The Distribution Performance Project prepares quarterly articles on a wide range of topics of interest to distribution management. The latest articles are listed below. Copies are available free of charge by clicking on the title of each article. Copies of ancient articles (they go back twenty-five years!) are probably available upon request. Feel free to go to the contact page and inquire.
Maintaining Profit When Prices Are Rising – A review of the challenges associated with supplier price increase along with their potential for higher profit.
Making Supplier Price Reductions Profitable– An explanation of how occasional vendor price reductions can either increase or decrease profit.
Surviving the Payroll Challenge– An analysis of how payroll growth can often oustrtip sales growth and solutions for that issue.
Sales Growth is Great Until It Isn’t– An examination of how sales growth can drive higher profit or actually reduce profit.
Return of the Big Two (March 2021)– A review of the two key factors that firms must focus on to improve profitability.
Taking the Right Road Back– An analysis of the ways the different CPVs impact overall profitability.
The New Financial Normal Well Be the Old Normal– A review of the trade-off between sales and inventory in the new economic environment.
Let’s Make Things Worse: Cutting Prices in a Down Market– An explanation of how price cutting never makes things better in a economic downturn.
Meeting the Commoditization Challenge– A review of the problems associated with operating with a commodity-based approach.
What Really Drives Profit?– A look at the Critical Profit Variables in distribution to determine their relative impact on profit.
Same Sales Volume, Different Profit– An examination of how the way sales volume is generated creates some very different profit results.
Avoiding the Mistakes of the Past– An analysis of the mistakes that firms make when encountering, or even thinking about, a recession.
Controlling the Uncontrollable Payroll Costs– A review of how to maintain payroll costs in a tight labor market environment.
Why Not Give Customers What They Want? – An examination of what services customers really want and the economic impact of providing those services.
Making It Up With Volume: Return of the Periodic Plague– A discussion of how price cutting almost never improves profitability.
Who’s Afraid of the Big Bad Price Increase? (June 2018) – A consideration of the ways in which price increases improve profitability.
Learning To Love Expense Control– A review of the reality that sales will not solve all problems. Expenses must be considered.
The Rule of 72: Having the Assets to Support Future Sales– A detailed discussion of how higher-profit firms end up eventually being much larger than typical firms.
Cash May be King, but… – An examination of the unintended consequences of reducing the firm’s investment in inventory and accounts receivable.
Making Incremental Volume Profitable Volume– A discussion of the opportunities and follies associated with incremental sales.
Managing With the PPR– Guidelines on how to control both payroll and gross margin.
Blocking and Tackling: Obsolete Concepts? – A review of operational improvements in a world focusing on strategy.
An Order is Not an Order is Not an Order– An examination of how changing order economics can increase both sales and profit.
The Inventory Reduction Trap– A discussion of how efforts to free up cash by reducing inventory often backfire.
Too Much of a Good Thing– An examination of how sales growth that is too fast can be bad for the firm’s profitability.
Harpooning the Whale– An analysis of how many customers reduce the distributor’s profits. It includes a discussion of what to do about it and what not to do.
Pricing the Forgettable Last Five Percent– An indication of where pricing opportunities exist within every distribution organization.
Joining the 40/40 Club– An examination of how gross margin and expenses are the key to profit improvement.
The Sales to Payroll Wedge– A discussion of how payroll expenses can be controlled with some new approaches to planning.
Rethinking the Stretch Budget – A review of why budgeting for a “great leap forward” may well prove dysfunctional.
Price Cutting Economics: Know Before You Go – An analysis of the impact that price cutting has on distributor profitability.
Sales Versus Expenses: The On-Going Civil War– An examination of how both sales and expenses impact profitability.
Watching Sales Growth Go To Waste– A caution about how driving for higher sales often reduces profits.
Supplier Price Increases Are Your Friend– A suggestion that firms should relish, rather than fear, supplier price increases.
Taking It To The Street– A examination of the financial impact of continual price reductions in a competitive world.
Providing Services Nobody Really Wants– A review of how the continual rush to provide additional services impact profitability.
Bending the Payroll Cost Curve– A discussion of the implications of letting payroll costs continue to rise unchecked.
Question of the Day
We feel we have to get more price aggressive to drive up our sales volume. How large of a sales increase will be required to offset a price cut?
Probably a lot more than you think.