The strategic role of analytics and analytic thinking is changing rapidly. Companies building analytics capability are building stronger ways to fight increasingly disruptive market channels — digital or otherwise. For as many buzzwords as there are swirling around every bit of analytics, it comes down to one thing: better decision making.
Over the past 25 years, I have had the privilege to work with and learn from some of the leading analytic thinkers in distribution. I’ve seen the tremendous financial impact that well-executed analytics programs have made for companies — financially and culturally.
Many distributors have implemented specific operational or financial analytics, such as strategic pricing, inventory optimization, forecasting or route planning. Fewer have applied deeper analytics to their sales and marketing processes or thought through how to elevate analytics as a culture and part of the fabric of company process.
Because we feel that expanding the role of analytics is such a critical capability for any distributor today, we created a 1.5 day conference, MDM Analytics Summit 2018, taking place Sept. 18-20, in Denver.
Send a few of your team members to help your leadership think differently about specific and proven ways to transform your company into a higher-performance organization. You won’t get there without getting better at all aspects of how to use analytics to run your company. That takes talent, not just project managers who lead a group of analytics vendors of different flavors.
This is an area where good enough is the enemy of great. There are countless stories of distributors implementing strategic pricing, for example, where quick improvements of 200, 400 or even more basis points in bottom-line profit are realized — a huge impact for distributors with low- to mid-digit net profitability. Moves that are enough of a game-changer that they become ‘good enough.’ Projects that give companies a big gift that keeps on giving.
The problem is, that’s not enough to protect the future of your company in markets where customers are transitioning quickly to alternate suppliers with new value propositions.
One of the primary reasons why MDM has been dedicating significant resources (and virtual ink) to analyzing the impact of Amazon on distributors is because they have invested in and leveraged every aspect of analytics — logistics; eCommerce; shopping, buying and selling behavior — to build their business models and adjust them by industry to dominate and crush the traditional participants that have not adapted quickly enough.
We’re at a point where I believe data-free decisions are destroying distributors. Customers are speaking clearly — screaming at times — with their dollars and buying behavior. Too many leadership teams aren’t listening. They’re trying to make their processes, their talent, their financial structures do things they weren’t designed to do, or incrementally improve them in a competitive environment where incremental is what happens to that old frog in a warm bath heading ever faster toward the boiling point. They aren’t watching the data to make better decisions on how to change, survive and get better.
Our conference in September will address analytics best practices, which include defining where to begin, build and grow your company’s analytics IQ. We’ll have case studies of how distributors built an analytics culture and how to assess and benchmark your current analytic capabilities. Going forward, your executive team has to understand and support how to best use and deploy analytics as a management tool. This is how the industry’s future is being defined today. How will your leadership team define your company’s future?