Beaming & Bumming At The ASA Industry Summit
Something To Beam About: The Summit itself. For the second year in a row ASA devoted its convention programming to a public summit meeting of industry VIPs. That's a great concept for today's troubled business environment. More than a dozen supply chain partners spoke about the problems faced by the channel and ways to overcome them.
Something To Get Bummed Out About: For the second year in a row, attendance at the afternoon session dropped to about half the morning's. Too bad, because the manufacturer and wholesaler panels featured some of the best discussion of the day. Is it that so many wholesalers don't care what's going on, or do they simply know everything there is to know?
Beamer: The aisles were packed the first two mornings of the ISH North America trade show, and most exhibitors were beaming.
Bummer: Just like the ASA Summit, afternoon attendance on both days dropped like a rock, and barely registered at all on Day 3. All industry trade shows seem to fizzle out on Day 3. Makes you wonder why anyone bothers to stretch them an extra day.
Beamer: The speakers at the ASA Summit were mostly genuine, articulate industry VIPs well worth listening to.
Bummer: The home builder representative was a notable exception to this rule. He did little more than spout a commercial for his company and spoke to no industry issues that I could detect.
Beamer: “Retail is here to stay. Consolidation is an issue. Offshore sourcing is here to stay,” said Masco's Group President of North American Plumbing Products John Wills. We applaud his forthright assertions to an audience that would like to wish those things away, but know they cannot. Confronting these realities goes hand-in-hand with fixing whatever ails the PHCP wholesaler channel.
Bummer: Wills also noted the growing clout of consolidating national home builders, and acknowledged pressure from them to buy direct. We still applaud his candor, but no matter how pie-eyed we look at it, simply cannot extract any good news for wholesalers in that message.
Beamer: Most salient observation of the Summit, IMO, came from Ferguson Enterprises President Chip Hornsby: “The last mile is important. We need to get better delivering product from the branch to the jobsite. Many times contractors are disorganized, and this gives us an opportunity to save them money.”
Bummer: Summit moderator Michael Marks cited a study from the industrial distribution field noting that from the time packaged industrial goods were put in a box until they were opened by the end user, they were counted an average of 17 times. There's no reason to believe PHCP distribution operates with any greater efficiency. This astonishing number shows how much work remains to be done meeting everyone's goal of taking extraneous costs out of the supply chain.
Beamer: Contractor Bob FitzGerald attention to a study underway by the Mechanical Contracting Education & Research Foundation titled “The Value Chain - Adding Value to the Supply Chain.” It's scheduled for completion by next August and is intended “to identify challenges and best practices,” according to FitzGerald.
Bummer: Don't you just know that study's conclusions are going to be a big slap in the face to many wholesalers.
Beamer: There was general agreement among manufacturer panelists at the Summit that back-end wholesaler rebates are hopelessly skewed from their original intent to incentivize sales. “Crazy” was how one described them.
Bummer: Nonetheless, nobody can see an end to the rebates anytime soon. The industry is hooked on them and there's not a rehab program in sight.
Beamer: Wholesaler Summit panelist Larry Pearson of Frischkorn, Inc., told of an episode in which his firm and a vendor weren't in agreement on the marketing of a specialty product. So the vendor and wholesaler split in half the cost of hiring a person with special expertise to do so. This was a splendid example of manufacturer-wholesaler cooperation.
Bummer: Other wholesalers told of constantly wrestling with something as basic as return goods policies. As if our industry's partners haven't had more than a hundred years to iron these out.
Beamer: General conclusion of almost everyone attending the Summit was that the PHCP wholesaler channel is here to stay, and the future is bright for those who recognize and capitalize on opportunities. <<