The electrical industry continues to wrestle with the need to accurately compile and communicate point -of-sale (POS) and point-of-transfer (POT) reporting.

POS is information about the end-customer transaction, including shipments directly from the manufacturer to the end-customer (direct shipments) as well as shipments from a distributor’s branch and/or distribution center to the end-customer.

POT is information about the transfer of product within a company including shipments between a distributor’s distribution center and a branch and transfers of inventory between branches.

POS/POT is designed to be an easy method for distributors who cross rep territory lines (such as buying in one territory and selling in another) to report back to manufacturers where the product is being sold. POS/POT information provides manufacturers with accurate sales information that they can use in compensating their reps and getting their sales assistance. When these reports are not correct reps are not accurately compensated for their sales, breeding distrust between the reps, manufacturers, and distributors.

NAED with its Manufacturer’s Council and NEMRA launched a white paper a little under two years ago to eliminate POS/POT wasteful activities with specific guidelines in compiling and sharing this crucial information among channel partners. Has POS/POT gotten better, same, or worse?

According to Jack Floyd, One Source Associates, who was a member of the NAED POS/POT Committee: “I have invested over 100 hours during 2007, my bookkeeper/executive assistant over 120 hours, and my VP of Stock & Flow over 50 hours on POS/POT issues. This equals seven weeks of lost sales management, marketing and sales planning, customer contacts and visits, joint sales calls, sales analysis, new product launch efforts, etc.”

Are Jack Floyd and One Source Associates alone with this claim? Certainly not! The POS/POT situation appears to be deteriorating. During this past year I have visited and worked with countless reps. What reps do, whether they tell manufacturers or not are the following:

   1. Move business from distributors with POS/POT issues to distributors that share accurate POS/POT data with them.
   2. Move rep resources from manufacturers that do not want to resolve rep POS/POT issues in a timely manner to manufacturers that resolve POS/POT issues.

One manufacturer that has successfully tackled POS/POT issues is Ferraz Shawmut. They made a decision to have an outside marketing company receive, cleanse and process their POS data into meaningful reports each month.

According to Kathy Bibaud, Ferraz Shawmut’s Channel Process Specialist:

“We worked with them to decide on the format of the finished reports. They require an industry standard format with regards to how the data from the distributor should be sent. When a new distributor is added to our POS, we hook them up with the marketing company to start the process and to get the files in the format needed. From there, the marketing company processes the information into reports that we developed together. By the 20th of each month, I receive the reports, slice and dice them into territories and include in a zip file, sent electronically, with other monthly reports sent out to each and every agent”.

Kathy added:

“We have 34 agents and I have had only one agent challenge some of the data on the reports. This issue was strictly based on the agent’s interpretation of the data. Once explained, no other questions or issues have arisen. The agents are very pleased with our new process. They receive their reports by the 2nd or 3rd day of the month so they know what their commission on POS is before receiving their check. This also is true of the direct sales commission reports which are handled in a similar process making their monthly reconciliations clean and simple”.

As consolidation in the electrical industry continues, POS/POT challenges will only increase. It is time to resolve this growing problem to the benefit of all manufacturers, manufacturers’ representatives, and distributors.