Supply Chain Experts Sound Off
Michael F. McHugh
I had a recent conversation with someone pitching me a story about their company and how they could help with the supply chain issues of HVACR wholesalers. While I dread a one-source story that extols the merits of a single company, the conversation resulted in a flash: Why not ask HARDI vendors, who are essentially supply chain consultants of some variety, to tell DC readers what makes THEM so special — in their own words? We extended an invitation for those in the supply chain consulting world who are HARDI members to share some of the limelight about their business. My goal was simple. I wanted our readers to have a specific overview of what these service vendors offered, which is helpful, I believe, if and when they need counsel in the supply chain area.
While I have covered the distribution side for many years, I wanted an even more nuanced approach and asked my resident expert on supply chain issues, Bryan Jensen, to assist me with formulating the questions. Bryan is a friend and a client, and is incredibly knowledgeable about supply chain issues. By way of expertise, he has spent more than 30 years in the industry and is a principal and vice president of York, Pa.-based St. Onge Co., which has done work for approximately 20 percent of Fortune 500 companies (www.stonge.com/clients). As we thought about the questions, Bryan assured me that St. Onge Co. has no financial ties to any of the companies that answered the questions. Also, we placed a 200-word limit on each answer to maintain a sense of fairness and proportionality regarding the replies.
These are the questions we posed:
Question # 1: Can you provide us with a thumbnail sketch of your company background and the services that you can offer to HVACR distributors?
WayPoint: WayPoint Analytics provides distributors with detailed costing and profit information so they can prioritize and manage customer relationships for best efficiency and profitability. The ongoing WayPoint service shows distributors exactly where and how their money is made or lost in day-to-day operations and gives managers tools and strategies that help them outperform their markets, industries and associations. Highly-detailed profit and costing information comes through an online system available to authorized users at their desktop or mobile device, so everyone can play a role in profit improvement.
KDL: KDL does different things for different companies in the HVACR industry, but it is all centered on outsourcing logistics support. There are a lot of moving parts around the logistics side of a business. There are planning and executing of shipments, there is selecting the most optimal mode and freight provider, there is handling procurement with freight carriers, which is very complex and time consuming, there is the whole reconciling of freight invoices and there are always service concerns. KDL builds solutions around taking costs out of the operation by providing services that streamline these tasks and helping companies gain visibility that is usually non-existent or not very clear.
Mincron: Mincron SmartDistributor Software provides robust, reliable ERP software for the HVACR distributor to drive their company to greater profitability. Mincron has been developing products for HVACR distributors for over 30 years and has enhanced the proven base software program with the help of its distributor partners during that time. Our tag line is “Distributor Driven by Design,” and we mean it. The Mincron Service First Promise is our guarantee that the distributor will receive the dedicated care they need, so they can focus on serving their own customers. This promise is central to the values by which we operate and has allowed us to become the industry-leading solution for HVACR distributors. Mincron is a one-stop solution for your ERP system. Beyond software installation, implementation and education services, Mincron provides many companies with customization, best practice integration, acquisition support and much more. Mincron will get it done, expertly and reliable, every time.
Profit2: Profit2 was formed by former distributor executives 14 years ago. Our sole objective is to enable distributors to safely increase margin.
We believe three key challenges prevent HARDI members from optimizing margin:
1. The scale of the pricing challenge – a huge variety in customers and items results in hundreds of thousands of potential pricing decisions.
2. Sales force apprehension – resulting in limited margin differentiation between commodities and less price-sensitive sales.
3. Limited pricing capacity – where just keeping the current system going is almost all consuming.
Our service is designed to address these key challenges. We provide expertise gained from hundreds of programs on how to best structure your pricing system. Profit2’s tools are designed to simplify the process of identifying and addressing where you are underpriced. We’ve developed methodology to gain the active support of your sales force. And we do the work, while you make the decisions.
MITS: MITS has helped distributors make better supply chain decisions since 1996. Our reporting and business intelligence solution, MITS Distributor Analytics (MDA), includes the tools to report on and analyze your operational data, plus 200 customizable reports, dashboards and scorecards that cover inventory, purchasing, pricing, sales, accounts receivable and general ledger analysis.
