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Distributor Advisory CouncilsFormal organizations bring both sides together.In recognition of the interdependency between the distributor and the manufacturer, several manufacturers are working with distributors to create formal advisory bodies intended to foster a mutually beneficial relationship. Meetings of the groups offer a forum for exchanging ideas and fostering communication.
The advisory bodies exhibit some variety with regard to size and makeup, the means of selecting representatives, and the frequency of meetings. Most are structured as national bodies that meet once or twice each year with the manufacturer's representatives. Depending on the particular organization, distributor representatives may be elected by the distributor body or appointed by the manufacturer based on established criteria of productivity and successful business management. In most cases, input from the larger network of distributors is encouraged, either through meetings of regionally based subcouncils or surveys of the general distributor body. Through advisory organizations, distributors are able to provide valuable feedback about conditions in the markets they serve and suggest product enhancements to better meet the needs of end-users. In addition, they are able to discuss pressing issues such as profitability, product availability and the impact of consolidation and e-commerce. Likewise, the meetings provide a forum in which manufacturers can present their long-term strategies, show distributors that their concerns are being addressed or explain why they are not being addressed. A survey of distributors serving as representatives on the various councils and boards revealed unanimous praise for their effectiveness. Several distributors noted that the meetings produce meaningful results because all participants engage in open and frank discussions tempered by mutual respect. Since the organizations are advisory in nature, a key to their success is the manufacturer's recognition of the value of input from distributor members.
An equally important benefit noted by the majority of the distributors surveyed was the wealth of knowledge that they take away from regular interactions with other successful business owners. At both national and regional meetings, time is set aside for distributors to meet among themselves and share with each other their expertise and best practices on a broad range of operational issues. At a time when consolidation, e-commerce and falling profit margins are raising questions about the future shape of the distribution network in our industry, Distributor Advisory Councils offer a means for distributors to participate in a partnership formed by the distributor and the manufacturer. Participation requires a commitment of time and effort, but the payoff is substantial. In addition to providing a system of mutual accountability that promotes trust, the organizations are a vehicle in which distributors can learn from the best—each other—how to make their businesses the most efficient medium through which petroleum equipment manufacturers distribute their products.
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At
its Distributor Advisory Council meeting, Liquid
Controls, A Unit of IDEX Corporation, shuts
down operations so that all employees can attend
a presentation given by distributors on where the
company is effective and where it can improve. In
an exclusive interview