Amy Bostock: What was the immediate impact felt by your company when COVID-19 first sent the industry into a tailspin last March?
Malcolm Caldwell: There were cancellations and delays of orders and an immediate loss of service-and-parts business. We had equipment in stock that was ordered for delivery last March and April but delayed until summer or fall 2020. We have customers that have not re-opened or are operating at such a low level that they’re postponing installation of new equipment until the revenue has recovered.
Chip McIntyre: At the onset of the pandemic, we worked closely with our suppliers to obtain concessions for our hospitality customers because their businesses were hit hard. We also quickly pivoted to source product and build supply chains for completely new categories and managed increased volumes in other areas. Avendra’s sourcing team worked with suppliers to provide product information for available critical supplies and prioritized access to critical items to hotels that shifted to functional patient- care spaces or those that provided housing for frontline workers. We also assisted supplier partners in distributing donated products to hotel properties.
Olivier Reuillard-Guerrier: The immediate impact felt by P&G was [related to] concern for our employees.
We made a dedicated effort and commitment to support and protect our employees and keep them as safe as possible. We maintain that commitment today.
AB: Did you experience any interruptions in the supply chain?
MC: There were supply-chain delays as manufacturers dealt with lost days of production because teams of workers were sent home. There are certain parts that are experiencing long delays, such as computer boards and motors that are imported from around the world.
CM: Avendra has always focused on quality assurance and ways to help keep the supply chain safe, so the logistics of our normal business and products was not interrupted. As I mentioned previously, we had to source product and build supply chains for many new categories and manage increased volumes in other areas, such as masks, thermometers, hand sanitizer and electrostatic sprayers. This was challenging because our customers’ needs were evolving and there were obviously challenges given the spike in global demand and building new supply chains — some of which had many brokers and re-sellers entering them.
OG: P&G Professional’s global operations were able to identify trends and took steps earlier in 2020 to boost production and shore up raw-material supply on certain critical SKUs. During the pandemic, our product- supply and sourcing organization has been doing amazing work to ensure we can meet the increased needs of our current customers first and we’ve been closely managing supply so that we maintain a consistent flow of product while maintaining the health and safety
of our own operations.
AB: What strategies did you employ to combat the challenges presented by COVID-19?
MC: Harco is part of the supply chain supporting laundry facilities in key essential services such as senior care, hospitals, first responders, coin-laundry stores, apartment laundry and the hotel industry. We have to remain open to ship parts, supply our service staff and deliver replacement laundry equipment. We made significant changes to protect our team and customers from COVID-19. The immediate goal was separation, so we moved all employees who could work from home to that environment. That move includes all outside sales staff and several support staff. We split our internal support staff between a secondary office/warehouse site so we would not have a complete accounting shutdown if COVID-19 struck one of the offices. We closed our showroom and parts counter, then enhanced our website and social-media presence. We’ve targeted key industries struggling to re-start their businesses and comply with new regulations. [We’re also] marketing products we already offer to new markets that must now comply with COVID-19-prevention protocols.
CM: During the early stages of the pandemic, we increased the frequency and cadence of our client communications. We developed a variety of resources, such as our COVID-19 Resource Guide, to help clients mitigate the operational impacts of the pandemic and provide supplier-product information. We also conducted several webinars through our industry partners, such as the Hotel Association of Canada, to help get the message out more broadly. Avendra also provided very detailed guidelines to our suppliers, which covered everything from property delivery methods and employee-health screenings to social-distancing measures and
vehicle sanitation.
OG: During this unprecedented time, we deliberately took steps to ensure we were making a positive impact [on] employees, consumers and communities who have always been there for us. [That includes] protecting the health and well-being of P&G [employees]; serving consumers around the world who count on our brands and the benefits they provide; and supporting communities, relief agencies and people who are on the front lines of this global pandemic.
AB: All indications show guests in a post-COVID-19 world still want the amenities they’ve come to expect. How will these amenities need to be adjusted to maintain safety standards?
MC: The sanitation of the linens and towels has always been a critical health-and-safety issue. Communicating the safety protocols that are used and are in place will ease the guests mind so they can enjoy the room and get their rest. Hoteliers should take a hard look at the sanitation process of the linens and perhaps adopt new systems such as ozone injection or a change in the transport of linens to protect against contamination.
CM: There is no doubt that COVID-19 has caused an enormous sea-change in guest behaviours and expectations. In fact, some studies show that enhanced cleaning and hygiene practices have moved to the top of guest priorities. Regarding next steps during the recovery period, there’s obviously a heightened sense of food-safety practices and common-area and room cleanliness — and properties have had to modify their operations to adjust. In addition to touchless check-in, keyless room entry and touch-free equipment for vending machines and beverage dispensers, hotels have also started to re-imagine guest rooms. As an example, hoteliers are now providing covers for TV remotes to help reduce the spread of germs and are removing magazines, pens and notepads and replacing them with disinfecting wipes and amenity kits with PPE items such as masks and hand sanitizer for each guest. We believe approaches like this will be withus for the foreseeable future.
