WEB EXCLUSIVE: Gates Roundtable
At a recent supplier group meeting in Louisville sponsored by Gates Corp., PLANT ENGINEERING editor Bob Vavra moderated a Roundtable discussion on the role suppliers play in helping plant managers achieve optimal performance. The Roundtable panelists included:
Justin Aschenbrenner, vice-president of industrial power transmission business development for Gates Corp.
Ken Miko, vice-president of the Midwest division
Tollie Roberts, senior manager for indirect spending for the Bremner Food Group.
The discussion began with a look at how maintenance issues affect that relationship:
VAVRA: I had a very provocative discussion with a gentleman earlier this week. We write about predictive maintenance, preventive maintenance in the magazine constantly: we’ve got a whole section of the magazine devoted to maintenance. And he said to me that the primary mode of maintenance in a lot of facilities is break-fix: you run it till it breaks; you call the supplier; they come on in and fix it or put in a new one; and you’re back up and running again.
That seems kind of contrary to everything that we talk about in maintenance and manufacturing, and I’d like to get your thoughts as to whether, A, you are willing to support that premise; and, B, to what extent it’s true.
ROBERTS: We have some plants that have various issues. They have some good maintenance groups. But, like any other company, we also have some where they’re a little weaker, and maintenance, really, is more firefighting.
VAVRA: And how do you approach the ones that aren’t doing as well?
ROBERTS: Change comes from the top down, not the bottom up. So the leadership teams in those facilities have to see the value in maintenance. They have to see that for every $1 you spend in preventive or predictive maintenance, there is a $2, $3, $4 return. They have to become the leaders.
MIKO: I think, as a distributor, we see a couple of different things. We see the break-fix. We also see, depending on the company and the industry we’re calling on, people that really do try to predict and prevent.
Some of the food industries seem to be better at diagnosing. They know what their history has been. They’re prepared to schedule some downtime. They’re prepared to work with the distributor to make sure the products are available so, when they are down, they can take advantage of the time.
VAVRA: The place we have to start with is that the idea of break-fix is a flawed theory. And yet it seems to be prevalent out on the plant floors.
ASCHENBRENNER: That’s the worst possible scenario. For our manufacturing facilities, we’re moving aggressively towards total productive maintenance, which moves you away from the break-fix. And it’s really a change in thinking in many facilities from fixing it when it breaks to understanding the value of the production that you’re losing when that piece of machinery is down. It becomes a much higher value than how much you paid for a given belt to replace the one that’s broken, because you’re losing so many more dollars’ worth of goods as a result of that machine being down. That’s where we want to move the equation %%MDASSML%% to liability.
VAVRA: How does a distributor or a supplier become more than just a commodities broker or a manufacturer? How do you become a business partner, and what kind of business relationship do you guys want to try and foster as that gets developed?
ASCHENBRENNER: We feel like, as a manufacturer for our distribution, we should play the role of the expert in that product family. When our distributions’ customers end up with shop floor problems, we have the resources to come in, troubleshoot, fix the problems and provide some input on either preventive or predictive maintenance cycles that those pieces of equipment should be on.
VAVRA: Ken, you’re very much of an expert for your end users in terms of how can you provide those right solutions for them. How do you solve their specific problem?
MIKO: Solving the problem is getting to know your customer. And to Justin’s point: our distributors have many different types of solutions to offer. Each distributor figures out which one is going to be best for that particular project that’s come up. The distributor today needs to get the problem fixed, but then make sure they follow up with the engineer and say, “This has broken 12 times. How about we really fix your problem?” That’s where we can show some value.
ROBERTS: We have to have a supply chain manager for your key things in plant maintenance; we have to have partners. I don’t need more vendors; I need more partners, people who take an interest, not just in selling us things, but in our business, in our people, in understanding the plant, the leadership team, what goes on, how it goes on, why it goes on. They take a bigger world view of us as a customer.
VAVRA: And is the optimal relationship you’re looking for at your end %%MDASSML%% someone who would come in and provide you more than just a catalog and a laundry list?
ROBERTS: It has to be. You don’t have any choice, really. We have younger people coming into the maintenance force. We have people who are at the other end who are going to retire; you have your group in between who are stable, but you have back shifts and front shifts that need more support sometimes.
