Robert Vick, a 35-year PHCP/PVF industry veteran and vice president of business development for Legend Valve & Fitting Co., will lead participants in an examination of where our industry has been and where it's likely going. The discussion, entitled, “Is our Traditional Manufacturer/Wholesaler Model Becoming Extinct?” takes place on Friday, September 29th as part of the ASA “Network '06” Convention program.
Economists, consultants, associations and others have spent the past 5-10 years enlightening us about the urgency to reduce costs and eliminate redundancies in our channel. ASA and the Mechanical Contractors Association of America have done studies and held programs aimed at these objectives. Yet as the saying goes, “You can lead a horse to water, but you can't make him drink.”
According to Vick, another popular adage might now be more appropriate: “Have we missed the boat?”
All full convention registrants are invited to attend this session, which is designed to solicit group participation. For more information on the ASA “Network '06” Convention, visit www.network06.org.
Has Our Train Left The Station?
“For the past six years ASA, PHCC and the MCAA have spent a lot of time and money trying to convince their members that there needs to be major changes made to the efficiencies in the supply chain channel. All three associations agree that reducing waste and redundancies are needed in order to offset the problems that their members are experiencing with shrinking profit margins.“In the past, wholesalers and contractors would look upstream to the manufacturer/supplier to provide a lower price to solve their margin problems. Usually, manufacturers/suppliers would reluctantly give in at the expense of their own margins.
“But recently it has become increasingly difficult for manufacturers/suppliers to keep giving out the 'extra fives.' They, too, feel that their margins have been squeezed and that there isn't any more to give. Unfortunately, during the past six years, neither the manufacturer, the wholesaler, nor the contractor have spent much effort improving the supply chain, and we now all find ourselves in a corner.
“The wholesaler sees himself as being in the middle and feels that in order to keep his customers he has to turn to innovative ways to get his margins back. One of the strategies starting to get traction is for the wholesaler to bypass his traditional manufacturer/supplier and to source material directly from overseas.
“National wholesalers and buying groups now have the size and volume to make this possible. Those that have tried it like what they see - bigger margins.
“We, as manufacturers/suppliers, had better quickly recognize this trend as a threat and stop the momentum before we become expendable. Threatening our customers is not the answer, nor is selling to the contractors direct. A better alternative is to provide our customers with increased value which can be converted into higher profit margins - both for them and us.
“Come join me in this spirited discussion and contribute to the ideas that will keep the traditional manufacturer/ wholesaler partnership alive and well.”
