The Hunt for Profit? Change? Or What?

Last Friday’s unemployment figures along with the number of people who went off unemployment benefits gives all of us an indication that we are in for a long recovery. Even retailers are having a hard time getting people to spend money. In some markets new home sale were above absorbed foreclosed homes.

Many distribution business owners are preparing for a long haul at their current sales levels.
Distributors say they have trimmed down their inventories, reduced head count and reached out to get their arms around their extended credit sales (D.S.O.’s) beyond their current terms. Still, many have problems collecting their current S.P.A.’.s. Banks aren’t lending any significant money.

That leads some to say they are not content with current profit rates.

So, what are they doing? It is all about more internal Productivity!

We recently spoke with 27 electrical distribution business owners who said that they are not going to stand by and just accept what the market gives them. To a person they say that something has to change inside their businesses. Winds of change are in the air.

1. A group are asking for audits from their E.R.P. software providers. They are asking how well are they using the software they bought. What functions can they turn on? What’s in it for them? What more can they get out of their current system?
   
2. Some are actively investigating the ‘joint’ use of ‘Software as a Service’ with select manufacturers. The goal is better balanced inventories, quicker claims, less money needed to run their business. This equates to less money spent.
3. Some are expanding opportunities at their store fronts on the Internet.
4. Then there is a group that is changing how they collect their invoices.
5. And others are shedding their assumed beliefs about the way they develop “sell prices”. Many say that they have been limiting their own profit opportunities by the way they price product.

The Hunt for Lean Manufacturing

Manufacturers

Some manufacturers are looking at some form of lean manufacturing. While others are expanding their Internet store front opportunities and are now populating them with rich content as well as performance guarantees. Many seek trusted third party ‘Software as a Service ‘partners to help them get a true handle on demand.

But, lean manufacturing comes in many different flavors depending on the products and company. So as manufacturers fold in their consolidated companies, how will this play out in the market place? More consistent pricing and policies. Will there be a change to not force product into the channel?


At the mid point of the year 2010, what is your company doing to adapt to the current market? How are you changing to adjust to what could be a slow recovery?
Is your company hunting for productivity?