Author - Robert Coolidge

CES 2024: Innovation is Back

Robert Coolidge, CEO

CES 2024: Innovation is Back

I have been attending CES for the past 15 years, and we have seen the same, if not very similar things for all these years, so much so that it seems quite rote. CES 2024 was a very different story…the show truly rebounded from the COVID years, and innovation is back in full force.
CES is a portal into the future; it’s a portal into where we need to go as a company and in the residential environment. VR, AI, IoT – used to be just cool buzzwords. They are now very much here in the present and the future. Manufacturers, as well as consumers, are excitedly embracing this future. Those pushing the envelope will be the innovation leaders, challenging others to dig deep to remain relevant. At the core of all of this is the question: how will this innovation provide value to the consumer and open the door for after-sales support?

Using Technology for Cleaner and Safer Homes

No doubt a byproduct of the pandemic, home sanitization products were abundant, utilizing steam and UV light technology. This has led to families taking more notice of cleaning and sanitizing their homes, from removing shoes upon entering their homes, to wiping down doorknobs and other surfaces, to disinfecting and finding disinfecting cleaning supplies, all of which will be an important factor in the marketplace. It has given us food for thought and new insight into the cleanliness of our homes and business places. It is imperative that we have peace of mind, especially when it comes to our health and that of our families.
The all-in-one technology has also massively improved, with new technology wherein one machine washes and dries laundry. While we have had these machines for some time, the mechanics were not nearly as advanced as those coming to market now. This not only cuts down on time doing laundry, more importantly, it cuts down on utility consumption, saving the average family hundreds of dollars per year. Also with the new technology, the washer/dryer combo can text the consumer to let them know the load is finished and ready to fold! Ideally it would fold the laundry too… I think that will have to wait until the next generation!

3D Printing in the Parts Ecosystem

Based on the products and technology we saw at CES, I am sure that 3D printing will be part of the service parts ecosystem. It may never get to the point where a consumer would print a part at home, CAD requirements are significant. However, I think distributors or manufacturers could potentially print a part on demand. Plastic items like gears or knobs, a handle for your microwave or a range knob could easily be printed on these futuristic printers. While still in its early stages, I think 3D printing will be in the parts environment as a viable service repair option.

Nurturing Relationships in the Aftermarket Services

There were so many opportunities for supply chain at CES this year. There are new companies that need to move quickly to try to capture their share of the US market. Often, when at CES, we will see exceptional amounts of new brands that have innovative technology, and they are usually laser focused on the design, build, manufacturing and distribution of the product. That said, it seems that the after-purchase service is an “after-thought.”

The obvious questions for these consumer product startups:

“What are your ideas for the aftermarket? What are your plans to support your products, as well as other important questions, which is where we can assist these companies in educating them about after purchase support.
Think for a moment, of a customer purchasing the product that you have innovatively put hours or months or years into creating, and that product fails; what is the backup plan or support? That consumer is going to be much more forgiving if they buy a product that the manufacturer stands behind. A good service solution, with a qualified technician, good parts source, a good original new part that will not fail is imperative to providing a good quality product. On top of which, the support base will also provide feedback about the service experience. This could be the most important part of the brand building experience.

That’s where Encompass comes in, providing that kind of structure and insight, and the full-service solution for supply chain logistics.

We have a consumer direct platform with fully integrated API’s with most all service claims administration companies. We integrate with a multitude of claims management systems, field service networks, home warranty companies, and extended contract firms. For these startup companies that might be entering the home appliance, consumer electronics, personal care, power tools, lawn and garden, and/or the computer marketplace, we can provide an even stronger support experience. Encompass will provide the same full service, with all the bells and whistles, right out of the gate, very similarly as do the core manufacturers.
This is why we always make CES a priority to attend. Not only to meet with current customers and existing vendors, whom we already support and nurture, but to also seek out new companies entering the market that may not know that they need the excellent quality service that we can provide. We look forward to seeing everyone at CES 2025.