Designed with mobile access for executives and nontechnical users in mind, MDA helps industry-leading HVACR companies – including Johnstone Supply (corporate and 19 store groups), Crescent Parts & Equipment and Johnson Supply – make better decisions that drive operational efficiency, improved profitability and sales growth.
“The MITS reporting tool gives you quick and easy access to rich information. The Management team at corporate has recently started using it to keep track of business performance, and we are very pleased with the tool.” DeWight Wallace, CEO, Johnstone Supply Corporate
Epicor: Epicor Software Corp. (Epicor) provides industry-leading solutions for emerging and midsize distributors, as well as subsidiaries of large multinationals. With more than four decades of experience in distribution and more than 7,000 distributors worldwide using our Epicor distribution software, we are a leading technology provider to the distribution industry. The Epicor brands that you are probably most familiar with are Prophet 21 and Eclipse.
Epicor’s distribution software solutions offer you a full range of order management, supply chain and warehousing capabilities, built within a single business platform and based on industry-leading technology. These capabilities provide distribution businesses with effective and efficient end-to-end software solutions. Beyond the technology, Epicor has more than 40 years of distribution experience and thousands of dedicated employees, allowing our distribution customers to dream big and deliver even bigger.
J & M Industries: J & M is a software development and support services firm with more than 35 years of experience in providing high-quality data processing systems and support to the HVACR industry. For most of that time, the firm has been a member of HARDI and its predecessor organizations. Our staff is very experienced, forward thinking, and very knowledgeable of the needs of our customers and of how our software can address those needs.
Question #2: Tell us what makes you different from your competitors. In short, why should someone choose your company over a competitor?
WayPoint: WayPoint invented an entirely new costing system (Quantum Costing) specifically for distribution companies. Unlike manufacturers’ Activity-Based-Costing, Quantum Costing is much more accurate, much faster to implement and much easier to maintain. Because of this, WayPoint does more costing and profit analysis work for distributors than anyone else. As part of the relationship, WayPoint provides educational and advisory services so executives know the best practices and strategies for using the analytics to drive profits.
KDL: The biggest difference between KDL and our competitors is our transparency to our clients and how we approach prospective clients. There are 11,000 registered 3PLs out there, from a broker working out of a small office to the largest logistics company. Only about 250 of those have revenues over $20m. KDL is one of them. However, most of those 250 have a model where they hide their fees. That can negatively impact a customer on several different levels. Not only does that not promote a good partnership, it also promotes the 3PL to make decisions that positively impact their bottom line, not necessarily the customer’s. Plus, our approach is slow. When we start talking to a prospective client, we are thinking 12 to 18 months out. Our clients find that refreshing because a lot of competitors seem to try to whip up solutions that might not be completely built out.
Mincron: Mincron’s focus is wholesale distribution of durable goods products. HVACR distributors are our primary vertical, and many of the largest HVACR distributors in the U.S. operate on Mincron software. Other verticals that we serve include plumbing, waterworks and PVF. Mincron is a privately held independent company with headquarters in Houston, Texas. Our customer service representatives and account managers have industry experience, and many of them have experience using Mincron software. If and when you need to call us for customer support, you will speak with a live person. You will not be placed in a queue or on a call list wondering if you will receive a return call. Mincron has an extremely high success rate in handling most calls on the very first call. And, based on an independent study, Mincron has a Net Promoter Score of +24: two times higher than the national average. Mincron takes a hands-on approach to implementation, where a team of professionals (led by your account manager) will guide you every step of the way.
Profit2: In our view, there are two basic types of pricing assistance. You can buy software to learn and operate, or you can retain a firm with specialized analytical tools and expertise who will do much of the work for you.
Software can provide endless analysis of opportunities. It’s kind of fun. If a distributor has a pricing department with significant capacity and the time to learn and search for opportunities, pricing software can help.
Profit2 clients select the other option and tend to have the following in common:
• They have limited pricing resources in house.
• Increasing margin is a pressing issue, demanding action vs. research.
• They want to reduce pricing system maintenance.
• The sales force has a good deal of pricing autonomy.
• Securing sales force support is fundamental.
We’re different from most firms. We help you price all sales vs. simply installing a generic tool. Our methodology is specific to the needs of each client. Our customers retain ownership and control over their pricing system. Most of all, we’re hands on and do the work. We come to you, stay with you throughout implementation and then work with you week after week to increase margin.
