Says here distributors and manufacturers don't like each other
Staff -- Manufacturing Business Technology, 12/1/2003 7:00:00 AM
A recent survey of industrial distributor operations by Industrial Distribution magazine and Philadelphia-based Pembroke Consulting reveals relations between distributors and their manufacturing suppliers are becoming more strained at the same time they're becoming more collaborative.
For example, distributors view only 15 percent of manufacturers as "true partners." Among large distributors, the number drops to 11 percent.
According to the survey, "The longstanding relationship between manufacturer and distributor is in serious trouble. Both parties still need each other, but today's affiliation often is more contentious and anything but a partnership."
Distributors want manufacturers to protect their market territories by restricting the number of competitors and lowering the order threshold for discounts. Manufacturers want distributors to sell more services to their customers, though industrial distributors are struggling to figure out how to charge for services that customers see as standard.
"Distributors are not quite sure if they can really reinvent themselves and offer new value-add to customers," the report states. "If successful, 'value-add' will be resurrected as a meaningful standard for defining distribution. If not, industrial distributors will continue to struggle under tightening margins as undifferentiated suppliers of undervalued services."
The current top three value-added services offered by distributors are technical/product support, faster delivery, and employee training.