It’s Time to Prepare for the Right to Repair

Robert Coolidge, CEO

Robert Coolidge
President & CEO

‘Right to Repair’ is a term that most of the readers of this blog will be familiar with, given the media attention it has received in recent years. For those less familiar, Right to Repair refers to the movement to expand consumer’s options in repairing their personal property. Tactically, this means providing both consumers and independent third-party providers with access to the same tools, parts and documentation, made available to in-house repair teams and authorized third party repairers. The Right to Repair movement spans multiple industries (automotive, agricultural, medical devices, consumer electronics), with state-level laws passed across these industry verticals in the past year (Digital Electronic Equipment in New York, Wheelchairs and Agricultural Equipment in Colorado). In this post, I will focus on Right to Repair legislation for digital electronic equipment (including mobile, laptop, gaming), which will significantly impact some of our OEM partners at Encompass, and how we can be proactive in the solution.

Legislative Action to Date

While the Right to Repair conversation has been active at both the federal and state level over the past 2-3 years, states are leading the way by translating this conversation into legislative action:

New York’s Digital Fair Repair Act – New York’s Digital Fair Repair Act (N.Y. Gen. Bus. Law § 399-NN) is the first US state law to broadly protect a consumer’s right to repair their own Digital Electronic Equipment[1]. The law states that in the event that an OEM makes the Documentation[2], Parts and Tools[3] required for the diagnosis, maintenance, or repair of digital electronics available to its own employees or authorized providers, that OEM is required to make the same Documentation, Parts and Tools available to independent repair providers and consumers on fair and reasonable terms. These materials can be distributed either directly through an OEM or via an authorized provider.

[1] Legislation states that ‘Digital Electronic Equipment’ “means any hardware product that depends for its functioning, in whole or in part, on digital electronics embedded in or attached to the product for which the original equipment manufacturer makes available tools, parts, and documentation either through authorized repair providers, its own employees, or any authorized third-party providers.” Exempt industries include home appliances with embedded digital electronic products (including HVAC refrigerators, ovens, and microwaves), motor vehicles, electronic bikes, medical devices, security devices / alarm systems, off road equipment including power tools and garden equipment, commercial and industrial electrical equipment, and enterprise devices (B2B sales, B2G sales)
[2] Legislation states that ‘Documentation’ includes “any manual, diagram, reporting output, service code description, schematic diagram, or similar kinds of information required for effecting the services of diagnosis, maintenance, or repair of digital electronic equipment.”
[3] Legislation states that ‘Tool’ includes “any software program, hardware implement, or other apparatus used for diagnosis, maintenance, or repair of digital electronic equipment, including software or other mechanisms that provide, program, pair a part, calibrate functionality, or perform any other function required to repair or update the original equipment or part back to fully functional condition.”

The Digital Fair Repair Act will go into effect on December 28, 2023; the law will apply to Digital Electronic Equipment manufactured and sold in New York on or after July 1, 2023.  The law will be enforced by the New York Attorney General.

Beyond New York – With the passing of the New York Digital Fair Repair Act, Right to Repair Legislation has started to build renewed momentum across other states. As of February 2023, 20 states had filed Right to Repair legislation across multiple industry verticals. Of this group, 14 states filed legislation applicable to consumer electronic devices or appliances, including: California, Connecticut, Delaware, Hawaii, Massachusetts, Missouri, Minnesota, New Hampshire, New Jersey, Oklahoma, Oregon, Texas, Washington, and Vermont.

Federal Action: Federal authorities, including the FTC and President Biden, have voiced the need for Right to Repair protections. However, as of March 2023, no federal Right to Repair laws had been passed, prompting attorney generals from 27 US states to deliver a letter to Congress highlighting the lack of progress and calling for lawmakers to advance expansive Right to Repair federal legislation targeted at automobiles, agricultural equipment, and digital electronics.

What This Means for OEMs

Now is the Time to Prepare: When the New York Digital Fair Repair Act becomes effective in December 2023, Right to Repair will no longer just be conversation. OEMs need to be prepared now to meet the extensive go-to-market requirements of this law.  Some OEMs are already preparing; Apple, Google and Samsung, have started to provide the public with access to repair manuals, tools, and parts on a limited scale (eligible for select models and a limited set of parts) – likely as a pilot in expectation of future legal requirements.