VAVRA: Ken, do you have to get your distributor group to think more along the lines of, “I need to be a consultant, I need to be a problem solver for my end user as opposed to just a catalog salesman?”
MIKO: Absolutely. There are many distributors represented here. We are all competitors. We all have our strengths, and the people who continue to be successful are the ones that go after providing that solution.
We have a bunch of people who are getting on in age, and then we have a gap, and then we have some younger people that have just come in. So to continue to get that value to our customers, we have to make sure we start training people and, maybe even more important is trying to attract good young people to do industrial distribution. Having worked with it for a number of years and trying to promote it, it’s amazing how many college people, high school people, that don’t even know what it is.
VAVRA: Justin, what’s the optimal relationship you’re looking for all the way down the supply chain?
ASCHENBRENNER: We’re looking to fulfill demand for our product through distribution to the end users. Our field guys are focused on doing calls with our distribution and providing the specific expertise to the end user that they need, going specifically after problems, and providing the solution to fix the break-fix issue that these guys are struggling with.
VAVRA: How do you identify the problems that need a product solution and how do you identify the problems that need a process solution?
ROBERTS: I think for us it’s two‑fold. Sometimes it’s something that is identified internally; ‘This is a continual problem, how do we address it, how do we stop it, how do we correct it, how do we prevent it.’ Sometimes one of our supply‑chain partners will identify something. Say, history shows in the last year or two years you’ve done X number of things on this line and we can make an upgrade and this could be your end result. So it’s both.
VAVRA: Ken, for BDI that may be an issue between a distributor and an end user, but there are also some things that you see throughout all of the end users that you work with and say, “We’re seeing these kinds of issues on an ongoing basis.” Communicating back and forth up and down this line is very important as well.
MIKO: It’s part of our job as a distributor to take this information and communicate it back to our people and then just communicate it back to our manufacturers, our suppliers, so that they can see what’s going on. And, you know, sometimes they will actually get in front, either with us or they will go and get in front of the customer and try to get more information and even help assist them in a really tough spot as far as a maintenance problem.
VAVRA: And R&D at your end, Justin, is such an important part of this whole process in terms of seeing what’s happening at every point along the line. There are also some really bright minds at Gates and other places that are saying, “Hey, we have this as a baseline product. Technology and new uses and new opportunities, new markets, can help us do this better.”
ASCHENBRENNER: Exactly. You know, in the work that we do with our distributors on the shop floor, we have a fairly extensive group of product‑application engineers who are available for the deep technical problems that come in, and do a lot of troubleshooting and understanding what the problems are, and they provide feedback through our channel as well on the product performance attributes that need to be changed or improved in order to work on the specifics of that application.
And just like at this meeting, we do a lot of development for OEM‑specific applications and we develop new technology and bring it into our manufacturing cycle, and that’s basically what we draw from to solve problems in the industrial MRO sector to stay a step ahead of, hopefully, our competition and provide more value to our end user.
VAVRA: (To the audience) What kind of relationship are you’re looking to foster with people? Are there some success stories or are there some horror stories out there? I think both are instructive in terms of getting us to this understanding of how your suppliers and distributors and end users are supposed to work together.
AUDIENCE MEMBER: The partnerships that we have seen that turn out to be successful are true partnerships, where our customer understands why we need a certain margin in order to give him the service that we’re looking for. So it isn’t necessarily a cost‑saving application; it’s a true partnership, and we try and take advantage of our expertise, our manufacturer’s expertise, and the need of the customer. Would you say that’s kind of true, generally?
ROBERTS: Absolutely. And in the supply chain today, really, in my company, for example, we are really headed towards a two‑tiered system of procurement. You’re always going to have people that are vendors; they’re just a one‑time, spot‑buy something for some incidental purchase. There’s no value; there’s no history.
The other piece of that are your supply‑chain partners, suppliers. Those people are truly adding more and more knowledge to the operation today as we go on.
AUDIENCE MEMBER: Do you find that as a customer you’re prepared to pay a little bit extra for that service? Or is the pricing still a big issue?
