Use Nontraditional Metrics to Measure Your Distributor

July 15, 2009
A distributor's involvement in your operations is a clear indication of its value.

For years, manufacturers have been relying on industrial distributors, not only for their basic equipment needs but for the services they provide. In this current climate, with every expense and every decision requiring bottom-line justification, it sometimes can be difficult to determine exactly how effective these suppliers are to your operation. According to Bill Moore, senior vice president, channel management, with SKF Service Division, manufacturers can determine how effectively their supply specialist functions as an operations and reliability strategic partner by employing nontraditional performance measurements.

Moore offers this example: "Top-tier distributors can bring into play engineering assistance from their manufacturer suppliers to optimize the performance of components, such as bearings, seals, shafts and lubricants. This enables end users to meet and even exceed mean-time between-failure (MTBF) goals for critical assets, such as pumps, motors and gearboxes. Your distributor's involvement is a clear indication of its value. MTBF improvements are especially important in primary metals, petrochemical, paper, food, mining and other heavy industries where unplanned equipment downtime due to the failure of critical assets can cost tens of thousands of dollars per hour."

That same engineering assistance, Moore adds, can address problems such as recurring equipment failure. "Often, a root cause failure analysis (RCFA) will identify the source of a problem that may be as simple as a soft machine footing or as complex as the need to design and install a new bearing arrangement. When a recurring failure disappears, you can credit your distributor's ability to bring in expert outside assistance."

Moore points out that distributors often produce written procedures that govern a variety of key activities, such as specifications for identifying critical inventory, collecting and documenting historic usage patterns, and methods for communicating with product manufacturers to fully understand lead times. These procedures also could include ways to determine minimum inventory levels at both customer and distributor locations. "Ask your distributor about its procedures," he recommends. "Written or not, they should be an integral part of the way your distributor does its job."

There should be regular meetings scheduled between the distributor and your operations and maintenance personnel. Indeed, at some large manufacturers, a distributor specialist might be on-site on a full-time basis.

"One nontraditional metric that should be judged with an especially sharp eye concerns your distributor's preparedness to react in emergency situations," Moore adds. "What can you expect in cases of catastrophic equipment failure? Has your distributor made it known what response time you can anticipate, and what its process would be for helping to get equipment back up and running? And what about fire or flood that can bring down an entire facility? Does your distributor have an emergency response plan?" If your distributor is truly prepared to assist in catastrophic conditions, Moore notes, you can consider it a leader in its service category.

See Also

About the Author

Dave Blanchard | Senior Director of Content

Focus: Supply Chain

Call: (941) 208-4370

Follow on Twitter @SupplyChainDave

During his career Dave Blanchard has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeekEHS Today, Material Handling & LogisticsLogistics Today, Supply Chain Technology News, and Business Finance. He also serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2010), which has been translated into several languages and is currently in its second edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!