Choosing the right-sized distribution partner can increase a manufacturer’s competitiveness. “Small” doesn’t have to mean limited capabilities or higher expense.
In the new economy, customer is king again. In Distributors Secure Role With Extra Services, EBN outlined how the distribution channel strives to add value for both customers and suppliers.
Manufactures shopping for a right-sized distribution partner want value. This includes customer experience, competitive pricing, and, ultimately, revenue generation. Personalized service, a nimble infrastructure, and a sense of ownership will ensure a manufacturer receives the best value proposition. When devising a distribution strategy, suppliers should compare total cost of ownership models by taking into consideration component costs, available support services, and time to market.
Small or specialized distributors are organized to work closely with suppliers; understand their product roadmaps; and provide personal attention. The right-sized partner should be flexible enough to respond to industry trends and changing design needs. Fewer processes and people stand in the way to rapid market introduction. Larger manufacturers can benefit from utilizing the niche distributors as well: specialty channel partners focus on only a few lines so suppliers receive more attention.
A good channel partner will have excellent personal contacts within the suppliers’ sales and applications teams. This can translate into a big advantage for any manufacturer. Suppliers should be able to consider their distributors as an extension of their technical staff, engineering, QA, or purchasing. A good distributor is an excellent conduit for ideas of entirely new products or adding features to an existing product.
For customers, niche players provide value by means of pre- and post-sales support. This should include detailed product selection, extensive technical support, and worldwide project registration.
Successful small distributors operate innovatively, listen to customer needs, and provide value through personalized services. They offer applications support and direct factory access and local inventory and flexibility in meeting logistics goals. (Remember the value of being remembered by name without navigating a huge phone tree?) In summary, the approach is customer first -- the value of each and every customer is always greater for small businesses.
"Small businesses are the essential engine of the American economy, generating two-thirds of U.S. jobs and roughly half of our GDP," according to government reports. For a small or midsized manufacturer, finding the right-sized partner is a competitive advantage.
@Barbara: yes, very wise approach; speaking for myself, current difficulties are about the model to adopt; in fact, maybe, sooner or later, I will be in condition to classify distributors based on right-sized criteria, but in front of unpredictable financial events, maybe also Mr. Bernanke is facing some small issues ;-)
@Peter: Yes, this is quite true. Reasons are - these distributors have plethora of experience as designer, quality expert, manager etc. at most reupted organizations. They almost share these knowledge base free when you associate with them as customer. I adore them most.
Thank you for pointing out another advantage of a specialized distributor - able to actively participate in the part selection. We think of ourselves as an extension of the customer.
We would often find you a unique solution that you wont find anywhere else, therefore you can make your product different, more competitive.
Customers have a choice. We appreciate your business.
@mfb: I think you have to run a cost comparison. That may be difficult becuase every scenario is different. But I've found recently that my time is worth something and if someone can execute w/o going through multiple layers of management, and the costs aren't outrageously difference, the convenience alone may be worth it.
Very interesting article and based on Barbara's post, I would like to point out (and share) additional perspective to consider in making partnerships' decision. We have assisted to unpredictable strike-out due to financial crisis, all over in the word. That said, ideal partner or rightsized-partner is choice for the short term, because in the long term, is still huge the probability for a financial crash, including major distributors. So the question is " how can I reach a proper trade-off in making decision if we need to cross right-size, financial stability and long term as main vairables of the problem? ".
Yes, I agree with this. This approach is very effective. It saves time and keeps cost under control. Most importantly, tirght sized partner works as part of small orgnization and perform many of crucial of task like research for parts etc.
Peter: great point about "small" not being equated with "discounted" or "service-challenged." Small distrbutors have always had a great reputation for hands-on customer service. Sometimes, price and cost gets in the way (let's face it, the big guys have leverage), but small distributros always provide value.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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