Customer demands push distributors past products
Distributors offer a wide range of services in response to customers’ changing needs. See customer advantages and distributor checklist.
Many distributors are offering technical assistance along with their products to create packaged solutions consisting of hardware, software, and/or services. These distributors partner with customers, from packaging products in custom cabinets to offering integration, repair, and maintenance services. In the familiar business model, distributors aren’t part of this trend as they just sell products, and provide few value-added services.
The shift in U.S. business where distributors provide more than products comes as companies move in-house functions, such as accounting and information technology (IT) infrastructure, to external organizations with specialized expertise in those areas. This enables corporations to focus more on core competencies while reducing fixed costs. The same trend is occurring in the industrial automation world as manufacturing facilities increasingly rely on their suppliers to assist with their automation and IT needs. Many companies must do more with fewer workers, and they need a business partner that can help provide support for their operations.
Benefits of hiring specialists
As a result of having to do more with less, companies are seeking outside firms to help manage some non-core areas of operations. IT service providers are a good example of this trend. A company may not be able to afford someone to manage its computer communication systems, so it a hires a company to implement and manage these networks. The right service provider can help the company take advantage of the latest technologies, such as cloud computing and remote access, to significantly increase efficiency.
Networks and other traditional IT functions are now part of many automation systems as processes that once were separate entities are now being assimilated into one all-encompassing system. To accomplish this integration, engineers must be very experienced with different communication protocols and have a thorough understanding of the newest devices that facilitate integration.
For example, an oil company decides to tie a manually operated valve into the automation system. However, it can’t afford the time for an engineer to get a manual to learn the latest techniques and technologies required to modify the valve, perform the installation, and program the associated automation system devices.
So, the oil company needs a firm that specializes in valves and in automation, one that will know the best method for installing and integrating an electric actuator on the valve. By using the right partner, often a distributor, the project can be completed quickly without unduly burdening internal resources.
This type of outsourcing benefits technical departments and can streamline accounting procedures as only one invoice needs to be paid for procurement, installation, and integration services. Locating providers and then maintaining contracts and billing cycles is time consuming and expensive, so today’s customers want one source to handle several needs, and this where a distributor can help.
Promac in Fenton, Mo., is an example of a distributor that provides services in addition to parts and equipment. The company has served the industrial market in the Midwest U.S. for more than 40 years with expertise in instrumentation, control, and heat tracing.
Approximately 20 years ago, the company noticed a growing demand for the specific skill sets required for successful implementations of the hardware sold to customers. In response, Promac began offering an all-in-one solution consisting of hardware, design services, documentation, field support, and training.
In addition to the ease of going to a one-stop shop, many end users find peace of mind in having one local provider with a long track record of service. If something goes wrong, they only need to make one phone call. If they need to integrate new equipment or expand their systems, they call the same company.
According to Mike Griese, president of Promac, the response to his company adding services to its offerings was so positive that the company started a new division, Vidac Solutions, in 1999, to provide software integration, along with piping skids and injection systems.
Demand grew and so did Vidac, prompting it to become a certified developer of National Instruments LabView software, adding to its automation expertise. While still building custom, portable, and battery-powered solutions around Yokogawa’s instrumentation, Vidac has also expanded into a complete specialty engineering shop providing turnkey solutions for electrical and process test systems. (see Figure 1.)
Griese explained, “Customers benefit by minimizing the number of calls they need to make. Whether they need something as basic as pre-configuration or adding connectors to a transmitter, or going all the way to a high-voltage test system, the bottom line is value-added services help our customers reduce their overall costs and save time.”
Pre-sale to post-sale
End users usually start the equipment procurement process by selecting an experienced local distributor in the same industry, often a long-term partner. Then industrial customers typically look to the distributor for pre-sales advice because of expertise in various manufacturers’ product lines. Certified distributors are trained directly by manufacturers and usually must participate in ongoing training to maintain certification requirements.
These two factors—industry experience and product knowledge—are why distributors can make the leap to services. On the distributor side, providing services is often a natural extension of offerings, often prompted by customer demands.
Since 1991, Classic Controls has been representing equipment manufacturers in Florida. Over the years the company has grown to provide services such as training and technical support for the power generation, chemical, and phosphate mining industries, among others (see Figure 2).
Classic Controls represents manufacturers whose lines are synergistic, making it feasible for them to add services and solutions to the products that they sell to customers.
“We sell control valves along with control systems and field instruments, so we also offer calibration, start-up, valve, and instrument repair services,” said Shawn Warren, president of Classic Controls. “Along with these hardware-related services, we also do a lot of system integration, from simple engineering to complete automation projects.”
Services help growth
Many distributors have customers who are turning to them for help with their rapidly expanding businesses. These customers must invest quickly in new equipment and systems to support sales growth. They don’t have time to become thoroughly informed about all the possible benefits, so they turn to the distributor to help maximize investment.
Warren explained, “As technology advances, it’s becoming harder to be proficient in all the latest technologies. Our business is founded on providing expertise for the solutions we sell. Not only can we help our customers implement a new solution, we can also help them unlock its full potential.”
Some distributor customers may be looking for something as basic as proportional-integral-derivative (PID) control for a filtration system, while others may need more of a partner-type relationship to execute complex projects. Regardless of project size, many end users increasingly depend on distributors for advice and assistance, often to expand capacity and/or add to their product mix.
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