By Ed Avis
Coronavirus has upended the world and put a big dent in revenue at most reprographics shops. How are suppliers to these shops faring? We asked them. Below is a “roundtable” discussion on the situation that we assembled from separate interviews and email responses from vendors.
How is the coronavirus crisis affecting your company? Are your employees able to come to the office? Are you able to handle questions/problems from customers?
Dan Middleton, Synnex: We transitioned our workforce to work from home within a couple of days. I’ve been very impressed by how smooth it has gone. From a customer facing standpoint, it’s business as usual.
We’re seeing that this situation is accelerating the adoption of digital technology and other IT advances. Customers are looking at developing greater web presences, such as e-store fronts. We’re selling lots of work-from-home supplies, such as laptops, headsets, monitors, stand-up desks. Anything related to mobility and cloud is surging right now.
Tobias Pernkopf, Es-Te: We are still receiving some orders, but it has certainly diminished significantly. We are now on Easter break; before the break some employees worked from home but the majority of people came to work. We still have limited capacity to reply to customers questions/ problems.
Rich Gigl, National / AZON: We are busy processing orders at all our distribution centers every day. There is still a lot of printing going on out there from floor graphics, to safety posters to restaurant window signs to medical graphics. We have a small crew of essential workers here every day and with much of the staff we have been rotating duty to keep them safe and sharp. We also have our sales and technical teams working mostly from remote. Our customer service has not suffered at all because of our communication system. Inbound calls are being answered and routed to the appropriate support source.
Ed Lamanna, Canon: Canon office workers are working from home, and our warehouses are open. We are in constant contact with our resellers/ dealers; we are running Webex’s and virtual demos to and for them. Our support lines are still open for end users.
Thomas Ingendoh, Image Access: Image Access Germany has been planning for this time since mid-February, since we were alarmed by our Chinese reseller. The last shipments that went to China early February included several hundred respirator masks to help our reseller´s employees. As of the 16th of March, we banned all non-essential vendor visits and all travel and/or customer visits of our own staff. We implemented strict disinfection methods, physical distancing of employees and sent everyone into home office for whom it was possible. We rearranged seating and occupancy in the manufacturing floors and removed 60 percent of the seats in the cafeteria to ensure social distancing and to encourage employees to eat at their workplace. We even opened our showrooms to the kids of our employees for E-learning and other activities.
Last year, we sold 30 percent more wide format scanners than the previous year. This put some stress on our inventory, and we have been working overtime since the beginning of this year to partially refill the warehouse but also to fulfill orders. We have company holidays in the week after Easter every year, but this year, we extended this to include the week before Easter.
Eric Steadham, FotoZoomer: FotoZoomer has not had to reduce its staff and we are running at 100 percent in all areas from sales, service, support and supply shipping. Because we have support people across the country and print has been extremely busy for our FotoZoomer family members, we have expanded our support to include Saturdays for the time being.
David Ma, Kingnote: The coronavirus has affected Kingnote as most employees have started to work from home. We have still been able to work with our foreign customers as well as our local vendors, but productivity may be down as everyone is adjusting to the new changes. Overall, we are continuing operations and most people that we have work with are antsy to work or still continuing to work.
Steve Blanken, Contex: All of our employees are working form their homes as they all have virtual office setups. We are allowing one or two employees a day in the office in Virginia following safe spacing guidelines. We are still receiving orders although not at the rate prior to the crisis. We are still handling sales and support calls via phone and email with no drop off at all. For the month of April we are hosting on-line webinars to answer any sales or support questions (click here to read about the Contex webinars).
Jeremy Evans, Sepialine: More than half of Sepialine’s employees are remote workers, and have been so since they were hired. So, for over two decades, not an hour has gone by that a team member hasn’t worked with another team member in a different location. Therefore, we have the systems and processes in place to further distribute our workforce with very little inconvenience. As per orders coming in… Since we aren’t a print shop my answer is only a point of reference but - ‘few if any’ orders are coming in.
Is your supply chain affected by the crisis? Do you have sufficient stock of equipment? Are you able to deliver supplies when ordered? How about maintenance?
National / AZON: Our supply chain has not been affected at all. We still have an ample inventory of our high-turn hardware and consumable products and our vendors are all still manufacturing and shipping product.
Image Access: Because we sell to GSA customers including the military, our US operations are still open and we can ship products. We also have no interruption in service assistance via the phone or the Internet, but we cannot go onsite for installs momentarily. We have set up cameras and can walk customers through the installations using video over the Internet. Currently it is extremely expensive to ship from Germany to Chicago via air because there are almost no passenger flights and we have to ship on freight carriers, which is much more costly. But we also prepared for this when we shipped larger than normal quantities of product to the US just days before the shutdown.
Canon: We have had a constant flow of goods coming to us and we are well stocked. Our resellers/dealers are the front lines and our 3rd party provider for service is still going out on calls.
Contex: Our supply chain was initially affected by this crisis but it is getting back to normal and we expect full normalcy by the end of May.
Synnex: Our warehouses are fully operational. Of course, we instituted a lot of new protocols and practices to make sure we are protecting our workers. We’ve been very fortunate that we haven’t been impacted from an operational standpoint.
FotoZoomer: At this moment FotoZoomer has not seen a disruption in getting the needed supplies from our manufacturing partners such and parts and inks. We have our own media line so we have been able to keep our shelves full and ready for our base. We have three distribution locations for inks and media, which gives FotoZoomer ample stock as well as shipping options for anywhere in the US. We can still ship overnight up to 4:00pm PST to any location in the continental US; the only challenge that appears is the fact that both UPS and FedEx have discontinued their guaranteed delivery timelines during this crisis. Maintenance is always a challenge but our manufacturing partnerships with both Canon and Epson allow us to keep printers up and running, plus we stock parts in-house on common items to ensure the best in customer service. As for the FotoZoomer software we are able to maintain that fully from remote login and diagnostics.
