For the past 18 months NEMRA has been working with its NMG (NEMRA Manufacturer Group) to better understand the impact of the lack of industry standards to report point of sale (POS) and point of transfer (POT) between distributors and manufacturers. The impetus for the initiative to streamline and standardize the reporting of core information was a landmark study on the State of POS / POT. Some of the key findings included:
- The amount of time that reps and manufacturers spend managing and auditing the POS / POT process
- Inaccuracies and inefficiencies in POS / POT reporting that impact rep compensation and the integrity in the process
- Rep ability to guide business to distributors from whom they know there will be accurate compensation (distributors whom they know report sales solely for their territory).
This research report highlighted potential initiatives for NEMRA and the NMG to undertake.
Standardizing Data Collection
The first step was standardizing the reporting from distributors to manufacturers. Initial research identified 18 different formats from 20 reports that Task Force members shared. The group agreed that if all reports had data fields in the same format, and the same data, processes could be improved, data management could be streamlined and compensation could be improved.
Hence the first phase.
Draft recommendations were released at NEMRA’s Annual Meeting last year. Input was solicited and this summer the POS / POT Task Force reviewed the input and finalized the recommendations.
The finalized recommendations were recently shared with manufacturers and some distributors at the recent AD and NAED Eastern meetings and announced to the industry via a NEMRA press release which was recently published by Electrical Marketing.
Manufacturers who have currently endorsed the standards include:
- Thomas & Betts
- Legrand (Pass & Seymour, Wiremold, Wattstopper)
- Eaton (Crouse Hinds, Bussmann, Eaton, Eaton Lighting Solutions)
- General Cable
- RAB Lighting
- Arlington Industries
- American Polywater
- King Electric
- Morris Products
- Northern Cables
- Orbit Industries
- Light Efficient Design (LED)
And IDEAL Industries endorsed the standards today.
Throughout the process NEMRA spoke with individuals from each of the national chains as well as the marketing groups. Each individual, and hence company, endorsed the concept that reps should be compensated for their efforts and that the information should be accurate and that they would endeavor to make this happen between themselves and their manufacturers. NEMRA is in the process of soliciting written endorsement from each organization.
Standards to Download
What you can do
- Manufacturers wishing to endorse should contact Ken Hooper, NEMRA President, or David Gordon, NEMRA POS / POT Task Force Facilitator.
- Manufacturers who have direct salesforces should also consider endorsing the standards as it will improve reporting from the chains and provide a consistent, industry, format for all parties.
- Manufacturer reps should encourage their manufacturers to adopt these reporting standards and should emphasize the importance of POS / POT reporting to their distributors who either have RDCs / CDCs (regional / central distribution centers) or sell across rep territories).
- Manufacturers should also encourage their national chain customers to adopt these reporting standards, which do not reveal customer-specific information.
- Distributors who adopt the standards should advise manufacturers and manufacturer reps who serve them as it could differentiate them in their local markets (and add further integrity to them accurately reporting sales information).
- Next steps in the POS / POT standardization process is to focus on standardizing reporting between manufacturers and their independent sales agents to streamline this process, improve efficiency / productivity and improve commission accuracy.
- And then the Task Force will focus on improving POS / POT reporting for “commodities”. The goal in this aspect of the initiative is to improve the process while recognizing it will never be perfect.
Aside from the benefits of manufacturer reps being assured of being appropriately / accurately compensated and there being transparency in reporting, other ancillary benefits for various channel stakeholders include:
- Consistency in reporting format (same column for each of 15 data points)
- Consistency in terminology
- Confidentiality of customer contact information unless both parties agree
- Operational efficiency
- Improved data integrity
- Ability to aggregate data so that data analytics could be utilized, enabling manufacturers and participating distributors to potentially share “more / different” information and analyses
- Increased rep support of distributors who utilize the new standards as it provides them with more trust in the sales data so that they know they are being compensated accurately.
Data aggregated can become information. Information, once analyzed, can provide insights to be acted upon, which is when it can result in improved sales and profitability. NEMRA’s POS / POT initiative is an opportunity to proactively improve business for many.
Are you willing to adopt? Or what concerns do you have that manufacturers, reps, distributors or “the channel” need to consider?
Gordon, David. “NEMRA Finalizes POS/POT Standards…26 Manufacturers Endorse.” Electrical Trends