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SPRING 2013

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Distributor's Link Magazine Spring Issue 2013 / VOL 36 / NO.2

14 THE DISTRIBUTOR’S

14 THE DISTRIBUTOR’S LINK Jim Truesdell James Truesdell is president of Brauer Supply Company, a distributor of specialty fasteners, insulation, air filtration, and air conditioning with headquarters in St. Louis. Mr. Truesdell is adjunct professor at Saint Louis University and Webster University. An attorney and frequently published writer, he is the author of “Total Quality Management: Reports From the Front Lines”. FAVORED BIDDERS - RIGHT OR WRONG Bill had been called in by his potential customer to size up a problem on the production line. The company experienced delays in production as the rivet application tools had been breaking down for the past several months. In hopes of getting the largest share of the customer’s rivet business, Bill used his many years of experience to suggest tool modifications which would alleviate the problem. He spent considerable time observing the workers and breaking down and examining the tools. The production supervisors were grateful for Bill’s input, which he had provided at no charge. Two weeks later the company went out for bids for its annual requirement of rivets. Purchasing came up with a list of needed fasteners (after consulting with the managers on the factory floor) and then put out a quote request to four potential suppliers. The low bid came in from a no frills outfit that did not employ an outside sales representative who would visit customer sites. Their expertise was limited. Bill’s company, with their extra built-in costs for traveling reps like Bill and others, and with in-house design engineers, was a distant third in the quoting. Some of the production guys wanted to give Bill a last look and a chance to beat the winning bid, but purchasing replied that they needed to squeeze every last dime out of the product cost and, besides, they felt it would be unethical to give a favored bidder that last look. Bill was left wondering what good all of his efforts and work had been. In fact, his sales manager criticized him for wasting time and money without reeling in the big order. This whole process of bidding out work or supply contracts gives rise to questions about what is right and proper. Should there be payback for the company that has provided extra services Is it taking advantage of a company if you seek their special knowledge to solve a problem and then place the order with a low bidder On the other hand, is it unfair for someone to expend time and effort to bid a job only to find that a favored bidder is getting the chance to meet or beat the low number Will word get around about what is going on and will bidders disappear or start bidding high to the detriment of the purchasing company In the construction industry, we often see the practice of what is called “bid shopping” or “bid peddling.” The general contractor takes competitive bids from subcontractors to whom he is outsourcing part of the work (like plumbing or electrical). He then fashions his own bid to the owner. If he is lucky enough to win the job, he then uses the low bid to pressure the subs to submit even lower bids, rather than giving it to the original low bidder. The general contractor pockets the difference and does not pass it along to the owner. This is what is called “bid shopping.” The other side of it is “bid peddling,” which involves a subcontractor who did not get the original bid offering to lower a price after the fact to convince the general to change the award. Neither of these is illegal but, to varying degrees, most professionals consider the practices somewhat unethical, though more companies engage in this kind of behavior than will admit it. Most are eager to complain about their competitors gumming up the market with such behavior. In the end, it could be argued that these practices do tend to drive overall prices down, which should be a benefit to society with lower prices for end users and consumers. But if material suppliers and subcontractors are pushed beyond reasonable limits to squeeze their prices, will it not inevitably lead to the use of shoddy materials, marginal work, and less-than-skilled workers as wages are pushed down in an effort to recover some miniscule level of profit please turn to page 23

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    62 THE DISTRIBUTOR’S LINK SURVEY

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    64 THE DISTRIBUTOR’S LINK Spirol

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    66 THE DISTRIBUTOR’S LINK Promptu

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    70 THE DISTRIBUTOR’S LINK Anthony

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    72 THE DISTRIBUTOR’S LINK William

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    76 THE DISTRIBUTOR’S LINK Leland

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    94 THE DISTRIBUTOR’S LINK Six yea

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    98 THE DISTRIBUTOR’S LINK Aztech

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    108 THE DISTRIBUTOR’S LINK WAVE T

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    THE DISTRIBUTOR’S LINK 111 DDI Sy

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    114 THE DISTRIBUTOR’S LINK Sandy

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    116 THE DISTRIBUTOR’S LINK NEFDA

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    118 THE DISTRIBUTOR’S LINK John R

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    120 THE DISTRIBUTOR’S LINK Edward

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    THE DISTRIBUTOR’S LINK 141 Our Co

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    144 THE DISTRIBUTOR’S LINK HEAT V

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    FASTENER TYPES: PRIMARY AND PREFERR

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    Spirol International Corporation is

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    THE DISTRIBUTOR’S LINK 161 PROMAT

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    164 THE DISTRIBUTOR’S LINK WINDOW

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    THE DISTRIBUTOR’S LINK 167 New fr

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    THE DISTRIBUTOR’S LINK 169 NATION

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    172 THE DISTRIBUTOR’S LINK THE BU

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    174 THE DISTRIBUTOR’S LINK IFI PU

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    180 THE DISTRIBUTOR’S LINK MAKE M

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    186 THE DISTRIBUTOR’S LINK Dave K

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    188 THE DISTRIBUTOR’S LINK Chili

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    THE DISTRIBUTOR’S LINK 201 NATION

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    ND Industries, an industrial leader

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    THE DISTRIBUTOR’S LINK 207 NEW EN

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    210 THE DISTRIBUTOR’S LINK THRIVI

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