Purchasing

Mary Walker

A review: Distribution 2007 Price is Still King
May 15, 2007

You must read this article entitled Distribution 2007: Price is still king. It is not often that we hear from customers that distributors are doing such a good job.See the facts of the survey.

The story is based on a survey. I was thinking, just really what is a survey? The key to a survey is “the target audience”.You all have received surveys that really do not fit your business.At one of the trade shows, Staples was handing out the “that was easy buttons” if you filled out a survey.Since I don’t buy this type of product and I really wanted a button, I told the Staples salesman, I would have to guess at the totals.

The end result was they wanted accurate information for the survey.He gave me a button for not filling out the survey.

The statement “price is still king” may not always get you the business.Certainly you have to be competitive in price, but that is not always the determining factor. The survey points out that 96% of buyers say suppliers are doing a good or excellent job. Distributors can’t do business from an empty wagon. Due to the increasing number of products, the distributor’s buyers are faced with a tougher job daily.Also the buyer is faced with buying special and unique products for their customers.Most distributors want to maintain a 95 to 98% service level. The buyer is continually working to have the right products on the shelf.

The article notes “availability, service, and technical assistance also are becoming more important to buyers when they select a distributor." In days past, when you bought a product line for a distributor, you were invited to a weeks training at the manufacturers plant. You were able to see the product made in a lot of cases, review the price books and policies, and best of all meet the people that you deal with daily on the phone. Maybe I am out of the loop but I don’t see much of that anymore. Sales reps continually visit our office and hold training sessions with the sales force.As they say, purchasing does not talk to customers.

As a buyer for a distributor, we all know our suppliers that offer support. 3M for instance is a company that furnishes hot lines for their customers and distributors. They have trained salespeople to work with the distributor’s sales force and their customers.

There are many companies that offer this assistance. I remember one time in the Briggs-Weaver days; a supplier picked up our sales force in their private jet and took them away for a week of training and entertaining. That is one time I wish I has been in sales.

It is a concern that when many of the older salespeople retire, will there be salespeople with product knowledge.

Purchasing has a formal process for measuring supplier performance. You can say that again. All you need is a good programmer and you can pull all kinds of data. What I need to know is how the supplier stacks up on delivery, error free shipping, quality, and accurate invoicing.In today’s business, it won’t cut it saying “your deliveries are always late”. When you call a supplier in to review their scorecard, you better have accurate data for the discussion.

In the distribution business to get the service needed for our customers, it takes everyone that touches an order to do their best. It takes the supplier to get the product to us on time that is a good quality product. We need the supplier to offer technical assistance when needed to sell the product to the customer.We must rely on our suppliers to give us the service that we must give our customers. Distributors that offer better service and can maintain a competitive price will get a larger share of the business.The distributor must offer an easy way to do business.

You don’t want to miss reading this article. Nice things are being said about distributors.

Posted by Mary Walker on May 15, 2007 | Comments (0)