ROBERTS: My opinion is procurement is like a pie. If you cut that pie into six or seven pieces, price is a piece of the pie. It’s not the whole pie; it’s a piece of the pie. There are still companies that try to make price or cost the pie, but that’s just
It’s funny you asked that. Our company has gone through some e‑sourcing over the last five or six years, and it seems like this reverse option kind of plateaued itself out. And I was just going to ask the people here, what effect has that had on you from a servicing standpoint after you have gone through two or three rounds of reverse auction.
AUDIENCE MEMBER: I don’t think they’ve been as bad as we thought they were going to be. We’ve been through a lot of them; I’m a distributor. And often times the customer seems to want to establish just what the low price is; and we may not be the low price on reverse auction, but we actually end up getting the order just because the customer has been able to establish that we’re in the right range. We may not be the low, but we’re who he depends on and who works with him 24/7, and we’ve proven through the reverse auction that he has really not overpaid for the product.
So some of them haven’t gone that way, and that’s been upsetting. But, really and truly, I think you’re right; I think they’ve peaked, and I don’t think they’ve hurt us quite as bad as we thought they would. Others might disagree with me.
VAVRA: The expression is: A fool is a man who knows the price of everything and the value of nothing.
ROBERTS: Be careful what you wish for; you may just get it.
VAVRA: You know, Tollie mentioned the commodities‑type purchases or the single‑time product purchases. I wanted to give you one statistic out of a study that is just starting to roll out from Plant Engineering. We’ve done a study called The Changing Role of the Plant Engineer. One of the questions in there was how many suppliers purchase or specify. Those with 20 or fewer suppliers is about 30% of the group. Between 20 and 50 suppliers is about another 24% while 12% of our readers said they work with 200 or more suppliers.
So to Tollie’s point earlier, this is an enormously complicated process; it is not just a single‑source, single‑purchase supply chain. You’re dealing with a lot of different people under a lot of different sets of circumstances.
ROBERTS: And I think the people in this room and those that are represented by the people in this room understand that indirect‑spend MRO capital equipment is an animal unto itself. We’re not talking about direct material here. We’re not talking about things where you can define, like in the food business ‑‑ corn, sugar, cocoa powder ‑‑ as a standalone commodity. There’s an infinite number of products.
But, even at that, we are still looking to consolidate or spend under what I call a trusted umbrella of those suppliers that want to come to the party and bring themselves and what they represent.
VAVRA: And that’s more than price.
VAVRA: I think it’s the toughest question you guys are going to get today from me: In an ideal world, what do you expect from the other two partners in this process? And what is the optimal? If you had the 100 or 50 or so suppliers and distributors, Tollie, that you deal with on an ongoing basis, if you were to give them a single sheet of paper and say, “Here’s everything I want from you guys,” what would it be?
ROBERTS: I can sum that into three words: ethics, integrity, and knowledge.
VAVRA: Those are great in theory. How do you measure them?
ROBERTS: That is on a case‑by‑case basis.
VAVRA: Have you booted suppliers?
VAVRA: Do they know why they got booted?
ROBERTS : I have done so, unfortunately, in the last couple of weeks.
VAVRA: In a competitive business environment
ROBERTS: I’m going to disagree with you. If I have to separate the company from a supplier, it’s if that supplier shorts me. If they choose to act less than honorably, fail to perform, that’s by their choice, not mine.
VAVRA: Does the reverse hold true, Ken? Do you fire customers?
ROBERTS: Go ahead. Go ahead; be honest.
MIKO: Have I or would I like to?
VAVRA: Yeah, it’s much harder in your position than it is in Tollie’s.
MIKO: That’s a tough question, because if I fire a customer, obviously my competition is going to pick up the customer. And maybe things will change. But you don’t want to lose a customer. Our job is not to lose customers; our job is to, you know, get customers and grow them.
But I would agree with Tollie. I know our owner, Carl James, is a huge believer in integrity. He says the only thing you bring into this world is your integrity, and it’s the thing that you most want to leave the world with. And that’s a 50,000‑foot statement. Sometimes you have to weigh certain things that come in throughout your business career.