MITS: Getting the right data to the right people at the right time requires a deep understanding of the processes, systems and challenges faced by our customers. This belief is the foundation of our company strategy, and HVACR distributors will find industry standards and best practices built into the software and content that come out of the box.
“Our ERP system captures a lot of data. It just isn’t very good at aligning that data with industry best practices. It’s been pretty useful for us to have the data pop out of MITS in a format that makes it easy to look at our KPIs and quickly make assessments, judgments and changes if we need to,” says Richard Cook, president & COO, Johnson Supply.
Other reasons distributors chose MITS include:
Ease of use: MDA is designed to meet the needs of the nontechnical user. Anyone can log in, drill down and run or schedule a report with minimal training and no impact on your operational systems.
Quick installation: We are intimately familiar with the data structures of the operational systems (e.g., Infor SX.e, Epicor Prophet 21) commonly used by HVACR distributors, so installation is quick, including validation that the data in MITS match your ERP.
Epicor: Epicor is uniquely focused on software for the supply chain versus being merely a general provider of software. Our key focus is software that serves the distribution and manufacturing markets (together, these comprise more than 90 percent of our overall business) by creating ‘fit-for-purpose’ software applications. This allows our software to be very robust and deep in feature functionality while remaining easy to implement when compared with traditional ‘tier 1’ providers.
Epicor possesses the resources and domain expertise to be your software and technology partner for life. We have a staff of about 4,000 software professionals worldwide, plus an extensive partner network to assist with a very local presence. Also, we have more than 1,000 staff members dedicated to customer support and more than 1,200 staff members directed toward implementing, training and educating our customers. Our domain expertise spans more than 40 years serving the distribution industry and helps to ensure that our customers achieve the return on investment that they desire.
J & M Industries: The two most important differentiators between J & M and our competitors are support and innovation. The firm is totally committed to providing the highest level of support possible. Support calls, answered 24/7, are answered by the highly qualified members of our support staff, who will immediately address and own the issue until it is resolved. We truly believe, and our customers tell us this often, that the level of support we provide is unparalleled in the industry. J & M has always been a leader in innovative new technologies. When HARDI’s predecessor organizations needed to go beyond discussions and show real applications of bar-code technology in this industry, only J & M could show the fully integrated software to do that. When HARDI’s technology committee asked several software firms to make presentations on the use of the Internet by HVACR distributors, our competitors could only talk in generalities about what they would do, while we presented customer usage statistics from live installations we already had in place. And today, we are moving our software to the next generation. When this project is complete, our software will be totally browser-based and supported by industry-leading, object-oriented language and database technologies.
Question #3: Many firms aim to improve supply chains for their customers by focusing on one end of the supply chain or the other, either enhancing the profitability of the business they are already transacting or increasing the revenue through the addition of business (and the associated revenue). On which area do you focus, and why?
WayPoint: Although some of the best profit gains are achieved at the “customer contact surface” of the business, WayPoint also helps their clients realize profit gains by working more closely with vendors and by optimizing operations. With the right analytics, it’s easy to evaluate the true profit value of customers, products, initiatives, sales pay programs and nearly every element of a distribution business.
KDL: Even though we focus on logistics, we really focus on the entire supply chain because logistics touches every department of the company. We might impact different departments more than others, though. As an example, one of the services we provide is freight bill audit and pay. So an accounting department might allocate five hours a week on reconciling freight invoices. By having us perform that duty, they can be freed up to devote more time to other tasks.
Mincron: Mincron focuses on both enhancing the profitability of business and on increasing the revenue generated through additional business. Our solutions are interactive, real-time, automated tools that distributors need to be both profitable and grow. We’re driven by our customer community philosophy, and we build and maintain long-term relationships based on mutual trust and respect. We see initial improvements in three primary areas of the business: inventory management, margin optimization and customer satisfaction. Mincron customers report improvements in all three areas within three to 12 months, leading to enhanced profitability and customer retention. Our user-friendly system is also intuitive and very easy to learn to use, allowing new users to master their job functions within 24 hours.
