Industrial Distribution

It’s summer and it is hard to remember to write my blog. But a lot is happening and we need to stay on top of it.

The economy, by many measures, is tanking. Price fluctuations are killing long-term planning and ordering. New competition is coming out of the woodwork (but where are they getting the money to start?). Threats of new regulations will continue to screw up our international competitiveness. Some commodities are getting into short supply.

It is enough to make some wonder if this is a time to just hunker down and protect what we have. The problem is that every time the wagons are circled, we become an easier target. So what do we have to do?

The most important thing most companies can do is accept the fact that the best ideas for survival may be hidden away within our workforces. Too many of us believe that if you are not p...Read More

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It is not very often that a whole organization can take advantage of trade show education. Normally, only the top executives get to go and listen. This time it is different. Every company can attend the education sessions at the Virtual Technology Show for free, right from your own office. Here is the chance to spread the education around your whole organization.

On April 30 and May 1, the Brown Smith Wallace Consulting Group will host the third Distribution Virtual Tech Fair. It grows each year and while the booths are worth seeing and the environment worth exploring, it is the education I want to focus on.

My suggestion is to review the programs and schedule a time for you and your staff to listen to the speaker. You might bring in lunch and then have a discussion of what you heard. This is a wonderfu...Read More

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Continuing with my focus on innovation, I want to ask a question:

"Are industrial distributors innovative?"

Certainly, we still have many similarities to the original peddlers who wondered across the country in centuries past. But there is a lot of new as well. So, are we an innovative industry?

As with most questions, it depends on your point of view. Obviously, much of what we do has changed considerably in the recent past. Consider the advances people like Jon Schreibfeder have made in inventory control. They have changed the fundamentals of a key element of the business.

Yet when I look at individual distributors, I am always amazed at how few are taking advantage of the proven technology and other opportunities that are available.

The last time I dealt with this question, Dr. Julia Kalish at...Read More

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As Innovator in Residence at Saint Louis University, I am often asked to define the difference between innovation and entrepreneurship. These two complimentary modes of action are often confused. So, what is the difference? And what can happen if they get together?

Innovations can be large or small and process- or product-oriented. They can affect the way we think or act. They can be minor enhancements or a totally new way of doing something. They can be an incremental product change or something completely new.

The portable tape player kept being enhanced by becoming smaller and delivering better sound quality with longer-lasting battery life. Each of these steps was an innovation that kept the product alive and consumers willing to purchase a newer, better (at least in perception) model.

Then, along came the iPod. That was not just an ...Read More

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"Best practices" is one of those buzz-word terms that get lots of press, generate lots of conversations and end up creating a minimal amount of positive change. Why? Because most business people want a silver bullet. They want an easy and guaranteed answer. They want someone to tell them what to do in order to be more successful.

It does not work that way. First, if it were easy and guaranteed, it would already be done. Second, the answers may be hidden. So look carefully.

Learn from what others have done. There are lessons to be found in every success or failure. But success requires work—hard work. Changing can be hard work. So do your homework to make sure the effort you will put into change will pay back in positive benefits.

Start by looking at the things that the most successful around us all seem to be doing. For example, many...Read More

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We have seen a great deal of consolidation in the software side of the distribution industry. Prophet 21 was buying everyone up and then they got acquired. Infor started as a West German company named Agilisys three years ago and is now generating over $3 billion in revenue. Eclipse got purchased for a price north of $100 million. Where will it end?

The question is important for a number of reasons. First, every user needs to feel comfortable that their software will be supported for the foreseeable future. Second, if you are looking for software, which players will stick around? Third, what happens to users who get caught in the consolidation?

The answers are many and varied. The most important good news is that the consolidation of distribution-centric software has not resulted in the mass “sunsetting” of products. In the past, some purchased compani...Read More

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Post Katrina, you would think that software vendors would get the need for disaster recovery. I will keep the name of the offending vendor secret for the time being, but here is a story from a recent negotiating session that blew me away.

The client was ready to sign a fairly large contract to replace their aging software system. We were negotiating the final terms and conditions. It used to be that a copy of the software was allowed to be maintained for backup and disaster recovery purposes. Since the contract was silent on this point, we raised the issue.

Understand, the client was located on the gulf coast and had lost their computer to the storm surge. Recovery from a disaster is no longer a theoretical possibility, but a real life requirement.

As such, we wanted to have a duplicate system at one of the remote sales/warehouse location...Read More

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I negotiate many contracts for clients. Over the years there have been many changes. Over the next few weeks, I will be posting comments related to contract negotiations for ERP software that have surfaced lately. In all cases, I welcome the feedback from our software friends as to what is to be expected, what is truly necessary, and what they might even admit is part of the past.

To begin with, I had to laugh at a recent contract that included a paragraph for reimbursement of telephone fees for connection to a customer’s remote computer. My guess is that there are IT managers that do not remember having to dial in at 900 baud to debug a system. In this case, when I pointed out the antiquity, they did agree to remove it from the contract.

More onerous, and one I would like to get input from the business community was a discussion related to disaster planni...Read More

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The three letters ERP (Enterprise Resource Planning) have come to represent what everyone seeks in a computer system. For most distributors, this is a good starting point. For some, it may be all you need. But there is so much more out there.

“Best Of Breed” means you buy functionality from the vendor who does it best, at the best price, with the best training and support. Then, and this can be the hard part, you have to interface it to the rest of your systems.

When you are looking at a “Report Writer” or Business Intelligence (BI) tool, the interfaces are very easy. Most of these systems have only a one–way flow of data. You need to be able to extract information from the existing system. This is a standard feature in most packages. The reality is many companies use lots of spreadsheets to manage their business (usually a bad idea...Read More

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No, it is not going to be as bad. Only a few glitches in some unusual places. Still, do not ignore March 11, 2007. This is the new start date for Daylight Savings Time. The Government decided an earlier change would save power. It is not a big deal – unless you rely on clocks for the right time.

Most of the world has software that automatically adjusted the time back and forth on a predetermined schedule. Guess what? The schedule changed. That means most computers will not automatically change to the correct time on March 11.

The only problems will surround automatic unlocking of doors to permit entry, switching of night calls back to the switchboard, and recording of your favorite TV show.

Plus it will not be over on March 11, it will strike again on April first. That is very appropriate. April fools day. Yes, all of your clocks will automatica...Read More

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Is the Supply Chain a viable method for moving products in the twenty first century? It was developed so long ago, I am not sure anyone can pin point the exact beginning. The chain represents a linear process that moves raw materials and resources from extraction through a manufacturing capability through logistics and warehouses to an end user.

The traditional supply chain is like an old fashioned audio or video tape. You have to start at the beginning and move to the end in a prescribed way. There are no short cuts, although you can speed up the process.

Then we went from tape to discs to CDs and DVDs and finally to MP3 players. Now you can get to any point of the recording at anytime. Why can’t we figure out how to do the same with our supply process?

One reason is that it scares many people in the industry. The word “disintermediation&...Read More

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Years ago, I remember asking my kids about what they were learning in school. So, I am turning the tables and I will tell you what I have been learning at Purdue. The course of study is aimed at full time executives in manufacturing and distribution. For more information on the program, call Mark Schuver at Purdue, (765) 404-3550.

Project Management Long ago, we all learned something about managing a project. Some learned to use coercion. Some learned to use rewards. Some begged a lot. Others prayed (even if it was not politically correct).

Dr. Edie Schmidt started our program with an excellent article: “Lessons for an accidental profession - project management” published in Business Horizons,  March-April, 1995  by Jeffrey K. Pinto,  Om P. Kharbanda

The premise of the article is that most project leaders do n...Read More

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