From Sales to Profitability
A leading distributor of industrial and hydraulic supplies, sold to a variety of industries, knows its profitability is very dependent on an efficient supply chain that gets shipments to customers accurately and quickly, while also optimizing its own inventory levels.
The 6,000 person company has over 400 distribution centers that operate as separate profit centers, and each one must carefully manage inventory, gross margin, shipping, billing, collections, and order processing.
Operating Efficiency is Key
Knowing that distribution operating efficiency was essential in an ever increasing competitive market, the leadership team embarked on a major, multi-million dollar SAP implementation throughout 2013 and 2014 that would significantly improve each distribution center’s systems capabilities. This enhanced IT system would ultimately place the key information in the hands of distribution center managers needed to optimize inventory levels, ship orders faster, invoice more accurately, improve gross margin, and accelerate collections.
A System Not Enough
Despite the improved IT systems via SAP, the leadership team soon realized that new systems alone would not be enough. Several distribution centers lagged behind others in on-time delivery, billing accuracy, inventory controls, gross margin, and collections. Given this data, it became obvious that local distribution management needed additional business skills and insight in order to maximize the SAP system’s ROI.
The problem, however, was that many of the local distribution center managers lacked basic business acumen.
In other words, without increased business acumen skills among distribution center management, the SAP implementation would never be fully leveraged, and thus cause disappointment among customers and investors. Therefore, the company turned to Celemi for help.