No one would deny good customer service can go a long way toward growing or, in its absence, hurting a business. While there are innumerable approaches to keeping customers satisfied, happy, or, in the best case, overjoyed, one solid approach is to consistently meet or exceed their expectations. While that precept is common across many channels in a supply chain — from manufacturer to wholesaler, wholesaler to retailer, retailer to John and Jane Q. Public — the needs of various customers can be dramatically different. In the case of a business-to-business relationship between wholesale distributors and professional contractors, the customer has a unique set of needs critical to their business, and they rely on the distributor to meet those needs. Whether the contractor is relying upon a plumbing, electrical, HVAC, or other industrial distributor, several keys allow contractors to identify a great partner from merely a good one.
The first key item is, well, the item, or, more specifically, item availability. Does the distributor have the item or items a contractor needs in its inventory? This does not mean a similar or substitutable item, but the particular component from the manufacturer that the contractor prefers. The contractor may only be working to satisfy their customers’ needs or demands for a particular item from a particular manufacturer. (Customer demands do tend to flow uphill within a supply chain.) A preferred distributor partner will have the precise item its customers desire in stock, even if that drives a larger-than-average item count in on-hand inventory through the stocking of a single item from multiple manufacturers along with stocking infrequently needed items. If fact, stocking a broader selection of items can be a differentiator between distributors that drives contractor customers to one distributor over another.
Having the item is only part of the value that a preferred distributor provides. A contractor will very often want to pick up their order — all items on their order — in the morning on the way to their job sites. As every realtor can tell you, there is value in location. Item availability, in the right place, will further distinguish one distributor over another. While it is impossible for a distributor to know where exactly the greatest demand might be, good coverage of its “claimed” service area is critical to maintaining existing business and attracting new contractor customers.
There can be a downside to a broad selection of parts being consistently available at all locations in a distributor’s network. If a distributor maintains all its parts, at all its locations, the cost of inventory — all other things being equal — will drive up a distributor’s price, which, in all this discussion of customer service, we have so far neglected. But no one in any business relationship can ignore price, at least not for very long. So if a contractor customer values specific part availability, proximate to its job site or work location, at a competitive price, how can a distributor provide that experience for its contractor customer? The answer is an agile supply chain.
A sophisticated distributor will stock all the parts its customers require, centrally stocking those parts that do not have enough demand to justify stocking them at all locations, and stocking those parts that do have enough demand at their outlying depots. Key to making parts available in all locations is maintaining transportation links between its central stocking locations and outlying depots to rapidly deploy parts needed by its customers. Usually, this means an overnight or early morning delivery to the outlying depots so that a contractor can place an order the previous afternoon, and rest assured his entire order will be available at the pickup desk or “will call” counter at the depot of their choice.
That brings us to one of the last places in the supply chain a distributor can distinguish itself to its contractor customers — the will call counter. The exceptional distributor will have its contractor’s orders assembled and available for the contractor upon arrival. For walk-in orders, they will have the systems in place to pick the order ahead of other less-critical order pick activity to service its contractor as rapidly and accurately as possible without disappointing any of their other customers.
Distributors who can meet all their contractor customer requirements, at the most competitive price possible, will distance themselves from their competitors in short order. Contractors will provide a return on the supply chain investments necessary to meet their requirements with loyalty and, most importantly, their order.
Bryan Jensen has 32 years of experience in retail and wholesale distribution, transportation, and logistics. He is a vice president and principal with York, Pennsylvania-based St. Onge Co., a material handling and manufacturing consulting firm specializing in the planning, engineering, and implementation of advanced material handling, information and control systems supporting logistics, manufacturing, and distribution since 1983. Contact Bryan at 717-505-8016 or at firstname.lastname@example.org.
Publication date: 7/13/2015