Trust and honesty smooth supply chain

P> ORLANDO, FLA. Life would be simpler if people just did their jobs. Contractors, wholesalers, manufacturers and a manufacturers rep shared ideas Sept. 8 on how to smooth out supply chain issues in a roundtable discussion at the Network '05 convention here. Their conclusions revolved around people doing what they say they will do, doing what they already know is the correct thing to do and communicating

P> ORLANDO, FLA. — Life would be simpler if people just did their jobs. Contractors, wholesalers, manufacturers and a manufacturers rep shared ideas Sept. 8 on how to smooth out supply chain issues in a roundtable discussion at the Network '05 convention here. Their conclusions revolved around people doing what they say they will do, doing what they already know is the correct thing to do and communicating with one another.

Bill Jones, president of Raven Mechanical in Houston, called for honesty and ethics on an everyday basis.

"Treat your best customer like he's your best customer or he won't be your best customer for long," Jones said.

The owner isn't happy if he gets a great product delivered late or a bad product delivered on time, Jones pointed out.

The contractor and supplier must have a personal relationship and work their out details in advance. The supplier should invoice as agreed and Raven Mechanical will pay on a timely basis. Agree on terms and conditions up front, Jones said, and have a thorough purchase order, such as who pays the freight.

Raven will buy out a new construction project up front, he said, then order all shorts of valves and fittings online and pick them up in its own truck. Jones added that he wants his suppliers to stand behind their products, ship on time, keep him consistently competitive, lower the cost per transaction and minimize transactions.

A service contractor depends on his wholesaler because he can't have everything himself, even with stocked trucks and a warehouse, said Milton Frank, Milton Frank Plumbing in Spring, Texas. Frank said he will be brand loyal, but he wants wholesalers to minimize brands and then offer every single item in a brand. He also expects training on that brand.

He wants to have a personal relationship with a wholesaler who knows he has to find the right part because Frank is sending a runner who doesn't know plumbing.

Jeff Clyne, Hughes Supply in Orlando, Fla., said minimizing brands was a great idea and that Hughes had pared its vendors from 14,000 down to 8,000. Nevertheless, cutting lines is difficult to do on a nationwide basis, Clyne said, noting that the Kitchen & Bath Industry Show typically features 200 manufacturers of faucets alone.

Don Maloney, Coburn Supply in Beaumont, Texas, added that his firm is constantly evaluating the lines it carries.

Clyne noted that both manufacturers and contractors had entered areas that should be in the wholesaler's purview, such as inventory control, warehousing, logistics and purchasing.

Maloney, who serves rural communities in east Texas, said he wants manufacturers to ship consistently so he can set up buying cycles. If a manufacturer changes its shipping schedule and doesn't tell anyone, contractors can get caught without materials. He also wants pricing consistency and stability, and to have his sales effort backed up with training.

Maloney said he wants contractors to order clearly. If something is needed in three weeks, say so, and then pick it up in three weeks. Don't shop every job out on the street, he said, and be willing to pay for extras, such as special deliveries.

Greg Schlotman of Moen said the faucet maker wishes it could get more information sharing, especially on inventory. He wants to know if a product is actually selling or if a wholesaler is building inventory. He suggested that wholesalers and manufacturers create a mutual demand-forecasting model.

NIBCO's Robert Vick advocated manufacturers committing to select distribution, consistent pricing and reasonably scheduled deliveries. Then wholesalers, in turn, should single source each product and carry an adequate inventory to satisfy customers. NIBCO ends up doing the wholesalers' job because 50% of its orders are for less than $100, Vick said.

"I do not want to be in the distribution business," he added.

Vick said contractors should plan ahead, be brand loyal and understand price vs. value. NIBCO will then keep contractors competitive and stand behind its product.

The panel members said the Internet provides a value-added opportunity that can smooth out the supply chain — but it has limits. Maloney said Coburn Supply teaches its contractors how to order from its Website. But Hughes' Clyne added that 25% of its customers don't have computers.