Print Solutions Magazine, March 2005 -- Manufacturing

IN BRIEF

Manufacturers and distributors can build relationships that solve end user problems and increase efficiencies, market share and profitability.

Partnering to Win

BY TERRY A. NAGI AND DENNIS McGARRY, CDC

Manufacturers are partnering more with distributors to grow sales and sell solutions to customers. Manufacturers often have resources distributors don’t have themselves, which helps distributors sell. How do you partner to win? How can you make joint sales calls? How can you solve problems for customers together?

Partnering with a distributor is an evolving process of mutual commitment and trust. It’s the joint acceptance of verbal and written expectations, designed to solve customer problems, increase efficiencies, market share and profitability for the partners.

Partnering Agreements: What Works, What Doesn’t

• Partnering agreements should be viewed as a written set of guidelines, not as a contract. Research shows that contractual agreements aren’t successful in the long term. Successful long-term agreements are based on keen understanding of each other’s business, as well as trust in the professionalism of the independent distributor and manufacturer.

• Partnering agreements should be reviewed regularly. The review should be formal and the measurements definable. Procedures should ensure that both parties have a clear understanding of how the agreement will be designed, implemented and reviewed.

• Agreements based on price aren’t successful.

• The manufacturer and distributor should view the relationship as a joint business alliance, designed to service distributors’ customers. A partnering agreement must define the business systems that operate between a manufacturer and distributor.

• The partnering process is ongoing and designed to shift the marketing emphasis from the print product toward solving the customer problem.

9 Steps to Better Partnerships

Partnerships promote “win-win” business relationships. Here are nine steps that help achieve that:

1. Define common objectives. As in all team activities, each participant should understand common, clearly defined objectives. Partners should know their responsibilities and the other partner’s expectations.

2. Form an ongoing relationship. A solid relationship is refined over time. Partners should strive to improve the quality of the partnership, not rest on past successes. Over time, closeness develops that allows the manufacturer and distributor to maximize operating efficiencies. Both parties should continually review and follow up with an eye toward long-term growth and profits.

3. Commit to resources. Both parties must make commitments of employees’ time, skills and finances. These commitments can’t be lopsided. The “gives and gets” must benefit both parties equally.

4. Define requirements. Both parties should define and agree upon what’s required from each partner. They should consider what exactly will be required in return for each benefit. Agreements to these requirements do little good without a clearly spelled-out performance review process. The agreements also should detail communication channels and procedures.

5. Commit to sharing complete information. Misinformation, incomplete information, exaggerated claims and false promises are all breaches of faith. In a true partnership, each partner is committed to providing the other with complete information on plans, progress and problems. Critical to the partnering concept is the teamwork needed to develop new product concepts, marketing campaigns and employee training programs.

6. Prepare for shared risks. Both the manufacturer and distributor must have a clear understanding that risk-taking is present, and each must be willing to support the other for mutual benefits. At the beginning, parties should agree on procedures for handling exceptions and problems. They should discuss financial risks and how to share those risks.

7. Share profits. If the partners share the relationship’s risks, they also should share the profits. Partnerships are established for mutual profits. Problems arise when the process for obtaining growth and profits hasn’t been defined, and measurement tools haven’t been installed to monitor each party’s performance. Partners should share all cost savings and cost avoidance that accrue from implementing the agreement.

8. Keep abreast of technology. One of the greatest benefits a distributor can bring to the manufacturer is information. The manufacturer must be able to rely on the distributor for feedback on end users’ changing needs. The distributor must also be prepared to keep abreast of technological changes that affect the office environment, and work with the manufacturer on modifying existing products or creating new products. Also, the distributor must be part of the manufacturer’s creative team. A joint effort ensures that the product meets the end user’s needs and its quality meets or exceeds expectations. The exchange of technological information also can enhance the training process for the distributor and manufacturer. A printer who has installed new equipment can offer the distributor’s employees tips on improving products by using the new technology. Many product ideas can flow from this type of exchange.

9. Don’t compete. Partners can’t form a solid relationship if they work too closely with each other’s competitors or if they compete directly. A distributor needs several partners because one trade manufacturer can’t produce all of the products the distributor requires. Similarly, the manufacturer may partner with many distributors. Partners should not compete with each other, and if a conflict does surface, they should speak up before either side gets hurt.

Manufacturers also should examine carefully how many products can be sold by specific distributors and from specific geographic areas. Manufacturers may have many distributor partners to sufficiently cover national markets for products, but it’s not possible to have partners who are competitors for the same customers in the same geographic area.

The commitment to not compete is one of the most critical reasons for utilizing performance measurements. If a distributor isn’t providing the volume that was agreed upon or if the product mix differs from the original intent of the agreement, then the partners must deal with the problems and repair them for the relationship to continue.

Powerful partnering can’t be developed overnight. Rushing the arrangement results in a program that doesn’t work for either side. Take your time and choose your partners wisely. Each agreement needs to be considered on its own merits and carefully built one step at a time. Some large companies that partner take up to five years to establish partnerships.

Each relationship must be able to stand on its own success. It’s best to start with one relationship and make it successful before beginning another. Working on one relationship allows a printer and manufacturer to learn from mistakes. One strong and working relationship should be used as a model to build future partnerships. The selection of the first partner is critical, and the time and effort required in the selection process shouldn’t be shortchanged.

Terry Nagi is president of sales and marketing consultancy DigitalPrint Resource, Washington, D.C. Dennis McGarry, CDC, is vice president of manufacturer and technical programs at DMIA. Email us your comments at bholt@printsolutionsmag.com.

NEWS

Spiral Binding Company Inc., Totowa, N.J., introduced Bright White High Docucopy® Tabs. It allows users to create tabs that look like traditionally printed custom indexes. The tabs are compatible with Xerox Docutabs and work with any bind method, according to the company. Call (800) 631-3572 or (888) 809-2463.

Visit www.spiralbinding.com.

SATO America Inc., Charlotte, N.C., introduced GTe Series of industrial printers. The GTe has a print speed of 12 inches per second and a resolution of 305 d.p.i. It features an automatic detection system that detects printhead change, according to the company. The printer can create and load customized stand-alone programs; interface with external devices such as keyboards, barcode scanners and scales; and process received data. It’s ideal for a variety of industries such as manufacturing, logistics, transportation, automotive, retail, government and health care. Call (704) 644-1650 or (704) 644-1662 (fax).

Visit www.satoamerica.com.

Bowater Inc., Greenville, S.C., introduced five lightweight basis weights. BowGlass® is now available in 32# and 34# basis weights, and BowSCB+® is available in 26#, 28# and 30# basis weights. The BowGlass 32# and 34# sheets have higher bulk, which results in postal and distribution savings, according to the company. The BowSCB+ 26#, 28# and 30# sheets also have excellent bulking and opacity characteristics, it said. The BowGlass and BowSCB+ are designed for inserts, catalogs, magazines and direct mail.

Call (800) 843-0375.

Visit www.bowater.com.

MAN Roland, Westmont, Ill., introduced Press Pass, a bundle of electronic parts available on site for immediate repair and minimum disruption to a printing facility’s production schedule. Press Pass is available in three levels. The Certified Printer Series contains electronic components such as power output boards for the press’ printing units. The Performance Printer Series provides electronics for main switch cabinets and printing units. The Master Printer Series contains parts of the Certified Printer and Performance Printer Series as well as electronic components that control the press console, feeder and feeder cabinet. Call (800) 700-2344 or (630) 920-9146 (fax).

Visit www.manroland.com.

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