I run a relatively simple business. I am a middle man, in wholesale distribution of heating, ventilation and air conditioning parts and equipment. We sell exclusively to tradesmen and facilities. It is a very competitive business (aren’t they all?) but I do pretty well all things considered. My vendors expect certain things out of me (market share, paying my bills on time) and I expect certain things out of them (good delivery, good pricing, leads, etc.). It really is a two way street. They need distribution, and I need their goods to mark up and make money on.
I have been doing this for eighteen years now, but was raised in the environment my whole life – this is what my father and mother have been doing ever since I can remember.
I tend to roam a lot. I am not a sit in the office guy; I like to watch the sales counter, check the fax, and I walk the warehouse a lot to make sure it is spic and span and to ensure that things are running smoothly. The other day I was greeted with this:
This costs me money. It is a photo of the back end of a semi containing a shipment of air filters from one of the largest filter manufacturers in the United States. This company is not my primary vendor for air filters, but I use them once in a while to fill in holes when my primary vendor can’t keep up, or if I get a request for this brand of filters. I was tempted to refuse the whole shipment, but we really needed the product, so the guys on the dock (and me) had to unload all of these by hand (75% of this semi trailer was for us). I never mind physical labor by the way – the exercise is good and it always helps to connect with the guys in the back – it sets a good example to see the owner unload a truck once in a while I think.
In contrast, when product arrives from my preferred vendor, the boxes are all shrink wrapped nicely, sorted, on skids so a standard pallet jack can slide them off the back of the trailer. An equivalent load from my preferred vendor takes approximately 10 minutes to unload – this load took approximately an hour. It tied up my dock and my men. Then afterward the product had to be sorted before check in, costing more time and money. Which vendor do you think I will be using in the future?
Where I am going with this seemingly minor story is that later this month I have a convention where store owners like me will be congregating in Chicago with the heads of our many vendors. I will bring this photo with me and when the inevitable question comes up from them (why don’t you buy more from us?) I will whip the photo out and say “that’s why”. As always, I will get puzzled looks from these very high up, important people. They will literally not know what to say – because they don’t know what it is. As I have done before a million times, I will have to explain that their warehouse crew and the methods that they ship product with are costing me money – good for them perhaps, but bad for me. The disconnect between president, marketing manager and warehouse will show itself yet again.
This scene gets repeated over and over again in my business – where the high up people in the company have absolutely no clue what is going on “down below” the food chain. I understand that companies are big and it isn’t necessarily the president’s job to monitor the shipping department. But this has happened time and again where I point out things to company heads and they are shocked – shocked – that things like that would happen at their world class company. An interesting trend I think and one that I hope slows down a bit.
Cross posted at LITGM.