Maintaining Profitability—Part 1
Roger Burnett, the president and co-founder of Order Commander is a seasoned industry veteran who has worked on both the distributor and supplier side of the business. I’ve asked him to share his take on this issue:
"The problem here has to do with communication between suppliers and distributors. I recently placed an order with a supplier that went through much iteration. It had a change in quantity by me after I'd already submitted the PO. The speed and effectiveness of the supplier’s communication back to me was horrible. Did I cause part of the problem? Yes, I did, but a day or more would go by without me getting a response to almost all of the questions that I asked in the process.
"Would an electronic standard improve the speed of information travel? I believe it would. That being said, people will still be receiving those electronic messages and need to deal with the order details. Until every industry participant is willing to adhere to a communication standard, you're going to continue to have problems on both sides of the fence.
"Having worked for a supplier, I will agree that there is a lot to be desired with respect to what we'd get for POs from distributors. I'm not exactly sure about most of the reasons behind why that happens. From my time as a distributor, I see that in some cases, the problem has to do with incomplete information from the end-buyer. The distributor may [be] trying to get an order in to a supplier to meet production timelines necessary to meet a required-in-hands date.
"That’s not a good idea. This flawed thinking is like, "I know it’s not a complete order, but at least I'll be in the queue and I hope that my client gives me everything I need in time to make the production deadline, but let me at least get the PO rolling." Of course this is ridiculous, but suppliers abet this by often bending over backward to make things happen for those incomplete orders, including an ever-moving production schedule, which is extremely expensive and difficult to do.