Right to Repair Creates Significant Risk and Complexity for OEMs: Given that Right to Repair has a heavy legislative pipeline at the state level, OEMs will need to be flexible to accommodate differing state-level (or potentially federal-level) requirements as new legislation is passed.  Alongside this complexity, supplying new customer groups (DIY, independent repair providers) who have less repair experience than traditional in-house, authorized repair teams will require heavier OEM investment in hands-on user content and training. OEMs will have to address increased intellectual property risks in making repair Documentation, Tools, and Parts, publicly available, and both OEMs and warranty providers will be confronted with greater complexity in navigating future repair claims.

Finding the Right Partner is Critical: Given the OEM exposure to risk and complexity described above, finding the right partner to navigate the rollout of Right to Repair laws is paramount. Right to Repair will require the creation of new content and go-to-market models. OEMs should lean on solutions-oriented providers that can offer agility, flexibility, insights, and resources to lighten the OEM load.

Right to Repair Support from Encompass

Commitment to our OEM Partners – With 70 years of experience, and a deep commitment to brand support, Encompass understands the needs of our OEM partners. Our work across ~20 repair industry verticals allow us to act as a thought partner to OEMs, bringing cross-industry best practices and learnings to the table. In addition, our commitment to selling OEM-only parts ensures that each customer receives a quality product and repairs the first time, eliminating confusion and dissatisfaction caused by generic substitutes.

Leading Data & Technology – We are actively investing in leading technology to improve the customer and partner experience. Our spin360 technology creates detailed 360-degree photographs of parts, helping ensure that customers are selecting the correct replacement part for their device. Our reporting and analytics capabilities enable us to provide our OEM partners with a complete view of demand and trends for both parts and customers.

Custom Solutions – Finally, at Encompass we work with our partners to design custom solutions to meet their needs. Whether it is creating virtual parts repair toolkits or bespoke user content (repair how-to videos, training guides, etc.), we are committed to the correct and safe repair of your branded products.

Evolution of Parts Distribution

It’s said the only constant in life is change – a sentiment that is certainly a given in the business world.  Companies form, merge with others or disappear for lack of innovation against startups or competitors. Industry disruptors have been a prevalent part of commerce for thousands of years since cattle trading gave way to coins as currency.

Just when it seems impossible, something new comes out of nowhere to upend the status quo. From online retailers usurping brick and mortar retailers to mobile phones replacing landlines, answering machines and cameras, it’s not a matter of if a better mousetrap will come along, it’s when.

While a disruptor may be inescapable, it’s not all that dire. In fact, a study conducted by Strategy& (PwC’s global strategy consulting team) found that the “fear of disruption can be more damaging than actual disruption.” Additionally, existing businesses typically have plenty of time to respond to new trends before they are impacted, according to the study. Examples cited were Amazon and Google, which each took at least 10 years before dominating the web and ecommerce.

When facing a threat, established businesses that try to rush out ill-conceived strategies are just about as ineffective as those that do nothing, the study found. Instead, incumbents are more likely to succeed when they focus on continually accentuating their own core strengths and forming tighter customer connections to build loyalty.

Distribution is no less vulnerable to disruption than any other industry. As a middleman, distributors are always at risk for disintermediation. In turn, they must continue evolving and innovating to provide increasingly value-added services. The question that should be asked repeatedly is “how can we help our customers be more successful?” This is the difference between a partner and merely an order-taking vendor and a disrupter and an incumbent.

In parts distribution, it’s all about keeping critical components in stock and getting them to the customer the same or next day. This requires a massive effort beginning with forecasting what customers will need and ending with the right parts quickly in the hands of the customer. In between, every step of the process must be optimized for efficiency, accuracy and maximum throughput.

With decades of parts experience, Encompass is heavily investing in the latest AI and predictive technology to arm customers with vital data. Helping customers troubleshoot repairs and identify the right parts for the job are just a couple of ways we’re serving as more than just a supplier. Working directly with customers, we also develop creative tools that address specific pain points and help them be more successful.  Along with product repair training, video content and matching tech skills with those needing to strengthen service networks, Encompass is deploying a host of resources for the benefit of the entire industry.

We’re also targeting warehouse management solutions and automated functionality with the goal of expediting parts delivery. Backed by the resources and best practices of our parent company Parts Town – the global market leader in foodservice equipment parts distribution – we’re better positioned than ever to turn our customer-centric visions into reality.

