There's a famous scene in the movie Cool Hand Luke in which the warden disciplines an inmate, played by actor Paul Newman, for trying to escape. He tells him: "What we have here is a failure to communicate." It's a line that's been repeated over and over again.

Communication, or the lack thereof, has existed for years in the distribution business, particularly among manufacturers and distributors. In fact, if you looked at any major study of distribution over the years, lack of communication is a main problem in the channel.

A distributor calls on a customer, finds out what he needs and puts the order in to his supplier. The distributor, in many cases, doesn't even want the supplier to know who's using the product or how it's being used. The distributor is afraid to reveal too much information because he's worried the manufacturer will use it against him and take the sale direct. It's happened many times before.

Point of sale information is a controversial topic. In the electronics industry many distributors are required to supply POS information to key suppliers. Just a few years ago, there was a major case in which a supplier terminated a distributor and gave POS information regarding specific customer sales to his new distributors. The original distributor filed suit and an agreement was ultimately reached.

The case raised a few questions as to who "owned" the customer or the information that was being supplied. In the MRO channel, some manufacturers that receive POS information say they do not share that information with their salespeople, but treat it confidentially.

The real question is, how can distributors and manufacturers work together on a joint marketing plan to increase sales without information flowing freely between the "partners" in the supply chain? As a distributor told me the other day: "Wouldn't it be great if the customer, distributor and manufacturer could sit down in the same room? The customer could tell them both the good and bad of the products that are being sold to him and what new products or improvements to existing ones are needed."

Finding out what the customer wants and communicating across the channel — wouldn't that be a novel approach?

Jack Keough, Editor/Associate Publisher jkeough@reedbusiness.com