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20 FEDA News & Views The new SelfCookingCenter ® – now also in XS format. The compact-size professional. Register today at: rationalusa.com Especially when it needs to be small. Think BIG #RATIONALThinkBigUSA at booth 2617 and in the WHAT'S HOT! WHAT'S COOL! ® product gallery. Visit us USA_Ad_XS_hand_7,5x4,75inch.indd 1 19.12.2016 11:44:13 tions, on the buy side, the operational side or the sell side. Additionally, the largest dealers have the advantage, either from a capacity point of view or points of distribution, to effectively and effi ciently service multiunit operators, par- ticularly those with national reach. That market segment has powered the growth of the industry in the past and is likely to do so in the future, despite short-term economic aberrations. While the barriers to entry into the distribution marketplace are unfortunately still not high, the barriers toward growth and reasonable profi t levels are indeed signifi cant—perhaps greater than ever. On the manufacturing side, some of the consolidation trends are similar to the dealer phenomena. While manufacturers do not contend on a direct basis with Internet pricing, they have to contend with inexpensive, imported and low-quality prod- ucts that have the potential to disrupt the marketplace and profi tability. And fi nally in a major more recent development, the largest manufacturers have greater entrée to the larger dealers (that are weaning down the number of suppliers on their preferred lists). How do all these changes affect the channel of distribu- tion in our industry? Clearly, there will be some jockeying for position, and blurring of lines. However, the fundamental functions of dealers, manufacturers, manufacturer representa- tives, service agents and consultants—those disciplines that are charged with delivering and supporting products to end users—are all of paramount importance. In fact, those who realize and appreciate this interdependence will thrive more than those who resist. In this age of specialization, even at the level of the largest dealer fi rms, the division of labor and functions created by the respective disciplines actually results in the most economically effi cient process. People who are trained to perform a function best in this chain are doing it all the time, instead of once in a while. That alone should create better quality and lower costs for the system—and a better customer experience. A good story will illustrate this point. One of our market- ing representatives recently called regarding a request from a chain restaurant that wanted to specify and purchase one of our products directly from us on a national basis. While our rep raised the issue with discomfort at the end user's request, my immediate response was, "Well what dealer do they use when this type of request is refused?" Our rep ultimately linked the end user to that dealer. We are a manufacturer and do not perform dealer functions, nor wish to do so. Understanding the strengths that each party brings to the table goes a long way toward crafting a happy ending. Notwithstanding all of these trends, Tim Schrack's assess- Industry Insights continued continued on page 34