Production and Inventory Management Journal (May 08, 01:58 AM) A major trend in industry is to seek expanded market share, acquire new markets, encroach on competitors, or lower costs through the use of e-commerce (EC), in which the Internet performs the vital function of providing the interface. EC will undoubtedly lead to changes in the role traditional distributors and retailers play in the supply chain. Their roles could be enhanced or threatened by the new channels arising under EC.
This article was developed as part of a research study with a large industrial manufacturer. The following five potential channels were developed and are discussed in detail: (1) direct sale to the end user, (2) supplier as information controller, (3) distributor- controlled channel, (4) mixed channel, and (5) independent infomediary (the cannibal).
The development of the five channels was based on the various possibilities of each channel member's changing roles in an e- commerce scenario. This article explains the way each channel model works. It discusses the changes in the roles of the channel members in each case, especially the manufacturers and distributors, and the benefits and disadvantages each of the models provides to the channel members, compared with existing conditions. The dynamics of the relationships between channel members in each scenario are also explored.
DIRECT SALE TO THE END USER
In the channel model direct sale to the end user, the supplier (manufacturer) connects directly to the end user/customer, completely disintermediating distributors and retailers (see fig. 1). The supplier's Internet Web site makes direct transactions with customers possible. Any end user can buy products from the company catalog through the Internet. This direct marketing technique has been successful in many high-profile cases such as Dell Computers and Amazon.com [3]. The success of this channel is well documented, but industrial applications have been less common.
The lack of industrial applications can be attributed to a variety of factors. One difficulty lies in the fact that information is not standardized into common fields and codes that can be read by multiple supply chain systems. Industry alliances such as the industry data warehouse (IDW), Rosetta.net, and other e-commerce initiatives, however, have focused a great deal of attention and resources on this problem. They have already reduced it and will provide a vehicle for making the seamless exchange of information possible.
Another inhibitor is the low technical sophistication of suppliers, distributors, and end users. In industrial channels, automatic identification of products-a key component of successful information exchange-has been hampered by a lack of standards for product numbering and information system communication protocols. This problem appeared insurmountable just two or three years ago, but technology is rapidly eliminating the issue. Recent articles in The Electrical Distributor [10] and other journals indicate that even the lowest-technology end users will soon be buying online. Laptop- or PDA-toting contractors planning to buy on the Internet are predicted to appear in the very near future (5 years or less). When end users go online, the rest of the channel will quickly follow.
Although technology will overcome many of the challenges, others will not be as easy to dismiss. Distributors and retailers add value in a variety of ways that cannot be eliminated through direct access on the part of the manufacturer. Perhaps the most visible of these is inventory management.
FIGURE 1:
Inventory exists solely because the supply chain is inherently inefficient. Assume that a company knows with absolute certainty (100% perfect forecasting) when demand will occur and how much replenishment demand there will be for all customers, and that it can source from suppliers or its own processes (manufacturing) with zero process variability The only inventory the firm would have to carry is enough to cover demand during the difference between its customer's required lead time and its suppliers' and/or manufacturing lead times [4]. That scenario is highly unlikely at this time.
The direct channel, however, may offer ways to reduce inventory. The inventory drivers, forecast error and process variability, are information dependent. Internet sales are direct to the end user without the variability added by the multiple layers of the supply chain; therefore, they have a demand stream that is less variable than one that passes through several intermediaries and their processes. This information aggregation, carried out at multiple points, slows the progress of information and introduces error through lost or filtered data and irregular inventory-tracking methodologies that differ from intermediary to intermediary. End- user demand tends to follow a regular pattern based on equipment failure and maintenance needs (maintenance, repair, and operating supplies [MRO] environment) or consumption (original equipment manufacturer [OEM] environment). These data streams tend to be much more regular than those created by multiple stops in the supply chain. Min/Max and other reorder point systems aggregate demand and send back larger orders that may or may not reflect actual demand. If the counts are taken at irregular intervals or if purchasing is taking advantage of freight or other discounting opportunities, the actual demand stream is lost in a new "lumpier" stream [9].
