College Station, Texas — A study recently conducted by the Thomas A. Read Center for Industrial Distribution and Education at Texas A&M University found that customers who purchase MRO goods are more likely to give a larger share of business to those distributors who can document cost savings.

Thirty-four percent of respondents said that they ask for cost-savings documentation from suppliers.

Brian Reynolds, associate director of the Read Center, said distributors already have some of the basic tools needed to start offering documentation. For many years, he said, distributors have introduced new products to customers, believing those products are more efficient, longer lasting and/or less expensive.

"Customers say, 'Okay, here's a trial P.O., we'll let you know what happens with your product,'" said Reynolds. "If, at the end of the trial, the distributor is following up, finding benefits (or drawbacks) and writing up those results, he has completed a total-costs savings document for the customer."

"When I was in distribution, we had a one-page form that provided a simple measurement of performance of, say, a new grinding wheel. We could quantify more production and present that to the customer on an annualized basis," he said.

The problem has been that distributors have not traditionally completed the process. Results must be presented to the end-user in a formal way, he said.

"I think every distributor should have, at least, annual business meetings with customers to say, 'Look, we're not selling today, we're looking to see how we saved you money and time this year,'" he said.