Just as a quarterback’s on-field performance is often only as good as his receivers in football, a distributor’s performance is often only as good as the suppliers it partners with.
In the industrial sector, many distributors have kept the same supplier partners for generations. As a result, the Supplier Best Practices section of our survey tends to be the most consistent year-to-year. But perhaps related to the tough market since the start of 2015, this year’s
totals showed more variation than those in the recent past. To help navigate these times of
weakened product demand, distributors can look to continue market share gain through new
strategic supplier partnerships or in some cases, reducing reliance on lesser-performing ones.
To no surprise, quality again reigned supreme when we asked our audience which criteria
(choosing up to three) they consider the most important when evaluating suppliers (Figure
2), chosen by 86.4 percent. It had a 1.6 percentage point gain from 2015, snapping a trend
of decline from 89 percent in 2012 down to 84.8 percent a year ago. On-time delivery once
again came in second for this question at 58.7 percent, but dropped 4. 3 points from a year
ago and has dropped 7. 7 points from 2014. Service/support was third at 55 percent, dropping 7. 7 points after jumping 8. 6 points a year earlier. Price was also chosen by a majority of
respondents, taking a 3 point dip down to 53.5 percent. Overall, the top four criteria from
last year repeated in the same order, with quality being the only one to increase. Reputation
held steady at 29 percent, while terms again rounded out the criteria at just 7 percent.
Over the years, respondents have indicated that the state of the relationship between distrib-
utors and suppliers has been consistent, and it was the case again this year (Figure 1). Like
in 2015, one-third of respondents said their relationship with suppliers has improved, while
those that said it has worsened dipped by 1.3 points to 9. 9 percent. Likewise, the amount of
respondents who said the level of
support they’ve received from sup-
pliers has stayed the same over the
past year grew by 4 points to 54
percent, while those who said it’s
improved dipped 2. 7 points to 26
percent. Overall, distributor-sup-
plier relations have held steady.
As expected every year, the vast
majority of respondents — 81.6
percent — said suppliers have increased prices over the last year,
but that’s down 5 points from
last year and 7. 2 points from
2014. Incremental price increases are always expected due to
inflation, but the decline shown
How has your
the past year?
It’s gotten better
It’s gotten worse
It’s stayed the same
◗Over the years, respondents have indicated that the state of the relationship between distributors and suppliers has been
consistent, and it was the case again this year.