This lumpy demand stream is more difficult to forecast. Manufacturers deal with the problem by setting fixed delivery lead times, which allow for efficient scheduling with their suppliers. These longer lead times (compared with customer lead times) force the inventory back on the intermediary (distributor), giving the appearance that disintermediation will result in huge inventories coming back upstream to the distributor's supplier [5]. As a result, the supply chain has more inventories than it would if the supplier could efficiently handle the end-user demand directly (see fig. 2).
The key question is, Will the reduction in inventory brought about by direct sales compensate for carrying inventory at the supplier's operation, where holding costs (on a per-unit basis) may be higher? We must also consider whether the same technology that will reduce the manufacturer's need to carry inventory could be effectively applied to reduce the intermediary's inventory. If so, supply chain costs may decrease by a greater amount if the technology is applied at the intermediary. The best configuration is likely to depend on the channel partners.
Other distributor/retailer contributions to the supply chain are technical support for end users, financial services, product value adds, local inventories, counter sales, transportation services, and a prospecting sales force. Each of these areas can be taken in- house by the supplier or customer or outsourced to a third party. The key issues are, What should the supplier handle? What should be outsourced? Is the new channel more cost efficient than the existing distributor/retailer channel? These issues depend on the product (complexity and logistical issues) and the customer's needs.
FIGURE 2:
Technical support is under pressure from EC. Industrial distributors provide technical support in the form of product information for installation and maintenance and solutions for better system performance. The technical support function exists because manufactured products require a specialist to adjust them and because the customer does not maintain such a specialist on site. The Internet will offer simpler troubleshooting processes and more detailed technical information. As the technical support available over the Internet increases, the customer or integrator will be more likely to keep a multifaceted specialist able to troubleshoot many problem areas, given strong information support. As the demand for a greater ability to solve problems in-house increases, the demand for greater diagnostic capability that can tie into Internet resources will also increase. The traditional role of the technical support specialist (big in distribution, small in retail) will lessen in importance.
Financial services-credit for small and midsized customers-can and very likely will be outsourced by both distributors and manufacturers; retailers have already done so [7]. Product value- added processing on the part of distributors (not a retail issue) is an example of postponement theory at work. According to that theory, value-added activities should be postponed in the supply chain for as long as possible [1].
If inventory is at a distribution center only, the distributor will carry less inventory (no safety stock at remote locations) and the location value-added activity is postponed. The onus is on the customer, however, because forecasting must be accurate or interruptions will occur. If customers buy into supply chain integration, they will cooperate (many already have) and help the supplier to reduce supply chain total costs. In retail channels, large retailers such as Wal-Mart have already begu\n providing real- time information to suppliers to improve suppliers' forecasting ability. Some industrial applications are under way, but who actually carries out the forecast and takes responsibility for its accuracy is still unclear. EC has a role because information delivered in real time leads directly to improved forecasting. The key issue for a manufacturer selling direct is whether the forecast improvement will reduce inventory enough to justify cutting out the distributor's DC.
Transportation services fall into two categories: common carriers and "hot-shot" services-hourly as opposed to daily or weekly delivery, frequently used in emergencies. The advancement of third- party logistics providers (3PLs) has caused most distributors to drop private fleets in favor of the 3PLs or common carriers. The hot- shot service remains a thorny issue and is tied to counter sales. Counter sales serve as a local retail shop for customers (especially contractors), as do "big box" retailers such as Home Depot, Lowe's, and Menards.. Typically, for distributors, counter sales constitute a customer service area with little or no profit attached. For retailers, the counter sales area is the principal business, which they support with stringent inventory demands on suppliers (consignment, Vendor Managed Inventory programs, "A" item only restrictions, high fill rates, and tough supplier buyback policies). Retailers' increased service demands have a negative effect on margins, though few manufacturers have attempted to measure the exact cost. Recently, retailers have entered into other distribution services.
