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Growing together18th of September 2012
Relationships are key to the success of any distribution business: relationships with product manufacturers and with end users, often contract cleaning companies. ECJ looks at a number of successful relationships and asks what makes them work so well.
Bunzl and ISS
Bunzl is the exclusive distributor to world-leading facility services company ISS in the UK for all its janitorial and consumable products. The companies have worked together for the last six years and have established what they describe as a true partnership.
Bunzl Cleaning and Hygiene Supplies is the largest distributor of cleaning and hygiene materials in the UK. It is a local branch-based business with a continual stockholding of just under £14million. Each of its 22 locations consists of a branch manager, office manager, warehouse manager, stock controller, drivers, warehouse staff and customer care advisors.
Greg Robinson, UK procurement director for ISS UK describes what the company looks for in its distributor. "We need a distributor to be flexible in its approach to supporting our business. This includes its approach to our IT developments and its support in what we are trying to achieve with our Cleaning Excellence Programme.
"Bunzl has established a great network with many of the ISS business units and employees to ensure a direct point of contact. This in turn allows for a good knowledge sharing. Besides, it is important this relationship also includes working under our Code of Conduct that constitute the principles on how we carry out our operations. This includes the conduct of employees, corporate responsibility and workplace standards."
Robinson goes on to explain how its day-to-day relationship with Bunzl operates. "We have a dedicated national account director who only works on our account. He is supported by a team of key account managers who engage with ISS at all levels of our business. We order via two E-procurement platforms currently, which ensures orders are processed immediately and without errors.
"It also ensures that our sites are only ordering from our agreed core range of products. We have an agreed minimum order quantity and all orders placed should be delivered within our agreed time frame. We have constant dialogue with Bunzl and have quarterly contract reviews that are documented and acted on."
Bunzl has 22 strategically positioned depots that can distribute all over the UK using its own vehicles without relying on third party couriers - Robinson sees this as a key strength. He adds: "They have mature working relationship with all of our key suppliers and adopt a can-do attitude to align themselves with ISS. Our business is fast moving and sometimes we get very little notice of when a new contract starts. Bunzl's assistance when mobilising new contracts is paramount to ensure a seamless delivery is achieved to our customer base."
Summing up, ISS firmly believes the supply chain is key to the on-going success of its business and places great emphasis on the relationship it enjoys with Bunzl. "Over the years we have enhanced our relationship, which in turn ensures we constantly achieve our delivery goals to our clients," Robinson concludes. "We have a very tight control over the product range used within ISS and Bunzl ensures this is not abused or increased. Our ISS Cleaning Excellence programme controls the products used and works in partnership with Bunzl to identify and review product innovation."
ECJ also spoke to Freddie Forsyth, national account director for Bunzl Cleaning and Hygiene Supplies national account director for ISS, about what he sees as being its key role when serving a client like ISS. "We are often consulted for advice on best practice, best products for the job (from agreed suppliers) and value for money," he explains.
"We are also consulted on startups, and when bid teams are tendering, especially for consumables. We offer British Institute of Cleaning Science (BICSc) accredited training at all levels and we support ISS with a complete suite of management reporting that allows in-depth analysis of what is being purchased and our efficiencies against pre-determined KPI's. Mobilisation of new contracts is a key role to ensure ISS delivers a professional service offering from the beginning."
Forsyth also explained Bunzl's role in introducing new technologies to ISS. "We work with a wide range of suppliers that ISS doesn't necessarily have relationships with, therefore we can introduce initiatives that ISS may not otherwise be aware of. We have also been actively involved in ISS' E-commerce progress. Bunzl introduces any innovations via the ISS procurement team to highlight new products and suppliers. However it is essential this process is managed correctly so that non approved suppliers are not introduced into ISS."
Bunzl employs a number of key account managers throughout the UK who are actively involved with ISS at all levels. And the company's IT department works closely with the contractor's IT teams in looking at continual improvement and additional value. "We operate in a true partnership to ensure each organisation's strategy is fully understood and aligned where possible," says Forsyth.
He concludes: "ISS is one of the UK's leading FM providers and as such, supplying a company of its size and to its expected standards can be a challenge. However, we have a very good reputation within ISS and consistently meet expectations - this is something we are very proud of. We actively promote the fact that we are the UK's leading service provider's chosen partner."
Futures Supplies and Principle Cleaning Services
Principle Cleaning Services in the UK has enjoyed a long and successful relationship with its distributor, Futures Supplies. Jim Freeman at Principle explains what he expects from his cleaning products supplier.
