This document summarizes a book that provides a framework and five-step methodology to help distributors optimize profitability through best practices. It identifies common issues distributors face around achieving high ROI targets and differentiating themselves. The book then presents the distributor profitability framework and five steps to assess processes, understand the impact of gaps on value, demonstrate how practices impact key metrics, present best practices and implementation details, and highlight critical execution components. Each chapter applies this to a different business function and includes a real-world example. The goal is to enhance shareholder value by linking processes to profitability.

1. Optimizing Distributor Profitability
Best Practices to a Stronger Bottom Line Optimizing
Optimizing Distributor Profitability
“The information is organized very well, supported by robust research specifically on the
wholesale distribution industry, presented in an easily digestible manner, and linked to
real-world examples to help convert concepts into actionable items.”
Distributor
Profitability
David A. Larson, Vice President–Operations, DW Distribution Inc.
“We are impressed with the material and its potential impact on our profitability. Truly
information and education for the times.”
Gary McKillican, President and CEO, McKillican International, Inc.
Best Practices
Have you ever wondered about the following questions?
• Is it possible to achieve the ROI requirement implied by
double-digit EBITDA multiples in most acquisitions?
• Step 3: Demonstrates how to quantify the impact of
implementing a best practice on key financial drivers
with financial statements.
to a Stronger
• What are the best practices performed by top-
performing firms that differentiate them in terms
of profitability/ROI?
• Step 4: Presents the compendium of best practices and
how-to-implement details.
• Step 5: Highlights the critical implementation compo-
Bottom Line
• Is there a systematic framework of best practice imple- nents and their role in execution.
Best Practices to a Stronger Bottom Line
mentation that can be adopted by wholesaler-distributors?
• How do best practices enhance shareholder value? Each chapter also presents a real-world example of a
• Where is the link that connects process to profitability? wholesaler-distributor (examples come from various lines
of trade) that identifies and implements process improve-
If so, you are at the right place because this book answers ments and the impact of those improvements on share-
those questions. With more than 120 exhibits, a Distributor holder value. Finally, each chapter concludes by showing
Profitability Framework map, real-world examples, and a exactly how you can apply the ideas and methodology to
five-step Optimizing Distributor Profitability methodology your firm.
with how-to-implement ideas and tools, this book presents
a powerful weapon for wholesaler-distributors across vari-
ous lines of trade to use to enhance shareholder value. F. Barry Lawrence is director of the Industrial
Distribution Program and the Supply Chain
In part 1 of Optimizing Distributor Profitability, the Systems Lab at Texas A&M University. He
authors present the basic idea—a wholesale distribution serves as an adviser to the distribution chan-
framework, and a five-step methodology. Then in part 2, nel on supply chain management. Lawrence is
they put those ideas into action by applying them to each a frequent speaker for distribution associations and private
distributor business function (Source, Stock, Store, Sell, firms on a wide range of supply chain topics.
Ship, Supply Chain Planning, and Support Services). Each
Senthil Gunasekaran is an industry adviser,
Lawrence • Gunasekaran • Krishnadevarajan
chapter includes the five-step methodology of process
assessment as follows: business manager, leading practitioner, and
• Step 1: Presents a template for you to use to identify researcher at the Supply Chain Systems Lab
where your firm stands in terms of common, good, and at Texas A&M University. Experienced across
best practices. multiple lines of trade, he designs and directs
• Step 2: Shows how to use the Distributor Profitability industry projects focused on implementing best practices
Framework map (a separate insert in the back of this for wholesaler-distributors. He is an APICS Certified
book) to understand the impact of any process gaps Supply Chain Professional.
(identified in the previous steps) on shareholder value. Pradip Krishnadevarajan is one of the
founding members of the Supply Chain Sys-
tems Lab (SCSL) at Texas A&M University.
He is an industry adviser, business and project
F. Barry Lawrence • Senthil Gunasekaran • Pradip Krishnadevarajan
manager, researcher, and practitioner at SCSL.
Experienced in diverse channels, he assists wholesaler-
distributors with best practices, business decisions, educa-
www.nawpubs.org tion, and technical support.