ASA News for September 2001
CONVENTION AROUND THE CORNERWith the ASA Annual Meeting and Conference Booth Program just around the corner (October 23-26 in Las Vegas), we want to remind those who are interested in attending that there is still time to register! If your registration is received before September 21st, you can still get your badges and other materials in the mail ahead of time. If we receive your registration after September 21st you can pick up your badge on arrival in Las Vegas.
The program is a well-rounded complement of great educational, networking and social functions, and we encourage all distributors, manufacturers and independent manufacturers reps to attend.
A big THANK YOU goes out in advance to all of our convention sponsors, who've contributed to support the event, and who will also be recognized during the course of the 3 1/2 day program (list is complete as of August 15, 2001):
Bradford White Corporation
Delta Faucet Company
A. O. Smith Water Products
Charlotte Pipe & Foundry
Franke Consumer Products
Mueller Industries, Inc.
Education Foundation Corner: TRAINING: A SMART INVESTMENT"What do I have to do to get my employees to think like owners?" seems to be the oft-repeated refrain of many of today's small business owners. That can be a tough job. Thinking like an owner requires knowledge of the basics of distribution, its critical financial ratios and access to company data. However, when company performance information is made freely available and leveraged with knowledge of the business basics, employees understand and support policy and realize the impact of their individual performance on the company's bottom line.
Owner/leaders who commit to open-book management and continuous training generally lead the pack when it comes to profitability, service and employee retention. In fact, ASA research has demonstrated that the higher profit firms in our industry spend the most on training. Unfortunately over half the firms in the industry have no training budget whatsoever and many of those who do spend less than the 1.8% of payroll spent by the average U.S. firm. Our ratio must improve if our industry is to prosper and attract competitive employees.
Business Literacy and BenchmarkingThe good news is that ASA's recently released Operating Performance Report 2001 provides a perfect tool to help owner/leaders evaluate their performance against similar firms in the industry, develop their employees' business literacy in the critical aspects of the business, and set performance goals for the company.
Information on sales per employee, gross margin per employee, net profit after taxes, percent sales change from the previous year and 54 other critical ratios tracked over a 20 year period provide the basis for engaging and compelling goal-setting sessions conducive to company-wide buy-in. A lot of folks believe in the saying that "What you measure usually gets done," but when everyone understands and helps set the measures, much more is likely to get done.
Business literacy training and open-book management helps connect training directly to business results. However, other training strategies are equally necessary to bottom-line success.
Product Knowledge TrainingIndustry-wide training research has shown that product knowledge training has been recognized by employees and their immediate supervisors as bringing the quickest and most direct impact to improved performance. That should be a no-brainer for the company leader who recognizes that a wholesaler with a net profit of 3% experiencing a $50 expense for every callback needs $1,665 dollars in new sales per callback to make up for every mistake.
Many leading firms accelerate their new employees' product knowledge competence by using ASA Education Foundation's ProductPro series of 10 product knowledge courses. This month we are introducing an exciting new CD-ROM training program for sales personnel called, "Essentials of Fixtures and Faucets." While the basic pipe, valves and fittings training programs will help prevent the mistakes that trash your profits, the new "Essentials" program will give sales and service personnel a leg up on the competition in improved customer service.
Regional Educational OpportunitiesBesides the programs offered by the ASA Education Foundation, there are also a variety of other opportunities for industry distributors and others looking for training. The association's Regional Affiliates around the country routinely organize local and regional seminars for all levels of employees and managers.
Following is a calendar of just some of the upcoming regional/local seminars being held. For more information, contact your Regional Association or visit www.asa.net.
- September 19, 2001, Sacramento, Calif. - "A Profit Center Waiting to Happen," with Abe "Walking Bear" Sanchez sponsored by Western Suppliers Association (ph. 800-752-8833).
- October 10, 2001, Ann Arbor, Mich., "Managing Your Sales Territory," with Dave Gleason, sponsored by Michigan Assn. of Distributors (ph. 800-537-6585).
- November 15, 2001, Sacramento, Calif. - "Branch Managers School," by Beltech, sponsored by Western Suppliers Association (ph. 800-752-8833).
- November 5-6, Birmingham, AL; November 6-7, Orlando, FL; November 14-15, Charlotte, NC; and November 15-16, Nashville, TN: "Improving Selling Skills," by Dave Gleason, sponsored by Southern Wholesalers Association (ph. 770-534-1155).
- February 6-8, 2002, Atlanta, GA, "Profit Enhancement Institute - Tools & Techniques for High Performance Management," presented by Southern Wholesalers Association (ph. 770-534-1155).
CAMPAIGN TO BUILD INDUSTRY DATABASETo advance their efforts to develop an industry-wide, standard product database, the members of the ASA Executive Committee recently gathered their collective energies, and combined them with the strength in force of 68 other companies in an aggressive mail campaign to manufacturers.
Following are excerpts from a letter sent to approximately 400 industry manufacturers, encouraging their support of the Source ASA+ database program. Recipients of the letter were provided with a spreadsheet, containing the company names and individuals who've signed on to the effort, along with specific comments made by each.