"It is important to us that all of our suppliers share our commitment to genuine partnership working. We look to have trust in our cleaning products supplier to help us meet the promises we make to our customers.
"This is not only in meeting deadlines and supplying the correct products but also in being actively involved in sourcing innovative new solutions and guiding us through the range of products available."He adds: "Futures has helped us with exploring new cleaning products and have helped us incorporate these into our tender proposals. It has a very proactive account management team who are always on hand to offer advice and to provide expert support."
Freeman describes Futures' key strengths as being in its product knowledge, proactive account management and its availability. "It is imperative in a cleaning product supplier that we can get answers to the questions our customers raise. The management team are all very happy to support our business and regularly go beyond the norm in helping us meet the demands of our customers."
And he is confident that Principle's relationship with Futures has had a positive impact on the business. "We have a supported each other through our development and we have both benefitted through a reputation for delivering a genuinely world class service."
At Futures Supplies Mandie Kemp explains the company's ethos. "We aim to deliver service, quality, value, and reliability with environmental consideration through continual improvement and technology. Our role is to deliver much more than just cleaning products."
Kemp continues: "Our role involves providing, through a dedicated account management team, the best advice on the right products to deliver value and quality, outstanding customer service, reliable and efficient deliveries on time, back office support, as well as delivering innovative and original technologies in both products and the services we provide.
"This begins through support at the tender process, the provision of on site training, regular meetings, reporting and maintain high standards throughout the provision of contracts and beyond."
The distributor has always sought to be at the forefront of delivering new technologies, not just in the product range it offers but also throughout its business processes and operations.
Sustainability has been at the heart of its drive to introduce new cleaning products. Futures also has a highly credible approach to climate change, offering Carbon Neutral supplies since 2006 and achieving a net zero carbon footprint. It worked closely with Principle in fact, when the cleaning company attained carbon neutral status and has been a valuable partner in its environmental management.
And this is just one of the ways in which Futures has aligned itself closely with Principle. Kemp continues: "We see ourselves as an extension of Principle Cleaning's business from start to finish and work closely with all departments within the business.
"Working together we have established robust systems, supplied invaluable training and support in sustainability issues and methods, recommended new and innovative products and supported the company in both its own and its clients' green and CSR events.
"This has included providing personnel to support Principle customer's event, samples and manufacturer support. We also fully support, not only financially through sponsorship contributions but also by proactive involvement, Principle's chosen charity. For example this year one of our staff ran as part of the Principle's team in the London 10 km run."
Summing up Kemp says: "Understanding the cleaning industry and the needs of contract cleaners is a fundamental part of our business. We see ourselves as an extension of their business and work closely to deliver expertise along with exceptional added value every step of the way."
Western Hygiene and SCA
Ireland-based Western Hygiene supplies cleaning products and equipment to over 11,000 customers in the hotel, catering, industrial and healthcare sectors. The company has been a distributor for Tork manufacturer SCA for nearly 25 years.
"It is an excellent relationship," said proprietor Kevin Collins. "We don't deal with any other tissue companies and Tork represents 65 per cent of our business. We align ourselves with Tork and embrace all their values, such as high quality and concern for the environment. In fact our whole DNA is Tork."
He says having joint goals and targets has helped to cement the relationship. "For example some years ago SCA was targeting the healthcare sector and we helped them to secure a large healthcare contract in Ireland. Then when SCA began focusing on the facilities management sector we jointly gained some FM business in the North East of the country."
According to Collins, remaining committed to one brand within the tissue sector has been an important factor in the relationship's success. "There are people out there selling commodity paper products and trying to be all things to all customers, but we would rather not confuse the message. And if you believe in a product, then the customer sees that.
"We don't have an exclusive agreement with SCA but we are totally loyal to the Tork brand. And SCA has been very supportive to us and has encouraged us to take actions to help grow our business.
"Being in a good distributor-supplier relationship is like being in a good marriage. We have some fights, but the bond remains very strong."
SCA offers various products for washrooms and industry under the Tork brand including dispensers, disposable hand towels, toilet tissue, soaps, industrial wipers and catering rolls.
Tork sales manager Sheona Ritchie says the relationship between SCA and Western Hygiene is unique within the organisation.
"Western Hygiene believes in an absolute partnership and the company only sells Tork, so we share some of our training and other initiatives with them," she said. "Kevin Collins is a unique character because he is not a commodity sales person - and he totally believes in the value of the Tork brand."
