It’s Time To Cross ... The Great Business Divide

Material handling in retail distribution is the main theme of this issue, and it’s a fascinating topic indeed. It’s downright amazing what many companies in the consumer front lines have done to compete and deliver quality — daily — to millions of consumers all over the world. In fact, some of these retail managers are writing some very important managerial history as well. Not all industrial managers would agree, however.

The topic brings to mind what I call the Great Business Divide (GBD), the set of beliefs suggesting that retail and retail managers are somehow very, very different. Some manufacturing managers even believe retail company managers are “inferior.”

For generations, the industrial world has looked upon all other aspects of the economy as “lesser” in terms of value-added work and “more” only in terms of hustle.

In other words, the Makers of Things have always looked down upon all those others in the supply chain who merely sell and distribute things. It’s rather like saying “Those who can, make or produce. Those who can’t, go into retail and distribute.”

After all, manufacturing involves all kinds of engineering and machinery and complexities that make brain surgery seem simple. It’s real work, right?

Besides all that, you have to deal with cost-nutty purchasing agents. What do retail managers have to do? Just smile at customers and keep shelves stocked, right? I mean how can anybody compare Wal-Mart or FedEx to General Motors or John Deere?

Well, a lot of people have compared — like thousands of stockholders — and many of them seem to feel that retail outfits are doing several things very, very well. One of those things is leaving enough profit at the end of the day for the stockholders to say “MORE!” How so? How does retail, at least in many cases, outshine manufacturing on Wall Street? 

Now numerous manufacturing experts have noted that other kinds of businesses don’t have the same problems. Manufacturing companies have special labor training problems. They have image problems. They have Big Time import problems. They are special targets of the environmentalists. Manufacturing is also especially complex and capital intensive.

If you are one of those who feel there’s nothing to learn from the retail folks (the final stage of the B2B chain), then pay special attention to this issue’s feature articles. They’re full of examples of just how those managers in the consumer end of the business world keep Wall Street and Main Street happy.

The material handling solutions in retail are among the most advanced in the business world. Ditto for their accounting and supply chain management efforts. And, as far as customer satisfaction is concerned, the manufacturing world needs to study some more. After all, what is a consumer if not a purchasing agent with an attitude?

Retail is different from manufacturing, very different in some ways. But, those folks who deal with the final stage of business — the consumers — have done some things better than they have ever been done in the past. Much of that success in performance contains lessons for the rest of industry, particularly in material handling.

 It’s time for manufacturing managers to cross the Great Business Divide and learn from the men and women who deal with the ultimate and final business judges — every day.

George Weimer

contributing editor

weimerg@fleishman.com