While technology is at the heart of many of our innovations, we still believe in good old-fashioned people skills. If you want to interact with a real person, Encompass has the channel for that. Our teams are always out visiting customers in person all over the country or we’re calling them with information on important new services or just to find out if we can do anything to assist.

In 2023, Encompass will celebrate its 70th anniversary. We could not have survived in a competitive industry this long without continually raising the bar for customers. While we mark this important milestone in our history, we will forever be looking forward and exploring how we can offer more.

To the market disrupters out there, we say: our resolve to be best-in-class is only getting stronger.

Musings from CES 2022

Although the pandemic clearly impacted attendance at the Consumer Electronics Show held earlier this month, innovation and the “wow factor” remained on full display (pun intended, read on).

Not Your Great-Grandma’s TV

Just when you think the television market has plateaued for good, Neo OLED televisions have arrived to blow your mind with displays so bright and crisp you can see the fuzz on a tennis ball.  The latest TV technology unveiled at CES is meant to fully immerse viewers into the entertainment experience. With screen sizes ever increasing and/or curving, users are enveloped more than ever before.  Even at dominating sizes, new models aren’t necessarily eyesores. Some display realistic-looking art masterpieces when in standby mode, while others roll up and are hidden from view entirely.

Mobility Space Accelerating at CES

Beyond developing more lifelike (and size) futuristic gaming and television displays, some electronics manufacturers are remaining relevant by jumping to completely new verticals. One such example is Sony. Alongside crystal LED, professional drones, gaming, virtual reality and other CE exhibits, Sony unveiled VISION-S 02, its second battery-electric car prototype. With focus on electric power, autonomous mobility and safety features, this year’s show drew 185 auto manufacturers in the growing vehicle technology category at CES.

Sony’s concept battery-electric VISION-S 02

Sony calls its car a “new SUV-type prototype vehicle that accommodates diverse values and lifestyles.” Meanwhile, Panasonic debuted new electric vehicle battery technology that substantially increases storage capacity to extend range. The manufacturer, which supplies TESLA batteries, is also making the motor/battery system for Totem USA’s first eBike, Zen Rider.

Sony’s first prototype VISION-S is now undergoing road tests, and the manufacturer is creating an automobile division. Although there is no guarantee the vehicle will ever be mass produced, hats off to Sony – and Panasonic – for diving into a new product pool. If Sony’s vision ever becomes reality, it may one day be perfectly fine to sleep in the back of your car while it takes over. Plus, with Sony’s ingenuity, the onboard display system is sure to shock and awe.

Appliances Getting Smarter & Snappier

Nearly all manufacturers showed off products embedded with smart technology. From dryers that send notifications when laundry is done to refrigerators that offer recipes based on existing contents, appliances are being made to do a lot more for consumers than simply heat and cool.

Appliances are also being designed to free up space in the home. Stackable laundry units provide ample capacity while providing enough room to add a sink or more storage. Vibrant colors are replacing the white, black and stainless steel of most standard appliances. Samsung introduced a line of French door refrigerators available in 12 colors from pink to emerald green.

Robotics was another theme on display with upgraded floor cleaners, self-filling baths and other automated functionality to assist you in daily home life. Here’s hoping the robot chefs that duplicate famous chef dishes make it into the home in my lifetime.

                       Robert Coolidge
                       President & CEO

Opportunities for Repair Industry

By now, savvy, ambitious servicers have evolved their skills and business models to meet market demand and stay current. Those still relying on 42” TVs for repair work are likely close to retirement or have a lock on their service area.

Electric cars are going to displace gas powered vehicles – it’s not if, but when. What does this mean for electronics gurus? Could their skills transfer to this technology and displace standard auto repair shops? What about robotics, e-bikes and next-level gaming consoles? These types of electronics are sure to hold their price points much longer than LCD TVs, which should help drive repairs vs. replacement.

It’s often hard for businesses to anticipate future trends and adapt their operations accordingly when balance sheets are healthy. But no matter how comfortable you are today, it can all go horribly wrong if you refuse to be forward thinking.   Look no further than Blockbuster, Sears, Kodak, Borders and the like. Turns out there’s no such thing as being too big or successful to fail.

