More than Traditional Industrial Manufacturer – Distributor Relationships

Even in the industrial sales channel, e-commerce has been a disruptive force in the traditional supply chain. Today’s buyers are accustomed to having the same detailed data in the workplace as they do in online home purchases. They expect everything from immediate access to pricing, product availability and tracking of the in-route precise location of their order.

As manufacturers generate leads and pass them to distributors who are responsible for the follow up and nurturing process, there can still be a disconnect because systems and process are often very different between the two entities. Plus, top line distributors work with many different suppliers, including competing manufacturers. It is not enough to manufacture top quality product at competitive prices. The companies that are likely to gain more attention from the distributor are those that make the flow of leads, orders and all other transactional activity easier.

Lead Sharing: EDI is More than Just Order Fulfillment and Forecasting

Most RFQs, leads and inquiries come in through the manufacturer. From trade show inquiries, to advertising and most importantly direct to a company’s website, the flow of leads is the life blood of new business. It’s the handoff from manufacturer to distributor that’s critical. Companies spend a great deal of money and time to cultivate marketing qualified leads. 

From the Old Days of Paper & Fax to Electronic Communications

Today the relationships in industrial distribution are complex, requiring channels of communication between manufacturers of parts and components to effectively communicate with their distribution network electronically, on a real-time basis. This method of communication is known as EDI, electronic data interchange. 

There are two options for industrial manufacturers to get their products to the end user; direct sales and distribution sales. The distribution channel has existed for as long as there have been manufacturers. Consider one well known manufacturer of fittings and valves. Beginning in the 1940’s, the company began to grow rapidly with a direct sales model but soon found demand outpacing their ability to effectively sell and ship direct to customers all across the country. The company quickly adopted a distribution model by funding independent, yet exclusive, distributors in major industrial markets.

As OEM procurement departments develop strong supplier relationships they gain a solid understanding of the suppliers’ business, products and services, ultimately fostering a dependable partnership. In turn, this allows the supplier to better understand the OEMs’ needs and respond
more effectively and efficiently. This fosters an increased economy of scale for both parties. Each organization is able to collaborate on product enhancements, new product development, managing inventories and exploring potential areas of consolidation.

The cost of components and managing the supply can represent a large portion of the final equipment costs.  Mismanagement of the supply chain can spiral out of control by incurring higher product and production costs, inventory overruns and strangling cash flow.

Some key considerations in managing the sometimes hidden cost overruns of the supply chain are:

According to a survey by Deloitte, organizations with superior supply chain capabilities demonstrate significantly above average performance on both revenue growth and EBIT (Earnings Before Interest and Taxes) when compared to industry average:

Supply Chain Efficiencies With Trusted Qualified Vendors

Up until the 1970s and ‘80s General Motors had dozens of autonomous manufacturing plants that did their own thing. Each plant had their own vendors and largely operated on their own schedules. Then in 1984, GM purchased Electronic Data Systems (EDS) in an effort to tie together cross functional operations and eliminate redundancies through more real-time data communication. EDS founder Ross Perot joined the GM board of directors and became GM’s largest individual stockholder while retaining control of EDS as chairman. 

It is with heavy hearts that we announce the passing of David D. Carr, CEO of Brennan Industries Inc.

Mr. Carr had been with Brennan industries almost since its beginning. Starting in 1959 as the second employee, he worked for the company for the past 60 years. He took over leadership of the company in 1973 as President, later transitioning to the role of CEO in 2008. In his later years, even though company leadership had been taken up by his son David M. Carr, Mr. Carr remained active in the business maintaining a presence in the office daily. Under his leadership Brennan established its current corporate headquarters, opened branches across the US, and developed its first machining capabilities, among many other milestones.

The Critical Role of Procurement 

Procurement departments play an essential role in ensuring success of material requirements planning’s (MRP) impact on production scheduling, materials forecasting and inventory control to manage an efficient manufacturing process. MRP systems at OEM companies are software-based and used to plan purchasing and on time delivery of outsourced components, as well as the entire manufacturing process.