In today’s Amazon-led business world, customers see lightning-fast response times and quick deliveries as the norm. With the next competitor just one mouse click or screen tap away, this puts unique pressures on equipment manufacturers and distributors that must meet these demands while maintaining profitability and growth—and all in the midst of the nation’s tightest labor market on record.
Achieving that balance isn’t getting any easier. Factor the higher levels of competition and an uptick in mergers, acquisitions, and consolidation into the equation and it actually moves even further out of reach. “The distribution environment right now is being consumed by consolidation and acquisition,” says Jim Klimt, vice president of sales, Duke Manufacturing in St. Louis, Mo.
“Larger distributors are continuing to grow and acquire some of the small to midsize dealers in the industry,” Klimt continues. “Those dealers are pursuing the same opportunities and it’s creating an environment whereby dealers have to carve out niches for themselves.” That could be a marketing niche, a product bundle niche, or some other point of differentiation, and all in the name of standing out in a more competitive marketplace.
The good news, says Klimt, is that a plethora of opportunities await the distributor that puts time and effort into building out and exploiting a niche. “It’s really how you tailor your solution to that given opportunity,” he explains, “whether it’s for a food prep, a cooking product, refrigeration, or a serving counter. Whatever the case may be, the dealers that are doing it best are the ones aligned with the real market opportunities.”
Helping Distributors Adapt to the “New Normal”
Knowing that its dealers are grappling with some interesting challenges in the current market, and sharing in many of those pain points itself, Duke Manufacturing has been honing some “lean” techniques that support its dealer network. Centered mainly on process improvements, those initiatives are helping to improve speed of service and flow when building and delivering equipment solutions.
“Both distributors and manufacturers are being asked to develop quotes, come up with drawings/renderings, and deliver and install products faster than ever before,” says Klimt. “We’re all in the same boat, trying to meet end-user demand in the most efficient and effective manner possible.”
Knowing this, the manufacturer took a step back, surveyed the business environment, looked at what it was already doing, and then developed a “Fast Lane” program for taking a service system counter platform from quote to finished product in four weeks or less (a process that would traditionally take six to 10 weeks during peak season, which is typically the summer months when school is out). Through this program, Duke Manufacturing is helping its dealer network meet the need for speed when working with foodservice directors nationwide.
The Fast Lane serving counter allows a dealer to configure a standard Duke serving counter to include Duke drop-ins and food guards, integrate it into an AeroServ or Thurmaduke counter and ship the counter within a month or less, at any time of the year. This helps distributors fulfill their customers’ needs for a serving system solution in a timely manner, and even when school’s out.
“Fast Lane has been a very successful program for us and one that helps alleviate the backlog that can occur in the K-12 segment during June, July, and August,” says Klimt. “Our distributors have been very receptive because it helps them provide a solution for districts that discovered that they had some leftover budget to work with, but whose designs didn’t get through the appropriate channels quickly enough.”
Another value-added service that Duke Manufacturing offers is its “Quick Shipment Program,” where distributors can order a variety of standard products that ship within 24 hours or less. According to Klimt, some of the top products in the Quick Shipment lineup include standard steamtables, worktables, convection ovens, counter top warmers, and various accessories.
“These products all require much less design than, say, a counter would in the Fast Lane program,” says Klimt, “and is especially valuable when a restaurant’s steam table or convection oven is in disrepair and no longer serviceable on the Friday before a busy weekend.” In fact, he says Duke Manufacturing maintains a robust inventory so that its distributors don’t have to. “We take that burden off the dealer who places an order by noon Central, who needs it for the next day.”
Embracing Lean Principles
A concept that’s been around a while but really took hold when Toyota started using it in its manufacturing plants, lean manufacturing is a systematic method for minimizing waste without sacrificing productivity. Duke Manufacturing has been using lean principles in its operations for about four years, and has invested heavily in the initiative, Klimt says.
The company initially implemented lean with the goal of creating a “culture of continuous improvement,” says Klimt. It conducted several focus groups and spoke with customers about its plans, and used those interactions to help uncover some of their pain points and challenges. In return, it has seen a range of benefits. “The direct benefits of this philosophy are improved efficiency, fewer hand-offs, better flow, and improved lead times,” he says. “It’s part of our operating system and plays a significant role in how we manage our business.”
Going forward, Klimt says Duke will continue to hone its lean approach while also implementing new programs that help its distributors get product to market. Before introducing such plans, he says the company wants to develop a more formal “Dealer Council” that will be comprised of various FEDA distributors, all of which will be asked for feedback on what’s working, what’s not, and what can be improved with the manufacturer’s processes and products.
“We’re big advocates of soliciting the ‘voice of the customer’ and using focus groups to better understand how the dealer community feels about Duke, and about how we behave and operate,” Klimt explains. “We don’t ever want to be seen as the company that just sits in an ivory tower in St. Louis, assuming that we understand those things. We want to hear it for ourselves, firsthand.”