But we think that integrity is important, and if we lose business because of that, then so be it; we’ll try to find some more customers. But, again, we don’t try to fire customers.
VAVRA: And it’s a rare customer who wants to put himself in the position of being fired.
ROBERTS: I never get up in the morning looking to wonder who can I separate myself from this week, never.
VAVRA: And, Justin, the same process holds true at your end of the game. There are people you have to deal with in order to continue to run a profitable, growing business, but there are limits to that as well.
ASCHENBRENNER: We have fired distributors for breach of ethics or integrity, and we just feel like it’s what we have to do to continuously refresh our base of distribution and to maintain the kind of distributor partners that we want to represent our brand. And that’s important to us, and it’s central to our beliefs as a manufacturer.
VAVRA: And how do you challenge your partners along the way to get better, to get a more optimal performance?
ASCHENBRENNER: Those are kind of foundational elements. The other one is that a distributor who has the same perception of value to the end user that we have and that is willing to provide the same kinds of services and input to the end users that Gates represents. And, you know, those are the distributors that we try to maintain in the Gates family.
VAVRA: Ken, how about at your end? What are you looking for from your supplier and your end user? What kinds of people are most optimal to work with?
MIKO: On the supply side, the most optimal people would be people that bring a very wide range of product to us as distributors so that we can then narrow our supplier base and we can then bring those types of products to our end user.
You know, we’re not a huge company, but we deal with 2,200 suppliers, which is quite a bit, so it’s even harder sometimes to figure out which are the ones that bring the value. We like to work with suppliers that have the same kinds of goals and the same type of thought process to our company so we feel good about it and we can take it to our end users. We like working with end users that are willing to not only, you know, get that thing fixed but listen to a person that has some experience and listen to a solution and then actually go ahead and implement it and then let’s document that, because our job is to make the end users‑‑ help them make their numbers make them look good.
VAVRA: And that’s a very straight‑line process between the distributor and the end user, but those are spokes in a long wheel that you have, trying to hit individual points for individual end users. And some of them are parallel, some of them go off at right angles, but it’s all about straight‑line relationships.
Tollie, what do you think?
ROBERTS: I think, all things being equal, people want to do business with other people they trust. And sometimes, a few things not being equal, they still want to do business with people they trust.
VAVRA: We’ve got some plant managers here. I want to get from you guys: Is that the experience that you’re seeing as you’re looking to deal with distributors and suppliers? We’ve got a number of different disciplines here and a number of different products. What is that kind of relationship like?
AUDIENCE MEMBER: We don’t take low bid all the time. Even in a contractual bid, it’s our option. And that goes for anything from just, well, small items, like motors, belts drives, things of that nature; we can review that ourselves. If we get into major, you know, million‑dollar projects and things of that nature, if they’re a design/build or what have you, we put that in the contract, that we won’t take the low bid and review the project among ourselves and make sure that we’re getting what we’re asking for.
And some of the expansion products we’ve gone into now, we break them down, product by product. You know, if you’re getting intointo dealing with people, you know, directly, one‑on‑one.
I’ve paid more money many a time because the person that you deal with
You get something that doesn’t work. I’ve had people that I’ve dealt with all the time that, you know, they go ahead and exchange it and make good on it. Maybe they’ve taken a loss; maybe I split the loss with them or I cover them so they don’t lose money but they didn’t make any either.
So money is not always a common denominator on how we make a decision; it’s what’s best for the plant and the operations.
AUDIENCE MEMBER: Cardinal Aluminum Company, local manufacturer. We do aluminum extrusion.
And we’re one of the guys that has probably close to 200 vendors. There’s a ton of vendors on our list. A lot of that is not by choice because a lot of our breakdowns are specific types of equipment that we need that exact replacement for, so it’s either that or find somebody that’s got that particular one.
But we really prefer suppliers that partner, that say, hey, you know, that may be specific, but we could do this, much easier, much simpler, much cheaper, a lot of times. And that’s what I like to work with, is the guys that care about your operation, not just selling you something and getting out of there but the ones that care about what you’re doing and your operation and want to help you, because they know that the next time this comes up, you’re going to call them. That’s what we like to work with.
