This is the second in a series of articles on Quality Certification Management for distributors. Find the first article, on the importance and growing adoption of certs, here.
Distributors that sell products that require quality certifications (certs) must:
- Receive certs from suppliers
- Organize certs internally so they are linked with physical inventory
- Create and send certs to their customers
Distributors employ a variety of methods to accomplish these basic steps. Smaller companies often use manual systems that rely on lot numbers and either physical or digital file folders. More sophisticated distributors use ERP systems with lot-controlled inventory features like INxSQL, The Business Edge or Epicor’s P21.
These systems link inbound certifications to the physical inventory as large lots are sold to customers in smaller quantities. While there are opportunities to improve these internal processes, the main problems and opportunities related to certifications arise when distributors receive certs from suppliers and send them to customers.
How Do Companies Send and Receive Quality Certifications?
Companies historically use three methods for sending and receiving certs: paper, email and portals.
Traditionally, certs are printed on paper and included with the product, checked upon receipt and stored physically. Many firms now scan inbound certs and store digital PDF copies in network directories. A few companies have transitioned to email, proprietary portals or cloud-based cert management platforms. However, relying on paper, email and portals has limitations, creating opportunities for innovative businesses that prioritize customer convenience as a growth driver.
Paper
Paper certs are frequently lost. They are often omitted from the shipment, incomplete, damaged or lost. That results in a steady flow of requests to vendors to resend certs, typically when they need to be shipped, creating unnecessary fire drills for everyone.
“It’s so nice to not have to field emails and phone calls of customers asking ‘I’m missing my certs. Can you send them?’ It has taken a lot of the busy work away from our sales team.”
— Matthew Boyd, VP Sales, Parker Fasteners
Maintaining paper certs is laborious, space-consuming and expensive. Scanning and storing digital certs improves the process but remains time-consuming and costly. A mid-size construction supply distributor recently shared they were spending nearly $50,000 per year on paper and toner for cert production alone.
Scanning and digitally storing inbound certs is an improvement, but it is also time consuming and costly for sellers to print them out and for buyers to scan them — not to mention the wasted paper, toner and fuel. When certs are scanned, unless a distributor has a robust file-naming and tagging convention, it is difficult to locate certs because the PDF contents are rarely searchable. An industrial distributor recently described how much time its employees spent searching for inbound certs because they are filed in digital folders organized by receipt date.
This traditional process also wastes time and creates unnecessary delays. When a shipment arrives incomplete or incorrect, delays arise. Richard Bowling, quality manager for Century Fasteners says that when the correct certs are not available, “our processes require us to quarantine the product immediately and document it as a grief issue. It’s a process that consumes a lot of time for me.” When certs arrive in advance of the parts, the quality team can proactively resolve discrepancies before the parts arrive and minimize shipping delays.
Using email for certs leads to overlooked messages in cluttered inboxes and breakdowns when recipients are unavailable. Required stakeholders, like the AP team, may lack access to the certs, causing delays in payment and communication. Email also has file-size limitations, posing challenges combining certs for all PO line items together, or a sending a First Article Inspection Report or PPAP package.
Moreover, email is vulnerable to cyber-attacks, with increasing sophistication in phishing tactics and potential data loss. In April, the FBI reported that 21,800 US businesses lost $2.7 billion due to business email compromise in 2022. The head of quality for a $1 billion fastener manufacturer recently told us email security was one of his greatest worries.
Portals
Many companies have built portals where customers can retrieve their certs. While this simplifies the process for the portal owner, it shifts the burden to their customers by adding an additional step. Some of the largest portals don’t have a cert download option; they must be printed. This becomes intolerable when a distributor must access many portals and is why most portal owners send paper certs too. Despite the limitations, it is easier for the customer to receive paper certs than to navigate multiple portals.
Digital Quality Certification Management
Digital quality cert management is a rapidly growing category of cloud-based software that enables manufacturers and distributors to electronically exchange quality certs and critical documentation on a web-based platform. Subscribing companies can request and receive digital certs from vendors, simplifying the process and eliminating manual paperwork. The software provides a user-friendly dashboard where users can manage, customize and send certs to their customers.
It allows for the creation of lot-based certs that can be created once and sent to multiple customers and combining of certs for all line items into one package. Suppliers can fulfill unlimited cert requests, while customers can access unlimited certs using a free starter account. The solution eliminates paper-based processes, reduces storage requirements and ensures 24/7 access to certs.
The Opportunity with Quality Certification Management for Distributors
Industrial distribution is at a critical point, with digital innovators pressuring low value-added distributors. To thrive, at-risk companies can move up the value chain by expanding product and logistics capabilities.
Meanwhile, some of the most recognized industrial brands let their distributors be a shock absorber between their inertia and end customer expectations. Innovative distributors will gravitate towards suppliers that make their job as easy as possible. Manufacturers whose actions demonstrate the important role played by distributors will gain share too.
“We have a recognizable brand and outstanding products that the market demands, but we also know that in order to grow, we need to make it easier for our distributors to specify and deliver our products, including streamlining our cert process.”
Sam Huller, Sr. Director Global Sales, Stanley Engineered Fastening Systems
Paul is a Co-founder of Aramid Technologies, the developer of SmartCert. SmartCert streamlines the exchange of critical documentation in global supply chains, taking the paper and the work out of paperwork so humans can do what they do best. With over 800 companies exchanging quality certs on the platform, SmartCert is the leading company in the field of Digital Quality Cert Management.
Paul experienced challenges with certs when he was the operations manager for a machining company servicing the aerospace, energy and medical industries. He is a Director of Greentech Environmental and Color Communications and was previously the CEO and Chairman of ABP Induction, a global manufacturer of high-powered electrical heating equipment.
Reach out at pdecker@smartcert.tech