If you’re not paying attention to tech news and looking for new opportunities to provide aftersales service, you will eventually get left behind. It was a long time before mobile phones replaced the ubiquity of landlines, but once they took hold, that was the end for all kinds of businesses. Remember pagers? When’s the last time you used a phone booth or bought an answering machine?

Displacement is just around the corner from the next innovation. Watch where we’re going and don’t fall flat on the pavement.

Reimagining Workforce Strategies

What a difference a year makes. At this time in 2019, it was business as usual with the excitement of the holidays just around the corner. None of us could have predicted that in just a few short months, the world would be turned upside down by a global pandemic.

“Social distancing” is now part of our vernacular, and face masks are as essential as shoes to wear in public. Zoom meetings have replaced sitting around a conference table, and even trade shows have gone virtual.

Businesses have had to quickly adapt to keep operations running, while minimizing the risk of spreading disease and complying with state and federal guidelines. The pandemic has forced businesses to rethink their workforce strategies – perhaps for the better. Those that have resisted telecommuting, may find it leads to more productive, content employees, while saving infrastructure costs and/or freeing up space for inventory. With today’s interactive technology, working remotely has never been more viable.

But there has also been other less positive impact. Although well-intentioned, pandemic-related government financial subsidies have caused a number of low-wage workers to quit jobs, believing they can make more money than they were being paid at work. Even if temporary, these payments have put a dent in available labor.

Now many businesses are faced with having to step up efforts to both retain existing employees and attract new ones. Not so simple in these unprecedented, unpredictable times. Since it’s much more expensive to hire and train new employees than to keep your existing workforce content, most of your efforts should be aimed at retention. According to a study conducted by CareerAddict earlier this year (prior to the COVID-19 crisis), these are the top five reasons people choose to leave their jobs:

  1. No Progression (lack of career advancement)
  2. Low Pay
  3. Not Getting Well-Deserved Raise
  4. Poor Leadership
  5. Change of Career Goals

Here are some ideas to consider for strengthening loyalty among existing staff, with focus on the warehousing, manufacturing and repair sectors:

  • Identify All-Stars – In our general industry, most tasks can be easily tracked: number of widgets made, picked, packed and shipped hourly and so forth. Management, as well as employees, typically know who’s killing it and who is barely doing the minimum. Be on the lookout for staffers going above and beyond. Talk to them about stepping up to lead positions and keep them engaged by rewarding them with recognition and a clear career path. Offer additional training and schooling as other incentives. These unicorns are hard to find – don’t lose them to a competitor down the street paying 50 cents more an hour.
  • Pay for Performance – Oftentimes, both all-stars and slackers make the same hourly wage, which is not good for morale. Realize that not all employees are performing equally. Paying a bit more to A players can help keep them on board, while potentially encouraging subpar staff to step up. You may even find you can actually allocate the same amount or less in wages with fewer people if they’re top performers.
  • Amp Up the Workplace – Make it a more fun place to work. Add a ping pong table or other games to the breakroom and energetic music in workspaces.Listen to your staff about what would make them more comfortable. When Encompass warehouse workers told management they needed better access to ice in the summer, we brought in an industrial-sized ice maker. When we learned not everyone could afford quality footwear, we initiated a program to regularly distribute Nike Air shoes. We also offer credits toward purchases of good quality, healthy food stocked in our breakroom by a local vendor.Making even nominal investments in creating a more employee-centric workplace could make a huge difference in loyalty and morale. You are sure to be better positioned the next time a competitor tries to lure away your team.
  • Flexibility – It’s obviously impossible to enable production line employees to work remotely. However, consider this option for other staff who don’t need to be on site every day. A break from a long commute goes a long way toward boosting quality of life, not to mention saving time and money on gas and meals. Encompass has found that  most remote employees are actually more productive, take fewer sick days and ultimately work longer hours.  and even working longer hours.For those who must be on site, try to incorporate programs that give them a chance to visit the doctor or see a child’s play without penalty. Always remember employees have lives outside your company. Keeping them happy is worth the slight hassle of rearranging schedules periodically.  Businesses that offer paid vacation should encourage employees to take advantage of this time away from work so they can get revitalized, while creating memories with their families

By cultivating more “A” players, your business can operate more effectively, which can help save money to improve wages and fund workplace perks. Yet even with a fun, motivating work environment, you will inevitably still lose quality employees. But you can always leverage your incentives throughout recruitment efforts to attract top talent. Strive to stand out from your competitors in the hiring channels.

