EXECUTIVE COMMENT: Don't Get Caught in the Web

January 1, 2001
EXECUTIVE COMMENT: Don't Get Caught in the Web
By Robert and Leland Ackerley
Smith & Associates

Successful Independent Distributors See the Internet as a Tool to Improve their Current Business Model

In today's competitive, time-critical market, it's no longer acceptable for Independent Distributors to "do their best" to make "just in time" (JIT) windows-on-time shipments are vital; late shipments are unacceptable. And, unfortunately, the Internet-for all its strong points-has not turned out to be the JIT knight in shining armor that many customers were hoping for. Today's successful distributors must be as reliable and friendly as the family dog, but as tech-savvy as a cyber pet.

It can be done. But few companies do it successfully.

Independent Distributors weren't wrong for embracing the Internet; they were just half right. E-business, at its highest and best use, is a tool for insuring JIT delivery, enhancing customer service and improving inventory management-which ultimately gets the right products to the right place in the right quantity at the right time.

Timing Is Everything
Today's manufacturers look for three things in an Independent Distributor: timing, quality, and reliability. When a backordered part is holding up an assembly line for a product that will be outdated in a matter of months, price is not the biggest issue. That is why the once "misunderstood" Independent Distribution channel is now a respected part of the supply chain. Quick delivery of hard-to-find, need-it-yesterday parts has earned Independent Distribution the respect of OEMs and CEMs. What used to be a second thought is now an important part of the supply chain.

Customer Service Still Exists
Most Independent Distributors claim to be worldwide-and with the Internet, they can have at least an online presence. However, although it's possible to operate worldwide from one locale, it is almost impossible to truly provide customer service without worldwide locations. If, for example, I'm in Houston and my customer is in Hong Kong - that customer will be best served by a Hong Kong office-someone who speaks their language, works the same hours, is familiar with the local customs, can be there if something goes wrong, etc. It's called customer service, and it always has been and remains the top priority for today's successful Independent Distributors.

Put Your Website to Work
Customers are not necessarily craving all the technology they can get their hands on. They want top-notch service and a seamless process from the time they communicate with their representative until their product is delivered. The Internet is a wonderful communications tool because you can communicate 24 hours a day with your customers, anywhere in the world, anytime - and more importantly, they can communicate with you.

Ultimately, the Independent Distributor's website should be a self-service tool for customers, allowing them 24-hour access to ordering, inventory status, shipping status and billing status. And, as customers simply check their accounts, they are actually adding to the Independent Distributor's efficiency: logistics managers use the information to track inventories on a global basis, creating more efficient supply chain planning and deployment. This is just one of the customer-to-supplier relationship tools that Independent Distributors, such as Smith & Associates, are in the process of deploying. Using the Internet as a way of extending existing systems out to customers and around the world may be the most successful move to make.

On your Mark, Get Set, Stop
Understandably, many Independent Distributors worried that the Internet would completely replace their previous business model. But, stop and think about it, the Internet works great for retail, catalog, even straight commodity products like petroleum and metals, but for customers in this industry, simply pressing "send" and crossing your fingers won't cut it. It boils down to the simplistic aspects of the "old school" business model: quality, timing, availability, and reliability.

Smart Independent Distributors see the Internet for what it is: a tool-a fabulous tool-for helping to improve the efficiency of their current business model. Keep the Internet in the equation, but don't overlook JIT delivery, customer service, inventory management and above all, quality and availability. At the end of the day, if the customer is satisfied, the bottom line will take care of itself.

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