CHICAGO — Twenty-one HARDI members participated in the Texas A&M University Optimizing Channel Compensation Workshop held recently in Chicago. This workshop was the culmination of an 18-month study designed to identify best practices in demonstrating value and creating fair compensation for all channel partners in wholesale distribution.
According to Dr. Barry Lawrence, program director, Industrial Distribution Program at Texas A&M, the inspiration for this consortium was a number of issues: margin pressure and expansion of services on the part of the distributor being two of the most crucial.
“The dialogue between the manufacturer and distributor has been in decline for many years. Distributors must revise this process,” Lawrence said. “This issue will determine the survival of firms.”
Richard Cook, president of Johnson Supply in Houston, and chairman of the HARDI Foundation, which sponsored the consortium, agreed. “I cannot think of another area that has more contention today in our industry than the respective understanding, communication, and value perception between manufacturers and distributors.”
Lawrence presented the results of the study through several modules. The first day’s offerings included focuses on channel management, commitment, performance and contribution analysis, and communication. Friday morning’s program concentrated on compensation; building a framework, implementing channel drivers and adapting to channel forces.