Tip: Investment Key to Integrated Supply Success - Modern Distribution Management

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Tip: Investment Key to Integrated Supply Success

Substantial investment is necessary to reap benefits of integration.

Willingness to make a financial investment is key for integrated supply success, says Blair Crum, who was deeply involved with integrated supply efforts at Norton Co. and Industrial Distribution Group, in Integrated Supply's Next Phase.

That investment begins with people. Having the necessary "access to people" means constantly training employees so that once a new customer comes on board, staffing a plant will be a quick process, Crum says. It requires ongoing investment in your team.

While integrated supply can offer significant returns, distributors need to have patience. Once a contract is signed, "you don’t make any money to speak of until all the old inventory is out of that operation, which can be six months or longer," Crum warns.

In order to properly control the inventory, investing in a state-of-the-art computer system is also key, according to Crum. “If you’re going to be a full integrator, you better have a model in place that you can integrate what you’re doing in that customer’s operation with your computer system,” he says.

Although the financial investment is substantial, successful integrators can experience a boost in bottom line while providing large cost-saving benefits to end-users.

Read more about the challenges and benefits of integrated supply in Integrated Supply's Next Phase.

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