WALTHAM, Mass. - Industrial Distribution surveyed over 500 distributors and found that a vast majority of distributorships are family owned, selling solutions is as important as selling products, and charging for services is imperative. Reporting these findings during a recent Webinar were Jack Keough, editor/associate publisher, Industrial Distribution; Andrew McGlasson, global marketing director, Distribution Infor; and Paul St. Germain, segment executive wholesale distribution, Americas IBM Corp.

The Webinar, titled “Caution, Speed Bumps Ahead for Distribution: How the Internet, Profitability, and Global Expansion May Affect the Future for Distributors,” acknowledged the fact that many of distributor’s top profitability road blocks were embodied in expansion woes, information mishandling, and the lack of technology usage in the company. McGlasson noted that distributors weren’t necessarily doing anything wrong in creating this current bumpy market.

“It is growth and global expansion that got us here,” he said. “By keeping track of the market changes, however, distributors are better able to handle situations that arise.”

McGlasson also said that change is accelerating. “The horse is already out of the barn when it comes to electronic business changes,” he said. “What was once a differentiator is now a necessity.”

Acknowledging the fact that implementing an automated, electronic business platform can be overwhelming and at times prohibitive, St. Germain offered that the value of having good business processes can be greater than automating for the sake of automating. “Inefficient processes can cost distributors numbers,” he said. “They are just as important as technology.”

He later defined a solid process as one that concentrates on the fundamentals of distribution, is accurate, builds business and customer service confidence, and provides a reliable information source.

St. Germain cautioned distributors to measure specific numbers before and after implementing new processes and technology.

“To determine the ROI on your process and technology implementations, it is imperative to measure before and after,” he said. “Without clearly defined goals, targets, and expectations, it is impossible to determine what adds value to you and your customers, and what adds cost.”

Both McGlasson and St. Germain advised distributors to set realistic goals and ensure that they are realistic.

“There’s just not one answer to the problems,” reminded McGlasson. “Expanding business and handling speed bumps requires distribution participants to expand as a community and as a network.”

For more information, visit www.inddist.com.

Publication date: 11/12/2007