What are the Challenges Faced by HVAC Distributors?

Michael Rosario, Construction Tech Review | Thursday, July 09, 2020

HVAC has a continually growing market—especially a growing global market as emerging economies ramp up construction, and additional end-users emerge.

FREMONT, CA: The HVAC industry is brutal to distributors who are not on top of their game. HVAC equipment is adopted more and more by the consumers because of the technological innovations and climate change driving affordability and demand, respectively. While demand is growing, so is supply, and with it, the distributors as well. The HVAC industry is highly competitive and is predicted to grow 13 percent through 2028.

Increased competition is not the only obstacle that HVAC distributors are facing. New energy efficiency, regulations, and standards are fixed for 2023 regarding specific HVAC systems, making it past time for the distributors to begin sourcing suppliers and diversifying their product portfolios for the products they’ll need to be at par with a new demand. With an ever-expanding market and evolving industry updates, HVAC distributors have a lot to keep track of without trying to keep track of their inventory manually.

The Inventory Challenges for HVAC Industry

Top 10 HVAC Solution Companies - 2019Seasonality

Seasonality is one of the challenges for the HVAC industry. For instance, air conditioning units are a hot commodity during summer while demand for devices and units for heating is reserved for the colder months. To meet this demand, suppliers and distributors have to prepare in advance in the case of devices to meet future regulations.

Inventory Overview

Managing a wide number of SKUs throughout the entire supply chain is not an easy job. At a minimum, inventory management includes sourcing from the right suppliers, accounting for lead times, as well as their ability to fulfill orders, storing and shipping inventory, and continuously analyzing and reordering. The massive the supply chain operation, the more complicated is inventory management.

HVAC distributors generally have multiple sites where they store their inventory. Multi-echelon inventory management piles add another layer of complexity like inventory redistribution, differing demand at different locations, increased costs, and so on. In a few cases, the inventory storage locations are not even warehouses – they can also include spaces like showrooms.

See Also: Top Inventory Management Solution Companies

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