Adding and documenting value is about more than piece price savings, according to Matt Cohen, president of industrial distributor Replenex, Eden Prairie, MN.
Cohen was featured in this June’s 7 Minutes With … interview, in which he spoke with me about the Web-based tool his company developed to document value for customers. Cohen said customers are increasingly asking the industrial distributor to illustrate the value they provide.
“They need to see our salesmen engineering solutions, they need to see our negotiations with our suppliers, they need to see our sourcing activities, and most importantly they need to see the results of all of those activities,” Cohen said. The Web-based tool allows them to create visibility for customers.
But what does “value” really mean? Where does Replenex find the biggest cost savings for customers?
Piece price is usually the first place many think of. It’s an easy way to measure savings. But, Cohen said, “piece price savings hardly scratch the surface.” The distributor looks at the manufacturing process as a whole, and oftentimes, piece price and total tooling cost go up. But because the process is more efficient, customers save much more than they spend on the upgraded products.
Read about common mistakes distributors make when documenting value in this blog featuring Tim Underhill, who was featured in the May episode of Executive Briefing.
Replenex was recognized as a 2013 MDM Market Mover. Read about the distributor here.
Listen to Cohen in his 7 Minutes With … interview with me below, or visit our 7 Minutes With … archive of Q&As with distributor executives.