In the distributor-manufacturer world, “partnership” is probably the most commonly abused word. Our experience is that it’s not that often that a true partnership is formed—at least beyond the next great project opportunity—that truly transcends the meaning of a partnership.
The Distributor Point of View
Although we do business with many vendors at Hy-Tek, only a few have worked with us to create a true partnership—a business relationship that is built on trust. These relationships have weathered some difficult times because of that trust and the strength of the relationship. We have truly worked together to understand each other’s business and the unique challenges experienced by the “other side.”
Just like the most sacred of partnerships, marriage, a good business partnership takes time and effort and is built on trust, communication and a few good disagreements! The end result is a healthy relationship where both parties understand each other, work with each other and go to market together. This is not an easy level to get to. Temptations faced on the distributor side include shopping to get a lower price, changing players to get a better lead time, playing the field from project to project and simply working with the last guy who was in the office to make unrealistic claims of service, loyalty and quality.
These strategies do not foster the trust necessary to work through the problems that inevitably happen at some point of a project. As Stephen M.R. Covey wrote in his book The Speed of Trust, “Simply put, trust means confidence. The opposite of trust—distrust—is suspicion.” When a relationship is built on trust, things get done faster with fewer challenges. This doesn’t mean that there aren’t disagreements or negotiations—there are. It means the disagreements and negotiations are healthy and done with a win-win attitude. When you don’t have a partnership built on trust, both parties are constantly looking to cover their own interests or wondering why certain requests are being made.
In a healthy partnership, when problems do occur (and they do), they get taken care of quickly. There are no arguments about “who is going to pay for this.” The problem gets solved and the financials get worked out. The beauty is that it is all transparent to the client, and in the end the experience is a good one.
I wish I could say that we have this type of relationship with every manufacturer and vendor that we work with, but we don’t. We can never take the relationship for granted and we have to constantly reinforce the values and principles that put us on this plateau.
The Supplier Perspective
It is no different on the supplier side. We would love to have a true partnership with every distributor we work with, but partnerships are formed with no more than 20% of them. A partnership to us at Steele Solutions is when a distributor decides that we are their source, as opposed to them sending each project to several manufacturers and picking the low bidder. In addition, our partners understand that a successful project involves a win-win-win conclusion where the distributor, manufacturer and end-user are all happy with the final result.
The easiest way to create this three-headed monster of success is to communicate. For example, have a kickoff meeting with all three parties together in one room before the final scope or pricing is determined. This allows the manufacturer to hear directly from the end-user what is most important. A manufacturer can be an asset to the distributor, as it is a large task for the distributor to be an expert in all areas. Putting together many different products to create a complete package for the end-user can lead to missing something early in the process, which can cause the dreaded change order and potential hard feelings.
As a manufacturer, recognizing a true partnership changes your perspective from “How can I get this job?” to “How can I help my distributor get this job?” You can focus on items that create value versus creating a lower price. The end result is a happier distributor, end-user and manufacturer.
Many manufacturers forget that the end-user considers the entire project to be done by the distributor, which means all problems are the distributor’s responsibility to fix (regardless of whose fault it really is). Our job is to support the distributors so that any problems get handled timely and professionally.
The analogy of a marriage is perfect to describe a true manufacturer-distributor partnership. There will be ups and downs, but knowing that you can overcome those issues allows both parties to keep their eyes looking at the big picture, in lieu of worrying about the small details. Both can keep moving forward instead of constantly slowing down to learn how the other works.
Much like a marriage, we cherish the relationships that we’ve formed with our distributor partners, and we work hard every day to make sure we don’t take our partners for granted. Nothing helps keep a partnership together like honesty, integrity and trust that goes both ways. When you find that type of partnership, celebrate it, as they are few and far between.
|Meet the Author
Scott Hennie is vice president and general manager of Hy-Tek Integrated Systems in Columbus, Ohio. Scott has run Hy-Tek’s Cleveland office for the last eight years. He says the biggest challenge facing the industry is establishing distributor value to the end-user and thinks MHEDA members should continue to promote their value to customers.
|Meet the Author
Kevin O’Neill is vice president of sales and marketing for Steele Solutions in Franklin, Wisconsin. He has been with the company since its first year of operation in 1997. His advice to manufacturers and distributors is to understand how each individual customer works.