The 2020 Mid-Year Economic Update_long

Commentary: Look Beyond Sales


The three Ps of process, productivity and profitability separate companies that are doing OK from ones that perform in the top tier of peers. That will continue to be the key differentiator.


The performance analysis reports many distribution associations sponsor offer a wealth of benchmark data about how well your company is doing in a range of financial performance metrics. Historically, a relatively low percentage of distributors participate in these data aggregation programs. Yet these types of tools are critical to make any kind of real change stick in your business. How else can you create realistic goals and then the specific short- and long-term steps to get there?


The report card in the area of productivity is better. Several studies have shown that distributors ...

The three Ps of process, productivity and profitability separate companies that are doing OK from ones that perform in the top tier of peers. That will continue to be the key differentiator.

The performance analysis reports many distribution associations sponsor offer a wealth of benchmark data about how well your company is doing in a range of financial performance metrics. Historically, a relatively low percentage of distributors participate in these data aggregation programs. Yet these types of tools are critical to make any kind of real change stick in your business. How else can you create realistic goals and then the specific short- and long-term steps to get there?

The report card in the area of productivity is better. Several studies have shown that distributors have become more productive in the past several years. Distributors are investing more today than a few years ago in specific technology tools that gain some efficiency by automating lower-level processes. More distribution companies are examining their operations from a perspective of how they can improve their processes to reduce costs and do more for less.

The real winners are those who have been able to focus on process first, and build in the systems, rewards and discipline to make these three Ps a priority. The process agenda doesn’t get shoved to the side when the business cycle is at one of its peaks. That’s a tough transformation for any company, but truly separates the long-term winners, regardless of sales volume.

If you’re still thinking about growth from a perspective of sales only, think hard about what you need to do in the three Ps outlined here. The days of managing the bottom line by pumping every resource into the top line are great to remember, but not the reality anymore.

About the Author
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

By subscribing, you are agreeing to MDM’s Privacy Policy.