Ask anyone in the business of distribution logistics and you will hear that the UK retail multiples are as good as it gets. So it may be no coincidence that an innovative development in distribution for the security industry should come via an installation group known for its High Street clients.
Ask anyone in the business of distribution logistics and you will hear that the UK retail multiples are as good as it gets. So it may be no coincidence that an innovative development in distribution for the security industry should come via an installation group known for its High Street clients. After all, when the customers have set the global benchmark in any area, they are hardly likely to expect less from their own providers. In a nutshell, the initiative explores a new slant in centralised distribution by partnering a national installer with its supplier in a way that frees both companies to do what they do best and share gains all the way down the line to the end-user. Those end-users may know little of how the initiative works – or even know that it exists – but they praise its benefits. Many, for example, speak of promised response times that were hitherto impossible – and have been a vital factor in awarding the contract. At the very least, the end-users agree, it is a significant contributor to their peace of mind. The installer is the ID Technology Group, one of the UK’s top ten, with a customer list including Dixon’s, PC World, B&Q, Powerhouse, Allsports and Wilkinson’s. The other half of the team is distributor VCL, a one-stop factor of branded security products and the exclusive source of its own manufactured range of Microspheres and peripherals, plus the new Ademco Video range. The retailers are very clear in seeing ID’s distribution efficiency as intrinsic to their own efficiency. Tony Batchelor, Operations Director at VCL, explained the benefits of ID Technology Group’s dynamic supply chain. ‘Strategic supply partnerships within the construction and retail supply industries have contributed heavily to the success of large retail outlets and their massive new store growth. The supply partnership with ID has been a part of that success. We do know that in turn the strategic partnership between VCL and the ID Technology Group has been pivotal to ID’s performance.’ The partnership was only formed at the beginning of this year and, according to ID Technology Group Operations Director Dave Abberley, the two companies are still discovering the full benefits. He says: ‘No one has done anything like this before so we are learning as we go along. We are also constantly evolving ways to fine-tune the system so some of the advantages are still emerging. Service has always been one of ID’s strongest points in our customers’ eyes so the greatest benefit to us by far is our ability to meet much more demanding deadlines – and with the confidence of knowing that we can keep all of our promises.’ The rapid response factor is even more vital in the field of maintenance and repair, he adds, so this is where the partnership gives ID the edge. ‘Some customers keep us on a 24-hour maintenance contract so if any part were not available then the customer would be vulnerable and we would have failed. But now it simply doesn’t happen. There were times long ago when a piece of kit would not arrive, or perhaps various components all came in separate deliveries at the wrong times. Now not only does everything arrive but it all arrives at the right time and all in one delivery.’ Few in his position would be comfortable making such a claim but a central plank of the partnership is that VCL keeps an agreed minimum stock level of some 150 lines – all ring-fenced specifically by the computer system at the supplier’s Runcorn warehouse. This invisible wall means ID’s 150 must-stock lines are always on shelf irrespective of demand from other customers. New software introduced by VCL has also aided product selection and ordering. Effectively, VCL provides ID with a ‘warehouse within a warehouse’ as well as following this with the use of its own distribution superstructure. VCL monitors its stock levels, usage and demand weekly, allowing it to fine-tune the products in stock regularly. It has allowed the company to understand and cater for customer needs. VCL International Marketing Manager Nick Bowden says: ‘This was best illustrated when we received an order at 3.30pm on a Friday to supply the kit for 10 stores in 10 different locations for 9am on the following Monday. Every order got there on time, complete and fully intact.’ Every customer of a supplier as big as VCL sees the company as a one-stop shop but the ID partnership takes the concept further. ID Technology Group Director of Marketing Shadi Ganjavian says: ‘Having the constant buffer of the core products means we don’t have to look elsewhere very often. This gives us piece of mind, knowing we can always deliver what a customer wants on time.’ The spirit of partnership extends to the financial arrangements, according to Nick Bowden. ‘Everything is operated on a completely open book principle so that our partners at ID know all our buying prices – and therefore the margins involved in the agreement. This has the added advantage that as well as showing our client what kind of volume discounts we are able to achieve, it also minimises errors and stands as reassurance that we are passing on those discounts and not discreetly pocketing them.’ The arrangement extends to some £4m a year of CCTV and peripheral equipment but the partners are looking to extend it. Shadi says: ‘The long-term plan is that we’d like everything to be sourced through VCL, including our EAS work. We do a great deal of EAS through other suppliers but it is not something that VCL covers.’ Tony Batchelor agrees that such a move would bring added bonuses for both partners: ‘It will enable us to offer ID all the same benefits in this area that the arrangement has brought in CCTV, including excellent volume discounts. But it will also provide us with a very healthy starting volume to break into what is for us a completely new sector.’ That service is an essential competitive weapon will come as no surprise. But when the chips are down, as Shadi Ganjavian says, it is perhaps the most important factor of all: "The product range is important of course but even that is far from being the dominant factor. The only real reason people change installers is the level of service they receive. If they like the service, they will probably stay; if they don’t, they will look around. To us it’s that simple, and that is why anything that can improve the quality and consistency of our service is so vital to us.’
