IS THERE ANYONE in our industry who believes they made too much money last year?
We didn't think so.
But even though profits appear to be in short supply for many of us, money may be falling through holes in the pockets of manufacturers and their respective dealers and distributors. The good news is that at least a few of these holes cost little or nothing to patch and that fixing them can result in a major boost to the bottom line.
When it comes to manufacturers and distributors, these holes come in several shapes and sizes. Too much stock. Too little stock. Wrong shipments. Too little information about the customer. Vague goals. Poorly defined areas for responsibility. Duplication of effort.
If you are a manufacturer, are you completely pleased with the performance of your dealer/distributor network? Does each representative have the sales skills you consider necessary? Does your product get the attention it deserves, or does it vie with competitors' products for the selling time of your distributors? Are your distributors providing you with the market information you need to make decisions that are vital to your business?
If you are a distributor, can you trust your manufacturer to respect your sales territory? To not sell direct? Does your manufacturer deliver what you need when you need it? Does your manufacturer communicate clearly and openly with you to develop products and marketing strategies?
If your answer to any of the above is negative, money may be slipping away. When manufacturers and distributors are out of synch with one another, research shows that both parties lose — and so do their customers. The resulting inefficiencies cost everyone time, money, and emotion.
The National Truck Equipment Association recognizes this, which is why it began an initiative last year to shore up relations between manufacturers and distributors.
As part of the first phase of the initiative, the association conducted a series of four regional meetings led by Robert Nadeau, a consultant who specializes in manufacturer-distributor relations. Nadeau has surveyed manufacturers and distributors extensively to identify the sources of inefficiencies and friction between the two parties.
The problems are basically the same whether he asks distributors and manufacturers in Atlanta, Newark, Indianapolis, or Las Vegas. Even in different industries, manufacturers and distributors cite the same issues. The complaints have been consistent across industry lines. And regardless of when Nadeau has surveyed manufacturers and distributors — 1997, 2001, or today — the answers don't change.
So if the complaints are the same, is there a chance of reaching some common solutions?
NTEA believes so and is planning what the association considers “Phase 2.” The association has scheduled a session at this year's convention in Baltimore that will be a review of Phase 1 and a preview of what the next steps may look like.
According to Vic Tedesco, NTEA president, the program will have three objectives:
Review. Those who did not attend one of the four regional meetings on the subject will get a brief summary of the content. The convention session also will contain “success stories” from companies inside and outside the industry who have applied concepts presented in the seminars. Companies from other industries are included because they have more experience (two-three years) with the changes that they have implemented than have those in the truck equipment industry.
Preview. What's next with this initiative? Details are not yet finalized, but Phase 2 may include a fee-paid program in which manufacturers and their distributors identify ways to collaborate their efforts more effectively. NTEA will subsidize but not completely underwrite these sessions. Tedesco says the association also plans to offer additional regional meetings at no charge. This will be a continuation of the series recently held in Atlanta, Indianapolis, Las Vegas, and Newark.
View. The convention session will demonstrate in part what a joint manufacturer-distributor planning session would look like.
In his presentation in Atlanta January 20, Nadeau graphically showed how inefficiencies drain profits. He and NTEA are convinced that the truck equipment manufacturers and distributors can do better — and keep the change in their pockets.