Three Characteristics of a Quality Industrial Supplies Provider

By: CovestAdmin
January 19, 2024
As procurement teams continue to shrink, identifying strategic partners can help free up resources and accomplish more purchasing goals. Despite limited internal resources, the pressure on procurement teams to achieve cost savings has never been higher. When tasked with higher cost savings goals, the organization and stakeholders must also clearly identify other value-adds a service provider can offer that extends beyond simply delivering a product. In this blog, we will explore some of the many factors a quality industrial supplier should demonstrate to maximize value.

In today’s market, most large distributor partners can supply a wide range of standard industrial products. Therefore, identifying ways an industrial distributor partner can add value outside of catalog and price is vital to maximizing your business agreement. For example, utilizing distributor tools or a workforce to manage inventory within plants can provide time and monetary savings. Tasking major distributors to propose solutions in a product and process format can help strengthen partnerships, expand site resources,  and generate cost savings. When identifying the right distributor, it is critical to partner with a supplier that is properly positioned in the market to source, ship and deliver through an extensive distribution network to navigate last-minute or difficult purchasing situations at a local level.

 Leveraging Managed Inventory Solutions

Gone are the days when an industrial supplies provider could drop a package at the door and leave. Assisting in inventory management has shifted from a perk to an expectation in the industrial supplies category and facilities management space. The benefit has now transitioned to centering on how much can the supplier manage and the creative ways they can execute. The level of desired partnership, current storage setup, and ability to drive change are only a few of the factors to consider. Standard vending has proven effective in managing waste, driving consolidation, and lowering employee management time in various areas. Personal Protective Equipment (PPE) has had significant success in a variety of CoVest programs. Deeper discounts can be achieved with increased volume and consolidation, all of which are achievable goals through standard machine vending solutions.

While the vending mentioned above is still effective, distributors always search for additional ways to provide value in the inventory space. Significant strides have been made in the types of vending available, allowing for more flexibility based on product. Weighted drawers and baskets can allow for easier stocking of fasteners and/or small parts. Individual item cubbies allow for stocking larger, more expensive items such as power tools. Finally, full-scale integrated solutions can help convert any crib or facility into a secure, automated storeroom.

Pushing For Creative Value-Add Suggestions

Alongside vendor-managed inventory, distributors are seeking additional ways to showcase their value. A key, often overlooked, area lies within data and access to the purchasing details within a company’s spend, not just in what they are buying, but what they could be buying. Reporting to identify lesser managed categories can allow distributor partners to assist in SKU consolidation, replacement, and refresh throughout a company. Additionally, identifying green products to help companies meet environmental initiatives while decreasing or even keeping costs flat, can help teams solve multiple problems simultaneously. Proactively suggesting in-house brands can offer additional savings opportunities when teams need them. All these initiatives can be spearheaded by distributors just within their own purchasing data, allowing procurement teams the ability to “say yes.”

Alongside the standard initiatives outlined above, many distributors have begun investing in more “hands-on” applications and services. Full-service consulting teams perform bottom-up analyses of a plant, its purchasing patterns, and its operational processes while identifying where waste can be eliminated now and in the future. Grainger’s Consulting Services, BDI’s Productivity Pipeline, and MSC’s Business Needs Analysis process are just a few of the value-add services CoVest partners offer. These assessments allow companies to put more of the change-management onus on their partners while receiving suggestions and savings, usually free of charge.

 

Identifying Shipping and Sourcing Strengths Within a Partner

Fortunately for the market, we are no longer dealing with supply chains as tumultuous as they were during the peak of COVID-19. However, even an improving supply chain comes with issues that must be addressed. Due to geopolitical uncertainty, new difficulties have arisen and global companies are diversifying their sourcing to avoid impacted geographies. Partnering with crucial distributors can help you cover more categories with less contracting, especially in niche areas. While your Bearings and Power Transmission partner may be focused on bearings/fluid-power/motors, their relationships may allow them to help find unique lubricants or belts for strategic needs. Large, established suppliers have cultivated these relationships for years, and this access is one of the many reasons CoVest only partners with nationwide distributors, many of which also have a global presence that extends beyond the US.

Along with increased sourcing capabilities, increased flexibility around shipping and delivery has never been more critical. National capabilities coverage is expected from CoVest distributors. However, how that national coverage is leveraged can make a difference. Customized stocking solutions can guarantee crucial inventory is stocked in Distribution Centers close to your affected branch, ensuring rapid response to avoid downtime. For items with large footprints, such as corrugated boxes, partners such as Veritiv can store inventory in their own buildings, shipping portions of orders at a time to free up your storage space. Combining this with Veritiv’s owned and operated national fleet can allow for just-in-time delivery with little possibility of interruption. Examples such as this can allow for cost, time, and storage savings all in one project

 

Final Thoughts

In conclusion, procurement teams continue to ask more and more of their distributors. As these partnerships evolve, investigating the value-adds of these distributors becomes of utmost importance. Maximizing the amount of inventory management done by distributors can free up your employee’s time to focus more on production rather than inventory stocking. Leveraging your spend data and the additional proactive solutions can allow for creative savings initiatives within your department. Finally, ensuring your partners are set up to successfully source and ship based on evolving needs can help alleviate stressors when high-impact problems arise. By carefully selecting critical partners within the MRO space, CoVest’s Suppliers are primed to assist in these key areas and more.

 

 

References 

BDI. (2024). BDI Value Creation Hub. Retrieved from https://www.bdiexpress.com/us/en/services/value-creation

MSC. (2024). MSC – MRO GO Solutions. Retrieved from https://www.mscdirect.com/solutions/mro-go

Veritiv. (2024). Veritiv Location Map. Retrieved from https://www.veritiv.com/locations

WW Grainger. (2024). Grainger Keepstock Services. Retrieved from https://www.grainger.com/content/mc/services-and-solutions/keepstock?gicid=V4VNOG:APZ_1

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