VAVRA: With that large of a supplier base, what percentage would you say are product purveyors and what percentage are problem solvers?
AUDIENCE MEMBER: A very small percentage are problem solvers. It’s very hard to come across a vendor that is a problem solver, that is thinking outside of his little box and is willing to put himself in your shoes and look at what you’re doing. I would say less than 15% of our vendors care enough to even want to take the time to look at your process to see if they can make an improvement.
VAVRA: The room rustled when you said that, because there were some people who heard that number and got nervous, because they’re either on one side or they’re on the other and they may know which is which; and they know people, certainly, who are on the other side of that equation.
Is that your experience as well?
AUDIENCE MEMBER: Actually, the reason that very few person is left behind, there are lots of really good problem solvers either have retired or switched to another career. So the guys that’s getting in, the new guys, actually, that don’t have much experience, they try to get involved with the customer.
So our company, actually, we manufacture military boxes and large ammunition containers. So we have limited business, actually, because most of our vendors, actually, are government approved also. So we work as partners with them and they work closely with us also. We have to solve common problems.
VAVRA: The government procurement process must be a fairly entertaining one?
AUDIENCE MEMBER: It is. You get specs like that (thick) for something that is very simple.
VAVRA: In fairness, I put it on my blog last week about a U.S. Government manufacturer who actually cut about a million dollars out of their own manufacturing process just by taking a fresh look at some of those issues. So the story talked about the days of the $650 toilet seat and that those days may be past because the government, like everybody else, is an end user and they’re also, in some cases, a supplier; they’re looking for the same kind of value‑added proposition.
In our survey, we asked about, you know, who and where you purchase and how you get the information for that, as opposed to, you know, what you use various sources of information for. The basics of finding out about products and processes, we’re very happy to say, is still trade publications like Plant Engineering. But we said, “Give us the three sources you rely on most for information.” No. 1, almost 50%, is supplier reps and distributor reps. That’s their primary place to decide where they’re going to buy something.
Second is colleagues and peers and word of mouth. So if you’re in a facility and you have a guy down the road that you trust, Tollie, you may pick up the phone and call him and say, “Hey, how am I going to solve this?”
ROBERTS: There is some truth to that.
VAVRA: So you’ve got your own little
VAVRA: And the third one is, back to the suppliers and vendors, the Website. Increasingly, the same kind of information, the same kind of knowledge, is available electronically. And that may be something we want to touch on just for a moment. How are you utilizing electronics and the Internet to help you do your job up and down this entire line.
ROBERTS: It really boils down to the age of the staffing in the facility and the number of people that are allowed to be staffed in the facility, because everybody has to do more with less. But the 40 and up crowd still are a lot of traditionalists with the way they do things but what I see is that the under that, some of the younger buyers that are in the company, really dig into the Internet and do a lot of what I’ll call e‑searching and e‑inquiring into various things.
VAVRA: How about you, Ken? What are you starting to see out there in terms of how the Internet and some of the Web‑based processes are ‑‑ are people coming to you at first blush with a little more knowledge than they might have in the past?
MIKO: I would say yes. You know, a little knowledge sometimes is very dangerous. But the good news is they’re bringing something to the table. And I think our industry, again, has that gap. Some of us are rapidly aging 40‑plus‑year‑olds; you know, we probably gravitated to the Internet a little bit more. You know, we carry some of the funny ‑‑ the technological gadgets have kind of driven us there; and our younger people, it’s like, you know, it’s their way of life.
I, personally, don’t spend a lot of time on the Web, but I know I can go there and get something. A lot of our suppliers are putting that stuff out there now. So the good news is I don’t have to go out there and get that stuff.
VAVRA: And I know, at the manufacturer end, you’ve got not only the product knowledge online but also a lot of the solution knowledge‑‑ a lot of best practices, a lot of white papers; a lot of case studies. And we see this all across the board, both from the standpoint of here’s Project A that solves Problem B for End User C, as well as here are some larger things that we see going on in the industry that everybody is affected by, and we don’t necessarily ‑‑ we want you to buy a Gates product, but it’s not necessarily about the Gates product; it’s about solving a larger issue in the industry. And both of those things are tremendously valuable in terms of that integrity relationship building that we talked about earlier.
