- Features | April 27, 2015
Optimize Your Supply Chain
There are some things that are best left to the experts. You choose the best surgeon in town to operate on a family member. You trust major car repairs to a certified mechanic. Similarly, you should allow specialists in distribution to optimize your supply chain.
Generally speaking, a supply chain is the network of individuals and organizations involved in the process of moving a product or service from the producer to the end user—and distributors are a vital link in the supply chain. Warehousing, inventory management, kitting, transportation, and estimating are all key functions of a modern distributor. Despite the expertise and technology used by distributors today, many contractors still believe their role in the supply chain is vastly greater than it has to be.
“When a contractor examines his or her business elements, they will most likely find work that someone else could handle more efficiently,” said Steven Horst, Graybar Vice President, Service and Administration. “By allowing your distributor to handle supply chain responsibilities, you can focus on your core competencies and become more profitable.”
Ask for Help
A contractor’s job is vast. It’s often difficult for a contractor to step back and examine their operation with a critical eye. It can be helpful to bring a third party to help recognize redundancies and suggest process efficiencies—that’s where your distributor comes in.
Reputable distributors not only provide competitive pricing on the items contractors need but can also minimize the effort it takes to order, manage, and move those items. Many distributors offer a variety of services that help you focus on productivity, not parts. The right distributor will work to determine what is causing your pain points and offer ways to fix them. Good distributors will also help identify and eliminate unseen issues that are costing time and money.
Graybar, for instance, offers a service for customers called an opportunity walk. Opportunity walks are designed to identify waste in a company’s processes and procedures, which could include how employees complete day-to-day tasks, warehouse receiving, inventory management, and shipping processes.
“Opportunity walks allow us to understand the contractor’s operations. We sometimes find problems that are relatively easy to fix. For example, we’ve discovered that contractors can save about 2.5 percent in operations costs by simply holding pre-job meetings,” explained Horst. “By putting all of the moving parts together at the beginning of a project, each individual should walk away with a clear understanding of his or her role and how to achieve that goal. This meeting eliminates redundancies and keeps all the key players on the right track.”
Bringing in a distributor with an outside perspective certainly offers an opportunity to offer simple suggestions, but distributors can also offer more complex ways to eliminate wasted time and money.
“Suppliers make magnificent products. Distributors efficiently deliver the products. Contractors are experts at installing the materials and providing related services to the end user,” continued Horst. “There’s an old school paradigm that a contractor has to have trucks, inventory in their back room, and handle returns and order from multiple suppliers. Experts find most contractors have a 25 percent redundancy in their supply chain. Material movement, transportation, returns, packaging – those things are productivity killers for a contractor.”
Many distributors count services such as warehousing, inventory management, shipping, and receiving a