June 25, 2017



This playlist is centered around 35+ specific case studies covered in clips 20-93. These cases star: different kinds of distributors; selling different kinds of customers; different types of line-item-net-profit- based solutions. Clips 1-19 that precede the case studies address the tools needed to tackle: our fears; customer profitability; and partnering. And, the 26 clips that follow the case studies (94-116) review key educational concepts that traditional sales reps will have to make their own in order to become the supply-chain math solution sellers and implementers that our biggest, best customers want them to become.

Clips that are in bold font, underlined and italicized are, I think, the most important and should not be overlooked.

Clips 1 to 5: These clips explain: (1) how many of the ideas from previous playlists will be drawn upon and are specifically footnoted on the slides. (2) how large the opportunities are for understanding and innovating with the big cross-subsidies that exist amongst super-profitable customers and items and the super-losers. (3) the common objections distributors have when they discover that ``best`` customers and items (through traditional financial lenses) are actually big losers. (4,5) The journey-process and tools that will unlock huge upside benefits for all stakeholders IF we can just patiently and open-mindedly listen to and discuss the case study stories.

Clips 6 to 8: Dr. Barry Lawrence and his research associates at Texas A&M`s (TAMU) school of Industrial Distribution have done some excellent research for how distributors can ``stratify`` their customers. Line-item Profit Analytics (LIPA) allows TAMU fans to extend and deepen what the stratification work suggests. (6) is the TAMU summary model. (7,8) expand upon the TAMU model.

Clips 9 to 10: While the TAMU model mentions the need for ``cost to serve`` (CTS) information, it does not recommend specific, CTS-model assumptions or design. These two clips highlight two levels of potential modeling: customer profitability using simple transactional cost activity assumptions; and determining line-item, net profit data with which both more and better solutions are possible.

Clips 11 to 13: Clip 11 introduces the ``4-View-Analysis`` for any customer, which, like a 3-D, color-coded MRI, gives a team the ability to see pockets-to-bathtubs-full of hidden supply chain waste that is hurting both distributor and customer. Clips 12 and 13 illustrate the 4-View-Analysis as it was applied by a Plumbing Supply Distributor to transform a big, net-profit losing Plumbing Contractor to big wins for both parties.

Clips 14 to 17: These clips cover the supply-chain-buying trend that has been taking big chunks out of distributors traditional channel share and profitability. No CTS model can see the powerful sweep of supply-chain buying over the past 20+ years; you have to be a long-term, student of the history of all distribution channels to see this trend as a force of change. The trend is for bigger, more progressive customers to demand that their suppliers be part of transitioning from shorter-term, price-sensitive contracts to longer-term, effective demand-replenishment systems that are continually improved. (15) provides a map to locate your company and your biggest best customers` abilities to successfully create and sustainably maintain win-win supply-chain solutions. (16) reviews channels in which most of the independent distributors disappeared, because they couldn`t figure out how to be part of the supply-chain needs of the big, rapidly consolidating customers. And, (17) summarizes why it is time for all distributors to get supply-chain-math savvy to make the trend their friend instead of their enemy.

Clips 18 to 19: Two summaries. 18) reviews what you can and can`t do with different levels of CTS modeling. 19) reviews key questions about whether a distributor should: try to do their own in-house CTS modeling and SC journey ware; outsource the need; or do both in parallel which is reasonable.

Clips 20 to 21: These clips introduce the case study section with a chronological order for tackling different categories of customer opportunities.

Clips 22 to 32: These 10 clips thoroughly cover all of the issues and opportunities of solving the small customer/small order challenge with a blend of case studies. If a distributor cannot first solve this often thorny problem, they will then have no extra resource energy take the big accounts – core, losers and targets – to the ``next level``.

Clips 33 to 39: These clips include four, core-customer renewal cases with references to 5 more that had peculiar pockets of waste amidst generally profitable business. The general lessons are that if you are the first mover with line-item insights, then: every customer can be re-tuned to generate more win-win efficiencies; there is generally good to huge additional upside growth in these accounts; and new needs and services are not hard to find. The first area competitor to discover and mine these veins of gold will win.

Clips 40 to 44: These clips explain how top-down buying policies for ``just-in-time`` (JIT) deliveries and/or ``zero inventory`` (usually do to ``shrinkage`` concerns) are very wasteful when applied to small-dollar, frequently used and therefore highly re-ordered/picked items. These clips are positioned between ``core`` and ``super loser`` case studies, because both types of accounts can be guilty of these practices within a large range. The custom ``spice-rack`` solutions that a distributor can co-create with customers using their own 4-View, stats are breakthrough, powerful opportunities. WATCH THESE CLIPS.

Clips 45 to 58: These clips cover the whys and hows of teaching contractors to be more effective buyers for the benefit of themselves and their distributor partner. Because contractors are more generally challenged in ``conceiving, believing, achieving`` total purchasing system economics, this section is quite detailed with good case studies. Any distributor who sells primarily to some sort of contractor should watch these clips.

Clips 59 to 79: These clips cover many case studies of super-losing accounts also referred to as the ``1%/(20%)``. This is shorthand for the phenomenon that on customer profitability ranking reports, the bottom 1% of the accounts will typically destroy about 20% of the peak internal profits made by all profitable customers. This 1% accounts for the sharp downward ``tail of the whale`` on customer profitability whale curve graphs. (59,60) is an index of different categories of super-losers. Anyone who is concerned about ``confronting`` a big losing account and ``telling them to change the way they buy`` will get great courage from this section. Instead of ``confronting``, we will invite them to look at their own statistical buying patterns and inferred-cost realities to then collaboratively, co-create improved buy-sell processes that give them huge gains. The fact that the distributor happens to reduce –as a by-product- their CTS significantly and often has much bigger share of the customer`s business offered to them is OK too.

Clips 80 to 87: These clips cover case studies on cracking TARGET/GAZELLE accounts. Honchoes, ACE reps, Total Team-Laser-Beam heroics all star in these stories that generate huge ``net-present-value`` of future net-profits. These cases are the most breakthrough rewarding and potentially the most challenging. But, with the accumulated insights, skills and confidence that come from seizing all of the previous case study opportunities, big scores are very likely.

Clips 88 to 93: These clips sum up with case studies the incredible ``dynamic upside`` profit growth is possible if a distributor applies all of the Supply-Chain-Math selling applications. If we have initial fear about losing any customers or any gross margin dollars, it is hard to have the faith in future good scenarios which we can`t yet see or measure. These clips will give you that faith. You will drive away some unprofitable customers (cases of 5 -50%) and margin dollars (less than 5% of the beginning total) in order to capture much bigger, profitable margin dollars from fewer, better ones. WATCH THESE.

Clips 94 to 116: These clips review concepts covered in earlier playlists, but with different words and examples. Most reps and managers should be inspired by the case studies, but still a bit concerned about achieving all of these great ideas. Because repetition is the mother of learning (and confident understanding) , skim through these as needed.