Bruce Merrifield, President — Merrifield Consulting •distribution management best practices •sales practices •profit strategy Wednesday, May 14, 2014—Randy MacLean and Bruce Merrifield discuss Supply Chain Issues, or what Bruce otherwise calls "Schwarzkopf Issues". Picture this, says Bruce, "as you do a customer profitability ranking report and get to the bottom of the report, you see what seem to be really good customers, because the sales are good, the margin always are good, but the transaction costs are even higher, so you're losing money." Among the possible causes for this loss are Schwarzkopf Issues. Bruce names the phenomenon for General Schwarzkopf, who gave a speech which included a story about a time he was given a tour of a large military base. While on this tour, he noticed two guards sitting in a random hallway wearing their helmets with their guns in hand. After exchanging salutes, he turned and asked the two-star general next to him, "What are those guys doing here?" The other general replied, "I don't know. They were there when I got here nine months ago." General Schwarzkopf then requested that the lower-ranking general ask around for an answer. When the two-star general returned, he sheepishly explained, "Well, three years ago, they painted the doorway and were afraid that somebody would bump into it so they put the guards on duty there until it was dry. They just forgot to write the paperwork to take them off. So for every day of the last three and a half years, we've been protecting the doorway." This isn't just a problem limited to military bureaucracies. "Between the silos of purchasing guys and production, you find weeds," Bruce explains, "And literally it could be just one quirky person who decides to do something." A great example was a customer who received a lot of small orders packed separately on skids. The order could be something as simple as a roll of duct tape. Bruce recalls that you would, "see 15 skids going out to this one guy, because different people on the plant were ordering stuff and all and had to be delivered to the back dock on separate skids." When the client investigated the policy, he found it was started three years earlier by a dock manager who, after hurting his back, made suppliers deliver everything on skids so he wouldn't have to get off the truck. The dock manager finally retired, but the policy had remained. Discovering and resolving this issue helped to turn the account profitable. The takeaway is that one of the things you should be doing is asking questions. Why do we do this? Is this still necessary? Does it make sense for us anymore? Watch the video above for more stories from Bruce and a great discussion on how to handle issues such as these. For more information about Bruce Merrifield, visit: www.merrifieldact2.com |
Measuring & Managing Fleet CostsSophisticated New Delivery Costing Drives Higher Profits A Culture of Innovation Starts at the TopSteve Epner and Randy MacLean discuss topics from Steve's book. In this video: How to Innovate. Optimizing Salesforce Pay Through Deep Data AnalysisCompanies are developing more and more sophisticated approaches to sales compensation and here Bruce Merrifield and Randy MacLean examine the trends. Webinar: Profit-Based Sales Incentives (part 1)Webinar: Quantum Sales Compensation - How to Create a powerful new kind of sales incentive plan Using Profit Analytics to Manage Your Sales ForceUse profit analytics to help drive radical profit gains by balancing volume, margin and service costs for every account, doubling and tripling territory profits Sales Force SpecializationDiscussion of how the most successful companies are adopting specialized sales functions, achieving superior results. Managing Product Line ProfitabilityManaging Product Line Profits shows how operations can have a significant impact on net profit and examines Peak Internal Profit, accumulated profit and more 9 Steps to More Profitable RelationshipsDiscussion about a 9-step process aimed at transforming a transactional relationship with an account into a partnership. Profit Value-Based Customer SegmentationRandy MacLean and Bruce Merrifield of WayPoint Analytics discuss profit value-based customer segmentation. The Advantages of SegmentationA discussion of the benefits of segmentation and how this approach can help distributors achieve far greater levels of profitability. Gross Margin Percent: A Poor Indicator of ProfitabilityMost distributors have naturally occurring, high gross margin percentage accounts and