If you are going to travel to Wisconsin, it is best that you go there during the summer months. HARDI members must have been thinking the same thing, as 44 distributors were represented at the Purchasing Focus Conference at the Lake Lawn Resort in Delavan, Wis., in June.
The distributors heard from a number of speakers, including Jason Bader, managing partner of The Distribution Team Inc., which specializes in providing coaching in the distribution industry. Bader talked about turning buyers into investors.
“You shouldn’t say you have warehouses full of stuff because you are not in the storage business,” Bader said. “Product is cash. We have vaults full of cash. A simple change of verbiage, but that will change the perception of people who work with and for you.”
Bader also recommended changing the name of the purchasing team to the investment team.
“They are investing with every purchase order they cut because they are spending company money. They are investing company money, and when you do that, you want a return on that investment. It is getting them to think that way.”
Also speaking at the event was Jon Schreibfeder. He is president of Effective Inventory Management Inc., which helps distributors get the most out of their investment in stock inventory.
“The primary goal you are trying to accomplish with your inventory is to meet or exceed your customer’s expectations of product availability,” Schreibfeder said. “If you don’t do that, you are going to be out of business.” Schreibfeder concentrated on telling the audience how to be effective in forecasting and replenishment in the HVAC industry. He talked about the 80-20 rules he hears from a lot of individuals — 80 percent of sales comes from 20 percent of the items.
“That is not true for anyone in the room,” Schreibfeder said. “I can guarantee you that.”
In the HVAC industry, 80 percent of your sales will come from no more than 10 to 13 percent of your inventory items, he said. Also, 95 percent of your sales will come from 50 percent of your items. Obviously, that means the other 50 percent of your items accounts for only 5 percent of your sales.
“I am not saying get rid of those items,” Schreibfeder said. “You might need them to serve your customers. They may be an emergency repair item that you need. But recognize the situation.”
Additional speakers included Joe Brady with Supply Chain Edge, who spoke about procurement trends and total cost of ownership. Also, Sam Meeks discussed forward buys and the risks/rewards.
This was the third of four Focus Conferences that HARDI is hosting this year. The final event will be Sept. 20-22 in Baltimore. It will focus on Operations and Logistics. For more information, visit www.hardifocus15.com.