The Competitive Advantage You Didn’t Know You Had

In today’s market, end users expect their distributors to deliver real, measurable value. Large national accounts typically require distributors to commit to specific cost savings as a condition of winning their business — something that is not always easy for distributors to achieve.

Id 4132 Competitive Advantage

This Manufacturer's View article first appeared in the July/August print issue of Industrial Distribution. To view it in its original format, please click here.

In today’s market, end users expect their distributors to deliver real, measurable value. Large national accounts typically require distributors to commit to specific cost savings as a condition of winning their business — something that is not always easy for distributors to achieve.

Most distributors have a large number of national accounts but may not have the requisite in-house expertise to achieve these cost savings commitments. This is where they can derive significant business value from manufacturers.

Manufacturers continually invest in industry and process-specific expertise. We can support distributors with experts who not only offer solutions to production problems, but proactively identify problem areas the end user may not have considered. By utilizing manufacturers’ specialized resources, distributors have the opportunity to not only meet, but exceed their cost savings commitments, demonstrating exceptional value to the end user.

When distributors provide unexpected savings, it strengthens customer relationships and helps embed the distributor in their customers’ operations. In addition, distributors learn from the manufacturer-provided solutions, enabling them to more easily identify and solve problems for their customers. This creates ongoing value.  In short, by drawing on the available support from manufacturers, distributors can build their own credibility — and their business.

NSK’s unique Asset Improvement Program (AIP) is designed to support distributors and end users in generating significant cost savings by improving production efficiency. The resources we bring to the table are based on industry experience, including the identification of problems and the successful implementation of solutions that many end-user customers experience. These solutions often both improve productivity and reduce consumption; this combination can result in cost savings that are over and above those expected. For example, the solution to a problem may not be to replace a bearing; in many instances bearings can be reused. In others, a replacement may not be necessary because the bearing is a candidate for reconditioning (a service we deliver in under ten weeks).

Some distributors may not be aware of NSK’s AIP, or that we have such knowledgeable experts. Others are aware, but may undervalue the resource and the opportunity it presents to help end users improve performance, and in turn drive more business opportunities for the distributor.  

The challenge for NSK is to help distributors understand when and where to leverage AIP to help them build business. As a place to start, we ask them to identify national or corporate accounts where they are struggling to achieve cost savings. Then, our field engineers perform a comprehensive analysis at the customer’s site. Once this is completed, we recommend a course of action that will generate measurable results. These could include productivity gains, component cost reduction, and reduced maintenance intervals.

The key is to identify the root cause of the problem, both in terms of the industry and the specific process. Without the necessary specialized expertise, often only the symptom is addressed, so the problem continues to occur in other contexts. NSK provides distributors with highly skilled technical personnel and we solve problems together. This powerful partnership enables distributors to protect their customer relationships while at the same time reducing price sensitivity through real value creation. It also creates a significant barrier for competitors who may attempt to establish a relationship with the same customer.

The bottom line is that cost saving is a key strategy in 2014. Distributors can only successfully differentiate by providing solutions with integrity, where cost savings is not only measured, but meets or exceeds contracted targets. Working with a manufacturer such as NSK enables distributors to do that.

Reid Jajko is the General Manager of the Aftermarket Business Unit at NSK Corporation. For more information on how to engage NSK to help your customers improve performance and reduce costs, visit www.nskamericas.com, or contact Heather Strack at strackh@nsk-corp.com.

More in Operations