Profit2: Our firm focuses on increasing the profitability of existing sales by safely increasing margins on less price-sensitive sales. Our HARDI clients gain 5 to 7 points on approximately 30 percent of sales to realize a 1.5 to 2 point gain on total sales. This margin increase can drive a 25 to 40 percent increase in company earnings before taxes.
MITS: As a reporting and analytics solution, MITS Distributor Analytics supports both ends of the supply chain improvement spectrum – enhancing profitability and increasing revenue:
MDA provides visibility into the margin breakdown for individual customers, products, product lines, warehouses, pricing programs and other attributes, allowing sales staff to focus on retaining the most profitable customers and product lines.
MDA helps sales reps easily spot customers with declining sales, drill down to analyze why and develop strategies to mitigate the decline, such as better pricing terms for increased volume or resolving product issues.
Maintain the right investment in inventory
MDA helps use operational system data to maintain the right stocking levels, eliminate items that don’t sell to improve ROI and increase profitable items that are selling.
“We are working on a project right now to import invoices from vendors electronically so they can essentially pay themselves if there are no problems. Imagine applying that same approach to 10 different areas of your company, eliminating gigantic sentiments of work that are monotonous and don’t need a human touch. This would free up your staff to do the things only they can do.” Andy Weith, acting CIO, Crescent Parts & Equipment.
Epicor: Epicor is actually focused on both ends (and more). We are positioned to help our customers do four primary things: increase their revenue, reduce their costs of operation, grow their profitability and improve their own customers’ experience. Every distributor has different goals and strategies regarding how they go to market; thus, Epicor remains committed to providing the products, services and technologies to allow our customers to achieve whichever combination of these four key initiatives they are targeting for their business.
As an example, Epicor has been at the forefront of lean business process re-engineering and KPI (key performance indicator) improvements for many years, both in terms of how our software is architected and in the manner that it is implemented. This means that our fit-for-purpose software is designed with the most efficient handling of workflow tasks in mind (such as the quote-to-cash and procure-to-pay cycles that exist at all distributorships). It is through these mechanisms that Epicor is able to streamline (and reduce the costs of) operation for our customers, by enabling more transactions to be handled with fewer of the distributor’s staff.
J & M Industries: The aim of any business software is to make the business run more efficiently with fewer errors. With that being said, the most obvious benefit to our software would be in improving the profitability of the business already being transacted. Looking deeper, however, our development efforts are now strongly geared toward making it easier to do business with our customers. If their customers find that it is quicker and easier to obtain their products from our customers, our software will also assist in increasing revenue through additional business. To quote one of our customers’ marketing VPs, “We use our software as a marketing tool, not just a way to do transactions.”
Question #4: How do you ensure your customers actually realize the improvements you know your services and/or products can provide?
WayPoint: WayPoint has a long-term relationship with every client, providing advisory services so that executives have a ready resource for profit best practices and market insights for every aspect of their business. Industry experts and top consultants also use WayPoint information extensively in helping their clients improve and optimize their pricing models, marketing programs, market initiatives, sales compensation and more. Having the ability to tie incremental profits directly to these and other areas ensures companies are focused on the things that generate profits and cash flow.
KDL: Because our approach focuses on really understanding the way a company operates, we build out our solution together with the client. We perform benchmark analysis on data to get hard cost saving numbers that are available through optimization. For the soft dollar cost savings, we work with the prospective client to agree on the cost benefits of having KDL perform certain tasks versus them.
Mincron: Mincron compares periodic performance rates to ensure companies are generating improvements in many areas of the distributor’s business. Some of the areas of improvement include customer service levels, inventory turns, sales and gross margins, product GMROI and collection days. We also provide real-time tracking of customer net contribution to the overall profitability to the company. And, to verify that our customers are making proper use of the many available tools, Mincron offers a MAXimizer (Mincron Audit eXcellence) program. This program ensures that our customers are maximizing the benefits from using our software correctly. At the conclusion of the examination, Mincron provides a management report with findings and recommendations, along with a recommended action plan for making improvements.
Profit2: We start ensuring our clients’ success before we’re hired. The first step in our process is to provide our clients with a free preliminary pricing analysis. This step enables our clients to see specifically where they are underpriced, what we would do and how much they would gain.
