After a century rife with pitched competitive battles, many business experts predict this century will be more distinguished for its cooperative efforts. For years, Bosch Rexroth has followed a collaborative approach with customers and suppliers. Now we are extending that model to our distribution partners.
Manufacturers havenít always had the best relationships with the distribution channels that sell their products to end-users. In some ways, thatís not surprising: thereís certainly creative tension. Manufacturers always want their channel partners to buy more. Meanwhile, distributors clearly understand that large inventories are expensive to maintain, especially for extensive product lines with many options, but few sales of any individual part number.
For Bosch Rexroth, there are several important reasons why we are seeking closer relationships with our channel partners.
First, with the breadth of our product line, we cannot reach all of our potential customers without their assistance.
Second, our first question to distributors is not about how many sales engineers they have, but how many applications engineers there are, since even our most advanced products often need to be customized or engineered to provide sustainable competitive advantage.
As a result ó though we may not have as many distributors ó we are fortunate to have the best, most technically astute distribution partners in the industry. And I consider them to be an integral part of our company.
This level of collaboration is unprecedented. We exchange information with our channel partners that many companies will not share even with their own employees, let alone another business.
Close cooperation in applications engineering is of particular importance. ďApplications engineering expertiseĒ is one of our core competencies and one of our clear advantages in the marketplace. We are giving our distributor partners a share of the brand positioning we have built for ourselves during the past several decades.
The benefit to customers is significant. They get a technically-advanced consultant within driving distance who can access a world-class product development and manufacturing organization. The result? Solutions with engineering sophistication well beyond the reach of most of our competitors.
For distributors, the benefits are equally significant. We have a clear understanding about how both partners add value for the customer. And while the industry has been in the midst of a rather lackluster recovery, our sales through U.S. distributors have doubled since 2002.
Bosch Rexroth routinely hosts its distributors for tours of the corporate manufacturing and research facilities in Europe, introducing key distributors to top management. There are regular quarterly meetings for a council of leading distributors where they have direct access to company management.
We have achieved significant sales increases, gained market share and had higher Bosch Rexroth content on machines as a result of these cooperative efforts, by fostering a collaboration with and between distributors.
That depth and degree of collaboration, information sharing and mutual trust is unique. In fact, some of our competitors have a business model with competitive distribution creating an almost adversarial relationship with and between distributors.
We are totally committed to our partnership. Our distributors are partnering with a company known worldwide for its collaborative relationships with distributors, customers and suppliers. Itís who we are, and I believe itís the best strategy for doing business as a technical leader in the 21st century.