Partners for Profitability

April 1, 2009
Find distributors that serve as business partners.

By Bill Moore

In today’s unforgiving business climate, businesses that refuse to adapt to changing demands will eventually fade away as progressive, dynamic companies take an unfair share of the business.

For equipment suppliers, competitive pressures are rewriting the rules. For distributors to survive, they must redefine themselves and their roles in the supply chain. Supplying equipment is only one service that the contemporary distributor needs to offer.

For professionals who buy and specify material handling equipment, there’s a hidden opportunity in this trend. With the guidance of the right industrial distributor, supply chain and material handling professionals can enjoy increased equipment uptime, better productivity and a more streamlined supply chain.

Serving as business partners rather than suppliers, industrial supply specialists can provide expert assistance in critical areas such as asset management, repair services and inventory control. They may concentrate on one or more product categories such as bearings, seals, compressors and lubricants.

However, identifying a supplier with superior skills and resources calls for due diligence as well as a commitment to long-term value over short-term, initial price.

Of course, that’s easier said than done. To make the task a bit easier, I’ve outlined five ways material handling professionals can find and select progressive distributors that will partner with them in their quest for profitability.

1. Seek authorized distributors.
Authorized distributors have a formal business arrangement with the manufacturing companies that supply them. To become authorized, qualified distributors must commit to up to 10 months of training and meet ongoing quality, customer service and inventory management standards.

Authorized distributors have proof of authorization, such as a letter, certificate or signage from their manufacturing suppliers. Supply chain and material handling professionals can locate authorized distributors by contacting the manufacturers of brand-name components.

2. Think in terms of business partnerships.
The distributor you choose to help lower your total cost of operation will need basic technical knowledge and familiarity with your facility’s equipment, operations and component usage patterns.

Expect company representatives to visit your facility frequently and get to know your key personnel and business priorities.

Successful relationships depend on commitments from both partners, so be open to sharing inventory, forecasting, purchasing and equipment-reliability data. The distributor won’t be able to improve your operation if you always keep your metrics under wraps.

3. Put value over price.
Authorized distributors are trained and equipped to provide superior support and guidance to businesses intent on lowering their overall cost of operation. Select your distributor on the basis of product quality and its ability to deliver valuable services, rather than relying on product costing alone. While sourcing options such as Internet-based resellers may offer discounts on selected products, they cannot provide a manufacturer’s full breadth of product line, its expert engineering assistance or valuable supply chain services, such as assembly services and kits containing every component needed for an emergency equipment repair.

4. Ask for engineering resources.
Ideally, the distributor servicing your business will have basic condition-monitoring equipment and the skills necessary to augment your in-house maintenance resources. Condition monitoring, the fundamental requirement of predictive maintenance, helps predict when components will fail so repairs can be done prior to a breakdown. Data collection for condition monitoring can usually be completed during a walkthrough tour of your facility.

Your distributor should also be able to leverage the technical services of an engineering company. Authorized distributors have a direct pipeline to services offered by their component manufacturing partners and can bring them to you on a priority basis.

These services might include advanced condition-monitoring, such as decision support systems or laboratory analysis that can prevent recurring equipment failures.

Root cause failure analysis (RCFA) identifies the underlying source of equipment failure—faulty lubrication, improper component installation or a soft machine footing, for example. Identifying and then eliminating the condition that caused the failure prevents that same manner of failure from happening again. This reduces equipment downtime, improves productivity and drives down maintenance and component replacement expenses.

Here’s a striking example of RCFA at work. A steel manufacturer enlisted the help of an authorized bearings distributor to address challenges associated with segment rolls in its continuous casters. The distributor called on its bearings supplier and facilitated an analysis from an applications engineer. The engineer performed an RCFA on the rolls’ bearings and discovered that overloading was taking place in the split-roll design’s center bearing positions.

Corrective measures involved a redesign of the roll to incorporate toroidal roller bearings in the center position. The result: Average segment life increased from 650,000 to 1.2 million tons, and overall segment rebuild costs dropped by 46%, accounting for an annual savings of $1 million.

Another RCFA example concerns a gearbox manufacturer that noticed a sharp spike in its warranty returns. Managers suspected that failed bearings were to blame for some of the returns.

As a result, they shipped a sampling of gearboxes to the bearing manufacturer’s headquarters, where engineers conducted an RCFA. During the procedure, engineers identified a series of equally spaced axial dents in the bearing’s outer raceway. To trained eyes, this evidence indicated that improper bearing installation procedures were causing the bearings to fail prematurely.

A bearing installation training program was put into place at the gearbox maker’s assembly plant. The result: a 42% reduction in warranty returns and 48% reduction in scrap associated with improper assembly practices.

5. Request inventory services.
Finally, when evaluating a distributor, prepare a wish list of services and capabilities that you feel would help streamline your operation.

Items on your list could include:
• Stocking centers near your facilities;
• Warehousing services and contingencies for emergency deliveries;
• Agreements with manufacturers for priority shipments;
• Assurance that all sourced products are brand-name components and not counterfeit, outdated or previously returned goods;
• A guarantee that product replenishment pipelines are full;
• Full warranty protection for all sourced products.

Ask your potential supplier about its ability to combine technical services with supply chain services. For example, a distributor that performs scheduled condition monitoring at your facilities should be able to forecast when a changeout will be needed for a particular assembly. The distributor can use this information to prepare a kit containing all necessary components for a repair. A typical kit might include bearings, seals, lubricant, motors and shafts. By preparing the kit in advance, the distributor ensures that all components are available for installation when you conduct maintenance during scheduled downtime.

Bill Moore is senior vice president of channel management at SKF USA Inc. The SKF Group is a global supplier of products and services related to rolling bearings, seals, mechatronics, services and lubrications systems. SKF also provides technical support, maintenance services, condition monitoring and training. For more information, visit or contact Moore at [email protected].

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