OG: P&G Professional research shows that post COVID-19, more than 50 per cent of hotel guests expect more thorough and frequent cleaning, hotel transparency on what the hotel is doing to keep guests safe and rooms clean; and visible signs of cleaning — such as seals/stickers on rooms, placards and employee-initiated checklists. The P&G Professional CLEANPlus experience is a program that signals clean from our top brands such as Microban 24 Hour, Comet and Spic and Span.
AB: What new product lines have you introduced/ramped up in response to increased health-and-safety requirements?
MC: Harco has offered ozone systems for years to our nursing-home customers. Ozone injection into cold water provides hospital-level sanitation during the wash cycle. This process saves energy by cutting hot-water use significantly and lowering overall water use. The ozone is an environmentally safe natural product that leaves linen and towels smelling fresh and clean without the need for harsh chemicals and will also extend the life of linen. These save dollars both on operating and capital costs. Many gas-supply companies offer rebates when ozone systems are installed.
CM: Nearly one year into the pandemic and face masks, gloves, hand sanitizer, disinfecting and sanitizing wipes and sprays, safety signage and clear barriers still remain in high demand from hoteliers. Now that the supply chain has adjusted, items that are needed in hotels should be in a good supply state for the most part. As an example, availability of hand-sanitizer dispensers took a while to catch up due to worldwide demand, but that has now stabilized. Similarly, disposable gloves have seen an increase in demand as businesses start to come back, so we have added supply to make sure our customers will have ample inventory as occupancy increases. We are also seeing increased demand for HEPA (High Efficiency Particulate Air) filters.
OG: While we introduced Microban 24 Hour in January 2020, demand for this product has grown exponentially since the start of the pandemic. Microban 24 Hour kills 99.9 per cent of bacteria in just 60 seconds and provides up to 24 hours of protection from bacteria growth — even after multiple touches. Microban 24 Hour products are also included on Health Canada’s list of disinfectants with evidence for use against SARS-CoV-2, the coronavirus that causes COVID-19.
AB: What are the two products that are most in demand from your customers?
MC: We’re being asked to help increase the laundry capacity in the same laundry-room footprint, so are offering larger-capacity washers capable of handling increased volume of laundry. We always recommend higher G-Force washers so drying time can be reduced. The new models of efficient dryers will automatically sense the moisture content of the load being dried and complete the cycle when the load is dry. This will extend linen life and save utilities. When laundry is processed faster and more efficiently, higher volumes can be processed in the same time and the same footprint.
CM: PPE will be critical for the next several months, as will disposable packaging to enable low- and no-touch food offerings. We expect to see a fair amount of innovation around this theme to help meet guest expectations around cleanliness and sanitation.
OG: As you can imagine, products with disinfection properties have been in high demand. We have products that both clean and disinfect at the same time — not a two-step process. Products such as Comet Disinfecting Bathroom Cleaner and Spic and Span Disinfecting All-Purpose Spray and Glass Cleaner provide a huge benefit to our-end-users’ cleaning procedures.
AB: How do you see the industry continuing to change, from a supplier standpoint, in the next six months?
MC: I’m worried that business travel will take much longer to recover and think there will be a real demand for travel as the shutdowns [end]. The population is sick of being held captive and will want to travel and get out of town. There is a real opportunity to re-build the hospitality business with Canadian and foreign travellers. The area inside the hotel-laundry operation that should be reviewed is the preventive maintenance on the equipment. If equipment has been left idle, don’t expect it to just fire up right away without requiring some attention. There are rubber seals and tubing that may have dried out and should be tested to verify proper functions. Testing and running full loads should be done prior to a full launch to ensure the operation is ready to handle the increased loads as occupancy returns. Remember, the laundry operation for your property will not be the only one getting started and service and parts may be difficult to source. Proper strategic planning will avoid a panic when the travellers return.
CM: As the vaccine becomes more readily available and hoteliers see occupancies increase, we’ll continue to work to drive efficiencies into the supply chain, causing creative thinking on how to save money and get more efficient. Suppliers should be getting ready for some of the pre-COVID-19 events to come back (weddings, family gatherings) but also adjusting to new approaches even as the impact of COVID-19 decreases. For instance, increased occupancy and the return of meetings may happen over time, but things such as grab-and-go meals and increased hygiene standards will likely remain. Suppliers should re-build inventory as occupancy and travel comes back, while also adapting to these new standards.
AB: What initiatives have you introduced to support your clients?
MC: We always work closely with our clients and their lending sources or we can introduce them to our finance partners who understand our clients’ businesses and will handle the details directly. We also have worked with our long-time customers on some extended terms when necessary and have asked other long-time customers with strong cash flow to not stretch their payments to us. It comes down to communication and discussing expectations and how those payments can be made and not playing games with anyone’s cash flow. Honest discussions have made for strong relationships that I trust will endure long after this pandemic is a history lesson.
CM: Avendra continues to work with suppliers and customers to help ensure the supply chain is supporting their business needs. This includes monitoring market conditions and product availability and providing updates on new category trends and sustainable sourcing options.
