In 1998, several members of our management team and I went to Boston for an industry convention. While there, we attended a presentation made by the group that consulted on the DREF (Distribution, Research and Education Foundation) study, which had recently been completed.
The group had an extremely interesting approach that advised distributors and manufacturers on how they could grow business and improve partnerships. The key question they asked was: What do customers want from their distributors? Customers, they said, wanted to know three things regarding their orders:
• How much is it?
• Do you have it?
• When can I get it?
These questions still need to be answered every day in the marketplace. However, companies must do far more today, and will have to do even more in the future, to satisfy their customers in order to retain and/or gain more business.
The NAW (National Association of Wholesale-Distributors) DREF studies have produced some excellent reading materials that have helped our company, and many others in the industry as well.
Facing the Forces of Change (The Road to Opportunity) and Outlook 2006, both available at www.naw. org, are two of the more recent publications that encourage management teams to look at their businesses differently, and challenge them to think strategically as they prepare for the future. The authors do a tremendous job outlining changes to come, which companies need to address if they are to remain successful in the future.
A Technology Shift
Just a short time ago (pre-internet), technology from a distributor’s perspective was being utilized as an inventory/order management tool. However, customers’ needs and requirements have changed. As a result, there has been a transition from inventory management to information management. The difference is technology and how it is being utilized. Now, it’s about the entire supply chain and all its partners. From raw material suppliers to manufacturers, to distributors, to contractors, to end-users, all stakeholders need to be integrated and linked with information.
When this integration occurs, and there is accurate and pertinent data to access, people and companies have the opportunity to extract value from the information. To be more productive up and down the supply chain, companies will need to share information so that systems are compatible. People will then become more efficient in their logistics, customer service activities, and overall capabilities.
The investment in technology and the implementation of supply chain integration takes time, energy, capital, commitment, planning, communication, and trust. However, when done right, and with mutual goals in mind, companies will get their return on their investment. Because it is difficult to implement everything at one time, it’s important to focus on priorities that will add value to all partners in the supply chain. Through communication, we can also make good business decisions by leveraging each other’s organizational strengths. If not, the tasks become more complex. We may even duplicate or triplicate work in ways that data integrity is compromised. This can potentially lead to a lack of standardization of data, which confuses business partners who need to utilize the information.
It would be hard to disagree with the fact that web ordering methods and accessing information online will increase dramatically. How will we respond? We all have choices. In the future, we can invest in technology and the right methods to deliver information up and down the supply chain. Or, we can get caught in the trap of looking back, not responding to changes in the industry, and therefore, not being best prepared to serve our customers and our own organizations most productively.
Our company certainly doesn’t have all the answers, but we are trying to learn from both industry experts and other organizations that have implemented best practices in this important supply chain integration area. As all partners in the supply chain reflect on the past and learn from it, it will help us answer the basic questions – how much is it, do you have it, and when can I get it – but more importantly, it will help us embrace future opportunities, so that we not only survive, but also succeed and grow as an industry.
Marc Blaushild is the president/COO of Famous Enterprises, Akron, OH (www. famous-supply.com).
Sometimes, before we can look forward, it pays to reflect back. Often that perspective,
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