In material handling, the answer is, “Not really.” First, there must be a strong, compatible partnership between the distributor and the manufacturer that can deliver the finest value in products and services.
This relationship had its greatest expansion when the young automobile industry wanted to put the world on wheels. The manufacturers needed local companies to sell their vehicles and provide back-up support and service to maintain customer confidence.
Manufacturers of material handling equipment soon followed suit. This created opportunities for individuals in various communities to become entrepreneurs in distribution. At that time, the manufacturer of established products was king and could write the rules. The fledgling businessman was at the mercy of his suppliers. Experience proved the need for both to work in concert in order to achieve their goals and create customer satisfaction.
Back in 1954, a great number of manufacturers even tried to influence their distributors not to join in the formation of MHEDA, fearing it would be an adversarial pressure group. It did not take long for both sides to realize they had the same goals and could achieve them best by cooperation. In fact, a great number of distributors today are considerably larger than many of their suppliers.
Working in Harmony
Today, manufacturers and their distributors work in harmony as partners to meet the needs of customers with the best products and local support for continued satisfaction. This requires ongoing programs to include retail financing, always available, rental units, fleet management programs, off-the-shelf parts availability, training programs for operators and service technicians, etc.
Once the manufacturer creates a demand for its product, it must then obtain capital to develop a competitive price by volume production supported with an attractive marketing program. Individual local distributors could not create such a sophisticated or competitive opportunity. But it takes the cooperation of a wide network of distributors to produce the required volume for the manufacturer.
Quality fleet management programs can be established by a manufacturer based on the input they get from their distributor groups. It then can nationally promote these programs, which then will be implemented by distributors at the local level. In order for the program to be successful, the manufacturer must have confidence that its distributors will give reliable quality follow-up service to the customer.
Distributors also must make significant investments in rental fleets that will give the manufacturer great visibility among a broad group of users. Very often, the manufacturer will offer various forms of rental fleet financing.
Quality distributors must invest in strong off-the-shelf parts availability for customer satisfaction, so that the manufacturer can safely state that its products are properly supported at the local level.
Many manufacturers have established distributor councils to solve the needs of the marketplace. This is where a select group of distributors meets regularly (perhaps bi-annually) with their supplier to fine-tune how to achieve their common goals. Manufacturers learn much from their distributor councils to help them understand distributor needs.
Only the manufacturer can promote such a wide range of benefits for the customer, but it takes the input and cooperation of the distributors to understand and develop these value-added needs by providing the logistical support and having the right product at the right place at the right time. Only the distributor can best satisfy the customer by diversifying lines in order to provide one-stop shopping so that the combination of products “fits.”
The material handling manufacturer and distributor must join hands in a spirit of cooperation to achieve their mutual goals of providing the best overall value to customers. Only then will “the customer come first.”
|Meet the Author
Howard Bernstein is chairman of Atlas Lift Truck in Schiller Park, Illinois, and on the Web at www.atlaslift.com. He served as MHEDA President in 1965.