Issue link: https://www.e-digitaleditions.com/i/480616
34 FEDA News & Views One of the final challenges is to make sure that everyone knows who the A, B, and C customers are. This is where our software can help us. Some of the more sophisticated pieces can actually have the customer code appear in a different color during the order entry process. Some user defined fields in the customer record can help; but they are not always seen. I ran across one distributor who came up with a simple code. He just added asterisks to the end of the customer name in the database. This worked well because the codes also appeared on the pick tickets. Because he chose to include the material handling team into the process, they understood the significance of the star codes. Customers with three stars were given special treatment. The key is to find a communication vehicle that works for you. Understanding customer profitability will go a long way toward improving your bottom line. As you can see, this simple data extraction will provide several avenues to look for cash. Don't be afraid to lose some of your C customers. You have already given them enough of your money. As always, I am here to help. Good luck. About the Author Jason Bader is the managing partner of The Distribution Team, a firm that specializes in helping distributors become more profitable through operating efficiencies. The first 20 years of his career were spent working in distributor opera- tions. Today, he is a regular speaker at industry events and spends much of his time working with individual distribution companies. For more information, contact him by e-mail at Jason@Distributionteam.com or visit his website at www. thedistributionteam.com. What do you find most challenging about providing your customers quality products and services? The Cost to Serve continued Has technology reduced or increased costs in your business? Keeping up with the advancements in technology requires a sizeable and continual investment. It also presents us with con- stant and unique challenges. Hendrix uses 10 showrooms and three distribution warehouses across Canada that are depen- dent on a centralized IT system. Our annual IT investment is continually growing at a healthy pace, however, we have seen some tangible cost benefits and, more importantly, we have greatly enhanced our customer service capability—something we feel helps set us apart from our competitors. Our increased ability to analyze data, for example, has enabled us to make better selling and procurement decisions and these 'better' decisions have produced improved margins and lower inventory carrying costs, but they are not easily quantifiable. A current example is our implementation of WMS systems in each of our distribution centers, which we expect will produce more efficient use of existing space, improve inventory turns, reduce 'can't finds' and pick errors—all of which we believe will lessen our overall cost. continued on page 40 Larry VanderBaaren, President Hendrix Restaurant Equipment and Supplies Brockville, Ontario Products with proven brand names, better design or superior craftsmanship can often be the smarter choice for the customer. Our biggest challenge is convincing them that investing in quality products and service is worth the additional price, particularly when there are so many low- cost, low-quality products readily available. Presenting the benefits of product quality and service differ- ences to customers is the primary task of our salespeople and, in some selling opportunities, that 'salesperson' could be our website. Convincing customers to invest in quality products requires skilled, knowledgeable salespeople and an effective website design. How well our salespeople perform very often determines our quality of service in the eyes of the customer, and so an equally important challenge for us is to continu- ally invest the necessary time and resources to develop our salespeople.