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How Distributors Can Accelerate the Pace of Profitability

It’s no secret that yourworld is changingYour industry has gone global, has becomemore competitive than ever, and hasgrown increasingly sophisticated. The nextgeneration of distributors has arrived, andis quickly adopting innovative technologiesto optimize daily operations and hone theircompetitive edge.The rise of social collaboration, theexplosion of mobile devices, and othertechnological trends are reshaping thedistribution industry. Your vendors andcustomers now expect to work the waythey live, with access to information fromany place at any time.The steady pace of the previous era isgone. Like it or not, you’re now in the fastlane of a rapidly evolving industry.In this ebook, we’ll explore ways that youcan streamline, automate, and modernizeyour business—and do it faster and smarterthan anyone else.Let’s get started›Life in the Fast LaneDoes yourday looklike this?How Distributors Can Accelerate the Pace of ProfitabilityVisit our Distribution Evolution microsite to learn moreabout automating, streamlining, and modernizing yourday to improve profitability and long-term success.2

Developing intelligentinventory managementWhat if you could solve the perennial puzzles ofdead stock, orphaned nonstocks, and other dailychallenges that make it so difficult to strike theessential balance between turns and fill rates?A process known as Advanced InventoryManagement (AIM) holds the key. By usingdata-driven technology to provide morecomprehensive inventory managementcapabilities, AIM can help you: More accurately predict demandto improve restocking efficiency Better manage transfers amongmultiple locations Reduce errors and maintain appropriatelevels of physical inventory More effectively manage costsWorking smarter is the key. AIM can help youstreamline your inventory management processand reduce costs associated with freight,transactions, and errors so you can maximizeprofitability. Inventory is your biggest asset, andmanaging it effectively is the key to increasingprofitability, as well as creating happy customers.Life in the Fast LaneHow Distributors Can Accelerate the Pace of Profitability“AIM allows thecompany to drivefill rates, turns, andbetter profits withless work—by workingsmarter. Instead of yourpeople spending 80%of their time chasingand putting out fires,they’ll spend 80% oftheir time managingyour inventory anddelivering a greatcustomer experienceand inventory ROI.”— Grant W. Howard,Inventory ManagementThought Leader & Principal,Grant W. Howard Company3

Changing the nature of thedistributor-customer relationshipImagine a scenario where you could replenish the inventoryin your customer’s warehouse without them even having toplace an order. That’s the idea behind distributor-managedinventory, a practice that forward thinking distributors areusing to differentiate themselves and forge closer bondswith their most valuable customers.Functioning more like an ever-present, intelligentpartner, you can manage and replace materialsin your customers’ toolcrib, industrial vendingmachines, repair supplies, and operationsinventory. Replenishment is managed behind thescenes so your customer always has what theyneed, when they need it—without having to placean order. A more efficient workflow for themmeans a more satisfied, loyal customer for you.Innovate, IntegrateTurtle & Hughes relies on integrated supply and otherinnovations to break out of the traditional distributor box.Read the Industrial Distribution cover story now.Life in the Fast LaneHow Distributors Can Accelerate the Pace of ProfitabilityRead on›4

Enhancing end-to-endefficiency for better marginsLow margins are an ever-present threat to profitability. In a complex distributionenvironment, pumping up margins requires improving day-to-day operationalefficiencies, lowering costs, setting prices more intelligently, and trackingdown any profitability leaks.Today’s innovative distributors are implementing software solutions thatgive them a holistic view of their day-to-day operations and margins, andare exploring a cloud-based infrastructure to improve efficiencies andreduce overall costs.Distributors take to thecloud to improve margins“Because wholesalers operateon slim margins . . . the industry isalways looking for ways to createefficiencies and cut costs. The cloudgives organizations an opportunityto reevaluate the existing IThardware spend as well as the ITdepartment’s role. Wholesalerscan also use the cloud as anopportunity to improve currentIT staff productivity and end-userservice levels by reallocating IT staffto work on more strategic internalinitiatives without adding new,expensive resources.”IDC Retail Insights — TechnologySpotlight: Opportunities for theModern Wholesale Distributor toLeverage Technology and Leapfrogthe Competition1Life in the Fast Lane2014 McGladrey Distribution Monitor ReportHow Distributors Can Accelerate the Pace of Profitability5

