Supply Savvy

Specialized News for Distributors
June 2011

INSIDE

Marketing: Thinking Globally, Acting Locally
Trend Watch
Improvement in Plumbing, Heating, and PVF
Quick Peek
You Can Say That Again
About ADS Solutions

 

 

 

Quick Peek

Is Social Media Right for you?

It seems like everybody does it. They tweet, they update, they “like”, and they recommend. Are you maximizing your exposure on social media platforms such as Facebook, Twitter, and Yelp? Here are some ways to measure the returns on an investment social media and to insure any time spent in that arena is worthwhile.

 

You Can Say That Again

We can't solve problems by using the same kind of thinking we used when we created them.

- Albert Einstein, physicist

 

Applying Global Thinking to the Local Market

The best international strategists employ market research to understand the business environment and buyer behaviors in other countries. Analysts examine culture, politics, environment, regulations, market size, buyer income, and logistical systems. Too often, we make assumptions about these conditions domestically. Take a page from international marketing and assess how these same external factors affect your business and potential expansion plans. Don't assume your city and its inhabitants haven't had significant changes in recent years. A neighboring city should be treated as if it's Timbuktu. Investigate various cultural forces in different neighborhoods including customs, languages, traditions and history.

While certain Federal laws and regulations are standard nationwide, don't forget that we are a country with many freedoms, including the flexibility to create widely differing laws at the state and local level. What may be feasible in one area may not be in another. Economic levels also vary across regions. Will the local businesses be able to afford your standard product set? What is the demand in this area?
 
And, while you are thinking locally, don't assume a border prevents your business from expanding internationally. If market research indicates demand for your products, with today's global connectivity there may be relatively few limits to sales or procurement in other countries. Advancements in technology, transportation, free trade agreements, lowered tariffs, and reduced export/import barriers may make it feasible for your organization to expand. The important thing to remember before moving into any new market, whether domestic or international, is to have a full understanding of the local factors that can directly influence your bottom line.

 
Distributor Trends for Second Half of 2011

Four Trends to Watch

Recently Lindsay Konzak highlighted the top four trends in the distribution industry for the latter half of 2011 for Modern Distribution Management. Distributors reported that to continue on a positive economic upswing they intend to address customer needs, mindfully rebuild inventories, cross-train employees, and diversify when appropriate.

Customer needs can be creatively addressed in many ways from offering end-user support to using just-in-time order fulfillment methods to keep costs low.  Many distributors are helping customers, when it makes sense to do so. If opening up more customer care lines is not feasible for a distributor, helping manufacturers trim costs might be. Savings can then be passed on for greater overall profits.

Another trend to watch is increased deliberation about rebuilding inventory. Forecasting based on past sales is a smart way to decide what, when, and how much to order and stock, so it is more important than ever to have an efficient replenishment procedure in place. Using a sophisticated ERP distribution software package that includes Economic Order Quantity calculations can help distributors determine how much to order. Analyzing data can indicate when to order; if products are seasonal or cyclical, previous sales will indicate these trends.

Cross-training employees to maximize their effectiveness at multiple job tasks is always smart. Instead of over-hiring in the face of an uncertain market, cross-training helps the bottom line and can give the staff a sense of satisfaction. The best employees want to feel needed, helpful, and trusted; cross-training employees and delegating new tasks can be beneficial for the company and the employee as long as the employee is not overloaded. Give employees technological solutions that automate redundant and repetitive tasks so staff can focus on aspects of the business like providing superior customer service for a competitive advantage.

Finally, diversification is an emerging trend. Expanding product offerings and diversifying the exposure to end-markets can help distributors who are looking to gain market share by offering products that complement existing inventory. By intelligently assessing current products for trends using reporting tools, it's possible to expand segments that show promise. Re-assess performance at regular intervals to make sure sales projections are being met. Analyze sales and cost information and adjust strategies to be sure your company is on target. ¬†Another way to expand on this is through “creative kitting,” bundling products together to be sold as a unique package perhaps with a pricing incentive.

Distribution industry trends show a focus on ways to offer more value to customers while maintaining a lean operation. Creating a nimble and flexible workforce is paramount to adjust to ever changing customer needs.

Plumbing, Heating, and PVF Sector Looking Strong

According to Modern Distribution Management the sector has shown substantial growth and companies are seeing revenues they haven't seen since 2008. Production revenues are up 14.2% from 2009, which is only slightly lower than the pre-pipeeconomic meltdown numbers. May 2011 was particularly exciting for the Pipe, Fitting, and Valve industry with revenues increased by 26.3% from 2009 numbers. June is the eighth month of reported increases in inventories and with concerns about inflation and possible shortages, the increases are expected to continue. So what do all these numbers add up to? Many distributors in this sector are reporting higher revenues and improving their bottom line.

 
About ADS Solutions

Bringing New Technology to Distribution

Since 1984, ADS Solutions - Advantage Distribution Software - has focused solely on designing software that meets the needs of the distribution sector. Because of this dedication, ADS Solutions Advantage software offers a marked contrast to generic small business packages.

ADS Solutions is pleased to announce the latest release of Advantage software which includes many beneficial enhancements like greater reliability and performance.

Numerous pricing methods work together to provide flexible, customer-specific pricing without the hassle of adjust price customer by customer. No matter what, your profit margin is protected.

Contact ADS Solutions with suggestions or questions.

Supply Savvy is published by ADS Solutions Corporation.