You never know when you may be able to entice an ace ping pong player who can pick 100 lines an hour.

Business Not As Usual

What’s Next for Repair Service Following COVID-19

 After enduring weeks of “stay-at-home” orders to contain the COVID-19 pandemic, most states are reopening businesses previously deemed non-essential. However, with the virus still circulating and causing severe illness and death, business is anything but usual.

Personal protection items like masks and gloves have become standard issue for restaurants, hair salons and other industries where personal contact with customers is the norm. The same goes for service providers who must enter homes to make repairs and interact with customers.

As we continue emerging from this unprecedented event, the long-term impact on the service repair industry is still yet to be realized. Some repair businesses have been forced to shut down permanently. With time on their hands and access to a wealth of “how to” videos online, there has been a sharp increase in consumer DIY repairs.

Adding to the mix of factors driving DIY repairs is an unemployment rate rivaling percentages not seen since the Great Depression of the 1930s. Retail stores are slowly opening across the country, but some powerhouse brands such as J.C. Penney, Neiman Marcus and J. Crew have filed for bankruptcy in the midst of the crisis. Industry projections for major appliance and electronics production and sales have dropped for at least the remainder of 2020.

Still, despite this challenging market environment, there is considerable opportunity for service businesses. Numerous complex repairs are way beyond the basic capabilities of a general DIY consumer. Anything to do with electrical wiring and circuitry, for example, is best left to the professionals.

In a down economy, demand for repair typically surges as consumers put off replacing big ticket household items. Plus, as restaurants closed and now operate in some states with capacity restrictions, consumers have been using their major kitchen appliances more than ever, raising the risk of breakdowns. Consumer need for professional repair service could ultimately outpace the availability of service providers – and perhaps enable higher rate charges. However, with decreased model production comes decreased parts production so it may become harder to find some necessary repair components.

Some repair providers have rapidly adjusted to the new normal and are getting creative with such service offerings as virtual estimates and troubleshooting that limit customer contact.  Contactless measures are likely to continue – and expand – even after the current pandemic abates.

If nothing else, COVID-19 has been a dramatic wakeup call to the world and the repair industry. And if the experts are correct, this is not the last time the world will face a similarly impactful pandemic.  Businesses must evaluate their existing response strategy and develop best practices for managing through the next crisis. Those able to adapt under the most challenging conditions will survive, and even thrive, while others risk becoming just another impact statistic.

Encompass Response to Coronavirus

Updated April 21, 2020

Message from Encompass President & CEO Robert Coolidge

Encompass has been closely monitoring the global impact of the coronavirus (COVID-19) pandemic since it first originated in China. Our heartfelt condolences are with all those who have been sickened and died from this terrible illness. Please click here for a helpful pamphlet on Preventing the Spread of Respiratory Diseases from the Center for Disease Control and Prevention.

Internal Response

Although all Encompass facilities are operating regular schedules, we have taken several precautions for the health and well-being of both our associates and business partners. We are following all government guidance and mandates to help contain the pandemic. Some measures we have taken include:

  • Office staff are telecommuting until further notice. Encompass is equipped with cloud-based systems, ensuring continuous communications both internally and with our customers. 
  • Essential on-site staff are required to wear masks and gloves and are also being provided antiseptic wipes and hand sanitizer at work stations and common areas. More importantly, they are mandated to frequently wash hands.
  • Staff travel is restricted.

Parts Supply Continuity

Due to the expected closings of factories during the January Chinese New Year, our Purchasing team had procured safety stock for the select brands for which we source directly overseas. At this time, highest demand parts remain in stock across multiple product verticals, including Home Appliance and Consumer Electronics. However, the team is in daily contact with manufacturers to identify any supply disruptions so we can then communicate with our customers.

Encompass has no immediate plans to close facilities and will continue to follow standard preventative guidelines to address the current situation.

Counter Sales Reopened

With additional safety measures in place, counter sales/order pickup has resumed at all locations. The counters at our Atlanta, Fort Lauderdale and Las Vegas distribution centers will be open Monday-Friday, 8:30am-4pm. To limit contact, we request that customers first place orders on prior to coming to the facility, if possible.