Bringing modern analyticsto an age-old problemSetting the right price is a headache for any business. But your retail andmanufacturing counterparts don’t have to contend with the enormoustransaction volume, high SKU counts, disparate units of measure, andother pricing complexities that are all too familiar to distributors.That’s why software built specifically for the distribution industry is socritical—it provides the visibility and agility you need to: Maximize your margins by offering different pricing options,including velocity pricing, contract pricing, quantity breaks,and promotions Get a global view of stockinventories to accurately quoteprices on the fly (and quicklyconvert quotes to orders)Rethinking the Rebate ProcessRebates, charge backs, credits, and otherspecial pricing authorizations can meana bump in revenue. But many distributorsrisk leaving this money on the tablebecause they use a manual process fortracking, monitoring, and reporting.Tracking inventory as it’s sold and settingup automatic notifications so you knowwhen it’s time to submit rebate claimsmeans faster rebate recovery and bettermargins. Technology built specificallyfor a distributor’s needs can help youautomate this process so it’s donecorrectly, every time. Evaluate what-if scenariosto better understand theimpact of potential priceadjustmentsLife in the Fast LaneHow Distributors Can Accelerate the Pace of Profitability6

Giving the people what they wantValue-added services certainly aren’t new. But competition is heatingup, and it’s not just small or medium-sized distributors in the raceanymore. Amazon launched AmazonSupply.com in 2012, and the sitenow offers more than 2 million B2B supplies.That’s why it’s more important than ever for you to offer yourcustomers something that sets you apart. Building loyalty and carvingout your own niche in an increasingly competitive landscape meansfinding creative ways to provide additionalservices that can grow revenue and winnew business. The good news is thatmodern software applications aremaking it easier for distributors tointegrate value added serviceslike light manufacturing,assembly, private labelingand others.Service Ease-of-Use Happy CustomersTo augment its core distributionbusiness, Huttig Building Products alsobuilds custom doors for its customers.Using a product configurator, Huttigcustomers can log in and create thedoor they need. The online tool alsolets them access pricing, automaticallymark it up, email a quote to the endcustomer, and purchase the door witha click of a button.Watch the video to see how Huttigincorporates light manufacturing andan online self-service tool to improveits margins and build customer loyalty.Play video1Life in the Fast Lane2014 McGladrey Distribution Monitor ReportHow Distributors Can Accelerate the Pace of Profitability›7

Learning to love social collaborationYou might think the term “social media” is synonymous with wasted time—especially when it comes to running a successful company. But now social media’sinfluence reaches into the business world, and tech savvy leaders see how socialcollaboration can save time and improve communication across their organizations.Relying on email, instant messaging, online meetings,and conference calls means critical information isspread out and hard to find when you need it.To bring all of this vital information into one sharedspace that’s easily searchable, social collaborationapplications borrow features from sites that manypeople use every day, like Facebook and Twitter.Employees can save time and get tasks done moreefficiently by following people, documents, andprojects. The true value of social collaboration is whencompanies, through broader adoption, go beyondimproved communication to operational efficiency.Life in the Fast LaneHow Distributors Can Accelerate the Pace of ProfitabilitySocial collaborationhelps you: Increase productivity Capture corporate knowledge Improve decision making Attract and retain top talentLearn more about the strategic waysthat companies are using socialcollaboration in From nice-to-have tonecessity: Why companies are gettingserious about social businessDownload thewhite paper nowDownload›8

Taking your act on the roadIt’s certainly not news that most companies rely on mobile devicesto connect and collaborate. More and more distributors are shiftingsome of their IT budgets to mobility and opening up their corebusiness applications to workers on the go. For example, accordingto the Aberdeen Group, best-in-class wholesalers and distributorsare 90% more likely to provide users with mobile access to their ERPsystem.1 Mobile access allows you to: Empower your employees to work smarter. By giving them fulltime access to core business applications, “down time” can turninto productive time. Satisfy your customers with self-service options and theinformation they need to track orders, ask questions, and runtheir own businesses more efficiently. Attract the next generation of employees who expect employersto offer a digital culture that embraces BYOD.Whether it’s a sales rep who needs to update invoices in real time, acustomer who wants to track an order, or a procurement specialistwho needs to modify a PO on the fly, integrating mobile devices withyour core software can help you work smarter (and faster) than yourcompetitors.“For the forward-looking wholesaler,leveraging mobile tools for improvingservice levels, transmitting orders, andmanaging customer product orders orconfigurations can be a way to driveincremental sales and profits.”— IDC Technology Spotlight: Opportunities for theModern Wholesale Distributor to LeverageTechnology and Leapfrog the Competition1Aberdeen Group, “Embracing Change in Wholesale and Distribution: Who (or What) Is Your Change Agent?,” Nick Castellina, September 2014Life in the Fast LaneHow Distributors Can Accelerate the Pace of Profitability9