Much has been said about the need to accelerate the benefits of the IDW. One of the areas most needed is participation by small to medium sized manufacturers. Without them it is difficult for distributors to further drive costs out of the channel. According to one distributor, they have been successful in reducing costs with 13-14 large manufacturers, the challenge is the next level.
The key to generating demand at the next level is creating pressure on these companies to act. Many of these companies sell something to most distributors, albeit not enough for them to respond to any particular distributor (except maybe a national distributor). To succeed, distributors need to collectively identify whom they want to become stronger data synchronization partners with.
In this week’s IDEA e-newsletter, Mike Rioux wrote to this issue saying:
So much has been written about data synchronization, but most of the attention and interest has been from the large tier one companies. Managers and even executives from large manufacturers and distributors have been actively touting the benefits of synchronizing their business information with their trading
partners, and studies conducted to date prove the value.
Many tier one companies have programs or solutions in place and are trying to sync their product and price files with their manufacturer or distributor trading partners. However, if we scan the average distributor vendor line card, many of the smaller sized supplier companies are not being pressed to become engaged in data synchronization. To get the smaller supplier engaged in data sync, it must be driven by a customer requirement. The distributor should make data sync a top priority whenever they meet with their supplier partners.
One challenge for small and medium enterprises is how to approach the technology for data synchronization activities. The smaller company may not be able to afford or may not necessarily need a licensed Product Information Management (PIM) application as they may be able to pull most of the necessary data attributes from a single ERP application. Furthermore, most small sized, and even some medium to large size suppliers are using a complete or partial manual process to produce their business data to initiate the data sync process. Companies that use manual processes for producing and delivering data will find
it very difficult to keep up with the data updates and even harder to realize the true benefits of data synchronization. It certainly supports our findings as suppliers that don’t understand the benefits of data synchronization are very reluctant to change their business data processes.The benefits realized by having your business information identical to that of your trading partner on a continuous basis (data sync) are tremendous, including:
Lower transportation and logistics costs
- Increased sales force productivity
- Error free order management processes
- Improved invoice accuracy
- Internal company business system alignment
To read the entire article, click here.
With the NAED Eastern Regional coming up in a couple of weeks, perhaps distributors could identify their key small to mid-sized manufacturers, communicate their needs to IDEA and then IDEA can meet with these companies and “share” distributor needs (and then perhaps IDEA could report back to the channel?) Without customer demand, selfishly, why should a small to medium manufacturer undertake a significant payback with questionable benefits (given that they are small to any given distributor)?
So which manufacturers do you need to synchronize with?
2 Comments
I’ll get you a line card if it will help.
JBL
Distributors that want IDEA to contact their supplier tradinng partners to send their transactional and enriched data to the IDW should forward their line cards with manufacturer contact names, street and/or email addresses to Nick Manzo at nmanzo@idea-esolutions.com. IDEA would also like to solict support from the distributor community by sending a letter to your manufacturer trading partners urging their participation in the IDW.
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