Traditionally, distributors have relied on their branch networks to provide manufacturers with effective paths to market, thus proving their value. But distributors looking to position themselves as the preferred route to market for their suppliers need to recognize that being a preferred route means more than saturating the market with branches, inventory and sales reps, according to Guy Blissett and Sanjay Agarwal in Wholesale Distribution Disrupted, Part 2: Engage to Combat Disruption.
It now means capturing a wider array of data and information and then sharing the insights from analyzing that data with their suppliers. In our last MDM-Baird Distribution Survey, we included a special question on sharing point-of-sale data. Nearly half of the respondents (49 percent) said they did. While most did it solely because it was a requirement of continuing to do business with those suppliers, others viewed it as a way to strengthen relationships with good partners.
"(We share it with) only certain vendors that show and demonstrate trust and commitment," noted one respondent. "Otherwise, no."
But point-of-sale data is just one example of how data can be used to become that preferred partner for your suppliers. For example, one HVAC distributor is modeling market potential for replacement units based on compliance with regulations requiring conversion to new refrigerants and technologies, changing weather patterns and usage profiles. These and other insights offer great value to the distributor, but can also represent a source of great value with suppliers.
Other are adopting end-to-end category management approaches, investing in sales and operations planning, spending greater amounts of time reviewing results with suppliers and searching for ways to enrich the insights with macroeconomic, regulatory and weather data.
Engagement is often viewed as a customer-facing issue, but if distributors increase their focus on how they engage with their manufacturers, everyone in the supply chain could experience a boost in sales and a stronger relationship.
Manufacturers want partners who will help them make markets, not just serve them.
Read more about the importance of engagement with all parts of the supply chain in Wholesale Distribution Disrupted, Part 2: Engage to Combat Disruption.
