Letter From Ed- Friends in Low Places
Establishing relationships beyond the local plant may help you retain customers when upper management calls the shots. Dr. Brindley explores how customer relationships are changing in the pallet industry.
By Dr. Ed Brindley
Date Posted: 6/1/2000
There is a popular country western song by Garth Brooks about having friends in low places. Much of the recent chatter on the Pallet Board (www.palletenterprise.com) has caused me to consider where our industry currently stands with our customers. Do we have friends in low places, or do they extend to the upper strata? Have we concentrated our efforts so closely on taking care of our customers’ needs that we have focused on operational people in relatively low places of corporate influence while ignoring corporate management types?
From the beginning of palletization through the 1980s most pallet manufacturers and emerging pallet recyclers concentrated on providing products and services for people who occupied operational decision making positions. These ranged from plant managers and purchasing agents to technical people such as materials handling specialists and engineers, to even dock workers. There was nothing wrong with that strategy; it is called serving your customers.
Throughout the last decade, I have suggested to my pallet friends that they stretch their marketing efforts and develop a core of contacts up the corporate ladder. Don’t forget service because it is absolutely essential, but don’t limit your imagination to just the quality of your products and the dependability of your service.
Recently the pallet auctions on Free Markets have caused a wave of concern within our industry (see complete article on pg. 84). The way they have been conducted, pallet auctions have served primarily to push down pallet prices, putting value-added aspects of our products in jeopardy. These auctions are giving birth to an interesting situation. Since plant operational people are often not heavily involved in the auction details, customers who use auctions may suddenly find upper management and operational management not playing on the same page. The pallet supplier caught in the middle can be put in an uncomfortable position. Has our industry developed enough friends in high places to complement those in low places? In the future, customers’ decisions may rest heavily on relationships built at the corporate level.
At the recent North American Materials Handling Show it was evident that people on the cutting edge of logistics systems see the flow of information as a critical element in tomorrow’s material and product handling world. Bar code technology and radio frequency identification were more prevalent than ever before. More companies are considering reusable pallets and containers to make their systems work more efficiently.
Even though rental pallets used today are mostly made from wood, the overwhelming perception of practitioners is that wood is for expendable, single-trip pallets, and plastics are for reusable ones. They place rental pallets in a separate category from the single-trip and reusable products.
Our industry desperately needs to create a better image. The image problem that the April 1, 1999 Wall Street Journal article brought to the forefront continues to plague us. In spite of efforts made by the National Wooden Pallet and Container Association, our industry has a fragmented nature, sells heavily on price, and fails in many cases to respect itself. If we cannot respect ourselves, how do we expect others to respect us?
Who will make decisions about the future direction of changes in pallet and container systems? Will it be the people we have served in the trenches for well over 50 years, or will it be people in higher places? If the decisions by-pass operational plant people and move up the corporate ladder, will we even have a place at the table? We must be willing to provide the changes needed to better serve our customers, but that is not sufficient. We need to play the game well enough to get in on the deal. Do you have friends in high places? If not, I suggest you start to cultivate relationships with corporate management for your larger customers.
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