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Non-Tech : Ingram Micro -- Ignore unavailable to you. Want to Upgrade?

To: Ausdauer who wrote (537)	2/19/2000 4:10:00 PM
From: Dale Stempson	Read Replies (2) \| Respond to of 576

Regarding channel roles and inventory ownership: If asked questions such as: Who should take responsibility for what in the channel? and, Where is value created? I would respond: Manufacturers create end user demand by designing and building products. Distributors are the back-room engines that manage outsourcing, logistics, order processing and fulfillment. Resellers represent the entire group and provide solutions to the end user. My view of this basic model has each member focusing on their core competency. While roles are blurring due to the net and the increasing need remove costs from the channel, I think that those who stray too far from what they know best will have difficulty competing. Resources directed towards primary business activities appears to me to be a more prudent way to go. I believe future success for distributors will be dependent on their ability to add new and improved services that reduce costs and create efficiencies for manufacturers and resellers, (standardized electronic services that increase information access and speed product delivery, for example). The implementation of the Viacore hub and RosettaNet is a major development along these lines. Among the many benefits of this system will be the ability of manufacturers to have fast access to extensive and detailed product demand and inventory information throughout the channel. This resource will be extremely helpful in determining accurate manufacturing planning. So where am I going with all this rambling on? Geez, I don't know, but perhaps this initiative will help open the door to manufacturers accepting responsibility for the cost of inventory. They would gain excellent visibility and control of channel stock levels. The process enhancement should decrease overall channel costs by reducing inventory levels. In addition, excess product returns could be lowered and on-time delivery would likely show measurable improvement. Without something like Viacore, I think manufacturers would be reluctant to take on the inventory risk. A great deal of trust in their distributor partners would be required, not to mention there being no incentive to make a change. I guess the bottom line is that distributors who continue to add value in this changing environment should not only be able to secure their place in the channel, but actually make money in the process. Regards - Dale