During the initial phases of our program, we develop program goals and a specific margin forecast with our client. Past results with other HARDI distributors provide us with a guide for what can and must be done. The program forecast drives our work plan. Any deviation from the plan is discussed and quantified.
Once pricing changes are imported, we stick around. We evaluate results with our client executives and pricing team. Together, we identify where we must make changes to reach our mutual goals and capitalize on additional opportunities.
MITS: User adoption and return on investment are key success factors, not just for our customers but also for the entire team at MITS. Here are some of the ways we help our customers realize the value of their investment in MITS Distributor Analytics:
Dedicated Account Manager: Every customer is assigned an account manager who is responsible for maintaining regular contact via phone and email. Customers can reach out to the account manager to discuss and find ways to resolve both business and technical challenges associated with their reporting and analytics program.
Support: A key component of our maintenance agreement is access to our team of seasoned technical support specialists via phone and email. Support will bring in members of our development, professional services and executive team as needed to help resolve a problem.
User Conference: Our annual user conference, MITS Exchange, provides customers with a hands-on forum for training, peer networking and exchange, and providing feedback to MITS on our product road map.
Business Integration Program: In addition to product training, we offer a range of programs designed to help customers integrate reporting and analytics into their business in a way that will meet their unique challenges and goals.
Epicor: Epicor has numerous tools in place to ensure that our customers achieve their strategic goals and objectives, and that our software is set up to assist them accordingly. A dedicated, professional project manager is assigned by Epicor for each and every software implementation. A key to the early stages is a business assessment conducted by our implementation team that identifies the business metrics each particular customer is striving for, so that our comprehensive implementation methodology can focus on the realization of these goals and objectives. Regular checkpoints are employed throughout and at the conclusion of every implementation in order to measure the attainment of the desired business metrics.
In addition, Epicor offers an extensive array of follow-up business consulting engagements that are targeted toward ensuring that best practices continue to be utilized and that high performance is achieved. Some of these offerings also include financial trending analysis, business score carding and even creating optimal shareholder value for mergers and acquisitions.
Finally, it is important to mention that Epicor has a world-class eco-system (such as Learning Management Systems, Knowledge Base Portals, Case Resolution, etc.) offering valuable go-forward support tools for each of our customers.
J & M Industries: As previously stated, J & M strongly emphasizes support. For support to work effectively, we must, and do, maintain a very close working relationship with each of our customers. As a part of that contact, we have regular and ongoing conversations about what is working and what can be improved in the software and support services that we provide. This close relationship gives us the ability to make recommendations to our customers as to how they might better use the system. In addition, we have periodic group meetings in which our customers come together to discuss our project status and make suggestions as to how we can improve the system.
Question #5: How reliant must your customers be upon you to continue to realize the benefits your services and products provide? Simply put, do they need to keep buying their fish from you, or do you teach them to fish?
WayPoint: WayPoint’s ongoing advisory and educational services help companies permanently improve the quality and capability of their executives, management and staff. Profit gains are permanent and sustainable when people become practiced in recognizing opportunities and dangers through a profit lens, and by adapting and applying WayPoint best practices to their own markets and situations.
KDL: The difference between KDL and a supply chain consultant is a supply chain consultant will charge a fee to uncover areas where they can improve and then leave it up to them to do the work. KDL works with the prospective client to uncover the areas of improvement for free. Then we build a program of services that we perform to make sure the company realizes the benefits. We get paid from our services.
Mincron: We teach our customer to fish. We do not want our customers to feel they must rely on us to be successful. It is our desire that our distributor customers learn to use our products to be “self-sufficient” and develop their own strategies for growing their business. But, we are here to support those initiatives, and there are many benefits to the long-term partnership. Mincron issues improvements and enhancements to the product offerings on a regular basis, and distributor companies benefit from the added tools and functionalities. Mincron continues to reinvest in our product and service offerings in order to meet the ever-changing world of technology. At Mincron, we believe that it is our responsibility to continue to enhance our offerings using the latest technologies available.
Profit2: Pricing is very dynamic. In order to optimize margin, a distributor must make sure their pricing reflects current purchase trends. This is key to maintaining credibility with customers and the sales force. Profit2 clients have a choice: They can maintain their system on their own or retain Profit2 on a monthly basis for a low guaranteed service fee.
