Optimizing Distributor Profitability

Overview

Distributors are being confronted with increasingly difficult challenges. Challenges such as:

• Rapidly Changing Customer Expectations
• Increased Margin Pressure
• More Aggressive Competition
• Increasingly Necessary IT Modifications Required for Meeting Customer Needs
• Other Complex Logistical Problems

All of these challenges are forcing distributors to Cut Costs, Optimize Resource Usage, and Improve Customer Service. To address these challenges, distributors have been implementing new policies and technology, but have not always reaped the expected financial benefits. The solution to this problem lies in establishing the connection between Best Practices and Shareholder Value.

By utilizing a systematic framework which connects Business Processes to Financial Metrics, distributors can Identify and Prioritize Process Improvement Projects which contribute to their Strategic and Financial goals. In order to connect processes to financial metrics, distributors should first perform:

1. A process assessment, then compare their own practices with research-informed best practices
2. Use the framework to quantify potential financial improvements
3. Make informed decisions regarding which projects and policy changes will yield the greatest increase in profitability