Arguably, order management and customer service are more complex in distribution than in any other industry. These complexities drive costs into the processes not only for distributors, but customers and suppliers as well. Distributors who want to combatshrinking margins or capture more market share need to develop a plan to streamline these complexities.

End users often need assistance in understanding what products they need to accomplish the task at hand. I have heard distributors say: "I do not sell drill bits; I sell holes,'' or "I do not sell electrical fixtures; I sell light." As the world gets more and more complex, distributors must become solution providers over product suppliers.

Of course there will always be a place for commodity items, but the more you can keep the focus on the value you add, the greater your margins and sales will be.

If one of your products can help a customer reduce their manufacturing costs, do you think they may be willing to pay a little more for the item than for a product that does not accomplish the same results? It's clear that to grow margins and increase customer service, we must grow our product knowledge to be able to provide customers with exactly what they are looking for, or to educate them on what they should be looking for.

This brings up the issue of whether or not your sales force can provide this kind of value to your customers. If you are a typical distributor, most product knowledge is stored in your salespeople's heads. Some of your best people are already selling value, but other, less experienced, salespeople probably aren't.

What if you had the ability to take the knowledge of your best salesperson and download it to your business solution, so all your salespeople benefit? With the click of a button, all the information your best salespeople had in their heads would be available to everyone. The technology is available to store all that product knowledge in your software solution and prompt your sales force when appropriate.

Right from the customer service desk, salespeople can access information that will help them sell solutions and not just products. When a customer asks about drill bits, the salesperson will be prompted to ask about holes. When the customer asks about lubricant, the salesperson will be prompted to ask what they are trying to accomplish.

And the sharing of information isn't limited just to your sales force. Customers can receive e-mails or faxes – directly from your business solution – so they can determine exactly what they need. Many distributors even go one step further and provide access to this information on an integrated Web site, so when the customer goes to buy products online, they can see exactly what they're ordering to ensure they get the best value and accomplish the task most effectively.

Aggressive use of technology can help improve gross margin dollars per employee – a key business indicator measuring the health of a distributorship.