One key difference between the retailer and the distributor is the hot-shot fleet service. Although retailers offer job-site delivery, they are generally not as responsive as distributors because their fleet requires a more rigid schedule as a result of its usually smaller size and the smaller-volume customers. To maintain a large, flexible fleet, the retailer would require highvolume customers to justify the fleet's expense. To date, the types of customers retailers have had are small contractors and do- it-yourself homeowners. From the manufacturer's point of view, direct Internet sales may be able to match retailer performance if a series of 3PLs (national and local) were combined, but the ability to respond to a crisis (distributor strength) would be less likely. The manufacturer could maintain a local inventory through a 3PL warehousing company but would, in effect, be duplicating the distributor's service.
Perhaps the most significant issue is a prospecting sales force. The manufacturer selling direct would find new product introduction more difficult without a sales force in the field explaining the benefits to existing and potential customers. The existing customer base may or may not use the Internet to handle new products. Evidence suggests, however, that the Internet could be a powerful tool for dealing with existing accounts. As members of Generation X become the purchasing decision makers, they will rely heavily on the Internet. Time compression dictates that direct customer contact on the part of the distributor's sales force will become less common as customers allocate fewer resources to that interface.
Some manufacturers have attempted to establish a direct link with "A" customers to control those accounts through electronic mediums or their own sales force. The distributor is asked to have the manufacturer's representative accompany the distributor's salesperson on the sales call and to establish point of sale (POS) information with that customer and the manufacturer. The "B" and "C" customers are left for the prospecting distributor sales force. Distributor reactions to turning "A" accounts over to the manufacturer have been mixed. The initial reaction is mostly negative, but a powerful supplier may force the issue.
If the distributor is persuaded to handle only "B" and "C" accounts, the distributor sales force becomes a prospecting tool. That function could be very difficult to replace without a major increase in manufacturer resources. The manufacturer could develop such a force, however, through its own organization or the use of manufacturer representatives (another 3PL of sorts). An advantage lies in the exclusive dedication that the manufacturer representative or manufacturer sales force has to the company. Distributors and retailers have long been criticized for not representing the best interests of their suppliers.
The direct channel will involve many new services and expenses for the supplier. The decision must be made based on the cost of those services as opposed to the additional margin or sales generated through direct sales. Another concern will be the short- term effect of a change; the distributor or retailer could become a competitor if a direct channel is opened and will use its considerable customer knowledge and relationships to damage the direct sales supplier.
A final factor to consider is whether the direct channel can be used in conjunction with existing channels. Some products, such as commodities, low-margin items, and items with little need for technical support, may lend themselves to these applications. Although many items can ease some of the direct channel problems, few will be able to dodge all the risks (especially the risk of angering other channel partners). Another option may be to attack one channel partner with direct sales. Retailers have recently had such threats from major manufacturers who have lost their distribution sales to the "big boxes." The manufacturers have found service demands and policies on new product introductions to be very rigid with retailers. The issue has yet to be resolved.
SUPPLIER AS INFORMATION CONTROLLER, DISTRIBUTOR/RETAILER AS LOGISTICS SUPPORT
In the supplier as information controller channel model, the supplier acts as a conduit and manager of the information flowing in the supply chain (see fig. 3). The supplier becomes the channel captain, and the distributors and retailers are left with the logistic functions. For this channel, the supplier will host a Web site for the purpose of information control on ordering and routing of customer demand. The order is routed to the distributor responsible for sales in the corresponding area of the customer, who can give the best price quote. Because of the seamless connection between supplier and distributor, the order placed directly by the customer with the distributor is also routed through the supplier's Web site. The distributor uses the supplier's site or another database such as the IDW database to get the updated product specifications and prices. The entire transaction takes place over the Internet. The transaction is immediately recorded by the system at all sites, improving forecasting for all parties and giving the supplier POS customer information. The distributor retains all basic functions except order initiation and exclusive customer information tracking (the supplier now has access to customer information as well).
