NDC exhibition
Stormy weather leaves NDC unfazed
National Distribution & Contracting Inc. weathered a storm of epic proportions to carry off its Xtreme international exhibition in early May.
No, the storm wasn’t healthcare reform. Rather, just as Nashville, Tenn.-based NDC was ready to kick off its annual meeting, Tennessee experienced the worst rainfall in recorded history - more than a foot of rain fell during the weekend the event started. Parts of the downtown area, where the conference was held, as well as surrounding areas, were underwater.
Despite the adverse conditions, NDC pulled off the meeting without a hitch, though its staffers overcame tremendous logistical challenges such as changing venues. More than 900 people were on hand for the event.
NDC is the parent company of American Dental Cooperative, which it acquired in 1999; and United Dental Dealers, which it acquired in 2003. More than 50 independent dental dealers belong to the two groups today.
Recapitalization
NDC’s recent recapitalization through private equity firm Silver Oak Services Partners, Evanston, Ill., was a topic of discussion from the opening of the meeting. "Last year, I talked about a new NDC," said Chairman Ted Almon of Claflin Co. "One of the most significant things we needed to do was recapitalize, so we could [carry out] the aggressive growth strategy and plans the board had made. That required us to find an equity partner to invest in this plan, this dream. I’m happy to tell you we accomplished that goal several months ago."
Indeed, in February, NDC closed a deal with Silver Oak, leaving that firm as well as several NDC members as owners of the company. The sale to Silver Oak "is really a commitment to do the things we promised we would do," Almon said.
Those initiatives include offering a low-unit-of-measure program to members; expanding the breadth of products in NDC’s warehouses in La Vergne, Tenn., and Sparks, Nev.; and rolling out a master distribution model for veterinary products distributors.
Low unit of measure
"We want to free up the working capital of our member distributors, so they can use their resources as sales and marketing companies, and lean on us in an increasingly relevant fashion as the fulfillment arm of their business," said NDC President and CEO Mark Seitz, speaking with First Impressions. "We want them to count on us to do fulfillment on their behalf to their accounts," he said. That way, NDC members can carry less inventory while depending on NDC to get products to their customers.
Through its warehouses, NDC acts as an aggregator of products, particularly slower-moving items, said Seitz. "We hope to expand our position as a channel utility." Offering a low-unit-of-measure program is one way to do so.
At press time, NDC had moved 1,900 high-velocity SKUs to a portion of the La Vergne facility and had created an e-commerce platform allowing members to order products on a low-unit-of-measure basis. The program will run in La Vergne first, then will be expanded to Nevada, though no specific time has been established for that.
"We’re traditionally a case-pick model," explained Seitz. In other words, members order caseloads of product from the NDC warehouse and receive shipments on a weekly basis. But in order to protect their competitive position, the typical dental dealer must adjust to different service level requirements, he said. For example, a dental office may need a particular instrument for a procedure the next day.
The low-unit-of-measure program - which will be offered to NDC’s med/surg and dental members - will give members the ability to electronically order small quantities of products. NDC will then ship the product directly to the dental office in a box that has the local distributor’s name on it. "[The distributor] maintains ownership of the account relationship, and [the program] improves the service level and responsiveness of the…distributor," says Seitz.
What’s more, the low-unit-of-measure program can help distributors expand their geographic territory, said Seitz. "Distributors have a certain radius where they can effectively distribute products," he explains. "The low-unit-of-measure program] will allow them to expand their service area on a family of high-velocity SKUs, so they can recruit business on the fringes of their service area and allow us to do the fulfillment."
In addition to the low-unit-of-measure program, NDC is planning to broaden the breadth of products it can offer its members through its warehouses, said Seitz. "Our strategy is to present unique product opportunities to make the independent distributor more competitive in their markets," he said.
Sidebar:
NDC Xtreme International Exhibition Highlights
Over 70 individuals representing 31 dental distributorships attended from both American Dental Cooperative (ADC) and United Dental Dealers (UDD). The dental vendors numbered over 100 individuals from 55 dental manufacturing companies.
Over 200 NDC distributor members received more than $3 million in checks for the VIPER Payout. (The VIPER program rewards NDC members for their support of the warehouse and other select vendor direct programs.)
The keynote speaker, Jack Canfield launched his presentation on Success Principles with the Event + Response = Outcome equation. It seemed to be written for the logistical challenges surrounding the city, as Nashville faced historic flooding.
Distributor member companies held strategic face-to-face meetings with 19 equipment manufacturers and 36 merchandise vendors. The timing allowed for 20 minute discussions to review and plan quarterly focus, as well as learn about new products and market opportunities.
The NDC International Exhibition closed with a concert by Grammy-award winning country artist Gretchen Wilson. The audience was treated to another country music star - John Rich, who showed up and surprised everyone including Gretchen.
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