We became aware of integrated supply in the mid-90's, when we began receiving orders from large distribution companies with names we'd never heard of before. Who were these guys and how did they find a small manufacturer like us in the first place? We were curious for answers to these questions and were also intrigued that this group of distributors seemed to lack the price-sensitivity gene so dominant in our traditional distributors. We set out to learn how to develop a marketing strategy for this group.

We attended our first Industrial Supply Manufacturer's Assn. /Industrial Distribution Assn. convention in 1996, where we learned that integrated supply was an emerging trend in large companies — 10,000 of them. The goal was to wring out unnecessary transaction costs in their operations by shortening their list of MROP vendors to a few hand-picked integrated suppliers. Cutting transaction costs was where the gold was to be found, and product price-cutting was less of a priority in the short term. The gurus went on to tell us that the middle market, with four times more plants than the larger business segment, would be the next area of concentration by integrated suppliers.

It made sense to us that if industry was heading in this direction, then all industrial distributors would need to broaden their product offering to survive in this new arena, and smaller manufacturers would need to help distributors strengthen and deepen their product and marketing knowledge. Specifically, we would need to take these actions:

• Communicate. As distributors broaden their lines, we need to help solve the end-users' problems quickly by providing useful applications-oriented information in a clear, concise format. No more self-indulgent brochures with pictures of our founders and our plants. We need to dig deeper by providing more application photos and describing exactly how our products can save the customer time, money, labor, etc. That's the kind of information this new slimmed-down industrial sector needs. And we need to provide it all online so that those solutions are just a click away.

• Educate. In addition to providing new user-friendly materials, we need to provide training for these new students. Thanks to PowerPoint technology, even small manufacturers can develop professional tools to demonstrate how their products can make industry more safe, efficient and productive. If we don't have people on board who can do such training, then we need to invest in them as soon as possible. If we don't do the teaching, who will?

• Facilitate. Once the sale is made, the small manufacturer is in familiar territory — producing and shipping is what we've always done. But in today's customer-centric world, that process must be streamlined wherever possible. Small manufacturers can make it easier for distributors to buy and re-sell our products by incorporating convenience-related services, such as: maintaining higher stocking levels to assure broad-line distributors' immediate access to inventory, and keeping that stock as close to the customer as possible to virtually eliminate unnecessary lead times.

Each of these initiatives has required a healthy investment of our time and money. And regardless of the future of integrated supply, the investment we made has not only enabled us to strengthen our competitive position in specific distribution channels, but, perhaps more importantly, to evolve into a better all-around manufacturer.