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SUMMER 2015

  • Text
  • Fastener
  • Fasteners
  • Washers
  • Industrial
  • Products
  • Bolt
  • Rivet
  • Screws
  • Washer
  • Distributors
Distributor's Link Magazine Summer Issue 2015 / Vol 38 No3

30 THE DISTRIBUTOR’S

30 THE DISTRIBUTOR’S LINK Dennis R. Cowhey Dennis, R. Cowhey, started Computer Insights, Inc. in 1981 and is currently CEO. He served for many years on the Illinois CPA Society Computer Information Systems Committee. He is a frequent author of articles for Industry Trade Magazines. Before starting Computer Insights, he served as Central District Manager for a division of Litton Industries (now part of Northup Grumman). That company offered Inventory Control Systems to Retailers. Prior to that, he was a Credit and Financial Analyst for National Credit Office division of Dun & Bradstreet, Inc. He received his education at Chicago City College and DePaul University. IS VENDOR MANAGED INVENTORY THE ANSWER? Distributors continue to struggle with shrinking margins and tougher competition. Customers are becoming more informed about the fasteners that they buy and they are often “shopping” their normal vendors on the Internet. Since fasteners are a commodity product, they can find what they are looking for and at a lower price. It is hard for the distributor to prove value in this situation. It often happens before the distributor even realizes it. When it happens, something has to go wrong, e.g. the customer buys the wrong product or the Internet vendor delivers poor quality parts or the delivery is late. Then the distributor value is appreciated. How can this cycle be stopped? Vendor Managed Inventory Offer An Edge We have many clients who have implemented Vendor Managed Inventory programs to improve the relationship with their customers. The distributor takes responsibility for the customers’ inventory balances. The control of the inventory shifts from the customer to the distributor. Labels are printed and placed on the bins or the packages so that the product is correctly identified from the start. The labels have the customer and vendor part numbers, the bin location and frequently the minimum and maximum for that part and bin. Salesperson Managed The fastener distributor has a salesperson visit the client on a regular basis (usually weekly). The salesperson uses a scanner interfaced with an iOS device (iPhone, iPad, iPod) that reads the bar codes and creates an order. The order is sent to the fastener distributor’s office for replenishment over the Internet directly from the iOS device. The order can be taken even if there is no Internet availability. In that case, it is transmitted when the Internet is available. CONTRIBUTOR ARTICLE Backorders Handled On The Spot When the salesperson takes the order, the system checks for backorders. If the scanned item is already on order (because it was out of stock on the last visit and it hasn’t come in yet), the salesperson gets a warning. At that time a decision can be made to order more or expedite the backorder. Customer Managed Option Remote customers, small customers and customers with remote locations, all fall into a special category. Even with the efficiency offered by the Vendor Managed Inventory system, it is not worth it to send a salesperson to them on a regular basis. This is no longer a problem. With the new scanners, the cost of Vendor Managed Inventory systems has dropped dramatically. Self Serve Scanner Only a Few Hundred Dollars The scanners are only a few hundred dollars each, while the old scanners were often thousands of dollars apiece. Fastener distributors are offering their customers a self-serve option. They send a scanner to the customer and the customer scans their own labels and submits the order online directly to the fastener distributor. Using this new technology the fastener distributors are serving customers that are thousands of miles away. They are serving their remote customers better than their competitors that are in those areas. They are winning the business on service, not on price. CONTINUED ON PAGE 138

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