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| Manufacturer / Distributor Relationships |
Customers
have been able to reduce the total cost of doing
business with their suppliers by as much as 7% of
their revenues according to recent research. But
what happens when they cannot reduce costs further
with their distributors? Often they try to go around
the distributor and work directly with the manufacturer.
Unless distributors and their manufacturing suppliers
determine how to make the channel more efficient,
customers will do it for them -- and in a way they
may not like, such as going direct, reverse auctions,
e-commerce, or overseas sourcing.
We help distributors and manufacturers work together
to achieve significant cost reductions and to create
a competitive advantage through the distribution
channel. Our support is based on the results from
a landmark research study we conducted for NAW-DREF
on how to make the channel more cost effective and
valuable to all channel partners, by working with
companies to:
- Perform an internal assessment: Based on company
objectives and costs, determine what opportunities
should be pursued.
- Select the right partner(s) to work with:
Impact and willingness to work together do not
always go hand-in-hand. Companies must determine
which supply partners offer the greatest opportunities
for success.
- Develop the team: Identify the right people
from both companies that must work together
to accomplish the change.
- Implement the improvements: Determine the
steps that result in the most cost effective
way to implement the improvements.
- Manage the change: Develop a strategy for
getting people to accept the change in both
companies.
- Evaluate the results: Determine if the improvements
accomplished their goals.
- Determine “what's next”: Identify ways to
continuously improve the channel.
As customers continue to focus on cost reductions,
distributors cannot constantly go back to their
manufacturers asking for price reductions. Eventually
the well will go dry. Today, an estimated 25% of
the costs in the channel are redundant, so it is
not surprising that many customers are already looking
for alternative channels to cut costs -- and that
trend is likely to continue. If the distribution
channel is to remain the channel of choice, distributors
and manufacturers have to make it the most cost
effective means for customers to procure supplies.
There are tremendous opportunities to reduce channel
costs and the ones that can make it happen will
enjoy a true competitive advantage. |
For more information on these and other areas for
improving Distributor/Manufacturer relationships,
take a few minutes to review the following opportunities:
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Training / consulting:
Joint Customer / Supplier Training (TCO)
Supply Chain Management
Understanding / Measuring
Total Cost
Supply Chain Implementation
Documenting
and Selling Value Added
Developing
a Unique Selling Proposition
Sales
Management
Manufacturer / Distributor
Relationships
System Integration
Managing for Profit |
Software:
SOURCINGSTRAT
SALESSTRAT
Train the
Trainer for Developing a Unique Selling Proposition
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Video:
Developing
a Unique Selling Proposition |
Books:
Strategic
Alliances
Team Up! Profit
Up! |
Or contact us at:
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Strategic
Business Solutions
PO Box 35895
Tulsa, OK 74153
Phone: 918-494-8085
Fax: 918-494-3718
Email: info@sbs4me.com
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