The supplier and distributor network offers an additional feature. When the distributor receives a request from a customer it cannot satisfy, it could use the Web site to search for the product's availability from other distributors. All distributors willing to share this information could benefit by selling through the first contact distributor. A distributor using another distributor's inventory would pay a price premium over cost that would compensate the supplying distributor for carrying the inventory. Distributors unwilling to participate in the supplier's Web commerce site would be forced to do a standard (full price) buyout from their competition or risk losing the sale.
The supplier, as channel captain, would have to set up the site and convince distributors to join. The ability to take business away from the competition, limit stockouts, decrease channel costs, and respond to the EC environment should act as a powerful lure. The network would need to start with only a few distributors to succeed. Success would lead to others joining, and momentum would build.
FIGURE 3:
All transactions take place either over the Internet or through a combination of the Internet and electronic data interchange. The customer receives the quote and can place the order in real time. The customer will have access to distributor services faster and at a reduced cost. Real-time communication between the manufacturer, distributors, customers, and retailers will reduce supply chain inventory. A likely outgrowth of this process would be the creation of a sort of "master distributor" who has sufficient volume in items other distributors consider to be "B" and "C" items to carry these items in inventory. The hits from other distributors through the Internet would enable the master distributor to treat these items as "A" items and relieve the other distributors of dead or risky inventories.
This network does not include retailers, because the customer is directed to the distributors. Retailers, however, can buy over the Internet and sell through their retail outlets to customers who feel uncomfortable buying on the Internet or who operate in environments that limit the ability to buy over the Web (these sorts of environments are becoming rare and could disappear entirely).
Distributors can fulfill another role for the manufacturer. All inventory could reside at the distributor's site, presumably less expensive than the supplier's inventory, and the distributor could provide service to the retailer through the manufacturers' Web site. The process would be invisible to the retailer, and the manufacturer would compensate the distributor for serving the retailers. The distributor's local inventory and services would greatly facilitate retail programs such as vendor-managed inventory (VMI) and JIT. Home center stores with large distribution centers tha\t buy at a volume distributors cannot meet would receive products directly from the factory. Inventory maintenance, however, will be more efficiently handled through the distributor's local presence when-not "if"-the home centers go to VMI.
This route does not alienate the manufacturer from the distributors. New products could be introduced to the market very easily (distributors are more accepting than retailers of new product offerings), and customers, retailers, and distributors could receive updates very easily.
Automobile companies such as GE and Ford have started Web sites in which they direct the customer to the dealers/distributors in a particular region. The customer can obtain complete product specifications, and even customize the car and realize the corresponding minimum retail price. Deals can then be made using the Web site information with the local dealer. At this time, however, there is no provision for the customer to have direct transactions with dealers on the Internet.
National Semiconductor has a similar system in place; the customer receives the complete product specification, list of distributors for various products, and the stock and price available with each distributor. The customer has a secured entry into the database and can order the required quantity of products directly from the distributor.
The effect of other distributor/retailer contributions to the supply chain that are listed as impediments to EC are reduced in this model. Technical support, financial services, product enhancements, local inventories, counter sales, transportation services, and the prospecting sales force remain in place at the distributor/retailer operations.
There are a few downsides to this strategy. The retailer is slowly marginalized as the distributor and supplier develop stronger contacts with the customer. The relationship between the supplier and the retailer could be damaged if the corresponding Web site is perceived as a competitor. Distributors may view the Web site as a threat as well because the supplier could go directly to the customer as all components for direct sales-customer information, ordering capability, and some relationship management-will be in place [6].
DISTRIBUTOR-CONTROLLED CHANNEL In the distributor-controlled channel the suppliers, distributors, and customers work in concert to develop an information center controlled by the distributor (see fig. 4). The distributor becomes the supply chain controller, using the principal supplier's and other suppliers' production schedules, customer data, and intelligent software to match customer needs with supplier capability. The result would be a channel with greatly reduced inventories and a greatly enhanced customer service level.
