Distribution Logistic Solution Interview with Expert Electric Automation Distributor Jim Friesen

More info click here: www.cpidenver.com

The supply chain in the U.S. industrial market is generally considered simple and straight forward. Manufacturers utilize a distributor network to stock material locally that is sold to end users. The distributors are referred to as "supply houses". Contractors and end users shop the supply houses closest to them that can sell what is needed at the lowest possible price. However, that method overlooks the opportunity for end users to realize some real cost-saving dollars. Buyers often fail to take advantage of services that elite distributor partners can offer to save time and money. We gained an understanding of that concept after an intriguing interview with the owner of a Denver electrical automation distributor, Jim Friesen of Consolidated Parts Inc. CPI is a logistics partner to Original Equipment Manufacturers (OEM´s) in the Rocky Mountain area. Jim has owned and operated CPI since 1986, and has seen his business evolve into the sophisticated, orchestrated movement of material from manufacturer to user. Jim presented to me a unique viewpoint on why logistics management is changing the role of traditional distribution.

Explain your concept of distribution being centered on logistics.

JF: Start from the perspective that virtually all products can be bought from multiple sources, and the products will perform equally well. So that is not the determining factor of why you would buy from one distributor over another. The reason you should select a certain distributor is that they provide better logistics in supplying the product you want, when you want it, and how you want it.

What defines logistics in the distribution world?

JF: Generally what I just described. Products must move from the manufacturer, through the distributor, to the OEM in an exact and precise way. That means the amount of exact product needed, at the exact time it is needed, and packaged or labeled or customized to however it best fits the OEM´s business.

How should a logistics model work?

JF: It will work best if expectations are clearly defined about what each partner expects, and what each partner is expected to provide. That requires some time each partner needs to invest in setting those expectations. And when those expectations are clearly defined, then the logistics model evolves into a real partnership between the OEM and the distributor.

What systems and processes are required for successfully meeting these logistic requirements?

JF: If an OEM customer can identify the manner in which their needs are best served, a delivery process can be created that meets those needs. As an example, would an OEM be best served if automation products are brought in individually and stocked on their shelf until it is needed? Or would they be better served by having the distributor take all of the parts necessary to build a machine, and assemble that into a kit that gets delivered to the point of assembly in a Just-In-Time system? All of those choices become potential logistics methods. It is then up to the distributor to customize their operation to meet those logistic needs.

What are the obstacles that must be overcome to succeed?

JF: If a certain requirement must be met, and it involves additional cost to do so, an agreement in how that cost is allocated must be established. And those costs are sometimes hard to quantify. Additionally, each partner must have a business system that is capable of functioning in conjunction with any particular logistics need. It is not unusual for CPI to educate and train customers on how to make their business system perform in ways that saves them money.

How is success measured in your logistics concept?

JF: For the OEM it is measured in saving money and saving time. For the distributor, they should measure success as creating loyal customers.

How does the customer benefit?

JF: The intent is that the customer can take their product to the marketplace quicker, and at less cost. That gives them a competitive advantage. When they realize their distributor partner is the reason for that advantage, they become loyal to that distributor´s logistic method. Everyone wins.

Where should the reader go to get more information?

JF: CPI is always available to help. Your readers can learn more about distribution logistics by visiting www.cpidenver.com or by sending an email to info@cpidenver.com.