Last Friday morning, I stayed home waiting for the Maytag repairman. A courteous, well-spoken repairman arrived two minutes after the provided “time window” expired. Nonetheless, the idea of having ice excited me sufficiently not to comment.
He took the door off the freezer. He noticed that water was not coming into the freezer. He pulled the entire refrigerator out and looked at the back. A-ha! Part 10a — the freezer compressor valve was faulty.
Hooray! I thought. Then, he went to his laptop and proceeded to order the pieces (through a pretty cool Web 2.0 application). “Uh, don’t you have part 10, uh, a?”
He replied, “No. I only have a toolbox.”
Oh no, I thought. So now what? He explained that the parts will come to my house in one to three weeks. After they arrive, I need to schedule another appointment through the 800 number, and then spend another half day at home.
This is a distribution model only an operations management geek could love. It’s easy for the parts manufacturer. It’s easy for logistics to just ship me 10a. It’s even easy to ensure that a qualified repairman can come and replace 10a. Did this delight me, the customer? NO!
Who cares? We should all care. We need to maniacally focus on distribution models that are customer-focused. Asset managers need to ensure that distribution is investor-friendly and not simply an easy process.
For example, the SEC push to XBRL exemplifies the difference between customer-friendly distribution and easy processes. The data provided through XBRL is not new or differentiated from the required data each licensed public mutual fund must have. But because each firm has matched its needs to follow an easy process, they publish this data in different parts of dense prospectuses; the SEC has become involved.
Thanks to Chairman Cox’s initiative, investors will soon be able to compare products easily. Perhaps they will even be delighted.
Distribution Gone Wrong
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