Kingnote: Our supply chain will be disrupted as business activity across the US and other countries slows down. Without business activity, there will be fewer print jobs and fewer buyers for machines. During this lockdown, Kingnote will continue to serve vendors looking to sell and remove used equipment.
While businesses are locked down in the US, we are seeing that China is once again moving again. Now there is at least some demand for reprographic and printing equipment. There has not been a full return to business activity there but there is hope that things will get better in the summer. Our foreign sales team is once again selling so Kingnote can give vendors the top, most up-to-date prices on equipment.
Es-Te: I assume that there are some effects on our supply chain, but, as we source the majority of components locally, I have not heard of any critical shortages.
Are you getting calls from customers asking for some kind of payment relief, like permission to skip a payment or requests to have interest temporary waived? If so, are you able to accommodate those? Do you have a set policy regarding that?
Synnex: Absolutely. We are working with our resellers. Our credit team members are definitely earning their keep right now. It becomes a one-on-one conversation with our customers. We have a whole financial services side of our company, and we’re talking about how we can help our customers now. That’s a big conversation right now.
Sepialine: Yes, we have had requests to modify payment terms. We have even had customers negotiate lower prices based on immediate payment. Cash is king in this day and age and we have gladly accommodated these requests.
Image Access: Most of our customers in the US are still up to date with payments but we must consider that many in the US did not realize or believe what would happen until four weeks ago. Most customers are on 30 days payment terms therefore we do not see an increase in payment issues up to now. If necessary, we can discuss payment options with our partners up to a certain degree. We do not have any bank loans and our business is strong and healthy, but we cannot act like a bank, therefore our options are limited.
Contex: We have not been approached by any of our customers with requests to delay payment. We have strong partners that are very stable financially.
Canon: Our resellers do not buy directly from us and our dealer channel has not come to that point yet.
FotoZoomer: We would address those on a one-on-one basis and can address that request if needed. However, we have not experienced any level of decrease in business; as a matter of fact, we have actually seen as small uptick in business as the need for print is becoming more and more. Just last week we created a series of designs dealing with CDC guidelines of social distancing and medical alert posters that were given to FotoZoomer owners around the country to provide solutions for businesses, hospitals, restaurants, banks and others.
Es-Te: Luckily, I have not heard of any such requests.
What are your feelings about the situation long-term? Will the industry bounce back?
Es-Te: That´s a difficult question, and I am sure there will be some consolidation along the way, but: HELL YES!
National / AZON: Our economy is multi-faceted, very strong and very resilient as are many of the resellers we are proud to call our customers. Those who ran successful businesses prior to the pandemic will continue to operate from a base of strength when we fully emerge from this economic mess. Of course, there will be some drop off and attrition as a result of the virus, but we expect to be continuing our business with the majority of our customers in the very near future.
FotoZoomer: I see a change in how people will go back to a “NEW” norm, rather than how things were before. I believe this bump in the road will highlight the NOW and give people a new appreciation of each day moving forward; maybe people will take the time to ”smell the roses” and take more time and see that what was so important before doesn’t need to control your life.
The market will come back. People will be eager to go out and try to get back to the life that this virus changed/stole for them and you will see that we as a people will be stronger and more resilient. Will certain things have to adjust? Of course, they will. People have the incredible ability to adapt, learn, adjust and overcome just about any obstacle placed in their way.
Contex: I definitely think the business will bounce back. Our economy was steaming along and just came to a grinding halt. That business is still out there. I don’t think it will be an overnight bounce back but I do fully expect a bounce back and hopefully be back to normal by the 4th quarter. In addition if an infrastructure bill is ever passed that will be very good for our business.
Kingnote: The impact of Covid-19 will be profound as the global economic outcome is still yet to be determined. As business activity slows down across the globe, demand is decreased and supply chains are disrupted. The effects of the virus on the economy could last years. In the short term, businesses will need to look at cost cutting measures to survive. In order for the industry to bounce back, there will need to be a full global recovery across all sectors. We are cautiously hoping for this recovery. In the long term, there will always be demand for reprographics equipment and businesses that can get through will reap the benefits once this is all over.
Image Access: As a global supplier, we must look at the overall picture. Last week we restarted shipments to China, Korea and Russia. It seems that east of us, the disruption eases off. It also looks like the supply from China is back. We just picked up a larger parts shipment from China and it will arrive via train in Germany three weeks from now. Of course, in Europe we have less business than usual, and the US will follow soon.
As to the long-term development, I will make a prediction here. After this is over, many businesses will have had the experience that home office does not work very efficiently if you don’t have everything in digital format. When home office was optional you could ask an onsite co-worker to provide a scan of needed documents any time, but when the archive is not accessible for anyone, you may not be able to continue working on the building permit, zoning project or other tasks from home. Therefore, I think that the industry will bounce back, and a large digitization push will be the result. We already see that happening here in Europe as more and more customers ask reprographers and others about digitization projects.
Sepialine: I think the industry will adapt and bounce back as something different from what we know today. Each of our partners are incredibly versatile and at their core - they are business folks. They look for opportunities and I think there will be an ocean of opportunity as we come out the other side of Covid-19. As a vendor/partner to this channel, Sepialine is looking to quickly develop software systems to support our partners in these new endeavors. We look forward to hearing the ideas that our partners will have and we can’t wait to get started.