Boy, do not let it ever be said that this great industry of ours is boring! In my 20 + years of experience I have never seen so many significant things pulling manufacturers, suppliers, distributors and salespeople in different directions. Some examples include:
- Direct Importing – to do or not to do?
- Pricing Policies – you get what you pay for?
- Product Safety Guidelines – who is responsible?
- Technology Innovation – What can we afford?
- Social Environmental Concerns – How much are you will to pay to be “green”?
- Government Legislation – How much control is enough?
We have not even mentioned the end customer yet. Do their wants and needs match up with what we can provide? Do they understand the product safety guidelines? Do they care? And last but certainly not least, are they willing to pay for a safe product?
When it comes to importing how does a distributor or a supplier decide who they are going to import from? Salespeople might say to import from the company who can get you those stainless steel mugs for the least amount of money. The customer might agree with the rep saying yes that is the answer because this will help them to reduce their spending and meet their management’s goal of lowering the budget. Is this the right answer? What if you the distributor has to pay 75 to 100 % of the cost up front on an order with a lead time of 90 days? Obviously this has some ramifications with respect to cash flow. Do we need to consider the fact that we have NEVER done business with this company before or that they have no US presence and cannot be found in Dun and Bradstreet (credit rating service)? Does this significantly increase the risk? Yes, would be my answer!
Looking at technology, there have been some phenomenal advances in the last 5 to 10 years. It really is amazing if you look back. What has your company implemented? Are they getting a return on their investment? Has it been worth it? Many of the newer initiatives seem to be affordable to only the biggest suppliers and distributors. Is it right that they bear the brunt of the development costs? Does it make sense to adopt some new technologies if only 20 suppliers and 20 distributors are willing to use the technology? H-m-m-m-m?
I have found myself wowed by some new applications made available, only to download them on my computer, and uninstall them 60 days later because I never used them. The bottom line in those instances was that the technology was cool but really not practical for me to use. Do you ever find yourself with that sinking feeling in the pit of your stomach that says if I stay still and make no changes (technology wise) that I will stagnate and die? I do!
How about the “go green” movement? I feel that 99 % of the people in this country are 100 % behind the green movement as long as they do not need to pay any more or change their behavior! What do you think? Of course, to be fair the eco-friendly movement really started growing in our industry just as the economy was souring so this situation is tough to read however I think many customers have spoken loud and clear that they do not want to pay 10, 15 or 20 % more to be green.
And finally that brings us to the government’s intervention into our industry. Legislation and initiatives have popped up all over the country with many of them restricting what companies can buy and how products can be used. It seems like officials with the swipe of a pen can significantly impact a local distributor’s ability to sell their insurance company or the hospital in their community. Recent news stories and speeches by top national politicians regarding the dangers of imprinted plastic bags could singlehandedly destroy some industry firms whose primary product line is comprised of bags. Wow am I glad that we are more diversified than that! But we need to be ever vigilant. We need to keep our eyes and ears open and make sure that we act to protect our interests to survive.
So the message here is to stay tuned. The changes of the last decade, as many as they were, may be dwarfed by the changes of the next ten years. All of us need to be nimble and flexible. We need to be open to other ideas, models and initiatives. We need to recognize that our way may not be the only way, and more importantly our way may not be the best way. We will have to learn to compromise! None of us will be working in a vacuum, meaning that how we act will be affected by the opinions and actions of those around us in the supply chain as well as customers and their desires. I feel education will be a top priority for many years to come. Communicating to others around us why something costs more and what value that represents will be critical for every layer of the supply chain. If anyone cannot or chooses not to communicate this information they will fall prey to lower cost competitors or more articulate competitors.
Are we up to the challenge? I am because I know that times are a-changing and I if I do not change with them I will fall by the wayside and I am not ready for that. Buckle up, here we go!
