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PERFORMANCE MANAGEMENT
Ready for a recovery? How about operational excellence, too?
N
o doubt about it. A top goal for wholesale distributors in 2011 is to continue to regain
sales volume and profitability. A re- cent Aberdeen Group study indi- cated that, during this recession, over 70% of distributors cut discre- tionary spending and 39% cut or de- ferred projects that required capital spending. As we enter 2011, some distributors may be concerned that they lag behind. If we have, in fact, entered a period of economic recov- ery, it will be all the more critical to catch up with those who may have been able to make some critical in- vestments. I believe that we are now entering another period of Innova- tors versus Followers. So what now? Well, here are some
things to think about: • Are your costs really under con-
trol? How much could your business be improved if you could achieve double digit savings? • Are you able, and willing, to
standardize processes across your organization? • Do internal inefficiencies nega-
tively impact your ability to provide the level of service required to retain existing customers and to compete for the business of new customers? • Are you technology-focused,
not for the sake of technology, but because you understand the opera- tional improvements possible utiliz- ing technology?
® • Are your people aligned with
your goals, and are they motivated? Depending on how you initially
answered these questions could pro- vide the impetus to embark on an Operational Excellence Journey. Where does operational excel-
lence fit in? As the economic situa- tion continues to improve, could this be a series of critical factors that will provide distributors the opportunity to grab back their fair share of the market — and profitability? I be- lieve so. Operational excellence, simply
defined, is a focus on, and bringing together, of three elements that can be transitioned into your business environment and reinforced across all functions. These Three Pillars are: • Process improvement — Or-
ganizing for continuous improve- ment and better resource utilization; focusing on adding value to cus- tomers (being innovative and easier to do business with); standardizing “the way you do things” (front and back office) and increasing interop- erability (and less friction) across your company’s operating locations. • Organization —Assessing, un-
derstanding, and focusing on your people’s attitudes towards change, their motivations and the organiza- tional commitment required to align the organization. • Technology — Incorporating
the appropriate technologies, such as Enterprise Resource Planning (ERP) systems or other appropriate tech- nology infrastructure, applications and functionalities. In 2011, the Innovators will be fo-
cused on: • Additional incremental im-
provements in cost reduction — Re- ally “driving” cost out of the business; their total value-stream, not just from attacking the low hang- ing fruit or chopping more heads. • Supporting future growth with-
out additional headcount. • Inventory investment reduction
— Increasing inventory turns to lev- els never previously achieved and thinking differently about how their supply chains operate. • Greater supplier collaboration in
mutual supply chain decisions. • Fueling growth through in-
creased “visibility” into their opera- tions, enabling more immediate and proactive corrective actions. • How people in their organiza-
tion take ownership for success. • Measuring and “dollarizing”
the results of their operational ex- cellence efforts, as opposed to just “evaluating perceptions of im- provement.” So, as we progress through this
economic recovery, the Followers will be leaving substantial potential gains on the table. The Innovators will indeed be positioned to reap the
BY HOWARD COLEMAN Special to TheWholeSaler
benefits of their Operational Excel- lence Journey.
n Howard Coleman is the principal
of MCA Associates, a management consulting firm since 1986. MCA As- sociates works primarily with wholesale distribution companies that are seeking operational excel- lence. Coleman and his staff of sen- ior consultants provide operational excellence — idea-leadership — and implement continuous improvement solutions focused on business process re-engineering, inventory and supply chain management, sales development and revenue genera- tion, information systems and tech- nology, organizational assessment and development, and succession planning. MCA Associates can be contacted at their corporate office in Connecticut at 203-732-0603, at their Florida Southern Regional Of- fice at 561-989-3221, or by e-mail at
hcoleman@mcaassociates.com. Visit their website at
www.mcaasso-
ciates.com.
Lochinvar announces 2011 training schedule Lebanon, Tenn. — Lochinvar’s an-
nual education program, Lochinvar University, is a trusted resource for industry professionals seeking expert information on cutting-edge Lochin- var products and technology, with courses designed to arm participants with the knowledge they need to size, select, install and service Lochinvar’s extensive line of high-efficiency water heaters and boilers. All Lochinvar University courses
take place at company headquarters near Nashville, utilizing Lochinvar’s state-of-the-art training facility. For each participant, Lochinvar provides accommodations for a two-night stay in Nashville based on double occu- pancy, as well as all meals, beginning the morning of the first school day. Beginning in March and continu-
• Be sure to visit
www.thewholesaler.com for web exclusive articles and videos! •
ing through October, Lochinvar Uni- versity offers various product-spe- cific service schools, covering a wide range of Lochinvar’s commercial water heater and boiler models. These courses teach service techni-
cians to install, operate and service Lochinvar’s commercial products. Tuition for each service school class is $200. In addition, Lochinvar offers a free, two-day sizing and application school
for industry professionals involved in the selection, sizing and/or sale of water heaters. Attendees learn the features and benefits of the full Lochinvar commercial water heater product line, how to select the prod- uct best-suited for each specific ap- plication and how to correctly size the water heater to provide adequate volumes of hot water at a desired temperature. This training also em- phasizes the various electronic and manual sizing activities to familiarize participants with Lochinvar’s sizing software and traditional formula- based methodologies. The 2011 siz- ing and application school is scheduled for September 21 and 22. Visit
www.Lochinvar.com and se-
lect Training at the top of the home page.
•THE WHOLESALER® — MARCH 2011
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