SCA supports Western Hygiene's own strategies and business plans and the sales forces of both companies take part in joint sales meetings. In 2008 when Western Hygiene celebrated its 20th anniversary SCA held an awards ceremony and dinner for the distributor.
"Western Hygiene is a very forward-thinking and progressive organsiation that continually embraces change," said Ritchie. "That makes them a very easy company to work with."
Staples and Diversey
Staples, the world's largest office products company, has been distributing products from global cleaning and hygiene specialist Diversey since 2006. Heather Barnes, channel account director for Diversey, explained the background to their relationship.
"Over the past years, there has been an evolution in the distribution landscape, and cleaning and hygiene is no longer the preserve of just the traditional ‘jan san' distributors. Competition in the marketplace has increased dramatically in recent times as a wider group of distributor partners has moved into this area, seeking to expand the categories with which they can serve their customers' needs, and attracted by the growth opportunities and often higher returns cleaning products can offer versus their traditional core ranges.
"Food wholesalers, cash and carries, mail order companies and office supply distributors are all examples of new routes to market that have opened up in the past few years for the cleaning and hygiene sector."
Barnes continues: "This trend is not only driven by distributors looking for growth and improved efficiency in their network. Professional end users are also seeking simplification of their own operating processes, rationalising the numbers of suppliers they deal with and valuing the benefits of the ‘one stop shop'.
"For Diversey too, this offers great opportunities for growth, as we are now able to reach professional end users in markets where previously we had limited or no reach. The development of the relationship with Staples is a good illustration."
Diversey's knowledge in cleaning and hygiene, coupled with Staples multi-channel business model, excellence in logistical services and marketing power are a good fit and offer significant growth opportunities for both companies. The two businesses now have solid relationships in many countries across Europe and as Barnes explains: "We bring together teams from our sales, marketing and logistics functions to create differentiated value propositions designed to meet the specific needs of our target professional end customers."
Barnes acknowledges the benefits its relationship with Staples has brought to the Diversey business. "Within the delivered trade area, our partnership with Staples has given us reach into segments of the market that previously would not have been viable or economical for us, such as small and medium sized offices and high street stores.
"The Staples multi-channel business model, along with its speed and flexibility in logistical services are really key strengths that set it apart from others."
The benefits are very much mutual, as Barnes explains what it offers to Staples as a distribution partner. "As cleaning and hygiene is a relatively new category for Staples, Diversey is able to bring considerable expertise and an in-depth understanding of the needs of the professional end user, built up over decades of experience in the market. We understand that customers needs can vary significantly, and pride ourselves in providing solutions tailored to customers' needs, not simply cleaning products.
"We work hard with Staples on running promotions to really drive awareness of the category with its customers and increase penetration, and provide assistance wherever we can to raise the profile of its cleaning and hygiene offer.
"Another critical success factor for growth is alignment of our respective sales forces to win new business. We understand that by working together, our expertise coupled with Staples' established relationship with the customer gives us the best possible chance of success."
Ruth Coates is cross channel marketing program manager Europe at Staples Europe HQ in Amsterdam, the Netherlands. How does Staples perceive its role as a distributor? "Our relationship with Diversey is important in developing the solutions our customers are seeking in the facilities category. By combining the expert knowledge of Diversey with our client solution expertise we can offer our clients good value and maintain high standards in product quality and sustainability."
Coates explains the Staples relationship with Diversey is a close one. "Key to the success of our collaboration is the cooperation not only at an Amsterdam head office level but also with numerous local business units across Europe. This collaboration is also strengthening all the time as our relationship with Diversey grows beyond our merchandising department to other areas of the business including marketing and sales."
Not only does Diversey offer a substantial product range along with expertise and understanding of user needs, says Coates, it provides invaluable support to Staples in servicing its end user customers. "Whether this is helping our contract clients understand what sustainable professional cleaning programmes could look like for their cleaning contractors, or working together on promotions across our retail and online channels, Diversey is always willing to collaborate."
This means the Staples relationship with Diversey has brought very real benefits to the business. "Working with Diversey has enabled Staples to achieve credibility with our customers and also has increased the awareness of the company within the facilities category. Our relationship has also helped Staples to serve our customers better through offering expert cleaning solutions - rather than simply cleaning products."
Having established such a close and successful working relationship over the past six years, both partners feel confident there is now much potential to grow together over the long term.
MTH and Kärcher
According to Kärcher, its dealer network has always been one of its key strengths. MTH in the UK is an appointed Kärcher Center, which Simon Keeping, managing director of Kärcher for the UK and Ireland, described as "the highest level of expertise we can offer a customer. Kärcher Centers carry the widest Kärcher range - both commercial and domestic - and are equipped to demonstrate the capabilities of every machine they sell."
