THE LAST WORD
Forging Links for Success:
The Distributor's Role Today
By Will Somers
Editor's note: The following is an excerpt from a speech, "Forging Links For Success, " given
by Will Somers, President of Somers Corp., parent company of Mersman
Waldron Furniture, Celina, Ohio, as featured speaker at the National
Wholesale Furniture Association's spring banquet at High Point, April
1987.
My
goal is to talk to you a little about changes that I see coming in the
furniture business, and how distributors can profit from them.
A
useful metaphor is that of the distributor as part of a chain. For many
years, people talked about distribution chains. That's become less
fashionable. People now talk about distribution networks. I think that
distribution from a manufacturing location to a retail customer is not a
network at all. It's a chain. A chain is much stronger because it's
linked "arm in arm." A network is more fragile. Like a spiderweb, it can
be ruptured easily.
You can't push a chain. You need to pull a
chain. A chain is only as strong its weakest link. So you can't pull too
hard. You need to manage a supply chain from end to end. If a link is
weak, you'll break the chain.
Unfortunately, this has happened in a
lot of furniture relationships lately. Manufacturers are falling by the
wayside. Certain links in the chain weren't strong to begin with.
Others were allowed to get rusty. To function as a chain, each link must
feature its own strengths and keep them polished.
To be a strong
link (as a distributor), you want to use the strengths you now have:
strong sales force; customer relationships; geographic presence and
manufacturer relationships. The way to this is through three specific
actions: developing skill in electronic data interchange, concentration
on a very few manufacturers and a redirection of your sales force
towards real retail training. Before I ask you to accept these somewhat
heretical notions, however, like to tell you why I feel they are
imperative and why some commonly proposed alternatives won't work.
A
key reason for the declining number of entities in the furniture
business is that we've done a much worse job than some other industries
that are more highly concentrated. I'd like to give you a really graphic
example: cigarettes and tobacco products.
Over the period from
1981 to 1986, furniture and bedding sales have grown from $22.1 billion
to $30.6 billion. Not a shoddy performance. Except when you compare it
with tobacco products, for example. Despite everything the government
has done to shoot this industry in the foot: warnings, unfavorable
publicity and the Surgeon General, tobacco product sales over the same
period have grown from $22.7 billion to $34.2 billion.
There are
three crucial links that I'd like to concentrate on today in overcoming
these problems. In doing so, you will be strengthening the chain we
discussed, or as I said in the title of my speech, "Forging Links for
Success."
A strong sales force is a crucial element in a strong chain. For example, there's a firm out in Texas,
LD Brinkman, that has 120 sales representatives in its 13-state area.
There's not a manufacturer in the country that can bring that kind of
firepower to the street.
Manufacturers cannot possibly provide the
sales coverage needed to develop proper floor sales knowledge. To
accomplish this, there needs to be thorough training. Reps, both your
road salesmen and our manufacturing reps, have a key part to play in the
conduct of this training. For our men to be well trained they have to
clearly accept the goals of our company and yours and perform against
them. They link one arm with you and one arm with us. In turn, road
salesmen link one arm with you and one arm with the customer. To us,
this is the strongest kind of chain, one composed of strong, independent
units connected at both ends with the right kind of anchors, that is,
strong manufacturers and retailers.
The second key thought for a strong chain is improved communications. I know you work hard at doing this every day
but today I'm going to stress to you the value of electronic
communications. A number of manufacturers have already experimented with
on-site computer systems at retail, often in conjunction with gallery
programs. We have created a system which has been quite successful. Its
called Comfortables. It has been placed in 29 or 30 stores. While not
yet perfect, it allows us to get an order from a retailer one day and
begin cutting the upholstery fabric the next if we wish.
The
average time it takes to special order a typical upholstered piece is 56
days. The bulk of that time is paper- work delay. The actual
manufacturing time for upholstery is only a couple of weeks.
Obviously,
both developing the knowledge to provide thorough training, and
establishing complex but durable electronic links like these require
close working relationships with a limited number of like-minded
manufacturers. This is the reason for my third heretical notion: that
you limit your sources, and become less opportunistic about changing to
what some may perceive as a "better line. "
Now
once you create these links between distributors and the manufacturer
and the retailer, obviously you're cutting yourself in for a piece of
the action and doing it in a very major way: you become a very strong
link in the chain.
Your other key links are manufacturers who
provide trained reps who accept this type of technology, retailers who
don't look at it as a threat and product suppliers who can plan such a
system and actually make it work.
If we do utilize the rep
relationships we have, enhance them with electronic communications, and
concentrate our relationships, I believe we have a real opportunity to
materially strengthen the distribution chain. All in all, we can forge a
chain which is bright, closely linked and which brings success to all
of us.