Kimball Midwest was ready for a great 2020. Pat McCurdy, the company’s CEO, says the family-owned maintenance and repair operations distributor was set up to double its sales every five years.
“And through about March 15th, we were really hitting on all cylinders,” McCurdy says of Kimball, which is in the maintenance, repair and operations business. “We were expecting 15 percent growth and a great year.”
Then COVID-19 hit the U.S. The company’s April sales dropped 18 percent. McCurdy, who’s been with the company since 1978, assembled his team to address what he says just might be the most challenging event he’s ever seen in his career.
Mounting a response
McCurdy and his leadership team decided they’d meet every two weeks to plan the organizational response to the pandemic. That soon became weekly. By mid-March, meetings were daily with what became known as the COVID-19 response team.
“We had some key leaders throughout the organization, and we developed the plans and the processes to be able to get through this, to set up all the information that we had to do as far as revised budgets, revised forecasts,” he says. “And all that seemed to pay off and resulted in really solid preparation.”
The nine-member COVID-19 response team included people from sales and operations. They stayed ready to respond and kept an eye on the safety recommendations coming from all levels of government to apply the guidelines to its workforce.
Kimball’s almost entirely outside sales team — about 1,000 representatives throughout the U.S. — connect customers with products channeled out of four distribution centers in Ohio, Texas, Nevada and Georgia. All but about 10 of those salespeople work out of their homes, and always have. Kimball provided its remote sales force with hand sanitizer, disinfectant and masks so they can go safely into customers’ facilities, restock the inventory in their bins and then wipe them down and clean them up on every visit.
For those who worked out of its Columbus headquarters, around mid-March, Kimball moved those 250 people to remote environments within a week.
In its distribution centers, where employees need to report in order to get products stocked and shipped, Kimball split shifts, sanitized and disinfected after each shift, and required employees to wear masks and maintain social distancing.
“In our distribution environment we’ve got probably 180 people just in the Columbus Distribution Center working in two shifts. It’s remarkable the performance that they put in, coming in for the first shift at 4:30 in the morning. So, they’ve adapted to it well.”
With everyone equipped to work safely, Kimball made other moves to brace itself against the impact of COVID-19.
Back to 2019
Deemed an essential business during the government-mandated closures, Kimball was able to continue providing products to other essential sectors, such as grocery and trucking.
“It was really a challenging time, but to be considered an essential business, to have the short-term decrease in sales and a return to normal by June, we feel very fortunate, and it does represent how needed we are by our customers,” McCurdy says.
The company provided additional promotional programs to help its sales team and customers during the disruption. It also managed to procure personal protection equipment, which was scarce at the time, and turned it around.
“In 2019, we might have sold $5,000 worth of hand sanitizer. In the month of April, I think our sales were $1.4 million in hand sanitizer alone,” he says.
By June, the company had returned to its 2019 sales levels, but it has not yet reached where it expected sales to be for the year. So, McCurdy says Kimball is working with its sales management team and salesforce to continue to find ways to grow sales.
“I think it illustrates the remarkable job our salesforce has done, the personal relationships that they build with our customers and the valuable, essential requirements of our products to these businesses,” he says.
And because Kimball sales reps are still out there working, making account calls, the company was able to open a remarkable 4,200 new accounts in April at a time when many businesses were shut down, generating significant new business and significant sales volume.
But whether it gets back to the 15 percent growth clip it was on at the start of the year depends largely on how the pandemic plays out.
“All things considered,” he says, “we’re happy to be returning to 2019 levels and will try to find tools and methods and programs to springboard that back into the growth we’re expecting.”
Supply strain
While Kimball is seeing sales trend positively, its suppliers each face different challenges. Some 80 percent of the company’s products are produced domestically, and COVID-19’s impact on each of those suppliers has varied by location. For example, McCurdy says a Michigan-based chemical supplier was shut down by government decree, putting constraints on its production, and a Long Island supplier was drastically impacted by the pandemic solely because of its location. This created obvious challenges.
“We’ve always been a company that believes in a 99.2 percent fill rate,” he says. “We’d have a 120-day inventory supply and could schedule that out when our domestic suppliers would shut down.”
McCurdy says Kimball has had a relationship with some of its suppliers as long as he’s been in the business. That means Kimball understands their delivery cycles and they understand Kimball’s order needs. Often the company gives its suppliers blanket orders so that they know its requirements a year in advance. He says suppliers have largely kept their commitment to deliver products on time and on schedule.
For those that shut down, Kimball talked with them to find out when they would open and determine if it needed an alternative source, or whether that, upon their reopening, they would make Kimball a priority.
“There have been issues where some of our suppliers have been delayed,” he says. “If you go to the PPE items, we have people that have supplied us for years that the date for delivery would be 2021. So, some of those items we’re not going to be able to get back in stock probably this year.”
Stronger together
It’s difficult for a business to succeed for nearly a century unless it can adapt and adjust during times of crisis. And that’s shown for Kimball. McCurdy says the company has maintained its financial well-being through the crisis and hasn’t had to ask for extended terms from its product vendors, lay off employees or reduce employees’ pay. McCurdy says that’s been meaningful to a lot of people. Going through the company’s distribution centers, he says the most frequent comment he hears is, “Thank you for keeping our jobs.”
“So many people were getting laid off — all their friends were losing their jobs — and they were concerned whether they would even have a job to go to,” McCurdy says. “So that really was a great sign for them, those messages we would convey that we’re not laying people off, we’re not reducing wages, and we’re going to get through this together. We’ve been in business almost 100 years. We know how to work through these kinds of recession/crisis events. We’ll manage through this and come out a stronger company together.”
TAKEAWAYS
- Relationships matter, more so during a crisis.
- Communicate often during disruptions.
- Agility is critical to survival.
