Walter Ulrich, president and CEO, repeated this mantra at the opening of the conference: You have helped us. He was referring to one of the company's most hyped - and newest - software releases at the conference: the Java-based HDX Hardgoods Distribution ERP software. “The path to HDX has been long and arduous,” he said. “But it makes Mincron stronger.”
It certainly seems to fit the need for modern technology in today's workplace. The makeup of the entering workforce is changing to a more point-and-click generation that is much more comfortable with technology. There is no question that the technological changes will be accelerated in the next five to 10 years, commented Steve Church, vice president of Avnet, a distributor in the hi-tech industry.
On Attendees' MindsUlrich led a small-group discussion on the trends most important to attendees by having them vote on their preferred topics of discussion.
Fee-based services were a major point of discussion, and most attendees seemed to be struggling with how to charge for services they have been offering for free in the past.
Church mentioned how his company tried kitting during the mid-80s to mid-90s when his industry was maturing. His company constantly struggled with whether to charge per kit or to charge by adding margin onto the whole cost. He noted that Avnet never made any money by adding kitting services. But, he said, “if you're not charging for a service, you're basically saying that service has no value.”
“You have to enunciate that value and how much it costs and they'll accept it,” Ulrich said. “If it's free, they're going to take advantage of it.” Ulrich concluded the topic by encouraging attendees to experiment with different strategies on charging for fee-based services and to report back at next year's conference on what worked.
Another key trend on attendees' minds was customer self-service.
Brett Winslow, MIS director of Indianapolis-based Central Supply Co., discussed how his company was trying something different from the usual Web commerce that comes to mind when talking about self-service - an “express” location for customers to quickly pick up what they need. Most stock, such as tools, is available directly for the contractors to select themselves. So far, he said, security hasn't been an issue. The main challenge is trying to figure out what to stock. If the store only has nine of the 10 items the customer needs, what should be done?
Economic OutlookPeter Warrian, economist and professor of the Munk Centre for International Studies and on the board of Mincron, provided his economics expertise throughout the conference. During one of his presentations and in casual conversations, he wowed attendees with the fact that China is building one Houston or Toronto per week - regarding building materials. There are 4.5 million people in each of those cities. This has had a serious effect on steel prices, however, he thinks the prices have spiked and the worst of it is in the past.
He predicted a 25% chance of a recession during the first quarter of 2006. He also said there would most likely be a soft-landing scenario. Many predictions say oil could remain at $50 to $55 per barrel, but he predicts it will settle in the $40s. According to Goldman Sachs, he said, oil prices would have to spike to $105 per barrel to change consumer behavior. In that setting, it is fairly predictable what would happen, but the $50 to $55 level is a bit scarier because the effects would not be as foreseeable. At this level, oil becomes an index for what happens to other commodities.
He said the “next wave” is companies that build to order, which he compared to customization procedures, such as kitting, that distributors can offer. As an example, Warrian compared how long it takes to get a customized Toyota car vs. a Dell computer. Whereas it takes 43 days for someone to get a customized car, it only takes three days to get a customized computer, he said. However, it takes one day to build the computer and 1.4 days to build the car. The build-up of the wait for getting the car is in the information exchange - which takes at least 38 days.
“In our industry, kitting is the equivalent of customization,” Warrian said. The solution is to expedite the information management and distribution side through technology.
“Yes, we could worry about the Chinese,” he said, “but we have a major opportunity here.”
The Importance Of ServiceSteve Church of Avnet gave a keynote speech on creating customer service excellence.
He asked all audience members if they were now trying to charge for services they had offered for free in the past and the majority of people raised their hands.
The value over time is moving away from the product to the service to the solution, Church said. There are a few select things companies should focus on when an industry reaches maturity, and customer service is one of them.
“You can't become a viable services/solutions company without being excellent with customer service on a line-item basis,” Church said. Day-to-day excellence earns companies the right to tackle more complex customer service offerings.
The sales force is changing from a transactional - or taking - method to a consultative - or giving - method. Consultative selling asks questions such as: How do I help my customers become more competitive? How do I build trust? How do I build loyalty and gain lifetime customers?
Start by always thinking three or four moves ahead of the present, he said. “We should have been playing chess instead of playing checkers.”
In other news, Mincron and the Management Information Systems Group (MISG) announced a partnership that will combine MISG's Internet-based Electronic Data Interchange (EDI) network, TransLink®, with Mincron's enterprise software. The integration enables distributors to connect with their business partners via the Mincron software to exchange business documents through the Internet.
Mincron software, utilizing the EDI FTP Process, now will be capable of producing X.12 EDI documents, delivering these via FTP to the TransLink network. As a result, distributors can manage document translation internally through third-party translation software.
- Ashley Anderson