Recently, IMI's sister company Modern Distribution Management hosted a webcast with Jonathan Byrnes, an authority on profitability management and contributing author to MDM through his blogs. Jonathan’s life work has been about helping companies, including many distribution companies, drill down and fully tap the reservoirs of profitability that exist today in good companies.
The focus of the program, the second in a quarterly series on profitability, was on supply chain finance, and why successful suppliers will be those who radically differentiate their service offerings and relationships with customers.
How do you do this? As Dr. Byrnes outlined, this critical shift requires segmenting customers and getting out of the “one-size-fits-all” mindset. So many distributors don’t allocate their resources based on account potential. Instead, they have developed such a strong service ethic over decades that the “fire hose” gets directed at every account, regardless of size, fit or potential.
The point is to not reduce service to certain customers, but to create very clear definitions of customer service for specific segments. And it starts with something we've talked about before: listening to what your customers are really saying.
Once the customer relationship definition is clear across departments, it opens the door to a much more strategic and efficient use of resources with existing customers, as well as positioning to exploit opportunities for growth.