Inventory would be reduced through more-timely customer information leading to improved forecasting. In addition, more thorough lead-time information would result in greater cross-dock, drop ship, and other lead-time reduction capability. Because lead times and forecast error are the only reasons inventory is carried in the supply chain, the end user would have a choice between minimizing supply chain costs and maximizing fill rates. Eventually, each market would strike a balance for the distributor to maintain while seeking continuous improvement.
The key to this model is strong alliances and technological competency on the part of the channel members. Alliances in distribution are not as strong as the model requires. A first step will be to identify distributors with whom the supplier has trusting and profitable alliances, and that merit further investment. The right type of alliance will involve distributors who will use any sort of Web marketing approach to represent the supplier's best interests as well as their own.
The principal problem with distribution alliances is their weakness on the customer side (efforts to explore customer processes in depth have been scarce). Most customer relationships have been based on availability and have driven large inventories. The distributorcontrolled EC strategy will require system-to-system connections that allow for better forecasting of customer demand. That information should be passed through to the supplier for planning purposes as well.
FIGURE 4:
Once the proper alliances are established, the strategy will require an investment in joint process design (customer, distributor, supplier), hardware, and software. The investment will have to be shared, hence the need for a profitable alliance that merits further investment.
The strength of this strategy is that it continues to outsource the inventory, financial, sales, and other distributor activities that would have to be taken in-house under any sort of direct channel. In addition, the model allows for further outsourcing of retailer activity as was suggested under the supplier-controlled model. Distributor channel relationships will improve. If just transactional data are passed through, the supplier may be viewed as a more benevolent supply chain partner than those that are attempting to control the channel and threatening disintermediation either in word or in deed. The distributors could also be encouraged to carry out the information- and inventory-sharing model suggested earlier. Consortiums of the supplier's distributors could band together and leverage their inventory.
The weaknesses from a supplier viewpoint involve the necessary commitment the supplier must make to the distributor channel. This commitment forces the supplier to "pick" certain distributors for the program (may be positive as a motivator). It may require the supplier to commit resources. It will require supplier processes that can share information. Finally, it forces the supplier to surrender the role of information controller to the distributor. If a competitor seizes the channel with a direct approach, the supplier may be trapped in its distribution model as Compaq was when Dell began to deal direct. On the other hand, electrical distribution was formed around supplier support of distributors. This model is in concert with the traditional approach to distribution. If the supplier is interested in a different approach, the company should ask why this change in tactic is warranted.
MIXED CHANNEL
The mixed channel model tends to incorporate the major characteristics of the models previously discussed and allows those models to coexist (see fig. 5). This model allows the channel members to be more adaptable to different product and customer needs. Some suppliers deal with and cater to a wide range of customers. These suppliers may require different distribution channels based on the types of products and customers served. Customers with MRO requirements, and small contractors may prefer to buy products from a retailer or a distributor, depending on the urgency. Advantages of dealing with a distributor include ready stocks, immediate supply, quick after-sales service, and other value- generating activities.
FIGURE 5:
Big contractors (project environments) and OEMs may prefer to deal directly with suppliers to leverage prices of large systems and products or to affect design, and to better monitor the product flow.
Currently, industrial channels are differentiated on the basis of customers and products. The mixed channel suggests automation of current relationships with a supplier's Web site offering some customer routing in the same fashion currently practiced for these customers. This channel is the path of least resistance because it offers little threat to distributors and retailers.
Depending on products and market acceptability, various EC channels can exist. This may lead to an optimized channel for a particular market segment. In the future, channels can be altered on the basis of the market situation. Whatever direction business trends may take, either for a direct EC channel or intermediaries, the company is in a position to quickly adapt because both systems will be in place. Note also that the previously suggested distributor shared inventory model is still possible under this model.
