Can Reps Fit Into a Global Sourcing Model?

Before the rise of the Internet, middlemen -- either traders or manufacturer's reps -- were often the lifeblood of global sourcing. That is, except for the most sophisticated organizations that had the ability to go global on their own. But do these two groups have a role in the current market, especially from a last-mile perspective within a country? I recently came across an op/ed which has some curious things to say on the subject, as it pertains to the electronics supply chain.

Personally, I always get a chuckle out of reading arguments that support reps, considering that the usual strategy of any good strategic sourcing project is to circumvent reps and deal directly with a manufacturer or larger distributors (not only to get better prices, but to get better service and performance levels). The author of the piece notes that while "it must be recognised that independent sales organisations can succeed in the UK and European markets, especially when working for emerging companies with a very limited number of customers ... the needs of both the component manufacturer and customer will probably be more effectively met by authorised distributors who have greater resources at their disposal."

And to this I'd add that often the ideal relationship is to establish a direct relationship between the buying organization and the manufacturer, cutting out distributors entirely (except where distributor managed VMI or JIT programs are key). Even if we all know this is not always possible, it's always worth trying (including threatening to yank the business if the supplier will not play ball).

Jason Busch

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