Industrial Performance Group, Inc., Northbrook, Ill., a company that specializes in helping manufacturers and distributors improve sales performance and profitability, has identified the following common mistakes companies are making in this digital-communication revolution.
1. Assuming that e-commerce is the solution to your sales-performance problems.
E-commerce can be used to reduce transaction costs and to improve the flow of information up and down the supply chain, or it can be used to leverage suppliers for additional price and service concessions. It all depends on how the participants in the industry choose to use it.
2. Assuming that you are still in control.
In the old environment, the manufacturers were in control. They determined the overall rate of change within an industry by controlling the flow of products and information through the distribution channels and into the marketplace. In this top-down approach, the primary function of distributors was to provide manufacturers with access to customers.
The greatest impact of the digital-communication revolution is that the balance of power has been transferred to the customers. They now have real-time access to a growing number of sources of information and products.
3. Applying old strategies and tactics to a new environment.
Manufacturers and distributorsare beginning to realize that many of the established strategies and tactics are no longer producing acceptable results.
To thrive in the new environment, manufacturers and distributors must redefine the purpose of their working relationships. They must make the transition from “Make and Sell” to “Learning and Responding” to the ever-changing needs of customers in the marketplace.
4. Assuming that it will never happen in your industry.
I don’t think that there are many in the adhesives and sealants industry that don’t appreciate the value of the dot-com revolution. Nevertheless, the Industrial Performance Group reminds us that if customers experience any dissatisfaction with their current supplier, they are more than likely to give a new supplier a try. We are also reminded that new and aggressive forms of competition tend to thrive in situations where the currently used supply chain and distribution channels lack structure and accountability.
5. Not changing the nature of your working relationships.
The Industrial Performance Group has identified the common barriers that keep manufacturers and distributors from taking action to improve their working relationships.
To help manufacturers and distributors address these issues, the Industrial Performance Group offers a number of presentations and work sessions. For information, call the company at 800-867-2778 or visit www.indusperfgrp.com.