FOR IMMEDIATE RELEASE
Wade and Merrifield Offer Distributors
Cash Flow Ops Planning Program to
Help Downsize, Refocus
Partnering with Innovator Waypoint Analytics Software
Elgin, IL (December 1, 2008) – In response to the MDM Reader Survey question, "How have you changed your strategy for 2009 based on current economic trends?", many readers – but not all – said they were making a change. Many said they were going back to basics. Improving customer service and pricing were both mentioned. Others are leaning operations to ensure efficiency and cut unnecessary costs.
Many respondents mentioned either layoffs or a hiring freeze, in addition to delaying major capital expenses. One respondent plans to improve maintenance on existing equipment to make it last longer. Others said they would be avoiding taking on more debt.
In cutting costs, respondents named reducing investment in "unnecessary areas," cutting back on expansion plans and "planning trips better." Some are looking to new markets or a product group such as energy-efficient products or, as is the case of one distributor in the Midwest, non-automotive markets. Distributors are looking to increase the service they offer their customers as well. Some are employing aggressive sales and marketing strategies.
Responding to a quickly increasing demand by heavy duty parts and service distributors for new analytic tools to:
- Improve profitability and increase free cash-flow
- Increase balance sheet strength
- Create strategic flexibility during a prolonged, credit-crunch recession
Bruce Merrifield and Bill Wade have teamed up with leading SaaS provider Ultra Plan LLC of Phoenix to develop a revolutionary approach to distributor operation analysis.
“The phone has not quit ringing with distributors concerned about creating real plans to get through a prolonged recession,” according to Bill Wade of Wade & Partners. Bruce Merrifield and I realized that our business simply did not have access to advanced tools to identify exactly what the root causes of their profit power are and start to measure and manage those causes in new ways.”
“Financial reporting numbers have nothing to do with profit-power sources,” according to Merrifield.
“They are, instead, lagging indicators – by 1 to 3 years- of right or wrong moves that affect profit-power causes.”
“While disciplined financial controls, reporting and cash-management are all important, they are not insightful to or sufficient for improving profit power,” continued Merrifield. “Adding a ‘business intelligence’ module that is fed data from a GAAP reporting system simply will not help.”
Wade explained that distributors of mature, commodity products make profits from customers… not product lines (or increasing excellent equivalents) that are also available to all competitors.
Wade summarized the problem as ‘untangling’ a Gordian Knot of cross-subsidizations within the account base. “Typically 40% of accounts generate about 150% of the profits to offset losses by the bottom 60%... while the 1% of the biggest losers can typically destroy about 20% of total profits.
Stages in the DURR Journey
Customer profitability ranking reports are the doorway to new profit power plays for all distributors and dealers.
How can there be a common, strategic, recipe that works for all (even head-to-head competitor) distributors? What insights and actionable plays can we gain from customer profitability ranking reports that are based on most-accurate and flexible, activity-based-costing models? These questions will lead to a journey with the following stages:
- Stage 1: Using different slices and strata of customer profitability reports
- Stage 2: Identifying specific plays for each sub-category of accounts
- Stage 3: Redeploying losing activity energy in to innovative, profitable activity
- Stage 4: “The sales force won’t stand for it” – solutions… How to DURR them.
- Stage 5: Cracking Target, “Gazelle” Accounts
Typical Results
Typical financial outcomes for DURR in actual distributor case studiesshowed astounding results…. double profits in 3 months; increase them 4 to 6 fold in 6-12 months; grow faster than the industry.
Getting Started
Call Bill Wade today (847-760-0067) for details on an all-day seminar that Merrifield, Wade and Ultra Plan will conduct for both interested companies and distributor groups.
Wade & Partners, located in Elgin, Illinois, specializes in business consulting, marketing and advertising services for the heavy-duty aftermarket worldwide. Go to www.wade-partners.com.
Bruce Merrifield started his consulting practice for the world of independent distribution channels in 1980, after having spent 8 years with a growth-by-acquisition chain of distribution companies. Bruce has given countless speeches to well over 100 trade associations, as well as many of the world’s largest corporations. He has written over 100 articles He authored “Electronic Commerce for Distribution Channels”. Bruce is currently working on two separate, but related start ups that leverage software-as-a-service technology to create new business models for distributors.
WayPoint Analytics is an online service that the best distribution and manufacturing companies use to analyze their business and maximize profits. With WayPoint, distributors quickly identify profit-draining products; customers and activities and can rapidly develop new profit strategies, then validate and implement them to immediately improve results.