Partnering with Your Distributor

By A. Lee Chichester | Nov 15, 2003




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Electrical contractors traditionally have a lot to say about how their distributors could make their lives easier. Problems range from not getting all the parts in one shipment to delivery delays to emergency service failures—all of which cost time and money.

“Most contractors will tell you that 40 percent of their labor expense is directly related to material handling on the job site,” said Arnold Kelly, director of construction markets for Graybar. “[If] we can streamline that process and get them the right products in the right quantities to the right place at the right time with the least amount of headaches, then we’ve just saved those contractors money.”

A specialist in supply-chain management services, Graybar is North America’s largest distributor of electrical, telecommunication and networking equipment. “The focus of our approach to partnering is becoming their supply-chain expert, working with all parties within the chain, from the manufacturer to the end-user, so we improve efficiencies,” said Kelly. Being an employee-owned company, Graybar has the structure to enhance true partnerships.

“Most Graybar employees, especially where they directly engage the customer in these partnerships, are attuned to the value we provide,” he pointed out. “As shareholders in our company, we want to see our company improve. We all recognize that the success of our company is directly tied to how successful we’re able to make our customers.”

Within the last 18 months, Graybar has completed the roll-out of its Zone Warehousing system to augment their local branch setup. Today, 14 enormous facilities (140,000 to 300,00 square feet) serve 12 to 25 branches each. The branches are located, on average, within a 300-mile radius of the zone warehouse that serves them, making 24-hour deliveries of even difficult-to-find or odd-lot materials routine for contractor clients.

“Not only are our contractors receiving fewer shipping errors under this system,” said Kelly, “they’re also getting fewer shipments overall since we can ship everything at once.” In some cases, contractors might receive shipments in two lots, where bulky items come from the local branches and the rest of the material comes from the zone warehouse. “Material handling is our core competency,” said Kelly. “So we partner with our contractors to become their solution provider. Our entire organization is set up to eliminate problems, error and waste.”

Fewer invoices helps the contractor keep costs in line, allowing him to bid more jobs knowing that his supplier partner will in fact keep material-handling mix-ups at bay. “In many cases, we’re involved with our contractor partners in helping specific project management efficiencies,” said Kelly. “We have in-house software developed specifically to help contractors manage the flow of products—from lighting to switchgear—to their job sites. Being able to help that contractor realize a new level of efficiency on that project, and being able to assure that project comes in as bid, or even better than expectations, helps everyone be more profitable. The partnership has to be win/win.

“If your contractor has to track any given order to find out where it is, why it isn’t on his dock or at the site, then you’re probably not serving him the way he needs to be served,” continued Kelly. “We offer the best of both worlds: local branch interface and accommodations and a huge inventory of nationwide warehouses that are never more than 24 hours away from a job site.”

Partnering with contractor clients is also the focus of Anixter Inc., a leading global distributor of wire, cable, communications connectivity products and C-class inventory components. Anixter has been redefining distribution by expanding the role of material supply through the constant growth of its product offerings, technical expertise and logistics and inventory services. “We feel like it’s our responsibility to actually go and work with the contractor and end-user to help identify what their needs are,” said Mike Duncan, senior vice president of sales/structured cabling for Anixter.

For example, Anixter personnel will help the contractor define what is required by an end-user, and will take several extra steps to assure the contractor’s value to the owner. “We do a lot of up-front design and consultation with the contractor so that the right products are placed into the right applications. Then we actually provide ‘whole order’ delivery, kitting together materials—cabling products, racks, cable assemblies. We’ll even take customer-owned materials such as PCs or networking devices, and put them together so they can be deployed to the job site in whole units. When the contractor arrives to perform the installations, it goes quickly and efficiently.”

This approach to delivery works especially well with multiple-location clients such as retail outlets and banks, said Duncan. In one instance, Anixter Integrated Supply (AIS) worked with a retail giant that was upgrading communications systems at 2,400 locations. Anixter color-coded, kitted and shipped 1,200 lines a day, allowing the company’s contractor to complete the upgrades in only four months.

“We’re one of the few companies that can accomplish multiple-location installations not only on a nationwide basis,” said Duncan, “but also worldwide. We can kit together the assemblies at one location and ship from there, or can do the kitting at multiple sites across the nation or in Europe.”

Along with the ease of installation of kitted products, the contractor can benefit from fast billing turnaround when working with a partner like Anixter. While Anixter doesn’t bill until the products are used, the contractor gets to accomplish the installation very quickly with the kits, so that he or she can bill the owner and turn around that payment with speed, keeping supply lines flowing.

“In addition,” Duncan pointed out, “when you feed the job ‘just-in-time,’ there’s far less risk of loss. The contractor gets the kitted materials on the day he’s ready to install them, lowering the time they sit on the job site, and the risk that they won’t be there when the installation is ready to start.

“We believe that our job is to help improve the entire process for a contractor,” he continued, “from design to sale, from implementation to billing, on any given job. We look beyond the typical distribution assets surrounding delivery of materials to a job. We want to provide whatever the contractor might need, both before and after winning the bid.”

You don’t have to work with a multilocation national chain to receive partnership service and materials handling solutions. Shepherd Electric Supply, a two-location, locally owned supplier in the Baltimore area, has asked contractor customers to challenge them with service requirements that raise the bar in distribution partnerships.

Eighty percent of Shepherd’s customer base is electrical contractors, so they are intimately aware of this sector’s needs. Internally, Shepherd has created specialized services specific to each contractor client’s requirements, which they guarantee to deliver. “If what the customer needs is an expedited channel straight to the manufacturer, that’s what we’ll provide,” said Jim Shearer, VP and General Manager for Shepherd. “We’ve gone to specific manufacturers and listed what we need from them, which enables us to provide a customized channel from the manufacturer straight to our contractors. We have received a commitment from these manufacturers that if we call in an emergency, they’ll respond.”

Sometimes, things just don’t go perfectly on a job site or in a manufacturing environment where a contractor might have a maintenance contract. “We’ve had a customer client’s factory go down at 11 p.m. because a part’s burned out,” said Shearer. “Our customer calls his Shepherd salesperson and our employee knows exactly how to reach the manufacturer or the manufacturer’s rep. Once that phone call is made, we’ve had warehouses across the country open up at midnight and they’re paralleling wire or whatever needs doing so we can make good on our guarantee to that customer, that we would have the material he needs en route to his site within hours of our having received his original call.”

Partnering with a contractor means more to Shepherd than simply dealing with emergencies. Many of Shepherd’s contractor customers have maintenance contracts with hospitals, schools and factories that stipulate conditions and times under which the electrical maintenance can be performed. These off-hours contracts require off-hours deliveries. Shepherd has extended the hand of partnership to these customers by dedicating some of their trucks to perform nothing but after-hours deliveries. Shepherd has responded as a true partner in the process by converting delivery challenges into a company asset; an asset that improves the bottom line for materials handling on the job site.

Convert your distribution outlet into a construction partner by expressing your needs and expecting them to be met—or change outlets. Distributors are thinking outside the traditional boxes to help create win-win situations for everyone involved, from the manufacturers of the items they provide to the end-users of those items. It can be done; it is being done. Let your distributor help make you a hero in the eyes of your own clients. EC

CHICHESTER is a freelance writer based in Meadows of Dan, Va. She can be contacted at [email protected]. 

About The Author

A. Lee Chichester is a freelance writer based in Meadows of Dan, Va. She can be contacted at [email protected].





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