Log in

ISM Article

Dock Strike Increases Dealer Savings

24 Feb, 2003 By: Ronelle Ingram imageSource

Dock Strike Increases Dealer Savings

The West Coast
dockworkers threatened strike (work slowdown, lockout and eventual
implementation of the Taft-Hartley back-to-work presidential mandate) has had a
direct effect on the office equipment industry. Copiers and accessories arriving
from Japan, China, Hong Kong and other parts of Asia, came to a complete stop
for a few weeks. Availability of parts, drums, toner, developer, imaging units
and other pieces of hardware quickly became chaotic. Manufacturers were forced
to put hundreds of dealer orders on back order status with no available due

The availability of
high-usage consumable parts quickly disappeared. Owners, purchasing agents and
service managers started calling fellow dealerships trying to locate needed
accessories and parts. The dealer service managers (DSMs) of many manufactures
also became the hub of inquires like, "Who do you think might have a large
capacity tray?" Old acquaintances were renewed and inventories reevaluated.
Rather than sell off a needed accessory to a fellow dealer, trades like,
"you can have a duplex unit, if I can have a print system" became the
norm. During the lockout and slowdown, I shipped several overnight, oversized
boxes of accessories, drums and parts to other dealers.

In the quest to
locate parts for down machines, I renewed some old friendships. I also took a
hard look at non-OEM sellers of drums, consumable parts and supplies that I had
not used in the past.

Learning From The
Past As service managers and purchasing agents, we can get into a comfort zone
when obtaining needed replacement parts and supplies. We buy from a few vendors
on a regular basis with prices that are usually stable. Periodically, there may
be a 3-5 percent across-the-board price or shipping cost increase. Generally the
computer program creates a reorder list and the vendor you most recently
purchased from, will usually receive your next purchase order.

The dockworkers
slowdown forced us to take a look at all of our purchasing habits and available
vendors. Chances are almost everything you buy is sold by at least two sources.
In most cases, there are probably more than a half dozen different places to buy
most of the products you need.

One look at the half
dozen prominent business magazines we (should) all receive, shows hundreds of
business that are trying to get our attention and ultimately our business. Web
searches for a product reveal literally hundreds (if not thousands) of
businesses that are advertising or informing us about something we sell or buy.

My search for
alternate vendors paid off in a big way. I found several new and
well-established companies selling the products I needed to buy. In most cases,
instant credit was available with a quick credit check. Everyone was willing to
take a credit card for a first order.

Another off shoot of
this quest for new vendors was the renegotiation of pricing with our current
vendors. After researching the availability of products through new vendors, we
achieved a new point of reference for the products we had been buying.

Profiting In The
Future After the port slowdown ended and our original vendors were able to ship
products again, we had become a smarter consumer. Each of our old vendors was
politely told about our newfound vendors, who were able to offer us lower costs
(and free shipping in some cases) for the same products.

And what did our old
vendors do? Every one of our original vendors matched or beat the lower prices
that our new vendors were offering. Admittedly we went through several hours of
researching, contacting and setting up new accounts with the newly found
vendors. The first month cost savings more than paid for the labor hours

Directing New
Demands I have an answer for those of you who are thinking, "we are an
'Authorized Dealer' who must always purchase from our manufacturer to meet our
quotes." Our dealership used to be the same way and was required to
purchase a specific amount of parts directly from our manufacturer to qualify
for our quarterly (yearly) rebates. Here's the news - you DO NOT have to accept
the parts and drum quotes that manufactures arbitrarily place on your
dealership. Because parts and drum purchasing needs have radically changed with
the introduction of digital products, many dealers have been able to completely
eliminate any parts purchasing quote from their rebate requirements.

This is an edited
version of the letter that I wrote a few years ago, to our manufacturer, which
completely removed any parts and drum purchasing quotes from our dealership.

Reasons to Reduce
Parts & Drum Quota

· Digital equipment requires less parts replace

· Longer life on PM cycles.

· lmaging Units (a supply item) replacing drums

· Longer usage cycle on drums

· Parts for older equipment is no longer available

· Non-availability of older model parts requires us to keep more "parts
machines."Thisenables us to get parts from "parts machine" rather
than ordering new parts

· More printer circuit boards (PCBs) available for repair

· Internet ordering allows faster turnaround time from ordering to receiving

· Daily air orders allow us to minimize our long-term, on-hand inventory

· Fewer PM kits required for digital equipment

· Longer cycle of copies between calls, fewer parts needed

· More sophisticated end-users (IT staff) take better care of equipment

· Average tenure of our technical staff is over ten years. Experienced staff
can work smart, requiring fewer parts lost, broken or improperly replaced

· Digitally connected equipment requires fewer ADF, duplex and finisher parts

· No longer able to go after the high-end market (90+ copiers per minute)
customer. The more copies a customer makes, the more parts that are required

· Digital printers use far fewer parts than copiers

· We have been rated a Gold Medal service dealer for the past eight years. We
are using all the parts that are necessary to keep the equipment in top
performing condition.

· Our needed technical staff has been reduced by five techs this past year.
This has resulted in returning over $50,000 of trunk stock to our warehouse
inventory and we do not have to maintain $50,000 of working car stock

· Bar coding increases efficiency in ordering, storing, dispersing and tracking

· Use of PM kits economizes on parts costs

Do not punish this
dealership for working smart, training our technical staff, and selling new,
connected digital copiers and printers. The parts purchasing requirements of the
analog era are no longer representative of the parts required to effectively
service digital equipment.

I respectfully
request an appropriate parts quote be assigned to our dealership. It is
imperative the manufacturer realizes the changing parts needs for the digital
equipment we are now selling and servicing.

The unavailability
to purchase inventory through our regular vendors forced us to take a closer
look at our purchasing habits. What we found was a real wakeup call to reassess
our buying patterns. The comfort level we gained through using our current
vendors was not improving the bottom line. Now is the time for you to reassess
how, why and where you buy the parts, drums and other necessary equipment.
Profitability, not convenience, should drive your purchasing habits.

WebinarCase Studies and White PapersSand Exchange Blog

imageSource Magazine Quick Links
Upcoming Events
ITEX Expo & Conference
©2015 Questex, LLC. All rights reserved
Reproduction in whole or part is prohibited
Please send any technical comments or questions to our webmaster