Internet solutions
If distributors aren't selling online, maybe they should be buying online
By Sara Procknow -- Industrial Distribution, 7/1/1999
AN INTERESTING E-MAIL ARRIVED IN MY INBOX THE OTHER DAY, from an industrial distributor who shot holes in the idea of ever having perfect supply chain solutions running in an e-commerce world.First, he notes, customers don't want e-commerce, they want solutions. He writes, "Most customers we know are trying to outsource the MRO process to someone else, but that includes the day-to-day running of the maintenance crib." How would e-commerce work in that scenario?
Interestingly enough, he answers his own question, writing, "E-commerce providers will have to partner with other companies to do the work at the sites." Another point to the argument would be that distributors could buy product online for this customer. Likewise, this distributor could use e-commerce to buy lots of product from lots of manufacturers for lots of customers.
But before we get too far, this distributor's next point is that the Web can't replace distributors. And I agree with him. He writes, "The first attempts to buy MRO on the Web are already in process, but they can't replace the immediate needs for product that occur every day across the country when equipment breaks down."
Yes, many MRO products are needed in emergency situations when a line goes down or a plant needs immediate repairs. Will customers go online to find the best product for the job at the best price from any company claiming to have inventory, or will they call their favorite distributor who has helped to put out fires many times before?
The Web is not likely to replace distributors. Distributors are needed for their application expertise. The Web will, however, impact distributors and force them to adapt. After all, general purchases of commodity-type items could be procured over the Web (dare I say direct from the manufacturer?) with a pittance of orders being thrown at a few distributors' feet as if it were an after-thought. But the big question is, will distributors put up with it?
Finally, the distributor's e-mail makes one last point: "With very few databases in existence today at customer sites, and a lack of uniformity in product marking systems amongst the myriad of manufacturers that serve MRO needs, one has to wonder how much real progress can be made in the next two to three years."
While true, I wouldn't think that product naming conventions would be the reason to throw e-commerce out the window. Maybe the better e-commerce product would include a way to generate the customer's own product codes when the customer signs on to an e-commerce Web site.
E-commerce is a lot like the quality movement of the early '90s. Everyone's talking about it, a few customers are demanding it, and a few distributors are spending the money to put the systems in place to accommodate it. However, just like ISO is good for customer-distributor relationships, it is also good for distributor-manufacturer relationships. E-commerce follows the same principles, a point the author of the e-mail neglected to see.
If distributors aren't selling online, maybe they should be buying on behalf of their customers online. What's the old saying? If you can't beat them, join them.
Send your comments to Sara Procknow at sprocknow@cahners.com or call (617) 558-4289.
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