We’ve created systems to greatly reduce the time it takes a distributor to maintain their pricing system and keep increasing margin.
MITS: Our goal at MITS is to provide our customers with the tools, training and resources needed to build a self-service analytics culture.
While our Technical Support and Professional Services teams can be called upon to enhance the MDA solution when or if needed, purchasing ongoing services from us is not essential to putting the base installation to work in your distribution business.
Epicor: Epicor’s mantra is to enable our customers to be self-sufficient, although there are some things that our customers certainly expect from us on an ongoing basis (such as continuing to invest heavily in R&D to grow our software’s capabilities and technologies). We have built our software solutions with open databases (SQL) and have embedded many user-based tools that our customers can configure themselves.
A key aspect is that our customers can add their own mission-critical process workflows within the software. This permits them to extend the software beyond what Epicor has built into the baseline of the application. These game-changing capabilities are part of Epicor’s core value proposition to our customers, as they allow for the creation of smart (mobile) dashboards, user-specific business rules, tailored screens/menus, and interoperability with non-Epicor applications (including the Microsoft Office suite).
As a special benefit, Epicor brings this user-driven extensibility while maintaining our customers on the upgrade path of the software. So they can experience the best of both worlds: a robust software application receiving multiple new versions each year, plus the freedom to be self-reliant (gaining a competitive advantage for their distributorship) by extending their Epicor software application themselves.
J & M Industries: Given our product, this question really demands two answers. First, how reliant must our customers be on us to use the installed software effectively? Once our system has been installed and the customer’s personnel fully trained in its use, the customer can very effectively use our software with only occasional support. But that is only a part of the picture. Distribution businesses are dynamic and constantly changing. Their software must change with them to meet new and changing business. Additionally, no one person or company has all of the good ideas. Our customers rely heavily upon us to develop changes and enhancements in our software to meet these changing business requirements. While it is true that each of our customers is provided with all of the tools necessary to take over this task internally, at this point none have done so. We think that fact speaks volumes about our ability to keep our customers at the forefront of the industry.
Question #6: Have you provided your product and services to customers for a fee proportional to their actualized savings or benefits? How?
WayPoint: WayPoint’s price structure is designed to be attractive to companies of all sizes – easily affordable for even the smallest operations. For most clients, the price is a tiny fraction of the profit gains they see. In fact, the average profit gain seen by a WayPoint client is 174 percent.
KDL: In every case, our services drive savings, and our fees are a small percentage of the value/savings we provide. The value prop is built out through our approach, and both the client and KDL are well aware of the cost benefits through our involvement. Our partnership is centered on KDL beating those projections and consistently validating those numbers.
Mincron: No, we license our software to distributors based on a per-user license fee. In addition, we charge an hourly rate for services such as software implementation, training and education, file conversions and customization services.
Profit2: Our services are priced on a fee-for-service basis vs. a portion of the benefit. We have a simple monthly service fee that includes help to price all sales, ongoing price system maintenance, pricing/margin analysis and consultation. Our clients break even on the cost for our services if they increase margin by a little more than 1/10th of a point. Our average client realizes a $12 to $1 first-year return on investment in our services.
MITS: We do not typically charge proportional to the benefits of the software. When it comes to analytics and reporting, the return on investment can be so astronomically high that most companies wouldn’t consider this as an option. For example, some of our clients find hundreds of thousands of dollars of business opportunities in the first few months of using MITS Distributor Analytics.
Epicor: Epicor intends to have our customers achieve an ROI (return on investment) within a range of three to five years, and we have an abundance of examples where this has been achieved. We exert tremendous effort to deliver products and services to our customers that allow them to experience a real ROI for their distributorships. An example of this is our exclusive partnership with Strategic Pricing Associates Inc., which encompasses a tight integration with SPA’s pricing analytic and gross margin optimization engine. Many of our customers have realized the ROI for their entire investment very quickly via the benefits of the combination of Epicor’s distribution software and Strategic Pricing Associates’ pricing structures.
Thus, it is with these types of value-based programs that Epicor is able to ensure that our applications will stay relevant in the distribution industry for many years to come.
