It's the process, not the product
Realizing opportunity in a changing environment
By Richard S Poole -- Industrial Distribution, 6/1/1998
Downsizing, restructuring, right-sizing, realignment for maximizing... you get the idea. These are terms that present a picture that most of us do not view in a positive manner. Cost reductions have become a daily issue.We are competing in a global market today more than ever. Our cost base has to be reduced in order to compete with the incredibly low labor rates of our global competitors. We can reduce our costs by improving our processes. But, process improvements generally emanate from engineering groups. Cost reductions tend to eliminate non-production functions. Most manufacturing companies view the engineering discipline as a non-production function. So how do we reduce our costs if we have eliminated the resource that helps us improve our processes?
We, the value-added distributor/manufacturer team, become process providers. The opportunity is tremendous, but we will have to modify our approach to the market. We will evolve from a product provider to process provider. As a team we will fill the need that enables the end user to compete in the global market. The team that offers process solutions does not become a valuable supplier. It becomes an invaluable asset.
Historically, we have been able to take our product's features/benefits and relate them to solve any problem, even some that did not exist. To become that invaluable asset in today's market, we have to think in terms of process. A process is minimizing set up time, in addition to manufacturing more products per tool. It is reducing cycle time, in addition to consigned inventory. It is maximizing efficiencies, in addition to cheaper prices. The process is the opportunity, not the standard product answer to a problem.
Providing process solutions requires an evolution in our approach to the marketplace. The traditional relationship, where the distributor knows the customers and the manufacturer knows the products, works but does not help us. Channel cost reduction has been a hot topic of discussion for the past few years. We have to be more effective with fewer resources. So the solution evolution becomes an even greater challenge. Partnerships, relationships, whatever term you use, must evolve to a team.
Market/sales plans between the distributor and the manufacturer are a necessity, not a luxury. Each member of the team has to take responsibility, either in part or whole, for the market we are trying to serve. We agree on the tactics necessary to be successful and then execute the plan. Communication and information transfer becomes a critical factor to the success of the team.
Market/sales plans are nothing of an evolution. Maybe the approach of not having both parties expend energy on the same account is different. But this formalized process has been practiced by many for several years. The evolution comes in what we take to the targeted end user: process improvements. In our sales approach, we have become pretty adept at talking about cost reductions such as more parts per product, lower inventories and reduced prices. But when is the last time we identified process improvements?
Training is the key component to the evolution, and a thorough knowledge of product capabilities forms the basis for process recommendations. Manufacturers are educating their own organizations on more than the traditional product features/benefits. The field sales and application engineering groups have become more educated in the attributes of cellular manufacturing, just-in-time inventory, and reduced set up times. We can share our education with our distribution team members in how to recognize areas of opportunity.
There can be no substitute for product knowledge. Consequently, the traditional distributor sales meeting cannot go away. This event has to evolve to a product knowledge session that includes market planning and utilizing technology to educate. The sales meeting can then evolve to discussions about product, process and market.
The solution provider has an incredible opportunity for the future. Distinguish yourself!
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