Issue link: https://www.e-digitaleditions.com/i/414972
6 FEDA News & Views Industry Insights Reflecting on Channel Profits and Two Simple Ways to Enhance Joe Schmitt, President Rapids Wholesale Equipment jaschmitt@rapidswholesale.com I t's a very busy time of year. Schools are back in session and many of the proj- ects of summer are coming to a close. What better time to reflect on the impor- tant questions: How would you assess the health of the profits in our chan- nel? What about opportunities to better use technology to streamline operations, enhance profits and reduce heartburn for the manufacturer, our factory reps— and ourselves. After some conversation internally, a couple of sim- ple areas surfaced where the channel collectively needs to spend some time and money short term for potential long- term benefit. Take for example auto- mated order processing and tracking at factories. The process of plac- ing an order, following up to con- firm receipt, attempting to receive an acknowledgement of ship date, confirm- ing the product shipped on the ship date, receiving a tracking number, and confirming delivery requirements seems fairly mundane and should be routine. However, mundane would not be the term my project coordinators or many of our factory reps would use to explain this process. As a matter of fact, it's quite the contrary. This simple part of the process con- sumes approximately 25 to 30 percent of the time of our project coordinator and, at times, our DSR's. It also infringes on a substantial amount of our factory reps' time. I recently asked several of my best factory reps how much time they spend on this "mundane" process. The consensus was under 30 percent. Any time wasted on this activity could certainly be better spent with dealers discussing new products or the latest energy and labor-saving ideas (that are now available and generating more rev- enue for the factory). Dealers could also invest more of their efforts into selling versus performing non-value added func- tions. This practice is not only common in most other industries, it is expected if you are to be considered an acceptable supplier. (I did not say exceptional, I said acceptable!) Complete, timely, accurate order ship- ments—this sounds almost too simple to put into print but we all should work to understand the cost of delays or incorrectly shipped products. Think about the installer in the field; the project coordina- tor getting lectured by the general contractor or end user; and the sales rep and factory rep trying to communicate with the production team or the ship- ping supervisor at the factory. The cost of a single production delay or shipment error affects the entire channel and it happens too often. So what can we do to correct some of the simple issues impacting channel profits? First it is critical to understand the impact of issues like those outlined above. Secondly, FEDA has begun work- ing with some suppliers and other mem- bers in the channel on elements that could easily help address a few of the issues clogging the order verification and status process. Thirdly, as dealers, we need to continue to encourage our suppliers to participate in these valu- able initiatives and treat them to more purchase orders. We need to have active conversations with factory personnel regarding technology initiatives and encourage everyone to strive for the mark of "exceptional manufacturer." The cost of a single production delay or shipment error affects the entire channel and it happens too often.