For its annual Distribution Report, PURCHASING Magazine often queries readers on the performance of their distributor suppliers. This year, a majority of buyers rate distributor performance as good to excellent.

But, what about customer performance? Do distributors rate purchasing operations? If so, how do buyers measure up?

Purchasing also turned the tables this year, asking general line distributors what they think of their customers' buying habits. In a recovering economy, some distributors were understandably reluctant to discuss the topic. Of those who did respond to PURCHASING's inquiries, the majority said customer performance could use a little improving in some areas.

Distributors say buyers do especially well at having well thought out purchasing processes, e-procurement readiness, and on educating end users throughout their companies on proper procedures for placing orders with suppliers. They give buyers fair to good ratings for such key performance measures as ability to forecast, ease of doing business, and understanding cost issues.

'Customers have evolved in their understanding of the need for win/win relationships with distributors. They are progressing in the transition from a 'I need the best price' to 'I need the lowest cost of acquisition' thought process,' says Willie Barnes, national market manager-end users, Graybar Electric, St. Louis, Mo.

General line distributors contacted by Purchasing measure their customers in a variety of areas. Among those most often addressed: having well defined procurement processes, ability to drive compliance to national agreements, change management capabilities, e-procurement readiness and communication skills.

'Customer performance can and has been rated in all of these areas, but the single most important factor in measuring performance is the ability to have effective lines of communication with the customer,' says Barnes. 'The willingness to listen by both the customer and distributor defines the success of the relationship and the achievement of maximum performance.'

Applied Industrial Technologies, Cleveland, Ohio, is especially interested in how well customers have their processes defined and how well they control them. Says Bill Purser, president & COO, 'In particular, do they have an accounts payable process? A shipping and receiving process? A material management process? A well-defined procurement process? We look at how good the processes are, how well they can control their system, and if the processes match up well with us.'

Some distributors say buyers need to work more on e-procurement readiness, driving contract compliance, and better understanding distributor costs, although other respondents give their customers good grades in these areas. Improvements, they point out, benefit both parties. A move to e-procurement (EDI, Internet buying), for instance, helps control and lower transaction costs.

In driving contract compliance, control of maverick spending is always challenging, concedes Purser of Applied Industrial Technologies. 'A lot of product is bought outside the contract even though it might be covered. Many customers have difficulty getting a handle on repetitive purchases. This makes it hard to forecast usage and need.'

Also high on many distributor wish lists is for purchasers to consider their costs of doing business. In particular, some customers 'need to better understand the cost of performing some of the value-added services they now write into their requests for proposals,' adds Graybar's Barnes.

And, while customers earn high marks from distributors for their purchasing systems, their accounts payable and receiving processes could stand some improving. Missing remittance information, distributors say, causes productivity problems for both parties. Another area that could use some work is suggested by Brian K. Flinn, E-business development manager, Fastenal Company, Winona, Minn., 'Customers need to adhere to more industry standards, such as units of measure, United Nations Standard Products and Services Classification codes.'

Most frequent suggestions from distributors on how buyers might make their jobs easier to perform include working to improve internal processes, driving compliance and working together as partners. 'More effectively driving compliance of agreed-upon terms in each of their locations,' is how Michael E. McGrew, a spokesperson with W.W. Grainger, Lake Forest, Ill. responds to the question. A spokesperson for Motion Industries, Birmingham, Ala., agrees: 'Working closer in partnership to meet mutual agreement criteria and measurements.'

Others say customers often overestimate their ability to control their buys, particularly when a contract covers multiple plants. 'Putting more control where it belongs would make everyone's life easier,' says Purser of Applied Industrial Technologies.

And, 'by looking at the customer/distributor relationship through the eyes of the distributor, the customer might better identify the distributor that best meets its needs and work more diligently to foster the relationship,' says Graybar's Barnes. 'It's no longer a one-way street. Both parties have to work to make the relationship grow.'