Help for Customers

Encompass is here for you! If we can be of any assistance, please let us know:  Have you taken advantage of the Coronavirus Aid, Relief, and Economic Security Act (CARES)?  CARES enables small businesses and contract workers to obtain a variety of loans to maintain operations and prevent layoffs during this unprecedented crisis. Tax advantages are also available.

We appreciate your patience and understanding during this difficult time. Encompass will continue to update this company response statement as conditions warrant to keep you informed.

Robert Coolidge
President & CEO



Planning for Unexpected Supply Chain Disruptions

 Hurricanes in the Southeast. Blizzards in the Northeast. Tornadoes in the Midwest. Earthquakes and fires in the West. Natural disasters occur often and mostly without time for planning. Major transportation carriers and routes are usually impacted, which has an immediate, but mostly brief, effect on supply chain continuity.

But what about supply chain disruptions occurring continents away? As the world’s largest manufacturing country, China plays an extremely important role in U.S. commerce. When something momentous happens – like the coronavirus (or COVID-19) or the once looming trade war with the U.S. – effects typically domino across the globe.

Although it’s still somewhat early days, the COVID-19 crisis is already having a major impact on global trade and logistics with Chinese factory closings, workforce quarantines and transportation disruptions. The electronics industry is at particular risk with Shenzhen, a major hub of electronics and parts manufacturing, located about 700 miles from the epicenter of the virus outbreak. While some manufacturing factories have reopened, thousands of workers remain under quarantine or otherwise unable to travel to work.

The situation is mitigated somewhat by the fact that the initial outbreak coincided with the Chinese New Year during which most businesses shut down for about 10 days. Distributors like Encompass typically anticipate this downtime and plan accordingly to purchase extra safety stock. The question becomes whether the additional inventory will keep pace with demand until business returns to normal in China.

Current fulfillment lead times from Chinese factories are 30 days or more, so even the slightest delays could significantly affect supply and complicate purchasing strategies. What can supply chain managers do to try to limit the impact of global supply chain challenges – particularly those affecting the world’s largest manufacturing cluster? This is probably one of the hottest topics of discussion occurring in U.S. board rooms and purchasing departments across the country.

Whether your business is directly affected or not by the current crisis, it’s still an opportunity to review your purchasing strategy. Identify any weaknesses and determine contingencies as part of your overall purchasing strategy going forward. Here are some areas of consideration:

  • Sourcing Partners – Are all your supply sources in one basket – be it a single factory or geographic region? Assess the impact level to your business and customers of any unexpected, potentially lengthy supply disruptions from this source. Just like your financial portfolio, diversification is good. Consider alternatives for a backup supply pipeline in a different geographic area to help mitigate the risk of being cut off from your primary source without warning. For repair service businesses, this can be as simple as establishing accounts with multiple parts vendors for seamless transition if ever necessary. 
  • Safety Stock – Do you stock enough inventory to meet demand for an extended period of time? While purchasing managers are constantly pressured to keep inventory turning, it may be worth stocking at least some high-demand SKUs beyond ordinary levels — particularly if your business is at risk from limited supply sources.
  • Business Continuity Plan – Many business continuity plans are focused internally on steps a company will take to recover from its own unforeseen events. Downstream disruptions in the supply chain should be included in your overall business continuity strategy.  And put the onus on your sourcing partners to provide their detailed plan for business recovery.

While the U.S. and China have reached a trade agreement and COVID-19 is likely to be contained sooner than later, the risk of future impactful events remains as certain as ever.  Don’t forget COVID-19 is not without precedence; in the early 2000s it was the SARS epidemic wreaking havoc on global trade. Sadly, chances are pretty good this isn’t the last time we’ll be dealing with supply chain disruptions, but ensuring you have a Plan B should help minimize harmful consequences to your business and customers.

Regardless of any business impact, we can’t forget that at the core of this epidemic are human lives. Compared to so many people dying, delays in receiving the next generation smart phone seem meaningless.  Above all, we should be focusing on joining together to help all those affected through this horrific ordeal.

Time for a Mid-Year Goal Assessment

As we are well into the second half of 2018, now is an ideal time to review the business and individual goals your team hopefully set at the beginning of the year. What progress has been made? Is your company positioned to meet these goals by yearend? Is the team continuing to work toward their personal commitments?  If not, what barriers are hampering progress?

