The Distributor Channel

Ah, the joys of being the “middleman.” For decades, distributors have been responsible for efficiently passing products from manufacturer-based suppliers to customers. During the 1990s, we were good at removing costs from our system. Into the 2000s, our customers tasked us with assisting them in removing extra expenses from their interactions as well. Without really being aware of the situation, we have improved the “supply chain,” whatever that is. In a quest to discover a workable meaning, I spoke to a young friend who had just earned a master’s degree in supply chain management. I asked her about the meaning of supply chain management. Her answers centered on order entry, shipping times, price points and several statements which sounded like she was spewing straight from the mouth of a big corporation purchasing agent. After telling her I was writing an article on supply chain improvement for distributors, she replied: “Distributors can improve the supply chain by red

source: Linkedin In our  last post , we discussed people; hiring the right people, building a solid distributor-centric onboarding process and the advantages of retaining experienced workers. Today, let’s turn the tables a bit and look at coaching and managing the very life blood of distributors – the people. Front-line managers make a difference According to work done by the Gallup organization first detailed in First, Break all the Rules , employees join companies but quit because of bad managers. Realizing the management structure of many distributors appears flat on paper with everyone reporting to just a few people, many of these front-line managers may not even have a m anagerial title. We might call them something like warehouse lead, inside sales supervisor, senior buyer, or perhaps they carry no real title but direct the work of others. To a lot of your workers, they are the “go to” person and reflect the day-to-day voice of the company. Oftentimes, they have no tr

We will be posting a lot about people over the next couple of weeks.  Why?  Without people distributors basically become an empty warehouse, a collection of well-used computers and an assortment of worn out office furniture.  Speaking with an assortment of folks (from inside and outside the industry) looking to purchase distribution businesses, the conversation typically revolves around three major points – profitability, solid customer relationships and stability of people.  Take away the latter two and the distributor is valued somewhere near zero.  Further, it might be argued, without the people there are no solid customer relationships.  So talking about people is doubly important. Our brand of wholesale distribution is one of the most people-intensive business models in existence. Sure, we have warehouses, inventory, customer credit, computers and company fleets of cars, trucks and lord knows what else, but people are the driving force of our model. For every dollar of gross