J & M Industries: While there is much subjectivity in a question such as this, we can fairly say that the cost of our products and services is more than recovered by the savings in operational costs produced by the use of our products and increase in revenues that can be produced by making your business easy to do business with. The basis of our opinion comes not from our own observations but rather from the comments that we have received from our customers. Given our long history in this industry, it has not been uncommon for us to hear from customers who have substantially increased their volume while not increasing overhead and staff to support the volume. Our customers tell us that they achieve much higher productivity from their employees and much better return on their inventory dollar investments.
Question #7: What was the greatest misapplication of your services or products, and how did you assist that customer in rectifying that misapplication?
WayPoint: WayPoint’s profit analytics can be used in so many ways that it’s hard to imagine an area of the business where it wouldn’t be useful. With the analytics, companies have developed and implemented whole new strategies, fixed under-performing business units, invented innovative new business models, revised policies, invented pricing strategies and more.
KDL: Our industry as a whole gets a bad rap from many of our competitors trying to shove a client into a boxed solution. Our competitors will cold call a prospect and guarantee 20 to 30 percent on their logistics spend on their initial phone call. It’s snake oil salesman-ish and really irresponsible. That’s why we take our time to understand the prospect’s business. It’s refreshing for our prospective clients and there are no gimmicky projections. Where companies get burned by a misapplication of services is by not having the solution built out the right way.
Mincron: Over our 30+-year history, we have maintained a 100 percent implementation success rate, an 88 percent customer retention rate and a Net Promoter Score® of +24 (two times higher than the national average). Five of the 10 largest North American wholesalers choose Mincron because from Mincron, it’s service first. So, customer satisfaction is a top priority at Mincron. In a few cases over 30+ years, a distributor customer has chosen to implement the software themselves without Mincron-provided training or implementation support. While they succeeded, it did not go as well as it should have because they did not benefit from the opportunities that normally come with a Mincron-assisted implementation. We recommend that you always use the implementation services provided by Mincron.
Profit2: The greatest challenge and potential misapplication in pricing is not recognizing the challenge of getting salespeople to embrace price increases. The natural apprehension and fear salespeople feel is the greatest barrier to higher margins. So involvement of the sales force is pivotal to our program. We’ve designed training, tools and methodology to make salespeople active partners in the process to safely increase margin.
MITS: The most common misapplication of analytics and reporting is when our clients attempt to expand the scope of their project too large, too quickly. Most companies are not able to change their business processes as quickly as the software can be rolled out. In many cases, the reporting solution can grow more complex than the business is able to accommodate.
We recommend a staged approach where we identify two or three areas of the business to improve, focus on implementing these first, and after some success has been realized in these areas, grow from there. We want our customers to realize value and ROI quickly with MITS Distributor Analytics, and trying to do too much, too soon inhibits that goal.
Epicor: To begin, Epicor has had a very long history of success with our products and services, so a misapplication of our software is extremely rare. However, we have seen customers struggle in cases where their leadership team does not embrace the proper sponsorship of the business migration efforts. As with all worthwhile projects in a business, the appropriate buy-in (commitment) from the distributor’s executive team is crucial to the overall success of the initiative.
In addition, Epicor has an excellent team of business consultants that can be brought in to assist our customers. One of the aspects that Epicor targets to include on all of our strategic implementations is a Change Management workshop. By taking a pro/active approach to unearth the potential obstacles to a successful project, we can help our customers construct a plan that navigates a course of action that best aligns with their overall business goals, strategies and mission.
J & M Industries: We spend a great deal of time and effort on training new customers in the use of our software so as to avoid these types of problems. However, the worst misapplication of our product occurred when a customer insisted on an installation schedule that did not permit adequate training. This “hurried up” installation and training schedule resulted in two unfortunate results. The first was that the customer’s personnel quickly fell back into performing their jobs just as they always had, failing to take advantage of the efficiencies offered by the system. Because the staff was insufficiently trained and practiced in the new methods of accomplishing their jobs, they did not make effective use of the capabilities offered. The second significant problem was that many capabilities of the system were simply not implemented. The system offered customer automation assistance in areas that had previously been manually processed. Again because of the reduced training and lack of familiarity with the capabilities, these features were not implemented at all. Because change is always difficult, rectification of these problems required considerably more training, time and effort than would have been required had the installation schedule been more appropriate in the first place.