The downside of this model is that essentially it leaves the company in the same position it was in before EC. The company may be able to respond better to the radical changes many sages are predicting, but change may come too quickly. Some opportunity may be lost in the transition. In addition, even though the exchange of real-time information will reduce inventory at all points in the chain, supply chain cooperation is lower under this model, and a great deal of synergy (hence savings) will be lost.
For smooth operations, the various channels have to be properly defined for each group of products and customers. Different policies will have to evolve and be maintained when each channel is dealt with. The supplier will have to increase resources for the Web interface and may take business away from existing divisions. Distributors and retailers may still find the system threatening because the supplier is better positioned to go direct. This model is, however, the least threatening of the models proposed.
INDEPENDENT INFOMEDIARY (THE CANNIBAL)
The independent infomediary channel model describes a radical change to the existing supply chain models (see fig. 6). A third party (the infomediary) is introduced in the channel; its sole function is to control and regulate the information flow in the supply chain, thus making it the channel captain. The book The Innovator's Dilemma [2] suggests this type of channel. Popularly called the "cannibal," this channel competes with existing channels independently of the manufacturer or its supply chain partners. An independent Web site is supported by the parent firm, which exercises no control over the site's actions. Christensen [2] describes Monster.com and eSchwab.com (Charles Schwab) as examples. In each case the parent set up the cyber company and specifically dire\cted it to go after any business it could, including the parent [8].
FIGURE 6:
The cyber company operates as a wholly independent company It would act as both a clearinghouse for dead or slow-moving inventory and a direct sales medium for distributors and manufacturers. This sort of site is springing up already (see ariba.com for an example). The site would focus on the company's products and tie into other complementary databases.
The clearinghouse function would help distributors, retailers, and manufacturers remove redundant or obsolete inventory from the channel. As a direct sales medium it would allow all parties to deal directly, with the most efficient channel winning. We should not assume that such a site would disintermediate distributors or retailers, because all other value adds would stay in place. In fact, there is good reason to believe the channel may have a primarily positive effect by handling low-margin or slow-moving inventory, freeing the channel members to deal with their strongest (most profitable) markets.
The supplier may choose to own the site outright, but it would probably become nothing more than a direct channel. Other firms have set up the infomediary and retained a minority share in the new firm [61, An independent site would, in time, gather tremendous customer, distributor, retailer, and supplier knowledge, enabling it to smooth channel redundancies. If distribution is moving toward a pure information environment, the entity with the most information will win. The infomediary will be positioned to be channel captain. A positive aspect of this strategy is a reduction in the risk of angering other channel members while the ability to deal direct remains a possibility. Competitor distributors would feel pressured to offer their goods over the site, leading to a more competitive market as customers view offerings from competitors on a oneto-one comparison with the company's products. Limited distribution (franchises) will come under fire as rigidly controlled distribution channels are pressured from customers to offer more solutions. If the cannibal sites are successful, they will spawn competitors and likely destroy limited distribution entirely.
Strong distributors should be able to maintain and possibly extend their markets through the Web site by demonstrating the value of their service offerings over the site. Weaker distributors, but not necessarily small ones, will be at risk. The Web site will give small distributors a voice they did not have before and may help level the playing field. Integrators would find the site especially helpful as a secondtier supply site [5].
A downside of this model is that the company's involvement will be difficult to hide and some distributor and retailer unrest may result [6]. Also, the site could become more successful with the competition's products than with the company's.
TABLE 1:
A final problem is that automation appears likely to take over the vast majority of all purchasing. The site may be better positioned to take advantage of systemto-system supply or it may not be able to compete with distributor or manufacturer direct links. Many believe the purchasing function will remain in some form, and so this risk may be a small one. These issues may be beyond the company's control and should be weighed carefully before any action is considered.
CONCLUSION
This article presented a detailed discussion of the potential channels of distribution in an EC and Internet environment. The five channels were described with respect to their particular strengths and weaknesses and the implications that their implementation might have on the relationships between supply chain partners. Table 1 provides a summary of the discussions.
