Delivering for Best-in-Class Wholesaler-Distributors
June 14, 2018  |  ByJoseph Nettemeyer, NAW 2018 Chairman of the Board Nettemeyer

The digital revolution is sweeping the wholesale distribution community. What’s more, the world is doubling the amount of data generated by all humans across all time about every five years. Which means that every song ever written and every poem, photograph and film created in human history is going to double over the next five years.

These waves of change, which some of us have gotten used to and some of us are terrified by, are accelerating and reshaping countries, industries and human behavior. The speed of change is making jobs appear and disappear . . . upending countless lives. Our existing sales and marketing models based on past success are becoming a liability. Change is upon us, and either we innovate or we die!

The most pressing issue upon us is where do we start? Picking the right initiatives with all the speed and the noise of daily opinions being pushed in front of us stalls an organization’s management team and leads to more inaction and frustration. First, consider a few scenarios faced by our workforce every day.

  • What are the most important decisions that our salesforce makes every day in the field?
    • Where to spend my time this week, what to sell and how to price, etc.?
  • What are the critical decisions that our buyers make every day?
    • Which items to buy, how much to buy, when and from whom?

You may extend this to warehouse personnel, branch managers, marketing and other functions. How are they making these decisions? They are making them mostly based on experience and judgment. The decision makers are not only our experienced workforce, but they include our millennials entering the industry. The ongoing technology trends, transitioning workforce and rising customer expectations provide a wealth of opportunities for us to make these decisions more analytically and profitably. However, analytics is only as good as the underlying data. Management must lead, and I suggest that you start with the premise that “Data is the Priority.”

Data is your organization’s most important asset. Accurate data with good analytic tools will move you from anecdotal discussion to data-driven discussion. No approach is perfect; the journey can be challenging, and you must prioritize your approach.

Let me share with you how the management team at Valin Corporation prioritized its initiatives:

  1. Valin operates its business on one ERP platform. We made that our standard 17 years ago, and we have integrated 40 acquisitions quickly and efficiently into our system.
  2. Data quality is your most important first step. The data we imported from different platforms was on its best days inconsistent. We committed teams 10 years ago to mapping our data processes and cleaning up the inconsistencies in data quality. It is an ongoing task that requires a focused team of individuals to create and sustain consistency in the data being entered into our system.
  3. We had to prioritize where we were going to start our analytic processes. After participating in a NAW Institute for Distribution Excellence and Texas A&M consortium, Optimizing Business Analytics we determined that the first priority should be to focus on Strategic Pricing. We believed that there was significant opportunity to improve margins, and with that improvement we could finance the investment in digital transformation. Our premise proved out and we have been successful in funding the digital transformation.
  4. Valin’s next steps were in Optimizing Sales and Marketing, which utilizes data to assign your sales organization’s efforts to the more profitable opportunities. Once we understood where profitable growth opportunities existed, we utilized analytics to optimize our investment in Human Resources, Inventory Optimization and Supply Chain Logistics to support growth in our most profitable customers.
  5. Concurrently, Valin’s Talent Development initiative took 15 high-potential employees and enrolled them in Master’s Degree Programs. Those employees’ skills were enhanced in Information Technology, Marketing, Supply Chain and Industrial Distribution degrees. We continue to invest in promising young employees. Our veteran employees participate in certificate programs at Texas A&M to ensure that we gain consistency in the utilization of tools that facilitate top performance.
  6. Our next step was to make the Customer Experience our highest priority. Meeting the Digital Expectations of our customers is driving us into new digital ventures: cloud-based software, Integrated CRM/ERP information portals, sales order automation software and accounting automation software.

The Valin journey is far from complete. The above initiatives are not start-and-stop individual projects. Rather, they are ongoing capability-building activities to help Valin remain relevant in the marketplace. We are under full sail achieving our milestones. Getting your ship out of the harbor is your first challenge. You may want to look at the new educational offerings that the NAW Institute and Texas A&M have just launched to help move your high-potential next-generation employees to higher levels of productivity and your company to sustained profitability.

It is my hope that in some small way I have provided you with insight on how to get your ship underway.

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Joseph Nettemeyer, NAW 2018 Chairman of the Board

Joseph Nettemeyer, NAW 2018 Chairman of the Board

Joseph Nettemeyer is President and CEO of Valin Corporation, a privately held, employee-owned company providing technical solutions for the technology, energy, life sciences, natural resources and transportation industries. Joe took over as President in 2001 and has transformed the company from simply being a distributor to a complete turn-key solutions provider. Prior to joining Valin, Joe worked for Emerson Electric, a multinational manufacturer of Industrial products, for 21 years where he held senior management positions.
Joseph Nettemeyer, NAW 2018 Chairman of the Board

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