Manufacturer–Distributor Playbook

A full-court press from both sides brings wins for everyone.

It is no secret that close manufacturing-distributor teamwork is vital to the success of all players in a market. Since I’m located in the heart of the Atlantic Coast Conference, I’ve applied select basketball terminology to highlight critical success factors in this alliance.

Offense
As a manufacturer, we look to distribution to actively press within markets for expansion of customer base and guide us in evaluating new allied products to increase our scope, while retaining focus on our core business. As the manufacturer places trust in the distributor for a majority of face time with customers, distributor employee development by the manufacturer ensures well-trained selling of the product line. Joint customer presentations further enhance the customer’s impression of both channels by double teaming and ensuring long-lived relationships.

A Winning Combination
Active focus on communication with end-user, distributor and manufacturer plays a key role to winning in competitive markets. There are far too many stories of manufacturers who have set uncompromising rules that have ultimately resulted in inflexibility leading to insolvency. New manufactured goods are arriving in large numbers from emerging countries and post a continuous threat due to pricing pressures. More than ever, domestic organizations must tighten relationships and formulate joint success formulas as markets evolve; it’s no slam-dunk. Each player’s function in this playbook will ensure a better understanding of mutual drivers that result in a win-win-win outcome.

Fast Break
The ability for a sales organization to rapidly respond to customer demand is critical to staying ahead of the curve and fostering goodwill. The manufacturer needs to understand that communications from and to distributors should be acted on in short order as the market dictates. It is, however, important to rely on expertise to determine long-lived versus short-lived trends.

Rebounds
Glitches in the process whereby shipping errors, damage, order mis-entry or bad advice have led to customer irritation. Customer relationships do not always carry an unlimited threshold for poor customer service even when the issue is beyond controllable. The ability to quickly regroup and, most important, handle damage control is critical to customer retention.

Tip-off
From the outset of a relationship, the manufacturer must carefully consider distributors based on the regional penetration and ability to warehouse and represent the supplier’s products. Obviously, all components of an excellent team rely on active communication of markets, product evaluation and the protection of all reputations. Enabling this liaison requires a two-way understanding of the key issues facing the distributor and the source of their product lines.

Possession
Adequately stocking inventory is a major requirement in the industrial gas business. As a manufacturer, we naturally strive to build and ship product efficiently. The typical distributor, on the other hand, looks for JIT deliveries, ultimately achieving close to cross-docked goods to maximize cash flow and efficiencies. Depleted inventories often result in takeaways or even turnovers where end-users source product elsewhere and may lead to a permanent loss of business. While lead times vary among manufacturers, the ability of rapid order fulfillment is a direct function of cost. Establishing innovative stocking programs leads to long-term forecasts, which drive production and assist in building finished goods in economic order quantities.

Gases and Welding Distributors Association
Michael Tarala Meet the Author
Michael A. Tarala is sales and marketing manager for RegO Cryo-Flow Products, located in Burlington, North Carolina, and at www.RegOProducts.com.

 

The Partnership Principle