Survey shows increased manufacturer-distributor tension in electrical industry

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Dive Brief:

  • An incredible 91% of electrical distributors and manufacturers believe that the time is right to reconsider their current style of collaboration, The Electrical Distributor reported Wednesday. Lack of trust is the primary challenge for both parties, preventing deep partnering and greater mutual achievement.
  • Both manufacturer and distributor believe that the other party is unprepared for effective partnership.
  • The economic impact of conflict is difficult to quantify, and often parties have no way of measuring the impact of discord on their business.

Dive Insight:

While conflict is inherent to any manufacturer-distributor relationship, emphasis on a strong and positive experience are the lifeblood of production. A variety of methods exist for improving those relationships, among them surveying  the supplier to see how you rate as a client. Growth potential, purchasing professionalism, early involvement and response to cost reduction ideas can help in identifying areas for improvement and growth, or even change. 

Yet, regardless of survey results, the supplier-manufacturer relationship will naturally bear a certain amount of natural tension, as intermediate goals often pull parties in different directions. Selecting the right partner can minimize that strain, as can ensuring there’s enough alignment on existing goals and initiatives to make the partnership a success. Also, both business should strive to see the benefit of working together.

In the automotive industry, Original Equipment Manufacturers (OEMs), which depend on their suppliers to an unusually deep degree,  strive to support buyers who communicate well. Plus, they establish basic practices such as resolving purchasing issues as soon as possible, as well as paying invoices on time. Such actions serve to enact mutual loyalty, and ease any conflicts that could diminish production.  

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Filed Under: Communications

Top image credit: General Electric Co.

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