A distributor adds value as it walks in door, says study
Specialist role continues to grow
Staff -- Purchasing, 10/6/2005
The specialist distributor—one with knowledge of the manufacture, installation and maintenance of the product—brings new value to bearing buyers every time the distributor walks in the door.
That's according to results of recent research by the Bearing Specialists Association (BSA), a distributor association in Glen Ellyn, Ill., that details how industrial buyers define distribution value and leverage that value to achieve greater efficiency.
BSA bases its thesis on results of interviews with a cross section of study participants who oversee the purchase, specification and application of bearings. Industry segments include OEM and MRO customers of various bearing products from discrete and process manufacturing, mining and construction companies. Some of their comments:
- The constraints of global competition in 2005 require bearing consumers to find critical leverage points outside the plant walls to address cost challenges and solve day-to-day operational problems, often with reduced capital, operating and labor expenditures.
- A specialist distributor is a strategic partner who brings new value every time he walks in the door. That's a key difference for separating the specialist from the generalist.
- Bearing buyers who follow best-practice methods with benchmarks, leverage specialist distribution re-sources more strategically and effectively than those who use more traditional supplier-management tools.
- Innovative bearing buyers tap into the service expertise, knowledge and experience of specialist distributors at multiple levels to achieve lowest total cost, stabilize supply, improve processes and more.
- Knowledgeable supplier-specialists, fulfill specific needs in six critical areas: product availability and cost control, process improvement, service reliability, benchmarking assistance, measurable value, and an intangible value, the personal touch.
"Customers are seeking ways to get more value from knowledgeable supplier-specialists," says Tom Gale, president of Gale Media, which conducted the research for BSA. "Innovators are using a broader set of evaluation tools to measure return from supplier relationships," he says. "These include total cost of ownership (TCO), total cost reduction and other metrics that incorporate process improvements brought by the distributor. There's opportunity for distributors to help customers optimize their production/process capabilities through their expertise."
The research identified six key strategies distributors can use to enhance their consumer relationships.
- The most important issues for bearing customers are availability and cost. Demand planning is key.
- Process improvement has to work from two directions. Bearing distributors help customers drive process improvements by (1) bringing technical expertise to optimize production and maintenance operations, and (2) offering supply chain expertise to streamline purchasing and inventory processes. Bearing specialists can help purchasers implement new supply chain efficiencies.
- Service reliability is essential. Getting the right product into the customer's hands when he or she needs it, day in and day out, and being responsive when questions or problems arise are important factors in determining which distributor a customer will choose for a strategic partner.
- A competitive marketplace and fewer internal resources mandate the adoption of supply chain best practices. Bearing distributors offer a breadth of application experience as well as other ways to optimize product life cycles, including application assistance, specification, purchase, inventory, use, maintenance, recycling and disposal.
- To quantify and track supplier performance, bearing purchasers must apply hard metrics to service indicators such as on-time deliveries, fill rates, leadtime, and inventory as a percentage of sales and cost savings due to inventory rationalization. Distributors can help document the value of hard and soft cost savings.
- Bearing purchasers value the intangible personal touch. In addition to measurable performance, purchasers come back to distributors for the value brought by expert salespeople who not only are technical experts in their product area, but also take interest in knowing and anticipating customer needs and leading the search for the most effective solution.
Producing automotive parts on a just-in-time (JIT) basis leaves no room for downtime. A study participant, who uses bearings in both OEM and MRO applications, looks to its bearing specialist for assurance that the parts it needs will always be in stock.
"Equipment reliability—maximizing uptime—is my most critical issue," he says. "We're a JIT facility that's leaned-out to where we can't be down for anything. Bearings play a large role in our equipment, so we pay attention to the basics, maintenance and lubrication, and we have sacrificial bearings that we know will be short-lived and we change them out as needed."
The study participant looks to his bearing partner for technical support to help anticipate possible problems, going into the factory and looking at new production machinery, making a list of critical spare parts and making sure they are on the shelf.
The bearing distributor manages the central stores department, and knowledge of the company's operations is its greatest strength. "I don't own those people," he says. "I consign inventory from them, and they manage other consigning suppliers for our MRO items. They bring the experience and knowledge we need to be more cost-efficient."
The bearing distributor sits in on the company's process-optimization team meetings to stay on top of emergent issues in maintenance, process engineering and equipment engineering. "I involve them in problems and challenge them to help me find a better way," he says. "I'm always looking for the best technology, the best bearing for the application. They do go out and try to find a solution for me."
|
View All Blogs
Now Playing:
