FEDA News & Views

FEDAJanFeb2013

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Board Member Q&A continued and in-house factory training as well as manufacturer-sponsored factory training programs. What is the best change you've made in how you do business in the last year? The last three years? N&V: We recently implemented new accounting and sales software that has given us better control of inventory costs, turns and sales analysis. With this software in place, we have been able to enjoy better efforts to partner with strategic suppliers by allowing sales personnel better access to warehouse inventory and special purchases. If you could change one issue regarding suppliervendor relations with a poof of a wand, what would it be? N&V: As far as a magic wand to change manufacturer behavior, I believe that less deviated pricing (e.g, Internet-dealer pricing vs. traditional showroom dealer pricing, led by the advances in technology), are a key factor in today's margin erosion. The efforts by a few manufacturers to control minimum selling prices have been helpful but not embraced by nearly enough manufacturers.The traditional value-added services—delivery, uncrating, set-up, demonstration, aftersale service and follow-up, by showroom dealers—have been devalued through some of the technology advances in the industry, thus causing downward pricing pressures. aspect of busiN&V:Whatsufferedyouyourduring ness most the downturn? What did do to salvage it? Our equipment sales suffered the most during this period, followed by kitchen smallwares and tabletop. In response to the long recovery, end users put their money into repairing broken equipment. They also delayed the purchase of new tabletop settings. Unfortunately, the horizon lends itself 20 FEDA New s & View s to continued downward pricing pressures. We will need to be proactive in our purchasing, continue educating our sales force and provide value-added services to the consumer to survive in the new economy. We are aligning ourselves more strategically with our suppliers and looking at methods to improve delivery and inventory operations. In your opinion, what is N&V:the biggest threat on the horizon to your company's viability and what are you doing to counter it? All in all, we are optimistic about the future. The industry is adjusting to the new economy,and we believe our methods and sales knowledge, and integrity in the marketplace will allow us to continue long into the future. do business in the last year? The last three years? We have incentivized customers to increase their drop size and we have improved our efficiencies with regards to freight. We have also been very diligent about activity-based costing and measuring what is profitable and what is not. Lastly, our new focus is on providing our preferred customers with an improved level of service. If you could change one N&V:issue regarding suppliervendor relations with a poof of a wand, what would it be? With a poof of a wand, the manufacturer would not give pricing to the end user and rebates would be only for the distributer. aspect of busiN&V:Whatsufferedyouyourduring ness most the downturn? What did do to salvage it? Patr ice Hagan , V.P. Sales R.W. Sm ith & Co., San Diego, Calif. Customers held off buying until it was absolutely necessary. This affected every spend category.What did we do to salvage it? We focused on projects and new openings and introducing a good, better, best philosophy for tabletop. We also focused on cost-saving ideas for the end user and became a partner in helping them with their business. What technology—big or is N&V:small, simple or complicat- N&V:In your opinion, whatthe the biggest threat on ed—have you implemented in your business to improve operations, reduce cost, or improve inefficiencies? We have updated our website and introduced ecommerce to our sales force and customer base. We are also testing tablets with our salespeople in order to streamline inefficiencies and minimize paperwork, which will allow them to spend more time in front of our preferred customers. What is the best change N&V:you've made in how you horizon to your company's viability and what are you doing to counter it? Hiring and retaining good people will always be in the forefront. We are currently implementing new hiring practices with a focus on LinkedIn and a company known as Hire Live. Another challenge is the cost of doing business in California, which continues to escalate. Plans underway to address this include a greater focus on ecommerce for our lower-volume customers and we are also offering varying levels of service based on customer volume and potential. K

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