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| WHOLESALE DISTRIBUTION |
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"Selling costs are up, productivity in the warehouse is down, morale fluctuates and people are jumping ship. This market is too competitive for us to keep moving in this direction - we want to continue to grow, but with all the mergers happening our competitors keep getting bigger and bigger, and the bar keeps getting higher. What can we do to improve our situation?" Sound familiar? In today's rapidly changing environment, a distributor has to remain proactive about the business to remain competitive. Yesterday's tactics just don't work any more. Consider your business:
Interested in more information? Contact Us! Sales and Marketing
Strategy and Execution Sales and marketing strategy and execution is the foundation for improvements in market share, margin performance, and comparable account revenue gains; arguably the most important factor in an organization's long-term profitability. Volume increases per account typically increase profitability versus adding new accounts by decreasing the cost per unit sold. Moreover, customer service may be improved by devoting existing or new resources to the same accounts versus additional accounts. Strong relationships take years to build….much less to lose. What are the key objectives for the sales and marketing teams and how should we execute to achieve the expected results? For example, sales teams when given competing objectives of improving sales and customer relationships while expected to complete an often overwhelming number of operational and administrative tasks, will typically complete operational and administrative tasks as the expense of sales and service. Why? Audits, compliance requirements, performance criteria, and other factors significantly influence short-term decision making…tasks that "have" to be completed. Additionally, high turnover may result as employees strive to be successful against competing objectives…objectives which often affect quality of life. Alignment of sales and execution strategies is critical to company performance. Organizations simply cannot afford to adopt a "flavor of the month" mentality by changing key objectives and becoming unfocused on the longer-term strategy. Too often, sales and marketing personnel become inundated with so many objectives, that they become ineffective in the marketplace. While market controls are important, too much control will smother those sales and marketing employees that perform in the top quartile. The GARR Consulting Group can assist in improving sale and marketing effectiveness by teaming with you to develop a sales and marketing strategy and an approach to business which is executable and aligned with key objectives designed to enhance performance. Sales and marketing opportunities may include:
Customer Service Most organizations use some relative measure of customer satisfaction. Often surveys are completed in-house or through an objective third party service. Still, fewer organizations measure "importance to the customer" to determine how responses to survey questions rank in the customer's minds. At the lower end of the "totem pole" is the effective use of these surveys in developing comprehensive customer service programs and tailoring the execution to planned service levels. More times than not, the surveys are simply returned so that employee's can begin repairing relationships in individual accounts where the customer service rating was low. While external customer service is very important, internal service is equally important. Finance, distribution and logistics, administration, information technology, and other area should be, at least in part, evaluated on the level of service they provide to their internal customers. Performance measures designed for these groups often overlook customer service ramifications and are often found to actually compete with the objectives of the sales and marketing group. These surveys can be designed and implemented to be similar to those used externally. In addition to surveys, it is often possible to construct tangible objective measures to aid in the service evaluation process. The GARR Consulting group can develop, design and assist with implementation of your custom tailored customer service program. Issues for your organization might include:
Warehousing
and Distribution Warehousing and Distribution is one of the top cost items for wholesale distributors. Certainly a key driver of costs in warehousing and distribution lies in "process". Inefficient processes can result from a number of factors such as insufficient warehouse or transportation capacity, bloated inventories, failure to re-engineer existing processes, lack of enabling technology, poor mechanized support within the warehouse, etc. Combined, these and other "process" disabling items can lower productivity, financial and operational productivity, as much as 30% to 50% below leaders within the market segment. Practically all organizations that use 3rd party warehousing and distribution have service agreements. However, many do not have similar service agreements for in-house warehouse and distribution. Why? Shouldn't the commitments to turn around time, quality, seasonal requirements, work week scheduling, fleet maintenance and appearance, etc. as important in-house as they are for a 3rd party? Not only should the service agreements be part of the internal operating environment, they should also apply to servicing accounts. What does an account or account category cost from a service perspective? How do we insure that that our customer service model contains the right blend of service excellence and adroit financial planning? The GARR Consulting Group's performance improvement practice focuses on assisting wholesale distributors improve their supply chain management practices through improvements in service levels, reductions in total company operating costs and increases in inventory turn. GARR has experience across the warehouse and distribution spectrum including:
Human Resources Hiring, training, rewarding and retaining the "right" employee is extremely challenging in today's wholesale distribution market. The AMA estimates that the cost of turnover may be as high as 40% of total payroll when including lost productivity, Human Resource department costs, training, and benefit costs. Flexibility and quality of life issues are becoming more important in the work place as the demographics of the labor pool change. Over saturated markets has placed increasing stress on employers to find the "diamonds in the rough". Many wholesale distributors have homogenized the employee relations and development parts of their business. Employee surveys, performance reviews, compensation, policy, and practices are often structured to fit the perceived needs of the employee pool collectively but not individually. Consequently, retention levels may be at all time lows or near all time lows. Each employee has specific requirements to feel successful much like every human has specific DNA. Moreover, with increasing stress in family and social lives, employees may require assistance in resolving issues outside of the workplace which impact performance. The costs of turnover are often hidden. As companies apply pressure, perhaps inadvertently, on managers to meet payroll targets the hidden costs increase. Quality, service, and work content typically plummet…things are left undone in order to complete the basic operating tasks. The GARR Consulting Group considers the employee pool as an integral part of the operating model. GARR can assist wholesale distributors with:
Information
Technology While Information Technology is often discussed as the "great enabler" it can also be the "great disabler". Technology which, when implemented, fails to support how the company desires to operate to achieve strategic goals and objectives or fails to provide the intended benefits can have a crippling effect, over the longer term, on operating profits. Horror stories abound surrounding botched Information Technology initiatives that were shelved for lack of progress, stopped because of cost overruns or simply failed to meet expectations following implementation. Successful Information Technology initiatives seem to always have five common threads. First, they are important to the organization as a whole and have stated goals and objectives which provide value to the organization. Second, they reach out cross functionally to all areas which will be impacted by the implementation. Third, they possess strong management teams well versed in the technical and functional aspects of the implementation and who can maneuver the highs and lows of the technology implementation life cycle. Fourth, they involve establishing appropriate expectations surrounding what the technology will deliver to the organization, often involving many positives but perhaps some negatives as well. Fifth, and perhaps most important, they are supported by training professionals who are included on the team and have the expertise to move the system from an unusable to a usable status and help alleviate apprehension associated with a new system. The GARR Consulting Group has experience in all aspects of Information Technology. More specifically, we can manage and help insure successful implementation. Selected initiatives would include but not be limited to:
Interested in more information? Contact Us!
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