Plubming Wholesalers Are Techno-Phobes
By Bob Boyles, President, Smarter Distribution

As a rule it seems that plumbing wholesalers are laggerts when it comes to investing in new technology! As I travel around and meet with various plumbing distributors many of them are perfectly happy with computer systems they bought 5, 10 or even 15 years ago. I just met with one plumbing distributor that has been on the same system for 30 years! Given the fact that most system investments pay for themselves within 3 years or less, why are plumbing distributors so tight fisted when it comes to spending money on computers and related technology?

When I talk with plumbing wholesalers about investing in new systems the underlying theme of the conversation seems to be, "we're happy selling the same products to the same customers and operating the same way that we've always have." This is not the prevailing attitude in other segments of wholesale distribution. Having divided my time between plumbing, electrical and industrial distribution I can tell you that the majority of plumbing distributors seem to be happy with dusty shelves and moldy computers.

Compared To Other Industries
Electrical wholesalers as a general rule are much more aggressive when it comes to investing in computers and newer technology, the same goes for PVF distributors and HVAC distributors. Yes, there are some exceptions in every market, I am working with several distributors here in the Dallas market that have no computers at all. But as a general rule plumbing distributors are not as technologically savvy as their electrical wholesaling cousins.

Are Plumbing Wholesalers Immune?
The litany of pressures on the sales volumes, margins and profits of wholesale distributors are so well known that I would be wasting your time repeating them here. (If you need a re-fresher course on the changing profitability of wholesale distribution visit Bruce Merrifield's website) The simple answer to the question asked above is, no, plumbing wholesalers are not immune to the mounting pressures changing the entire distribution marketplace; they just haven't developed skills to react to the changes yet.

The Slowly Shifting Focus
In re-action to some of these external pressures plumbing wholesalers are slowly coming around to the understanding that they need to develop their technology skills. Different companies are trying different approaches. At Smarter Distribution we have seen the focus beginning to shift from internal to external. Think about all the sales talk related to computers that you've been exposed to. For the past twenty years almost all of it has focused on the same thing, how to improve your internal operations. Whether it's improving you inventory fill rates, reducing lost sales or standardizing your pricing matrix the focus has been all about improving your internal operations.

Today the focus has shifted to more of an external slant. How can I use technology to grow my sales and margins? After using computers for the past 30 years rather effectively to improve internal operations distributors are now beginning to understand that this same tool that has aided them in decreasing cost can also be used to increase sales.

Some Answers
How exactly can you accomplish this task of shifting the focus from creating internal savings to generating external volume? The simple answer is, that there is no simple answer. The correct approach for you depends on your company and your market. Example: If you are a tradition bound plumbing wholesaler using an old RS-6000 and PICK based software you may not be ready to try your hand at developing an internet store front. What may be the correct approach for you is to use your computer system to develop a closer relationship with your current customer base. The answer depends on a myriad of factors. But the first step is clear and that is developing a strategy for your company to grow your business. At Smarter Distribution we call this process "developing a technology roadmap".

Does your company have a technology roadmap?
Are you still using software that was designed with 30 year old technology and built with 20 year ago? Do you know how to take advantage of the evolving technology market to grow your company's sales volume? Building a technology roadmap for your company should be the first step to growing sales and profits.

A Technology Road Map is far different than a System Audit. A System Audit looks at how you are using your current system and attempts to suggest ways that you can get more return from your current system. Are there entire modules that you are not using? Are there features of current modules that you are not using correctly? What are some areas where you and improve the effectiveness of your operations? Are there training opportunities for recently hired staff?

A Technology Road Map has more of a strategic slant and attempts to answer the question, "Where do I want my company to be five years from now?" Knowing that margins are under pressure what tools am I going to bring to bear to counter-act that pressure? Understanding that new external forces are changing the competitive landscape what assets do I have that I can use to prevail in the sales battles? For many companies the answer to these questions lies in how effectively they are going to use their existing computer assets and perhaps investing in new computer resources.

However, before you go out and spend a wad of money on a new piece of software doesn't make sense to align your company's marketing strategy with your planned technology expenditures?

About Bob Boyles and Smarter Distribution:
Bob Boyles is the principal of Smarter Distribution in Coppell, Texas, a strategic coaching business focusing on assisting distributors in using technology. He is also the author of "Succeeding With Distribution Technology" a practical how-to guide for selecting and implementing the right technology. You may reach him at (972) 304-1180, via e-mail at bob@smarterdistribution.com or on the Web at www.smarterdistribution.com

© Copyright 2003, Robert S. Boyles Jr. All rights reserved. This article cannot be reprinted or reproduced in whole or in part, without the express written permission of Robert S. Boyles Jr.