What are you kind of seeing in terms of how you’re using the Web, both in terms of providing knowledge and in terms of extracting it?
ASCHENBRENNER: I would say, in the actively‑providing‑knowledge area, you know, we have a weekly e‑mail that goes out to a distribution list that’s called Tip of the Week, and it’s just general tips on belt drives. And it doesn’t matter if it’s Gates, Goodyear, Carlisle, whoever; it’s just, you know, how do you make your belt drive more reliable, which, you know, to us it’s important as an industry to make sure that end users continue to consider belts as a viable option for power transmission.
I would say we also utilize the Web in areas like, you know, if an end user goes on Google and types in “chain,” “polychain” pops up first, so they see our stuff, right, and it will drag them to a Gates solution for what would have been a different product family.
So, you know, we’re actively out there trying to phish for people that come into our Web site find the solution that they want, and then they can, depending on their geography, find the local distributor that carries our product line so we’re carrying that pull‑through demand for our distribution onto the Web. And that’s really what we’re trying to do there, is connect through the Web with our distribution to end users.
AUDIENCE MEMBER: To follow up on that: I’d really like to take advantage of this opportunity of the time with end users to find out: How would you guys prefer to be introduced to our product once you find out about it? I mean, we offer white papers; we offer PM seminars; we offer products demos, whatever. But I’d be really curious to know, in your time‑constrained day, what’s the best way to meet with our distributor partners who can come and introduce you to a product? Or to a solution, more specifically. Any ideas? I mean, just personally, what do you look for?
AUDIENCE MEMBER: Personally, I like to talk face‑to‑face with an expert, someone that knows and cares about what they have and what we’re doing so that we can make it mesh. That works well for me. The Internet is great, and you can get a lot of information, but….
VAVRA: Is it a problem searching for a solution or is it a distributor or a manufacturer coming to you with a solution for a problem you may not know exists?
AUDIENCE MEMBER: It’s usually the first. It’s usually a problem looking for a solution.
VAVRA: And has the way you’ve gone about searching for those solutions changed over the last 10 years? Because we’ve seen some changes in the way all aspects of manufacturing are going out looking for those solutions.
AUDIENCE MEMBER: The Internet is probably the main drive of that.
VAVRA: We’ve seen trade events being dramatically affected by a number of factors over the last five or six years. Everything from 9/11 to energy costs to the Internet has affected the way a trade show relates to end users these days. They are more focused; there are more people going in there looking for very, very specific solution. They have identified five suppliers that might be able to help them, they gather up that information, and they get out of town and make a decision. It’s not a three‑day event where you just wander the floor because that’s your only source of gathering that information over the course of a year. So the whole dynamic has changed a great deal.
So, to Rich’s question: How do you want people coming at you?
AUDIENCE MEMBER: Manufacturers, actually, that could develop something that might be applicable to industry. They could put it in the publications. The product involves leak testing. And when you talk about leak testing, you have the very Cadillac and then you have your Volkswagen; you need something in between.
And one time I saw a publication that came out with a very good application. So we tried to get in touch with them and found out that they’re located in Cincinnati and they had been supplying about 75% of the leak testing in the world.
So when we talked to them, he said, “Do you have any military application?” Said, “No, never.” I said, “How come?” He said, “Well, we have so many commercial that we didn’t care about the military application.” So when the guys came over and they saw our application, they were willing to work with us. Then, lo and behold, we got the product. They give us a loner, something that we could play around and test and see until we got the confidence. And we started buying three of it, then we worked with it, until we are now a ten‑unit system.
So when the military people came over and saw the application, it was like day and night compared to what we had before. They were so enthused that it’s been spreading all over the military applications now.
So it all started with publication, you know, the publicity of what they have available, we would have never known.
ROBERTS: Your best customer is your most informed customer, and the most dangerous customer is a stupid customer. That’s my opinion.