- UPC numbers, which are needed as a cross-reference in order to do EDI;
- Pricing, updated regularly with one standard format, making it easy to use;
- Product information, including descriptions, units of measure, carton info, etc. for a variety of uses internally and with our customers;
- Catalog information, including ready-to-use images for inside sales, order entry, customer proposals, and customer direct order entry.
- Each website has different navigational patterns to get at the data, and probably also different passwords;
- The format for each download is different; so with 100 vendors you could have 100 methods of breaking out data to incorporate into a wholesaler's system;
- The formatting, sizing and nature of the data is different at each website, so a PDF file from one will be a different size than another's, or perhaps it's in BMP format, etc.;
- Update schedules vary by manufacturer, so a wholesaler is never really sure if the information is the most current;
- Many websites do not have UPC codes, pricing information and standard product information needed for a wholesaler's database.
We, the members of the ASA Executive Committee, are writing to ask for your help. ASA has been challenged to take a leadership role for the good of our channel of distribution, and we have taken that challenge on.
Simply put, we need your support for the development of an industry-wide, centralized database. In order for it to be maximally effective, the database must include UPC codes as well as pricing, product and catalog information.
In addition to the seven of us, there are dozens of other distributors who have signed on to this effort, many of whom are your customers. We are telling you that we need a database for our day-to-day internal needs, as well as for customer direct order entry. We've shared some of the specific comments that have been made on the enclosed spreadsheet.
Companies like Hughes, Hajoca, Noland, Coburn Supply, F.W. Webb, USFlow, Frischkorn, Your Other Warehouse, and many others are asking that ASA develop this database. We're meeting with Ferguson Enterprises to solicit their support as well.
Why Do We Need a Database?
An industry-wide, centralized database will save all channel partners time and money. Specifically, wholesalers need the database for the following reasons:
There are undoubtedly a number of additional uses for a centralized database, depending on the technological sophistication of the distributor. And the bottom line is that wholesalers desperately need this information to populate their own databases, which are linked to the systems such as Eclipse, NxTrend, Mincron, Prophet 21 and others, in order to make these systems run efficiently.
How Can This Save YOU Money?
By taking just one of the uses as an example - EDI - think about what you would save if you eliminated order entry. How much of your salesperson's time is spent resolving input errors resulting in shipping problems? You could save even more money by using EDI for priced purchase order acknowledgements, electronic invoicing and electronic funds transfer for payments, not to mention vendor-managed inventory. However, you can't do any of that without a standardized database.
How about catalogs? All of the wholesalers using the Source ASA+ database no longer need catalog updates. Lloyd Noland of Noland Company says that the catalogs are the "biggest waste of a manufacturer's time, money and efforts in trying to keep them updated." Can you save money there? You bet you can.
The Database Already Exists
ASA has already begun the development of this industry-wide database. It's called Source ASA+ - yet only 85 manufacturers are currently involved. Source ASA+ is an ideal program because it not only provides a robust database with all of the kinds of information we need, but it is packaged with functional software that distributors can use for marketing and administrative applications.
The problem we're facing is that not enough wholesalers are using it because they say they need more manufacturers involved. Manufacturers have told us they'd like more wholesalers to be using it. You get the picture.
Why Your Website Is Different
A common objection we hear from manufacturers about participating in Source ASA+ is that they believe a central database is unnecessary because "we have our own website." We suggest you think of that part of your website as your catalog. Now think about how many manufacturers we work with, and how many "catalogs" we need to work with. In fact, the Internet is even more cumbersome than paper catalogs because:
Don't get us wrong. We believe in the power of the Internet and appreciate the investment that you're making into your websites. They have a variety of functions to help our businesses, but using them in place of a database is not one of them.
We're Asking for the Order
The Action Plan 2003 report challenged ASA to take a leadership role in looking at ways to reduce transactional costs and increase operating efficiencies across the channel. We have accepted this challenge. AP2003 says, "Both parties (manufacturers and distributors) seek the same answers to the same efficiency issues, while both sides feel that the other part is the obstacle in attaining these goals."
The 70+ wholesalers who have lent their names to this effort (Note: Recipients of this letter received a spreadsheet listing all 70 wholesalers, along with comments each had made) represent 1,123 locations and almost $9 billion in annual sales. There are countless other customers of yours who would no doubt agree with us.
Please help remove some of those obstacles. You can break this "chicken and egg" cycle by participating in the industry-wide database that is called Source ASA+. Your customers will thank you.
Donald J. Maloney, ASA President, Coburn Supply Co., Beaumont, TX
Harold L. Williams, ASA Chairman of the Board Security Supply Corp., Selkirk, NY
Jack Hester, ASA President-Elect, F.W. Webb Co., Burlington, MA
Richard Klau, ASA Vice President, Hajoca Corp., Ardmore, PA
Don Robertson, ASA Vice President, Steam & Plumbing Service, San Francisco, CA
Mark Theis, ASA Vice President, H. W. Theis Co., Milwaukee, WI
H. Steve Anderson, ASA Treasurer, Central States Industrial Supply, Omaha, NE