It would be an understatement to say that this sector’s already thin margins are still being squeezed. Whether it’s increased competition from previously smaller competitors going up-market or larger competitors reaching down into your market to steal a piece of your pie, defending established accounts can be a full-time proposition, never mind worrying about growth. Rising transportation costs and scarcity of reliable drivers only compounds the financial and operational challenges faced today.
There are large economies of scale to be gained in this sector, yet smaller companies typically remain competitive by specializing in specific products or market niches. Larger companies maintain a cost advantage by buying in volume, but they require operational discipline to keep a more complicated distribution network cost effective. The profitability of companies engaging in distribution and wholesale operations depends largely on popularity of their products, in-house efficiencies and contracts with large customers.
With all the complexity that companies must deal with today, a class of distributors and wholesalers are setting new standards of operational excellence and are pulling ahead of the crowd. They are doing so by applying Best Practices that already have proven themselves for others and are now reaping their benefits.
MRSI hits the ground running, demonstrating immediate results to our clients by implementing changes in various systems. Throughout all of these implementations, we recognize that moving ahead with clients in each of these areas requires a customized approach that gives consideration to your existing staff, and the needs of your customers rather than an abstract “market”. Some processes we’ve implemented in distribution and wholesale companies include:
- Tiered inventory control systems to predict and optimize on-hand requirements of stock
- SKU rationalization processes to reduce burgeoning line proliferation
- Pricing strategies that reflect volume and costs of servicing accounts
- Optimized pick and pack processes to reduce costs and increase fill rates
- Rationalization of delivery routes to reduce cost and minimize delivery times
- Regular reporting on key metrics, such as GMROI (Gross Margin dollars divided by inventory investment) by line, to assess performance
Working with MRSI is not for everyone. Changing the mindset of your people and the processes they follow to become truly competitive is not an easy undertaking.
To determine if the right conditions are in place for you, please give us a call at 1-888-267-5095 in the USA or 1-416-323-0762 in Canada and ask to speak with a Benchmarking Coordinator today. Or, if you prefer, contact us by email at benchmarking@mrsibenchmarking.com.
