The entire distribution chain is now linked together by technology in every phase imaginable. The larger distribution networks reports entire complex shipments arriving at their dock doors with close to 99% accuracy rates making the process of counting in inventory no longer cost-effective. The time and efforts spent trying to find the one miss counted part or supply is simply not worth the labor. Everything is scanned and rescanned countless times before it ever leaves the main distribution center. The accuracies that can be achieved today are astounding.
The way successful supply houses are being run in today's brave new world are totally dependent upon a business model that strives for total efficiency; for example how many steps does it take for your warehouse personnel to pull an order? How many keystrokes does it take you staff to enter an order? The ideal scenario is that your customers are entering their own orders online thus increasing your gross profit dollars generated per employee. If you are not actively trying to move more of your customer base over to internet purchasing you are missing out on the opportunity to increase your margins while keeping your customers loyal. Studies have proven once a customer becomes efficient navigating an Internet site it becomes extremely hard to convince that customer to switch sites or suppliers. It becomes much easier to communicate training class, special sales offers, new products, etc.; with your customer base once they become regulars to your Internet site.
The successful wholesaler understands you don't necessarily need to add more employees instead you need to maximize your current employees abilities by applying new technologies, best practices, and solid procedures.
The forecasting program that various software platforms offer allows a supply house that is well managed to rarely be without inventory. If your operation lacks in any of these critical areas chances are you will soon be extinct with players such as Amazon creeping into the fray and manufacturers selling more and more direct your margin for error is almost nonexistent.
You must strategically look at how product enters and exists your building. How well and often does your staff scan product? How interconnected are you’re various locations and how well do they share stock? Do you have the right software that will allow you to code stock as A, B, C and D moving stock? Do you rotate stock to help prevent old inventory from becoming either obsolete or becoming second a generation part? The key is to relay on the right reports which can only be generated by investing in the appropriate Supply Chain Management (SCM) software that way you can reduce your amount of costly dead stock. The more you use technology the more training becomes an absolute must this is where most companies fall short. The days of understanding just the products that you sell and your customers is over your employees must now be well versed in how to use the various technologies that are at their disposal whether that is using forecasting models, using smart phones, I-Pads or tablets, scanners, Customer Relationship Management (CRM) software, or HVAC apps, a detailed ongoing training program is more important in today's world than ever before.
Technology is now in the hands of your customers as they are more tech savvy than ever using I-Pads or various tablets for everything from sales presentations to invoicing so the question for the wholesale supplier is whether your outside sales force is keeping pace with the technology that your customers use? Do you have video referrals to show customers? Do your sales people employ the use of power point presentations? What kind of dedicated e-mail campaign do you have designed? How about a text message campaign? A text message is ten times more likely to be opened than an e-mail message. The real questions are how well and often do you effectively reach out to your customer base?
If your company cannot provide what I call the “wow” factor your ability to retain customers will be tested. I believe there are many times where a good wholesale supplier will give premium services but the customer just takes the services that where provided for granted. The “wow” factor was provided but it was not felt nor noticed by the customer. The failure to shock and awe the customer never took place even though the outstanding service was indeed produced. It is up to the supplier's well-trained staff to point out the outstanding performance that was just supplied. If your staff forecasted ahead, predicated the customer’s needs, had the stock on hand, ready and waiting for the customer, plus was able to deliver on time, then it is up to supplier to point out the magic that was just performed. I am all the time asking customers “who takes care of you?”
I will remind the customer, “Do you realize I just gave you same-day service? You wanted it quoted, then delivered on the same day and Bang look who came through for you again.” If you don't pat yourself on the back and make the customer aware of your services you're losing the battle and are being taken for granted. You will have a hard time charging more for your services if the customer does not perceive the value that you providing. Purchasing is based on an emotional response. You want to not only create a positive customer experience but you want for them to realize that you had just pulled the proverbial rabbit out of the hat.
Darrell Sterling is a regional manager of a wholesale distribution company in the HVAC segment.