MRO purchasers look to authorized distributors for leadtime help
Motion Industries and SKF show why it's important for purchasing
By Susan Avery -- Purchasing, 9/13/2007 6:00:00 AM
As leadtimes for some critical MRO components such as bearings stretch out, buyers managing relationships with authorized distributors may find it easier to get the parts they need to keep their facilities up and running.
Such is the case for the purchasing operation at a large steel company that saw supply of some bearings tighten recently. The company has a long-term relationship with manufacturer SKF and its authorized distributor Motion Industries.
"Motion contacted us and together we worked out an order-processing plan to make sure the customer has the inventory it needs," says Bill Moore, senior vice president of sales development and channel management for SKF Service Division, USA, Kulpsville, Pa., a global supplier of roller bearings and seals.
"In addition, we conducted a technical review of the company's internal processes that helped bring about $1.6 million in productivity improvements and cost savings," he says. "A nonauthorized distributor would not have access to our technical resources, and we would not have supported them if they asked."
The buyers at the steel company are under increasing pressure to improve productivity while keeping procurement and inventory costs down.
Neither of the projects led by Motion and SKF would have occurred had the buyers either opted to purchase bearings from a supplier selected based on price or, in a panic to make sure that they had the parts needed, turned to a source though capable of providing the bearings, were not authorized by the manufacturer.
For some manufacturers such as SKF, nonauthorized sources buying and reselling their products, especially those in strong demand right now, is a growing problem. "I don't want to infer that all nonauthorized distributors are bad," says Moore, adding that the issue was discussed by his peers attending distributor association conferences this spring. "But nonauthorized distributors can't offer customers the manufacturer's warranty or its technical expertise and product support."
 Miller: “The value of an authorized distributor is in its access to the manufacturer’s technical knowledge.” |
Tom Miller, executive vice president and COO, U.S. groups and divisions at Motion Industries in Birmingham, Ala., says the value of using an authorized distributor is most evident in its access to the manufacturer's technical knowledge. "As an authorized distributor, we can apply the right product at the right place to give the customer the longest service life. Number two is the ability to work hand-in-glove with the manufacturer on its production schedule. Number three, there's an obligation on the distributor's part to stock and inventory the manufacturer's products." Authorized distributors also work with manufacturers to provide customers with quantity price breaks.
An authorized distributor for SKF annually signs a legal document that states the supplier will maintain inventories in a prescribed way. The distributor manages the inventory and tracks the flow of materials beginning with the SKF location where it purchased the parts—in the U.S., Canada or Germany. SKF also requires the distributor to maintain a certain level of proficiency in its internal processes, to ISO or quality standards for warehousing, billing, shipping and receiving. It has a formal process so the distributor can return products that may become obsolete.
SKF and other manufacturers invest heavily in training personnel at its authorized distributors on use of their products.
SKF's Moore also points out that authorized distributors can help customers solve application issues that involve products other than bearings. "If there's an associated problem affecting product application, the distributor has the knowledge or can get other people immediately to the site," he says. "That's why we use distributors. It's rare that a problem with a bearing is simply a bearing problem. So, having authorized distributors is especially important to us."
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