In the last installment, we discussed the inability of the industry to seriously take on the issues of industry standardization to help decrease overall distribution costs. Notwithstanding the apparent success in other industries and the opportunity to use NAGASA or other trade organizations to mediate between the channel members, nothing was globally accomplished.

Indeed, lacking productivity measures to lower costs, the industry's manufacturers increasingly resorted to customer rebates as a means of securing customer loyalty. Soon, competitive rebate schemes proliferated and all the vendors could see the downward spiral in which profitability was heading.

Mediating overtures were quietly made by several consultants for the manufacturers to retreat from this doomed strategy in favor of cost reduction measures implemented through collaboration. In this way, supply chain costs could decline in proportion to prices and the customers' own infrastructure costs could also be lowered.