Is It Time to Change Your Distributor?

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Excellent service and communication are as important as pricing, our reader survey found.


What would spur you to look for a new distributor? Pricing that's been creeping up - and is now in danger of busting your supply budget? The lure of free shipping? A delivery person who simply leaves the boxes stacked haphazardly in a hallway?

For Tawnya Sharke, the materials manager at Marin Specialty Surgery Center in Greenbrae, Calif., it was a mix of major and minor issues.

"Being a 'small' facility - two OR suites and one procedure room - we felt treated as the little guy," says Ms. Sharke. "Our former distributor did not give us the attention that we deserved, especially when it came to delivery flexibility and cost management with contract compliance. The most insulting action was that our area had no sales rep for surgery centers for more than eight months."

That was the breaking point. Ms. Sharke switched to her previous primary distributor, which had maintained its good relationship with the center as a secondary distributor. The biggest issue was service.

"We changed primarily based on the sales rep, then on the potential cost savings," says Ms. Sharke. "We've had a few glitches with shipping, product cross-referencing and backorders, but those are minor compared to the excellent customer service."

Ms. Sharke's experience seems to be the exception, as more than 90 percent of the 73 respondents to our survey are happy with their distributors. Here's what you can learn from good and bad experiences to determine whether your distributor is helping - or hindering - your supply management.

1 Setting service standards
It may be clich' to say that there are things more important than money, but perhaps that's because it's true. There's no question that cost is important, especially when you consider that more than one in five (22 percent) of you are using just one distributor, and more than half (53 percent) of you get at least four-fifths of your supplies from your primary distributors. That's a lot of money riding on one company to keep your expenses in check.

A Closer Look

While our survey provides only a small sampling of our readers' opinions about distributors, it still gives us a peek into how you use their services and what's most important to you.

Top 5 reasons respondents use their current primary distributors

Best pricing available

59%

Able to reach a rep when needed

55%

Excellent service and communication

49%

Online ordering/tracking

49%

The variety of supplies available

47%

5 highest-rated factors in choosing/staying with a distributor

Excellent service and communication

4.6 out of 5

Able to reach a rep when needed

4.6

Best value for money

4.6

Best pricing available

4.6

The variety of supplies available

4.3

Top 5 factors that would make respondents switch distributors

Saving more than 5% on current company's rates

42%

Cost rise of 5% or more with current company

35%

Free shipping and handling

35%

To get a distributor specialized to or more willing to work with case volumes

35%

To get more personalized service

31%

SOURCE: Outpatient Surgery Magazine Reader Survey, July 2006, n=73

But service can be the make-or-break factor: While 59 percent of survey respondents said one reason they use their particular distributors is getting the best pricing available, 55 percent cited the ability to reach a sales representative when needed. Notably, 15 percent have changed distributors within the past 12 months, and four-fifths of respondents say they have chosen their distributor, not simply inherited it.

"Our rep never attempts to make contact with the account. Just a friendly stop in to make sure everything is going well would be nice," says a New Jersey business administrator. "There is no customer service provided by our local rep. I need to track everything closely and sometimes I feel I am doing his job. Example: If there is an issue with online ordering, no one follows up to see why a standing weekly order has not been placed: if it is due to a problem with the online ordering system or if the facility just didn't need to place the order."

She's not the only one who feels this way. More respondents (69 percent) ranked "excellent service and communication" as being "of the utmost importance" when choosing a distributor than they did pricing (64 percent). And 65 percent of respondents said that being able to get a sales rep on the phone when they need one is a top priority.

Your rep should always watch stock and pricing and independently maintain weekly communication with you, says Cheryl Stanley, RN, CASC, the director of the Elkhart Clinic Endoscopy and Surgery Center in Elkhart, Ind. You definitely shouldn't be chasing down your rep, she says.

"Our sales rep is slow about returning calls," says Barbara Anderson, ADN, RN, clinical director at South Alabama Outpatient Services in Enterprise, Ala. She's one of the few respondents who says she's not happy with her distributor. "[Overall] I have problems with most of the sales reps returning pages or phone calls in a timely manner - which means, to me, within the same business day."

Even worse: One respondent who's part of a hospital system says that she hasn't seen her rep in years.

Ms. Stanley advises getting your rep on a monthly or quarterly meeting schedule to determine items that can be changed, added or eliminated to help your facility maintain efficiency and profitability. Several respondents also touted honesty and integrity in the relationship.

"Not only has [our rep] been very responsive when we run into problems, we feel we can contact her at any time," says Linda Trainer, RN, BA, the clinical administrator at Sawtooth Surgery Center in Twin Falls, Idaho. "We keep open and honest communication with her, including when we are not happy with how things are going."

In short, your rep should feel a vested interest in your success. If he doesn't, it may be time to move on.

2 What you want, when you want it
Time - especially your time - is worth nearly as much as the supplies themselves. Delays and mistakes in orders may not only threaten procedures, they waste staff's time and effort.

Ms. Anderson, for example, is having trouble getting her supplies, adding to her dissatisfaction: "We have too many backorders averaging six to eight weeks' delay, and orders are sometimes incomplete or inaccurate or missing altogether."

"If items are back ordered, [our local rep] makes no effort to attempt a substitute for us," says a New Jersey business administrator, who says better developed software programs would be a big help in staying on top of her orders. "I really should seek out another distributor, but time is a factor, as in every facility. Staffing and time are limited."

Those who are happy with their distributors indicated that online ordering and tracking, immediate backorder notification, no-hassle substitutes, late-afternoon ordering with next-day delivery, driver assistance in bringing the supplies in and at least some free shipping should be standard.

"I have used three distributors over the course of five years," says one materials manager at an ASC in Colorado. "The first distributor always charged me shipping fees if a product was coming from another distribution center or direct. The second distributor we used had too high of a minimum order."

He ended up switching to a distributor that has never charged him shipping and has "an incredibly low minimum order." Also, he says, the distributor lets him buy "almost everything in each," there's "virtually no shipping cost if the item is coming from a different warehouse under whatever circumstances" and deliveries are nearly always on time.

3 Embracing your case volumes
Pricing is usually based on the number of supplies you use, which in turn is affected by the number of cases you perform. However, respondents were more concerned with the feeling they weren't a priority for their distributors. Like Ms. Sharke's facility, Ms. Stanley's center recently made the same company switch for the same reason: She expects her surgery center to be treated the same as a hospital with double or triple the case load.

"It is essential that you have a rep who is knowledgeable in customized procedure packs and in helping you watch your bottom line," says Ms. Stanley. "Managers wear many hats and need a distributor that helps manage their supplies, par levels, best pricing and contracts."

On the flip side, distributors may have difficulty dealing with a large facility's demand. If that's the case, it may be time to look elsewhere. Lynda Simon, RN, administrator at St. John's Clinic: Head and Neck Surgery in Springfield, Mo., says her hospital system developed its own "in-house" distributorship to service its clinics and affiliated hospitals - much to her delight.

"We order all our supplies through [our distribution center]," she says. "They warehouse it, truck it to us and keep adequate supplies on the shelf for our needs. They work out pricing, notify us when vendors change, ask for feedback when changing products and provide 24-hour service as needed."

Set high expectations when you partner with a distributor, and keep searching if you feel you may be settling for less.

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