Better communication with suppliers can help distribution companies realize strategic planning goals, according to distribution industry consultant Brent Grover. In Brent’s new book, The Little Black Book of Strategic Planning for Distributors, Brent explains why distributors should keep communication lines with suppliers open during the strategic planning process.
One reason is that suppliers can provide competitive information not available elsewhere. “Suppliers are remarkably forthcoming about what is going on with their distributors, their competitors and their competitors’ distributors. In fact, one of the most accessible and objective sources of information about a company may be the right person at a large supplier,” Brent says. Savvy supplier sales reps pick up signals about the shifting marketplace from their conversations with distributor managers, sales reps and end-users, and these signals can indicate present and future moves of competitors.
Supplier-to-distributor communication can also reveal where their strategic goals align and deviate, helping distributors identify which supplier relationships are most important. In The Little Black Book, Brent offers a case study of a specialized distributor of safety products experiencing friction in its key supplier relationships. The company was among the nation’s largest distributors for a critical vendor, yet the supplier threatened to cancel the distributor’s exclusivity in its market segment.
An outside facilitator’s meeting with the suppliers revealed strategy gaps between the supplier and the distributor. With this new information, the planning team was able to determine which vendors’ products and new technologies were the key to the distributor’s distinctive value proposition and future growth. As a result, the company changed its product emphasis and selling approach to better align with those vendors.
Brent doesn’t advocate that distribution companies share all the details of their strategic plans with suppliers, but integrating supplier intelligence and goals into the planning process can help distributors identify the best competitive direction for their companies as well as the most ideal supplier partnerships.