Wholesale distributors provide HVAC fabricators and contractors with steel metal consumables, including steel, sheet and coil, and HVAC products like fittings, venting, and roof curbs. By offering a centralized source for these products, distributors streamline the supply chain process for both manufacturers and contractors. In this post, we'll dive into the functions and benefits of HVAC sheet metal distributors and why they make up a critical step of the industry supply chain.
The Importance of HVAC Distributors in the Sheet Metal Industry
Distributors share a close relationship with both the manufacturer level, as well as the contractor level in the HVAC duct forming and sheet metal supply chain. For manufacturers, the benefit of working with a distributor is streamlining the sales process. A manufacturer of duct, fittings, or other supplies will only have to deal with a few distributors in a given market area as opposed to potentially hundreds of contractors if they were selling direct.
HVAC contractors benefit from efficiency in operations when purchasing from a distributor as well. As a contractor, you can place a purchase order for multiple different manufacturers' product from one location as opposed to working with multiple vendors, simplifying the procurement process and reducing administrative tasks. Contractors can getting one delivery and one invoice instead of cutting a dozen purchase orders and then getting that same number of deliveries and invoices. In addition to supplying materials, distributors can also offer valuable services to contractors, including storage, packaging, and delivery services.
Distributors also help to maintain a balanced inventory level, acting as a buffer in the supply chain to mitigate any disruptions in production or fluctuations in demand. If manufacturers have any blips in production, distributors can often offset those changes or oversights. If the contractors have a big pull-through of any products and the manufacturers can't keep up, distributors can act as a buffer when it comes to quantity.
The quantity of product available from a distributor, however, will depend on usage and market size. For each particular product, the systems are going to look at the total sales from all customers in that market area over a period of time. A distributor will use these numbers to determine what stocking levels are going to be, taking into account lead time from the manufacturer, seasonality of the business, and price fluctuation. If a contractor knows they're going to have a massive swing on a particular item, it's important to communicate with distributors early or they may not have the product.
Overall, the presence of HVAC distributors in the sheet metal industry ensures a smooth and efficient flow of materials from manufacturers to contractors, ultimately contributing to the successful completion of HVAC projects. Their strategic stocking levels and comprehensive services make them an indispensable part of the HVAC supply chain.