There’s a sense of optimism among distributors about 2014, according to Grant Thornton LLP’s Supply Chain Ingenuity survey. More than 9 in 10 expect their company’s sales growth rate to either accelerate or stay the same. Almost 9 in 10 are planning to either grow or keep their inventories flat in 2014. And 2 in 5 predict they’ll grow their sales team to more than 30 people within the next two years.
These are good, encouraging numbers that show the industry is again eager — and able — to grow. But our survey also revealed some gaps in the growth strategy, which may put distributors that ignore them at a big disadvantage.
Ask yourself these four questions to see if you’re missing out on hidden opportunities:
1. Is e-commerce part of your growth strategy? About half (52 percent) of distributors told us that 10 percent or less of their company’s sales are e-commerce driven. This is a missed growth opportunity because sales channel diversity may drive higher profit margins.
2. Are you giving vending solutions enough credit? Vending is a growing trend among distributors, largely driven by end customers. We’ve found that only one-quarter of distributors offer vending solutions, even though customers appreciate the convenience and savings they offer.
3. Are you using your profit-mapping tools to their fullest potential? More than 77 percent of distributors said that their company’s IT platform allows for full profit mapping. Chances are you’re analyzing data primarily by customer, vendor and invoice. But are you also looking at SKU, branch and end market, among other variables? These may not be top of mind data points, but they can help you identify hidden pockets of profitability.
4. Are you able to get actionable insights from your data? Most companies sit on a mountain of data, but few know how to put that information to work. Leverage your current tools — including the profit-mapping — to see how you can optimize your current processes or what strategies will give you the highest margins.
Being good is not good enough anymore. In order to gain a sharper competitive edge, you need to look beyond the traditional growth strategies and see opportunities where others see risk.