high gross margin percentage (small dollar pick) SKUs. Protecting Your Core BusinessHow to identify and protect the accounts at the core of profits. Triage Customers & Set Priorities to Increase PerformanceRandy MacLean and Bruce Merrifield sit down for a talk about the issues and opportunities, tactics and strategies for increasing profit performance. Discussing the Enterprise Account Selling Model (#3)Continuance of the Enterprise Account Selling Model video series. Refers to a preceding video. Drawn from Bruce's presentation at APIC on March 1, 2016. Discussing the Enterprise Account Selling Model (#2)A continuation of the discussion between Bruce Merrifield and Randy MacLean over Bruce's Enterprise Account Selling Model (part 2). Discussing the Enterprise Account Selling Model (#1)Bruce Merrifield and Randy MacLean discuss Bruce's Enterprise Account Selling Model, as presented at APIC on March 1, 2016. Getting Your Salespeople to Negotiate SmarterUsing the negotiation process to achieve CTS savings, allowing you to offer your customers lower prices while leaving the table with a larger profit. Increase Innovation with a Rule and a ToolBruce Merrifield discusses the Wheel of Learning and how this simple tool can catapult you forward with innovative thinking. Cost-to-Serve Math: Why Gross Margin May Fool You Every TimeThis video by Bruce Merrifield and Randy MacLean describes why you can't rely solely on gross margin to determine profitability. The Changing Face of SalesAn in-depth look at some historical limitations to sales compensation, and why those factors no longer apply with the availability of LIPA. Gross Margin FixationA fixation on gross margin – without looking at cost-to-serve (CTS) – has blinded countless distributors and limited their ability to achieve profitability. A WayPoint Client and Whale Curve Success StoryLearn how this distributor was able to massively ramp up its profitability even as it lost many of its customers. Cost Structures: What Makes for a Good Sale?Learn why distributors can't simply rely on gross margin when determining whether a sale will add to the bottom line. Why You Should Sweat the Small DeliveriesA discussion on how little extras can sometimes add up to a lot of infrastructure cost in wholesale distribution companies. It's Not Who You Think It IsRandy MacLean discusses key profitability metrics for QPM. Why You Should Be Optimizing InventoryRandy and Bruce explain why it's important to optimize inventory in the same way you optimize personnel and other resources toward the best profit opportunities A Two Step Strategy for Being Number One in DistributionIn this video, Bruce Merrifield turns the tables on Waypoint President Randy MacLean, and asks Randy to strategize on how to beat the competition. Using WayPoint's High Volume Account Report to Increase ProfitRandy discusses the benefits of the extraordinarily valuable High Volume Account Report. Prioritizing Your CustomersA discussion of the perils of a cookie cutter approach when it comes to sales and service in the wholesale distribution industry. How Customer Segmentation Unlocks Hidden ProfitsBruce Merrifield of WayPoint Analytics teaches the importance of customer segmentation and the insights it can offer your distribution company. The Element of PricingIt's not necessary to compete with AmazonSupply on pricing when you've got your ordering and delivery systems, fill rates and customer service at a high level. Quantum Profit ManagementRandy MacLean introduces the core principles of QPM and illustrates how it's the most effective way to run a business. The Benefits of a Cost-to-Serve Math ProgramHave you had trouble conveying the importance of CTS to your team? Learn how this course provides an affordable and convenient educational solution. Why Come to APIC?What is the value of the APIC conference for a business, and why does it stand out above other education programs? Getting Results with a Customer AuditGetting Results with a Customer Audit Making Money by Giving Away ProductBruce Merrifield and Randy MacLean discuss profit strategies for wholesale distributors that will raise their cost-to-serve and profits. Webinar: How to Create a Sales Compensation Plan (pt 2)Webinar: Quantum Sales Compensation Plan Part 2 Webinar: How to Create a Sales Compensation Plan (pt 3)Webinar: Quantum Sales Compensation: Designing Your Plan Webinar: How to Create a Sales Compensation Plan (pt 4)Webinar: Quantum Sales Compensation for the Wholesale Distribution Industry: Launching Your Plan |