MTH has been a Kärcher dealer for 30 years, explains Keeping. "The relationship just gets stronger, borne out of a mutual respect for the competencies of the other partner. MTH expects Kärcher to continue to innovate - both with cleaning solutions and marketing approaches to assist it in the market. Kärcher in return knows that MTH is the face of Kärcher in its territory, and that customers will receive great service from knowledgeable people, with a smile on their face."
Kärcher's vice president for global sales management Marc van Ingelgem emphasises how its relationships with distributors have altered in recent years. "Today it is much more than a pure supplier - buyer relationship. It is our task to make our distributors successful. Therefore we have to analyse the market jointly to understand the potentials and the main customer groups. Without a clear focus on target groups we will not be able to fulfill our customers' requirements. This needs to be reflected in the structure as well as joint activities on the marketing side.
"At the same time we are constantly investing into the quality. The big difference is service and advice within these partners."
With all its large distributors Kärcher agrees and develops a marketing plan every six months. "This includes the definition of the target groups we focus on as well as mailings, ads, promotions etc," continues van Ingelgem.
"We also offer all our Kärcher Centers on-site training for all new products once a year. Together with all other training in service and sales this helps to train all our partners' staff, not only selected people. This is motivating for the team and improves quality significantly."
Kärcher appreciates that MTH knows its customers and respects it knowledge when it comes to the needs of its local market. "Kärcher Center MTH was offering machine leasing and contract hire to its customers well before Kärcher appreciated the market need for example," adds Keeping. "The business is perfectly equipped to provide their customer with the optimal solution to meet their cleaning needs.
"We are far more demanding of our dealer base than we were previously," he continues. "They are required to become experts in selling and maintaining a far larger range of cleaning machines than was historically the case when we were predominantly a supplier of high pressure cleaners.
"We put a great deal of emphasis at Kärcher on how we can become truly ‘customer-centric' - not only meeting the customer's needs, but anticipating them. Our dealers play an integral part in this, and have to recognise, as we do, that customers are now far more sophisticated than was historically the case. Customers now demand an immediate response - whether it is for information on their overall cleaning needs, or a particular product, its price, availability, or ensuring it is correctly maintained. And in the current difficult trading conditions, our dealers must be able to offer leasing and contract hire."
Keeping believes Kärcher can help its dealers to become even more adept at targeting their local markets. "Ultimately, I think we can still learn a lesson from the premium automotive marques. If you walk into a showroom anywhere in the country, or indeed online, you should be met with the same level of service - consistent branding, knowledgeable friendly staff offering great products and excellent after-sales service."
Van Ingelgem adds that modern business methods have brought about the greatest changes in how a manufacturer can now relate to its dealers. "The most significant changes are in the speed we are working in. For example deliveries: large amounts of stock are no longer necessary. Almost all of the machines can be shipped within 24 hours, parts the same. This reduces capital investment from the dealer's side and improves the service level to the customer.
"Another example is the communication. Almost everything is electronic and orders via our intranet are standard - the intranet also offers an instant view on availability."
He concludes: "Processes are more and more integrated. And all processes that are necessary but not creating value have to be as lean as possible."
Heading up the MTH Kärcher Center, which is a family-owned business, is Chris Banks. He explains: "Our strength is in supplying quality equipment and providing a first class backup service to our extensive local customer base. Our sales representatives and service engineers are trained to a high standard thanks to Kärcher's excellent training academy. We have become expert in understanding the needs of our customers."
Banks speaks positively about its relationship with the manufacturer. "We have mutual respect for each other and we find that any approach made to Kärcher, whether it be to discuss potential new equipment or sales and marketing, is always handled professionally and our partners there always assist us to the best of their ability."
When MTH first began selling Kärcher equipment it only dealt in high pressure cleaners. This has extended to now encompass floor cleaning machines, commercial and industrial equipment, and even retail (home and garden) - which has inevitably led to a substantial increase in business.
Training has been an essential element of the relationship, Banks believes, and he rates the Kärcher Training Academy highly. Through this MTH staff have been equipped to offer its customers the knowledge and expertise that are now so essential in today's more demanding market.
Summing up Banks says: "We feel MTH Kärcher Center has enhanced the manufacturer's profile in our trading area and similarly Kärcher has assisted us in identifying new businesses in our local market and, as our business develops in the future, long may our strong bond with Kärcher continue."