Improve your supply chain's profitability

Does this story sound familiar? It's 7.00 p.m., your warehouse team has just finished their final picks for the evening, your fleet has been loaded based on standard routing calculations, and you're ready to pack up shop. Then that dreaded moment happens — a member of your sales team calls down to the warehouse: "Our best customer needs more 'x' by tomorrow or they'll go somewhere else."

It turns out, however, that the customer that made your people jump through hoops is, in reality, an underperformer from both a gross margin and gross profit perspective. In fact, unknown to the sales force or anyone else, this "best customer" has been in the bottom quartile of your customer portfolio for several years. Worse, that "critical" sale just cost you more money to process than it produced in profit.

If your distribution business serves a wide variety of accounts across a range of industries, then the question likely is not if this problem is happening, but how often.

The solution to this problem starts with a deeper understanding of customer profitability. It then requires that every team work hand-in-glove to not only execute core tasks — receiving, storage and shipping inventory — but more importantly know how to better manage the intricate network of vendors and customers, as well as each nuance associated with these relationships.

Click here for 10 practical steps to help get you on the path to profitable growth.