The Utopian channel: the bond forged between producer and distributor in today's door and...

The bond forged between producer and distributor in today's door and hardware market.

Not long ago, I was asked for my opinion on what the number one critical success factor for a manufacturer in the door and hardware industry was. My answer raised some eyebrows, because it wasn't low costs

or engineering or technology or any of the conventional cornerstones of manufacturing success. I believe what matters most are quality distribution relationships. If any manufacturers are surprised at this opinion, that probably reflects the inclination to place importance on advantages that are tangible. The make-orbreak impact of distribution is much more difficult to measure, count or value in dollars. Nevertheless, it is very real.

For example, some manufacturers underestimate the role of distribution by looking at it as merely a channel to the user. From this nearsighted perspective, distributors might appear to be simply intermediaries. Certainly, they add substantial value by providing technical and logistical services that manufacturers find impractical to furnish. These include local inventory product modification, and assembly of the total-opening door/hardware package. However, only focusing on these factors means only seeing the tip of the iceberg.

Instead, step back and look at the manufacturer/distributor relationship on a more strategic plane. When it attains its full potential, it becomes a long-range, voluntary alliance between independent entities. These partners share a common competitive mission. By agreeing to work together, they leverage each other's strengths. When manufacturer and distributor are aligned in a quality relationship, they form an integrated, seamless system to deliver customer solutions.

Utopian? Let me assure you that there are numerous examples of this kind of bond forged between producer and distributor in today's door and hardware market. And if a manufacturer wants to measure the value added by the distributor, here is a sure-fire way to gauge it: Try going it alone. I'm speaking from experience: During a period in our own company's history, we attempted to do what distributors do - that is, sell directly to builders, undertaking the financial exposure and providing the before-and-after sale services customers expected. At one time, almost 40% of our company's volume came from this practice. Today that figure is 0%, which speaks for its success. But the experience held an important lesson for us. We had underestimated what distribution contributes, couldn't duplicate it, and were better off concentrating on what we could do well.

To fathom the value added by a quality independent distribution system, we need to understand what happens to product in the realm beyond the shipping docks. There, distributors provide dimensions of product support capabilities that no global manufacturer could hope to imitate:

End-user relationships

Distributors relieve manufacturers of the responsibility for the end-user relationship. Manufacturers can relinquish this responsibility without misgivings, because distributors are much more adept at managing these relationships. Each market has its unique characteristics; each customer has correspondingly unique expectations for products and services. Only local distribution can tailor product solutions to meet these expectations. In addition, distributors make these end-user relationships personal. Many are family-owned businesses that stand behind products over several generations. Not long ago, for example, a Boston-area distributor celebrated a 50TH anniversary. The owner's father had preceded him as principal of the company, and now a son is active in the business. The kind of continuity in customer relationships this provides is something no large manufacturer could match.

Entrepreneurial service commitment

The fact that distributors are independent businesses is highly significant. Independent ownership means the difference between being "involved" and being committed to customer satisfaction because your livelihood is on the line. That sense of urgency keeps customers loyal. I'll never forget a conversation I had with the owner of a new-startup distributorship struggling to establish itself. At the time, their crew was working through the night to complete an order. Someone asked "why don't you just come in tomorrow to finish the job?" He replied, "If we don't deliver, there is no tomorrow for our company." As a manufacturer, you couldn't buy that kind of dedication to honoring commitments.

Distributor independence benefits the manufacturer in other ways as well. Their autonomy helps leverage the best aspects of free enterprise in product selection. For example, architects can be highly particular in specifications. Independent distributors are in a position to make unbiased product selection decisions to satisfy these specifications. If it so happens that a particular door, frame or hardware product isn't the best solution, they are free to suggest something better suited This competitive objectivity keeps manufacturers on our toes, to be sure our product designs feature reasons to prefer them.

Before-and-after sale support

Substitute the word "consultant" for "distributor" to appreciate another key contribution of the distributorpartner. In technicalities, for example, no industry could be more formidable than ours. National building codes, local building codes, handicapped-access codes and fire labeling requirements that differ by opening location and the interpretation of local authorities. Usually, distributors assume the role of technical marketing representative for the manufacturer, consulting with customers on the correct application of products. This is a competency that takes years of training and experience. Don't forget that the distributor's proficiency isn't just in one product line. They furnish a depth of expertise in doors, hardware, glass for lites and in the many companion product lines, from gasketing to exit devices. Not only are they asked to coordinate all these products, but also to be knowledgeable in how buildings are constructed so they can apply them.

In the alliance between manufacturer and distributor, it is the latter who stand behind products after they are installed. It would be unimaginably expensive for a manufacturer to respond to every field problem. Even when the trouble is no fault of either the distributor or manufacturer - a frame out of plumb or incorrectly installed latching devices - these partners run interference for the manufacturer on jobsite trouble-shooting.

Community commitment

Distributors stand behind products in a larger sense as well. Many are prominent business leaders within their communities. There, the reputation of the products and their reputations are one and the same. Customers in this industry have exceptionally long memories: A single negative experience with a product can permanently damage the end-user relationship. Another way to look at this: Personal integrity is a big part of what customers want to buy when they purchase a door and frame. That "look you in the eye" trust factor only exists when you have quality distributors.

Market awareness/intelligence

Let's give credit where due for most of the new products and improved programs that manufacturers come up with. Distributors are consistently the best source of ideas. When the manufacturer/distributor partnership reaches its full potential, it becomes a two-way avenue for communication. This doesn't mean just intelligence on what competitors are up to. Nor is it merely an audit process - a report card from distributors to help rate performance. On a much higher level of intimacy, distributor involvement can affect every manufacturer product and process to help the partnership deliver superior service. The distributor advisory groups in our industry are a perfect example of constructive partnership. Ours literally helps us run our business. We consult our council on virtually every significant decision. Conversely, when I list the major initiatives undertaken by our company in the last decade, the majority originated in distributor advisory council discussions. Not just product developments but concepts like computer estimating software or order entry automation. Without these distributors as consultants, we would be blinded competitively.

These are just some of the reasons why quality distribution tops my list of manufacturer success factors. Without the value-added alliance, manufacturers don't have a complete solution for the customer. However, like any voluntary relationship, making this alliance work requires mutual understanding, respect, attention and effort. Because there are no formal ties to each other, it is a delicate balance of common interests. It is built on trust, confidence and especially, clearly deemed expectations of each partner. Each respects the other's contribution and makes no attempt to dictate, control or interfere in the other's domain. As manufacturers, if we simply listen to our distributors, trust them to do what they do best and observe the rules of the road in our relationships with them, we'll discover how dynamic the partnership can be.