Over the years, as end users and customers‑‑ in some cases, end users have gotten smarter, better, more efficient; and in some cases, some ways, they haven’t. I do think there will always be a place for a factory rep that covers a region of a territory for those product lines made by manufacturers because, I don’t care how many times Igo to the Internet and look at it. I mean, catalogs that I may have that Ken or somebody may send me for an application ‑‑ until somebody comes to that facility or to one of my food plants and actually looks at it and says, “Yes, this will work; this will take 12,000 pounds of torque; this willlast; this will do this,” you’re never really certain, especially with younger and younger people coming in the workforce who don’t have experience.
So I think there will always be a place for a good, qualified, intelligent factory rep.
MIKO: One of the things that as distributors we like to see is the manufacturers developing a Website and sharing some of their success stories, not only for us distributors but even the end users. We have some pretty good suppliers that do that and have developed that; and then as distributors we take that and use it as a knowledge base within our own company so that, you know, if I’m going to go out and make a call on a distillery but I haven’t been there or I know there’s a problem there, I will go out and I’ll do a key‑word search and look at a couple of things and then, when our people go out there, they can be knowledgeable and they can take advantage of the time that the customer gives them to help them solve their problem.
ROBERTS: Can I add something here to what I said?
On my side of the street, people today, though, have less and less time to just have somebody come in and stand and talk or whatever. A factory rep and the distributor he’s doing a ride along with would be much more effective, much more efficient, and would generate more business if they knew what they were going to talk about before they got there. Don’t call me at 9
ROBERTS: ‑‑ don’t call one of the plants at nine o’clock in the morning and say, “Hey, I’ve got the Gates rep with me today and tomorrow and can we stop by and see you today, maybe take you to lunch?” That is a waste, for the most part, of both people’s time, you know. But if, again ‑‑ but if Ken’sguy knew that we had a specific product line that could be updated, converted, replaced, overhauled, made better, or they had developed this poly chain that could replace metal chain and they had some familiarity with us and there was a specific thing to talk about, that generates a lot more interest on our end than just a handshake and “How are you doing?” and “Here’s a book” and “What’s going on at Bremner?,” you know, “How can we be your new best friend?”
VAVRA: Value is not always measured in dollars and cents, not direct dollars and cents.
AUDIENCE MEMBER: As distributors in general, how are you finding product knowledge? Are there still a lot of order takers or have you seen an improvement in what a distributor brings to you?
ROBERTS: Both. Truthfully, both.
AUDIENCE MEMBER: So we still really haven’t, as distributors, brought you a better‑quality, trained individual to call on you?
ROBERTS: Let me say this very respectfully: It depends on what world‑view does that distributor have of their employee. Are they paid X dollars an hour to be a W.W. Grainger order taker or are they paying them to be a product‑professional, expert face of the company? How much training do they get before they ever go out to see the customer? How much training dothey have about their base before they ever answer a call?
You know, how long were they able to retain them? Do they switchthings may not always be a hundred percent.
VAVRA: And you see this in all aspects of business today. Sometimes your best product is your people, or your worst product. And if you’ve got a distributor out there who’s not representing themselves or the distributor well, it doesn’t matter what kind of product they’ve got.
ROBERTS: That’s right.
VAVRA: That goes back to the whole value proposition we started with at the outset. What are you looking for from your end user? How much knowledge do they need to have in order to be able to make not just a good sale and a profitable sale but an informed sale that carries value down the line? What’s the other challenge in the other direction?
Because he’s writing the purchase order, so he’s king in this; but in the middle of the process, you’ve got to be looking for the same kind of give‑and‑take relationship from the end user as well.
ROBERTS: I would say most distributors would still think the value is trying to get in front of the customer, the end user, a story that’s pertinent to the customer, not just a story to talk about maybe it needs a Gates chain to fit into an aluminum extrusion pipe but it might fit into a meat plant. So we have to know your business. That’s a great relationship with your customers that, when you walk in the door, you know we’re here for business, you know that we can help you, you know that we know a little bit about what we’re looking at so we’ll bring the best thing to you.
And then that translates back, a lot of times, to the training we get from our suppliers. You know, we had just been talking about this morning, before the afternoon session, you know, having reps call on us as distributors and having a purpose and making it how we try to build that relationship, because it’s not all electronic, so that we can then take that information and go build a relationship with our end user.