The relationship between manufacturers and distributors appears to be getting worse, according to a national study of manufacturers and distributors conducted by the Industrial Performance Group of Northfield, IL. Specifically, the report found that 82 percent of the manufacturers and 92 percent of the distributors believe that deteriorating relationships are causing sales and profitability to fall. The study, based on interviews with 750 manufacturers and 500 distributors, also shows that conflict in these relationships is increasing, while trust and communication are declining.

In fact, according to the study, the level of communication between manufacturers and distributors has declined significantly since the last study was conducted four years ago.

We're not totally surprised by the findings. Recently, a distributor in the South told us that his biggest competitor isn't other distributors — it's his suppliers. Another distributor told us he would be "loathe" to share any sales information with his suppliers because he didn't trust them. Our own 55 th Annual Survey of Distributor Operations shows that one of distributors' top concerns is manufacturers selling direct.

In this latest study, manufacturers said that the biggest problem with their distributors is a lack of commitment to their products and promotional programs. They also said that distributors lack sales and marketing skills, as well as the ability to manage inventories.

Meanwhile, the number one problem for distributors is the ineffective or inconsistent management of territories by manufacturers.

The ironic part of this whole debate is that the customer doesn't care about the manufacturer-distributor relationship. What he wants is seamless delivery of products at the right time at the right cost. And the only way that can be done is if a manufacturer and distributor work together to achieve that result. That's the real bottom line.