      President & CEO
       Robert Coolidge

Goals should serve as a road map for individual professional development and business growth. Establishing targets is the easy part.  Actually following through on them is the real challenge. To help prevent goal setting from becoming meaningless busy work, there must be accountability. Otherwise, your commitments become as pointless as the paper that likely wasn’t used to record them.

Prior to the fourth quarter, it’s a good idea to take another look at the targets you set. Assess the status and where you expect to be by year end. With any luck, some of your commitments may even have expanded into larger opportunities than first thought, or new ones have come into play.

Otherwise, you’ve got to pinpoint where you are falling short and then laser focus on improving those areas. Have market conditions changed? Are the right people in place? Do you have enough resources and the right tools? Don’t wait until Q4 to identify issues that should be addressed now.

If you’re falling short on personal commitments, take a harsh look at what’s keeping you from success. While there may be obstacles, what are you doing to defeat or sidestep them?  At the end of the day, you are responsible for your own achievements. Be honest with yourself, and make a solid plan to get back on track.

You’ve got most of the second half now to make field adjustments and strengthen your game plan. It’s not too late to reach the goal line.



10 Tips on Shaping Company Culture

As a CEO and former football player and coach, I see many parallels between business and team dynamics. A team has a shot at winning only if all players do their job to the best of their ability. The best quarterback cannot be effective without a solid line and talented receivers.  A running back can’t gain yards without blocking support.  Every position has a purpose, and each must work collectively as a team to succeed.

Robert Coolidge
      President & CEO

For your business to thrive in the long term, you should follow a playbook of strategies to build a winning team and company culture. Here are just a few to consider:

  1. Communication – Leaders should communicate often and honestly about company direction and progress. Silence only leads to speculation and rumors, which are often wrong and can cause distraction and impact morale. Keeping employees informed is also critical to ensuring everyone is working from the same playbook. The more information you share, the more employees will feel ownership.
  2. Integrity – Playing by the rules, even when no one is looking, is a key factor in forming a trusted, honorable team culture. Instill zero tolerance for any shady, corrupt behavior. Always remember your culture forms your brand.
  3. Commitment – During a merger/acquisition, deciding go-forward branding is typically near the top of the To Do list. Whether you opt for a brief co-branding period or hard cut over, all entities must embrace and commit to the new team identity. Uniting under a common brand best promotes a team culture and helps avoid an attitude of “them against us.” Eliminate items with the former brand and substitute with the new to promote company pride as one team.
  4. Empowerment – Empower your team to make decisions. Don’t penalize them for making mistakes; if you never make mistakes, you’re likely not pushing yourself hard or fast enough.  If you do happen to fail, focus on correcting, learning and moving on smarter rather than dwelling on blame.
  5. Goals – Setting baseline goals comes from the top down.  Perfection or 100% should always be the goal.  Anything less is an opportunity for improvement.
  6. Involvement – When starting a new project, ensure initial discussions include everyone who will play a role in execution no matter how large or small. Exclusion could create unnecessary insecurity and confusion. Winnow down the team to core players as practical, but solicit opinions from all members to convey the value of their input and place on the team.
  7. Accountability – Every player must be held accountable for their position and field assignments for the team to be successful. As Bill Belichick would say “Do your job.” Tracking performance and taking responsibility to make improvements is integral.
  8. Pace – This also comes from the top down.  Set the pace for others to follow. Work hard and fast with the intent to execute better each time.  This will guide your team on a path of success.
  9. Prosper – Setting performance goals and incentives gives those who want to excel the chance to be recognized and advance.  It doesn’t matter if they’re in the warehouse, call center or collections – everyone likes to be a winner.  Those that do not have the drive to succeed should understand that their future will be dictated by others.
  10. Camaraderie – While it’s vital for the team to excel on the field, it’s just as important for members to build relationships off the field. Getting to know each other on a more personal level fosters trust and understanding that is difficult to achieve during office hours. There’s a reason that an entire cottage industry is devoted to “team building” activities.

By regularly evaluating your team environment, you can quickly identify and address gaps in your playbook. Always keep your eye on the ball to load the scoreboard.