The article also discusses issues that need to be addressed before any of the suggested models are implemented, including to a certain extent reorganization of current business processes. The models proposed in this article will perform best only if they are consistent with the long-term goals of the organization adopting them. These goals need to be clearly defined before any sort of reorganization can be done.
REFERENCES
1. Billington, C., and J. Amaral. "Investing in Product Design to Maximize Profitability Through Postponement." World Wide Web page (accessed May 25, 2000). 2. Christensen, M. The Innovator's Dilemma. Boston, Mass.: Harvard Business School Press, 1997.
3. Hartman, A., and J.G. Sifonis. Net Ready: Strategies for Success in the E-conomy. New York.: McGraw Hill, 2000.
4. Lawrence, F.B. "Closing the Logistics Loop: A Tutorial." Production and Inventory Management Journal 40, no. 1 (1999): 43- 50.
5. Lawrence, EB, and A. Varma. "Integrated Supply: Supply Chain Management in Materials Management and Procurement." Production and Inventory Management Journal 40, no. 2 (1999): 1-5.
6. Narayandas, D., and S. Frug. Arrow Electronics, Inc. Harvard Business School Publishing. April 20, 1998: Product No. 9-598-022
7. Rosenthal, B.E., P Bendor-Samuel, and K. Goolsby. "Accounting Outsourcers Have Your Number." Outsourcing Journal (June 2000). World Wide Web page (accessed May 25, 2000). 8. Useem, J. "Internet Defense Strategy: Cannibalize Yourself." Fortune, September 6, 1999, 121.
9. Vollmann, E., L. Berry, D. Whybark. Manufacturing Planning and Control Systems. Homewood, III: Irwin, 1992.
10. "What Do Your Employees Do on the Web." TED Magazine, September 1999.
F. BARRY LAWRENCE, PH.D.
GAIL M. ZANK, PH.D.
DANIEL E JENNINGS, PH.D.
GARY L. STADING, PH.D.
ROBERT J. VOKURKA, PH.D.
RAMASUBRAMANIAN NARAYAN
Texas A&M University, College Station, TX 77843
About the Authors
F. BARRY LAWRENCE, Ph.D., is an Assistant Professor with the Department of Engineering Technology and Industrial Distribution at Texas A&M University. He has extensive industry experience in both retail and wholesale sales. Dr. Lawrence holds a Ph.D. in operations management from Texas A&M University, an MBA from Southwest Texas State University, and a BS in business administration (finance) from the University of Texas. His research interests include logistics and supply chain management, electronic commerce, and specific issues involving inventory and information systems. He has published articles in professional, academic, and society journals including Production and Inventory Management Journal, Journal of Operations Management, Journal of Engineering Technology, and Indus
trial Distribution Magazine. Dr. Lawrence has conducted extensive industry studies in the areas of integrated supply for electrical and pipe/valve/ fitting distribution, forecasting and logistics for fluid power distribution, warehouse automation and layout for electronic distribution, warehouse and transportation logistics for electrical distribution, warehouse/transportation/inventory management/customer service for steel distribution, and distribution information systems.
GAIL M. ZANK, Ph.D., is an Assistant Professor in the Department of Engineering Technology and Industrial Distribution in Texas A&M University's Dwight Look College of Engineering. She has consulted widely on marketing and management issues for manufacturing and distribution firms. Dr. Zank holds a Ph.D. in marketing and an MBA from Texas A&M University and a BS degree in business administration from Marquette University. Before joining the Texas A&M faculty in 1997, she had been a faculty member of the University of Central Florida and Eastern Connecticut State. Her teaching and research interests include sales management, industrial marketing, purchasing, marketing strategy, and service quality. Her frequent workshop presentations and published research articles have focused on marketing issues. Her current research and teaching interests are in purchasing, service quality, sales force management, personal selling, and supply chain management.
