Optimizing Distributor Profitability

Best Practices to a Stronger Bottom Line

Course Overview

For years individual firms and researchers have been compiling many best practices for distributors. These practices have been time tested, and a “best” approach is now known for almost every imaginable distributor activity. Though each best practice has been analyzed in isolation and projections about their impact on financial statements have been made, no one has attempted to take all relevant best practices and determine the effect of implementing the most significant ones on the firm’s ROI and net profit. How profitable can a distributor be when all of the potential best practices are implemented? The perfect distributor would not only implement the most significant best practices, but would do so by optimally deploying resources that include people, inventory, cash, facilities, and equipment. This program and the research behind it aims to determine the path to creating the perfect distributor–to see how profitable a distributor can become.

Who Should Attend

  • Strategic Business Managers
  • Regional / Functional Heads
  • Branch / Operations Managers
  • Finance Managers / Controllers
  • C-Suite, Business Owners, and Entreprenuers

What can you do immediately after the course

  • Assess your business performance using a proven and structured approach
  • Access to our ready-to-use process assessment toolkit
  • Communicate value of best practices to top management
  • Obtain a roadmap for successful best practice implementation
  • Achieve stronger bottom line and improve cash flow
  • Double your net profit and triple your return on net assets – (potential identified and observed in our research study)
 

Testimonial

"The information is organized very well, supported by robust research specifically on the distribution industry, presented in an easily digestible manner, and linked to real-world examples to help convert concepts into actionable items."

David A. Larson, VP Operations, DW Distribution Inc.

Course Outline

Motivation and Trends

This course will answer the following questions:
– What are the best practices performed by top-performing firms?
– Is there a systematic framework of best-practice implementation that can be adopted?
– How do best practices enhance shareholder value?
– Where is the link that connects process to profitability?
– Is it possible to achieve the ROI requirement of double-digit EBITDA multiples in most acquisitions?

Business Process Framework

As the traditional supply chain becomes increasingly global and complex, the distributor’s role in supply chain functions grows, both in scope and depth. Hundreds of processes are performed in a typical business environment. Bringing structure to these business processes requires grouping them under certain functions. The structure has to be multilayered given the number of processes performed in a distributor’s daily operations and the number of functions involved. Business operations can be structured as the 7S groups – Source, Stock, Store, Sell, Ship, Supply Chain Planning, and Support Services.

Financial Framework

Distributors capture so many metrics on a regular basis it can be difficult to make appropriate use of the measured values. You cannot improve anything you cannot measure. The financial framework in this section focuses on 12 key metrics all distributors should measure and understand. After defining the business process framework, the next step is addressing the financial structure that connects those processes to shareholder value. Often described as “connecting the office to the warehouse” or “linking finance and operations,” a multilayered structure defines the financial elements used in day-to-day business activities.

Five Step Methodology to Enhance Profitability

Distributors typically perform processes in silos rather than in a connected fashion. The five-step methodology connects people, processes, technology, and metrics. It consists of the following:
1. Identify process gaps by assessing each process group.
2. Link identified process gaps to financial drivers to understand the impact on shareholder value.
3. Analyze profitability of the proposed best practice implementation to close the gap.
4. Understand the best practice methodology, implementation details, and challenges.
5. Enable appropriate resources to implement best practices.

Critical Best Practices

Over 47 best practices across the 7S process groups will be discussed in this session. We will take a deep dive into critical best practices that every distributor must implement. Each best practice will include the following:
1. A template to use to identify where your firm stands in terms of common, good, and best practices.
2. Distributor Profitability map to understand the impact of any process gaps on shareholder value.
3. Methods to quantify impact of best practices on key financial drivers with financial statements.
4. A compendium of best practices and how-to-implement details.
5. Highlight the critical implementation components and their role in execution.

Roadmap

The action plan and roadmap will contain the following:
• A five-step methodology with clear how-to-implement ideas and tools
• 123 detailed real-world examples / exhibits that walk you through the business processes
• 50 action steps that you can implement today and over time
• A separate, over-sized Distributor Profitability Framework map to hang on your wall to help you follow how business processes and financial drivers are linked to enhance shareholder value.

Course Packet – Tools and materials

What will you receive at the program?

What do you need to bring?

Slides as a course booklet

Laptop or tablet for class activity

Workbook for exercises and activity

Financial Metrics and numbers for you to use in the session

Best Practices Framework Map

Calculator

Optimizing Distributor Profitability Book

 

Certificate

 

Course Instructors

Barry Lawrence, Pradip Krishnadevarajan, Senthil Gunasekaran

Course Timings

Day 1:

Day 2:

8:30am-5:00pm

8:30am-Noon