ID Day challenges distributors to add value
By Industrial Distribution Staff -- Industrial Distribution, 5/1/1999
Chicago--Highlighting distribution's role in manufacturing, Industrial Distribution Day activities took place on March 16 during National Manufacturing Week with a call to action.The first challenge came from Industrial Distribution Assn. president Sam Mitchell. "If we don't add value to the channel, we won't exist," said Mitchell, president of E.C. Blackstone. "Our greatest challenge is to embrace emerging trends and make industrial distribution the channel of choice for this industry."
Second, Harbinger Corp.'s vice president Dan Manack, featured speaker at the Industrial Distribution Day luncheon, challenged the audience of distributors and manufacturers to add value by implementing electronic commerce.
"Distributors have an opportunity, because of their relationship with customers, to be a single point of information for those customers. And, by adding e-commerce, distributors can make it much easier to do business," Manack said. "There is so much activity tied up with inefficiencies and dissatisfying the customer, distributors using e-commerce can make a substantial difference in eliminating the delays and inaccuracies."
Manack pointed to the most common areas of supply chain inefficiencies, and areas where e-commerce could help to solve, which includes:
* Higher operating costs
* Longer cycle times
* Obsolete inventory
* Excessive carrying costs
* Inaccurate orders
With the growth of the Internet, buyers and sellers are going online and exchanging information, and according to Manack, with the growth of ERP systems, they can process real-time transactions and current information for customers.
Forrester research predicts business-to-business electronic commerce will grow from $43 billion in 1998 to $1.3 trillion in 2003. That's good news to the automotive industry, whose product AutoChain Online was introduced recently. The Automotive Industry Action Group, working with Harbinger Corp., developed AutoChain Online to assist in automating the supply chain.
"The automotive industry had a billion dollars of inefficiency," Manack explained. "Now, any trading partner within the supply chain shares scheduling information, shares production information by being a common repository of information. It's working together towards process improvement."
Questions from the audience dealt with manufacturers selling direct through the Internet and the impact of W.W. Grainger's online offering, OrderZone.com. Manack's response was that manufacturers of MRO and production supplies need distributors.
"It's not about removing the relationships where it is needed," he said. "One way distributors can compete is by automating their sales force with Internet access and taking orders with the customer using the Internet."
EDI was another topic for discussion from the audience. According to Manack, it is not EDI vs. the Internet. He explained it this way: EDI is a set of standard transaction sets -- a language -- that can be sent over a VAN or the Internet. "Using the Internet, you just change the transport methods," he said.
In closing, Manack told the audience to understand their own supply chain. "How is value created for your customers? What nonvalue steps can be eliminated? Seek opportunities, like e-commerce," Manack said.
An awards ceremony was also held during a post-show networking reception for the winners of Industrial Distribution's 1999 Excellence in Distribution awards. The award winners are: Sanders Tools & Supplies, Texas Process Equipment and Cunningham Supply.
Preliminary numbers for National Manufacturing Week, held at Chicago's McCormick Place, put 1999 attendance at 2,100 exhibitors, 60,000 visitors representing 47 countries.
The fifth annual Industrial Distribution Day was sponsored by the American Supply & Machinery Manufacturers' Assn., the Industrial Distribution Assn., the Fluid Power Distributors Assn., the Power Transmission Distributors Assn., Industrial Distribution magazine and Reed Exhibition Companies.
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