Planning now to make lots of evolutionary refinements that fit nicely into our old industry and groupthink may not improve results for two reasons:
We may not be as good at implementing planned changes as we think. Have we honestly scored our success rate for past annual objectives? And,
As we review past accomplishments, did they have the big impact we thought they would have or did the top 80% of all competitors do the same things leaving us with no sustainable competitive advantages?
Less product pushing, more value innovation?
Are we still hoping for big results from lots of "new" product pushing promotions when the effectiveness of such efforts has been declining for years? In mature industries, 90% percent of sales typically ...
Health Savings Accounts (HSAs) are more than a short-term, cost-control tool; they may be the catalyst that will power a trend that already has traction called "consumer-driven health care." The trend could, in turn, transform - not reform - both the health industry and the health responsibilities of employers to their employees. Every business will do better in the people talent war if they can correctly read and catch this wave.
All businesses in America, especially small ones, are concerned about health care costs and the related problem of attracting and keeping best, front-line, service employees. Because of critical and still climbing health insurance costs, there is a justifiable and growing buzz about "health savings accounts" (HSAs) as a tool for reducing health ...
Corporate Wellness Programs (CWPs) have ebbed in and out of fashion since the late ‘70's, but the general trend has been for more companies - at least larger ones - to have them. Surveys unanimously conclude that CWPs yield good to great economic returns and that a steadily increasing number of them have offered incentives to employees to stop smoking, lose weight, etc. in order to reduce health insurance premiums, although most such cessation incentives" don't work (Hewitt Associates survey. For more on this and all other references go to this article's support notes at http://www.merrifield.com/articles/5_16SupportNotes.asp.)
Small businessAmerica has, however, lagged big businesses in ...
What are HSAs? For the full answer and lots more go to www.hsafinder.com and/or buy The Small Business Guide to HSA's (Author: JoAnn Mills Laing, Brick Tower Press, September 2004). The short answer, for now, is that HSAs can only be set up when an employee has a qualifying high-deductible, low-monthly premium health insurance policy.
HSAs are then similar to IRAs in that both employees and companies can put pre-tax contributions into them on a regular basis to be invested tax free, and the employee owns the account and takes it wherever they might work. A big difference is that individuals can withdraw money from HSAs with both debit cards and checks to pay for a wider range of medical expenses than most insurance policies cover.
If you want to know where your 'product profitability' has gone, consider this exhibit. It raises some key issues for manufacturers and distributors:
There is no inherent profit power in 90% of the product volume sales for a typical distributor
Why and how are 'supply-chain commodity products' driving margins lower?
Why can most consolidating distribution channels no longer afford to push new, incremental, even-exclusive, products/lines anymore?
The big question is: how can manufacturers re-deploy their marketing mix dollars into web-based, virtual trade-show site(s) that get the product story to niche end-users ﾖ faster, better, cheaper ﾖ while still re-intermediating and giving incentives to distributors and their sales reps? ...
Question: "I don't have time to read a book or watch a video, Bruce. Ever since we cut back on personnel to get back to break even, all of us (management) have been swamped. Don't you have any ﾑone-minute-manager stuff' that can help us to improve our profits?"
Answer: What could I say to this durable goods distributor executive? He didn't want to hear right then that the Tooth Fairy and simple, magic management bullets don't really exist. Because he is a hard-working, conscientious, deadly serious and operationally smart fellow, I thought that I could get him to at least read a 1000-word turn-around recipe for dramatically improving his profit line.
If he could then create a new, one-page report on just 15 accounts from three different profit-enhancement groups, then ...
In his upcoming book, Reinventing Distributor Profitability, Bruce discusses six strategy maps for distribution companies to use. In this excerpt of a composite case study, he analyzes how a company revises its fill-rate strategies and customer segmentation to gain better results. A draft of the first chapter, including this case study is at www.merrifield.com.
ABC Distribution has for years pushed an expanding array of supplier lines and SKUs to diminishing return limits of its geography and active account base. A few years ago, ABC's management found that they were working harder to have less fun and no profits. Their statistical profile at that point was: $10MM in sales, 1000 active accounts, 250 suppliers, 10,000+ stock keeping ...
Executive summary: Using a distribution case study, this article examines several angles on how to use ranking reports to identify, measure and attack prime opportunities to boost productivity and profitability.
During a recent phone conversation with a client who is starting to have some real success with applying our video's strategic productivity solutions, he asked what I thought the final math might look like for his business after he completed all seven of the productivity plays that can be derived out of the initial profitability ranking reports. To be honest, I had to say "it depends" on a lot of variables, which we started to work through.
Here is an outline for the discussion that evolved. First, I started by citing before and after stats for a benchmark ...
Executive summary: This article examines how a distribution company developed an effective system (after a few years of false starts) to focus branches and frontline employees on the key factors to improve profitability.
One of my distribution chain clients has evolved an in-house return-on-net-assets (RONA) trend ranking report for their 30+ branch managers and three regional managers that has sparked real, positive changes. Here's the history of what has happened so far:
Their RONA formula? All managers in this company get paid on the financial components that go into measuring RONA. This chain's particular flavor of the formula starts with the numerator being the operating profit before interest and taxes (PBIT). But corporate allocation expense is deducted ...