; Office Depot was sold to a private equity firm; and that brings additional uncertainty to the sector."
ERA: What immediate effect will this have on businesses?
SM: "Some products and delivery schedules could be disrupted in the short term. Plus; with fewer wholesalers; supply will be more concentrated; which could affect pricing and availability."
ERA: What’s the first thing businesses should do to deal with these changes?
SM: "Pick up the phone! They need to call their suppliers sooner rather than later to ask about their sourcing strategies — specifically; how suppliers are replacing Essendant capacity and what backup options they have."
ERA: Are there things businesses can do on their own to ensure business continuity?
SM: "I suggest that once they assess their situation; they consider options with other suppliers that are equipped to meet their ongoing needs. They might also consider vendors that focus solely on specialty sub-categories to meet their critical needs. When evaluating suppliers; make sure to look at resilience — not just price — and prioritise those with robust logistics; tech integration and multiple supply channels. Some smaller; independent suppliers may be well suited to help now and into the future; while others may no longer be viable. There’s no magic wand; but they shouldn’t hesitate to ask for help in finding new sources. ERA has long-established relationships and connections with the office products supplier base; and we can help. Businesses should also try to lock in service commitments and ensure delivery times; product availability; and pricing are clarified in writing. It’s also a good idea to plan for short-term bumps; including product substitutions and potential delivery delays while the market resets."
The supply chain is consolidating; but businesses that are proactive can stay ahead of disruption.