DANIEL E JENNINGS, Ph.D., is the J.R. Thompson Endowed Professor of Industrial Distribution, Director of the T.A. Read Center for Research and Education in Industrial Distribution, and Program Coordinator for the Industrial Distribution program at Texas A&M University's Dwight Look College of Engineering. His corporate career includes engineering, corporate planning, and managerial positions with Armstrong World Industries, Kaiser Aluminum and Chemical Corporation, Olinkraft, Inc. (now Riverwood International), Boise Cascade Corporation, and Certainteed Corporation in locations in the United States, Canada, and South America. His industry experience involves manufacturing and distribution activities. Dr. Jennings holds a Ph.D. from Texas A&M University, an MBA from Northeast Louisiana University, and a BS in industrial engineering from the University of Tennessee. He is a Regis
tered Professional Engineer. He has served as a visiting professor at universities in Russia, France, Canada, and Australia and has conducted executive development programs in the United States, Canada, France, and Italy. As a published author of 10 textbooks and more than 100 articles in academic and practitioner journals, Dr. Jennings has received awards from the Academy of Management, Prentice-Hall Publishing, McGraw-Hill Publishing, New York University, and Baylor University for his publications. His work has also appeared in the Wall Street journal and the New York Times.
GARY L. STADING, Ph.D., is a Lecturer with the Department of Engineering Technology and Industrial Distribution at Texas A&M University. He has spent more than 10 years in industry working primarily for 3M and Hoechst Celanese as both Product and Quality Engineer. He developed a working expertise in quality and material flows, having implemented successful projects in managing supplier quality, material traceability, and de-bottlenecking material flows. Dr. Stading holds a Ph.D. in operations managemen\t from Texas A&M University, an MBA in finance from Miami University, and a BS in chemical engineering from the University of Illinois. He also holds CQE (quality) and CPIM (inventory management) certifications. Using his training as an ISO 9000 lead auditor, Dr. Stading has seen the other side of a successful ISO 9002 certification. He has presented papers at many industry and academic conferences including The American Society for Competitiveness and The Portland International Conference on Management of Engineering and Technology. His writing has won several local, regional, and national awards. Dr. Stading is active in several academic and professional societies including the Institute for Operations Research and the Management Sciences, the American Society for Quality, and the American Production and Inventory Control Society.
ROBERT J. VOKURKA, Ph.D., is an Assistant Professor in the Department of Engineering Technology and Industrial Distribution in the Look College of Engineering at Texas A&M University. He has more than 20 years of industry experience in positions as Plant Manager and Controller with firms such as Belden Wire & Cable and Cooper Industries. Dr. Vokurka earned a Ph.D. in operations management from Texas A&M University, an MBA from Northwestern University, and a BA in economics and business administration from Albion College. His research interests include manufacturing and distribution strategies, total quality management, supply chain management, and performance measurements. He has published in academic and professional journals, including Journal of Operations Management, International Journal of Forecasting, International Journal of Operations and Production Management, Production and Inventory Management Journal, Industrial Management & Data Systems, and the Journal of Marketing Theory and Practice. He holds professional certifications in production and inventory management (CPIM), integrated resource management (CIRM), purchasing (CPM), quality (CQM), and accounting (CPA and CMA).
RAMASUBRAMANIAN NARAYAN is a graduate student with the Civil Engineering Department of Texas A&M University, specializing in environmental engineering. He holds a BS in chemical engineering from Nagpur University in India. He has worked for more than three years as Senior Design Engineer and Product Manager for Heat Exchangers with Alfa Laval (India) Limited, India. He has been working as a graduate research assistant to Dr. Lawrence since June 1999. He has been involved with the following projects: "A study on alternative channels of distribution for a manufacturing company," Information System Consortium for Supply Chain Management's projects "Measuring the Value of Standardization in the Supply Chain", and "Neutral vs. Non-neutral Marketplaces."
Copyright American Production & Inventory Control Society, Inc. Third Quarter 2001
