This article originally appeared in IMPO's April 2015 print issue.
Products for Industry (PFI) is a Milwaukee, WI-based full service wholesale distributor of industrial-related products sold through a dealer network. PFI’s strategic accounts manager Craig Andersen recently spoke with IMPO about ways industrial customers can better utilize the resources of a value-added distributor – including ways to improve efficiencies and cut costs. The big question is – is your supplier offering you the most valuable benefits available? Andersen walks through the top five considerations you shouldn’t be going without.
1. Streamlined Purchasing: One-Stop Shop Saves Time and Money
Maintaining a large and diverse vendor database is a tremendous cost. For many industrial customers, their core competency lies in building a quality product. MRO consumables are an afterthought where procurement can become quite complex and costly finding a supplier who offers a diverse array of products in order to offer a more ‘one stop shopping’ type of experience is a simple and cost-effective solution
“We find that those distributors that are focused on MRO look to help reduce the number of vendors required (for their customers),” Andersen explains. “Whether I am in food, automotive or technology manufacturing – everything it takes to keep my facility running, I am getting an advantage by consolidating sources. You hear a lot about supplier reduction in the marketplace, and you’ve seen a lot of consolidation of distributors. What was traditionally a jan-san supplier might now take on lighting and safety, for example. If I am an automotive manufacturer and I have multiple plants over multiple locations, can I get a single source that can also support multiple locations where I assemble automobiles?”
2. Leveraging the Integrated Supplier
Working with integrated suppliers is all about harnessing value from up the chain through a range of targeted services. “An integrated supplier looks at distribution and tries to align themselves strategically with their partners out in the distribution market, to help them be stronger and more valuable to their customer,” explains Andersen. “We find that integrated suppliers try to be a funnel – that source for procurement – and they also benefit from having a strong distributor who has better and more detailed product knowledge than they may possess themselves.”
Once an integrated supplier learns how a particular plant wants to run, they can quite easily step into other facilities, knowing that they best appreciate and understand the culture and the purchasing practices of those customers, explains Andersen. “A good distributor that leverages the relationship with an integrated supplier and becomes that consultative knowledge base to the integrated suppliers – those are the folks that start adding more value to taking care of and benefiting the customer. So it’s a value add.”
3. More Products Choices, Best Practices, Better Outcomes
The industrial distribution market sector has seen record-breaking levels of consolidation over the past few years, the results of which have been distributors who are better aligned to offer more product choices.
“Many of our best customers traditionally distributed related lines like tools, safety supplies, packaging or facility maintenance products. As these distributors continued to see customer opportunities to increase their presence and product line-up, working with PFI to expand their footprint was a next logical step in the distributor growing their sales with the least amount of time and investment”
4. Essential Products: Covering your Basic Equipment Needs First
Before a lot of companies get into the more complex product applications, they still have their essential needs. To keep their facilities running, some of the essential products might be just the basics: “What are the essential products from the minute you hit the parking lot to the time you’re going out the shipping dock? As a distributor, to have a strong offering of essential products – and being a single source or the primary source for those products – brings a lot of value,” says Andersen.
Andersen likens the need for essential products the same way a homeowner finds themselves at the big box hardware store within a week or two of purchasing a brand new house. “In facilities – especially green field facilities – that same type of spend occurs. Those essential products are identified, whether it’s for improving a process, providing safety… and some of that spend that occurs on the essential products side should not be underestimated. We personally here have seen customers spend two to three hundred thousand dollars on products outfitting these brand new facilities once they come online -- only because they weren’t originally identified. You move in, and you realize – ‘we’ve got to run back to Ace Hardware and pick up another widget.’” The idea here is ensuring a supplier is well outfitted to attend to these types of needs – and even anticipates them.
5. After the sale support
Andersen stresses the importance of a relationship with your supplier, in order take advantage of things like extended warranties, guarantees and better, stronger follow-up presence.
A supplier like PFI deals largely in capital goods, so a customer might buy something and not have to replenish or re-purchase it for many years. For Andersen, the chain of communication is important for not only the end user’s well-being, but also to keep the supplier on their radar for future orders or support. “To stay in touch with these customers when you’re offering new promotions, or new products come online… it’s key after you get the order to stay relevant with these customers, because there are a lot of choices out there. Long after price is off the table, it’s about knowing they got the best selection and the best support.”
For more information on PFI (Products For Industry), please visit www.productsforindustry.com.