Optimizing Distributor Profitability Assessment

Optimizing Distributor Profitability AssessmentA journey of a thousand miles must begin with a single step. — LAO-TZU, Chinese philosopher

Staying relevant to your customers can be a long, arduous process. Forward thinking companies are able to short circuit this journey by proactively reinventing / adapting their business models to stay ahead of competition and remain indispensable to customers. In our two decades of work with hundreds of distributors, we’ve seen that successful reinvention can happen only when you, 1) streamline your business processes and link it to financial outcomes to create Alignment, 2) incorporate customer and supplier inputs to your processes to bring Relevance, and 3) focus on efficiently building your Capability to support your stakeholders (customers, suppliers, employees, shareholders). Doing this will set your company down a shorter path to creating a Customer Experience driven organization. The classic, proven ‘Optimizing Distributor Profitability’ framework is where you should begin to reinvent your business model. The assessment is done using three-step process: Assess, Compete and Transform.

connecting business processes to shareholder value

Deliverables & ROI

Your path to developing a capability scorecard will be broken down to 2 key zones.

Zone 1 will focus on high level concepts (what key steps are required?). The distributor profitability framework will provide a blueprint for key “7S” functional areas that represent the foundation of every distributor. The framework will help you think uniformly and coherently about key processes and their link to profitability. This zone will expose you to a five-step methodology and corresponding tools to optimize shareholder value.

Zone 2 is all about blueprint in action (how do you get there?). For each of the 7S functions, you will learn how answer essential questions – Where do you stand now? How far can you go with reinvention? This zone will also highlight the challenges associated with identifying and mobilizing key resources you need to implement best practices.

The key outcome of the assessment is a Capability Scorecard, listing your status in the spectrum of common-good-best categories for 47 critical business processes. It also provides a plan of action for each process on how to implement best practices immediately. The playbook includes, but not limited to,

  • A five-step methodology with clear, how-to ideas and tools
  • A detailed capability scorecard that walks you through key processes
  • 123 detailed exhibits that walk you through key processes
  • 50 real-world examples and action steps that you can implement today and over time
  • A Distributor Profitability Framework that helps you make the explicit connection between business processes and financial drivers.
  • Case studies explaining how other distributors doubled EBITDA (operating profit) and tripled RONA (asset efficiency) when People-Process-Performance is optimized.

Creating a capability scorecard is different from acting on it (consumption). Many firms understand their current status but don’t travel further. They work hard to assess processes and get busy firefighting. This is where ActVantage helps you with focus and alignment. Our team provides you a detailed roadmap that aligns people, process, technology and performance – an integrated approach that helps you achieve sustainable profitable growth.

We help you align people, process and performance through a peer-driven, blended learning approach. Research shows that people retain more, apply more, and experiment more when opportunities are aligned for them to learn, apply, follow-up, and re-learn.

Our assessment consists of, but is not limited to:

  • Pre-assessment preparation
  • In-session business assessment tools
  • Post-assessment follow-up
  • Capstone projects
  • People-process-performance alignment
  • Best practice resources

We are here to listen and learn. Let’s optimize your firm’s profit potential. 

We are impressed with the material and its potential impact on our profitability. Truly information and education for the times.

Gary McKillican
President and CEO, McKillican International, Inc.

Sounds interesting? Contact us for a quick chat.