Thrive has analyzed lost sales due to stock outs at hundreds of distribution companies since 2001 and we have made some interesting discoveries. We found that plumbing and PVF distributors lose between 3% and 10% of annual revenues due to out of stocks.
In distribution, large clients have a disproportional impact on your business. Large clients bring in large orders and can have a very positive profit contribution. But they can also add stress to your system in terms of service, support and risk management. One of the biggest influences a large client has on a distribution company is in their inventory levels.
Plumbing and PVF distributors suddenly had to understand the differences in both sales and replenishment levels for two kinds of pipes – leaded and lead free – where they may not have tracked demand by those two categories before the change in law.
All of your employees want to do a great job. Success in work makes for happy employees and happy employees make for more success. To do a great job, you employees need the right set of goals, tools and technology to succeed.
In a distribution organization, inventory often represents the largest commitment of capital, space, labor and overheads. So it should come as no surprise that inefficient inventory practices are also one of the largest barriers to growth.