This was a special report I created for the 2010 International Manufacturing Technology Show exhibitors. I'm reposting it here for the 2012 IMTS Show exhibitors.
If you are selling through a distribution channel then the DISTRIBUTORs are the FIRST customer who’s needs you should meet. I’ve seen many manufacturer’s who have great products, great catalogs, and yet they can’t figure out why they are not selling more. Somewhere there is a hurdle.
Sometimes the hurdle is in the last place you might expect because you don’t see it every day or feels it’s effects personally.
You’ve paid for the catalog, you’ve paid for the marketing, you’ve found a good distributor, you had a great sales meeting and the outside salespeople are excited to go show their customers your product.
What happens next?
The end-user customer asks for a quote. Now that goes directly to the inside people at the distributor. They now have to create a quote, and when they do it, they don’t want to have to enter the same information over and over again. If one customer wants something “just like my buddy Joe got at his place” they have to standardize.
Here’s a couple of cases where the manufacturer slipped up:
Sometimes the hurdle is in the last place you might expect because you don’t see it every day or feels it’s effects personally.
You’ve paid for the catalog, you’ve paid for the marketing, you’ve found a good distributor, you had a great sales meeting and the outside salespeople are excited to go show their customers your product.
What happens next?
The end-user customer asks for a quote. Now that goes directly to the inside people at the distributor. They now have to create a quote, and when they do it, they don’t want to have to enter the same information over and over again. If one customer wants something “just like my buddy Joe got at his place” they have to standardize.
Here’s a couple of cases where the manufacturer slipped up:
PDF issues: The Old Established Company
These folks have a great product and printed price list. They’ve been in business for many years and have a great printed price list. Because they’ve been in business such a long time their part numbers and descriptions where entered years ago at the advent of databases when distributors first embraced computers.
| They supply their price list in a PDF format. Creating price lists in PDF or MSWord is great for printing but we live in an world of databases. If there is no way to import the fields then everything has to be manually entered or was entered manually. Internally the inside sales people within the manufacturer knew that when they got the purchase orders from a particular distributor the part numbers looked different. One may have in their database “part# 32.476.198” while another had “part# 32-476-198” and still another had “part# 32 476198”. |  Don't do THIS! |
Human beings reading a fax can understand that. However, as more and more larger distributors move to EDI or other forms of electronic order entry this inconsistency can become a big problem. Computers understand spaces, “-” and “.” as different items.
Remember, “Garbage In, Garbage Out” If you want consistency and standards don’t let it up to an inside salesperson at a distributor, who is rushing to enter and order to get to a customer, to enter your part number, description and pricing.
We are going to see more and more electronic databases being used. If you have not standardized your price lists yet you may want to get started so you have time to think it out and plan accordingly. You don’t want to be put into a position of rushing to complete only to discover you should have created it differently.
We are going to see more and more electronic databases being used. If you have not standardized your price lists yet you may want to get started so you have time to think it out and plan accordingly. You don’t want to be put into a position of rushing to complete only to discover you should have created it differently.
Older Software: The Storage Company
This manufacturer created the price list In excel, but, it just would not load: There was a problem with importing. Something seemed incorrect. When the distributor contacted the manufacturer their comment was “Well, everyone with a Mac has a problem. You should get a PC.”
As it turns out the excel was a trainwreck: Several people had worked on the file over time. The first person did not have a good working knowledge of excel and collapsed some columns. Column B was collapsed at some point in the creation of the file and some of the product descriptions where there while other product descriptions where in Column C.
In addition to that there was a mixed standard of descriptions. As an example, one description read “Cabinet Tall 36″” while another read “Tall Cabinet 36” but they both had different part numbers.
Once again, inside sales people who are in a rush to enter orders become quickly disenchanted with vendors who make their life difficult.
If it’s not easy and intuitive, you can have the best product in the world, the best sales force, the perfect price point but you will lose orders because you’ll be branded as “They’re just tough to work with”
As it turns out the excel was a trainwreck: Several people had worked on the file over time. The first person did not have a good working knowledge of excel and collapsed some columns. Column B was collapsed at some point in the creation of the file and some of the product descriptions where there while other product descriptions where in Column C.
In addition to that there was a mixed standard of descriptions. As an example, one description read “Cabinet Tall 36″” while another read “Tall Cabinet 36” but they both had different part numbers.
Once again, inside sales people who are in a rush to enter orders become quickly disenchanted with vendors who make their life difficult.
If it’s not easy and intuitive, you can have the best product in the world, the best sales force, the perfect price point but you will lose orders because you’ll be branded as “They’re just tough to work with”
The “non standard” Standard
Distributors work with many many manufacturers and are very familiar with how jobs are “routed” through a facility. So when a distributor talks to a vendor and the vendor says “If you want it in black just add a “B” to the part number at the end. If you want it in Gray – just add a “G” There is no charge extra for that either, just add a “G” to the end. That’s what our guy use on the floor”
Aside from the above discussion about how computers would understand a “-G” vs. a “.g” there is a larger perception problem in play here. What may seem like a rather simple way to designate what color you want actually raises a big red flag for the distributor. They know that the way one person writes a “G” could look like a “B” to another person.
Even if the “guys on the floor” know enough to ask someone to double check, distributors know how important accurate information on the floor of a plant is to efficient delivers. It’s the real basis of “lean” “SPC” “ISO” etc. Again, what the manufacturer perceives as a “simple easy to use, ‘just add a letter’ system” what the distributor hears is
“Our shop routing process is a real mess so this vendor is probably going to be late or mess up an order at some point. I’ve got to keep an eye on them”
Aside from the above discussion about how computers would understand a “-G” vs. a “.g” there is a larger perception problem in play here. What may seem like a rather simple way to designate what color you want actually raises a big red flag for the distributor. They know that the way one person writes a “G” could look like a “B” to another person.
Even if the “guys on the floor” know enough to ask someone to double check, distributors know how important accurate information on the floor of a plant is to efficient delivers. It’s the real basis of “lean” “SPC” “ISO” etc. Again, what the manufacturer perceives as a “simple easy to use, ‘just add a letter’ system” what the distributor hears is
“Our shop routing process is a real mess so this vendor is probably going to be late or mess up an order at some point. I’ve got to keep an eye on them”
For further Reading check out: The Future of Industrial Classification: UNSPSC
RSS Feed