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Identifying "best practices"

In an effort to improve distributor- manufacturer relationships, PTDA has set out to break down barriers and re-build trust

By Stephanie A. Kaplan, Contributing Editor -- Industrial Distribution, 4/1/2003

As in many segments of the industrial distribution channel, overall lack of commitment, cooperation and communication in power transmission/motion control distributor-manufacturer working relationships hinders both parties' sales performance and profitability. To collaborate more closely to benefit customers, distributors and manufacturers must overcome long-held beliefs and mistrust.

To help address these issues, in 2002 the Power Transmission Distributors Assn. developed a list of distributor-manufacturer relationship best practices to lay out the "golden rules" of these relationships. To illustrate how each practice benefits distributors, manufacturers and their customers, PTDA has developed a series of member case studies on the true meaning of these guiding principles. The following two case studies, told in the distributor's and manufacturer's own words, are part of this series; for the complete list of best practices, visit http://www.ptda.org/members/bestpracticeslist.htm.

 

Case Study #1

Who: George Flolo, General Manager, The Flolo Corp., Bensenville, Ill.

Branches: Five

Key Markets: Municipalities, industrial machinery, fabricated metal, rubber and plastic, food processing, paper products, chemical

Best Practice: Your people are accessible

From the customer's perspective, the quicker the answers come, the quicker the problem goes away. Accessibility leads to faster solutions.

For our best suppliers, we have the names of specific people that really go deep into the bowels of the organization and are responsive to our calls. If a salesman has a question about how a product works in a certain environment, he can call one of the supplier's application engineers and get an answer while he's standing in the customer's office.

With too many of our suppliers, getting an answer may take anywhere from 24 hours to two weeks. Sometimes you're forced to go through channels and your question gets shuffled up the line … or people are so busy they can't get back to you quickly … or they're hiding behind voicemail and not returning your call. It's just a tremendous waste of time, because now you have to make more calls to get the answer.

Knowing that we can get to the real experts to get the answer we need quickly is a real confidence booster for my salespeople when they're in front of the customer. And it frees up their time to go get new business because they only have to handle that transaction once.

We had a situation with a major customer who had a very large horsepower drive that failed because of a plant fire. We were able to work with our supplier to get a replacement system onsite and started up in only three days … practically unheard of turn-around time. That's when accessibility really counts: when you need to talk to someone immediately to verify that the right part is in stock or help you identify a substitute that can be used with minor modifications.

And we're not the only ones who notice whether or not a supplier is easy to do business with. Being accessible also builds the manufacturer's brand with our customers. When customers have a good image of the supplier, they may even specify them by name. It's not unusual for customers who've had good experiences with a particular line to gradually move all of their business to that supplier.

And it's not just accessibility to our suppliers' technical experts; it's the ability to get to decision-makers who can make things happen. One of our municipality customers went to a consulting firm on the West Coast to design a new wastewater facility. After the customer saw the preliminary specs, they came to us because the drive supplier they'd been most satisfied with was not included in the list of brands.

Even though the spec rewriting process takes weeks, we had to get the ball rolling quickly — and that takes immediate access to the very highest levels. With one phone call, we were able to work with the manufacturer's national sales manager and product managers to schedule a sales call on the consultant. Within two days, we'd managed to start a dialogue to get that supplier added to the specs so we'll be able to quote on their products.

If the supplier makes it easy to deal with them, you know we'll go back to them the next time — and push business their way whenever we can. If they're not — well, lack of responsiveness on a technical problem with a particular product just cost one of our suppliers all of their business at a food-processing plant, about $150,000 a year. We've managed to keep that customer's business, but we're switching to other brands to do it.

The bottom line: Today, a quality product is simply a given. Pre- and post-sales support is what really differentiates manufacturers for both distributors and the customer.

Case Study #2

Who: Bob Ruland, President, Ruland Manufacturing Co. Watertown, Mass.

Locations: One production facility

Key Products: Shaft collars and couplings

Best Practice: Acknowledge mistakes and work to correct them

We want our distributors to take responsibility if they make mistakes and really work to prevent them. Everyone makes mistakes; if you admit them and take both short- and long-term corrective action, you will have better-served and more loyal customers — and business partners.

In our own company, we've found that proactively correcting mistakes ensures ongoing high quality and service, as well as ease of doing business. If there is a problem, our goal is to admit it and provide both an immediate fix and long-term corrective action.

Distributors really are in the middle if there's a problem with component selection, and since they tend to be less technical than the manufacturer, they may find themselves stuck without a solution. Part of correcting mistakes is recognizing when you simply don't have the resources to solve a problem…calling on available resources to help.

Today, nobody has time to fool around with people who don't want to accept responsibility or focus on making things right. We want our distributors to be customer-service oriented. We want to empower them to admit mistakes, to say, "We're sorry. We'll ship you the right part." Or, "Let me get you someone who can answer your technical questions."

We wish our distributors used us more to help customers. We're eager to offer technical training, in person and online, and to give advice on product applications. We're even willing to recommend other manufacturers' products if they're better suited so that the distributor can find the right solution for the customer.

A few years ago we had a situation with a coupling for a large customer, where the distributor made the mistake of comparing our product with our competitors' only on price, instead of on performance features and benefits. We want our distributors to go to bat for us, explaining that while other suppliers might offer a cheaper product, there's a real tradeoff in quality. Instead, after multiple failures, we received a call directly from the customer saying he didn't want to work with them anymore; the distributor salesperson ended up looking bad to us and to that customer.

The bottom line: Making mistakes and correcting them is an important part of continuous improvement. Failing to do so can lead to a form of corporate arrogance that may be your company's downfall.

The Flolo Corp. and Ruland Manufacturing are members of the Power Transmission Distributors Assn. PTDA is an association of industrial distributors and manufacturers dedicated to providing solutions to customer needs. A strong relationship between manufa cturers and distributors, combined with focus on the customer, ensures high quality products and services that provide value. This is the first in an occasional series of PTDA's Best Practice Case Studies.

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