2020 Vision

The Future of High-ProfitWholesale / Distribution Companies

The Coming Future of Distribution

• By 2020, the face of wholesale distribution will have changed

• the stratification of players will have become extreme:– top-profit producers: 10%+ NBT– margin erosion will take 3%–4% off NBT– today's tier-one companies destined for

bankruptcy or acquisition

What Will Be Different

• top-tier companies will run with a different operating philosophy

• they will use big data to set priorities and to allocate effort and resources

• they will be much more integrated with their vendors and customers

• they will have replaced much of their current business model

• accountability measures and incentives will be common and aligned throughout the company

• the need for continuous improvement will drive focus on deltas (gains)

• the C-Suite will have: CEO, CFO, CSO, CPO, CIO• every level of the company will understand

and master triage (prioritization)• will have a clearly articulated business model

What Will be Different (cont'd)

Mission of 2020 Vision

• Develop an organization to identify companies lead by the most forward-thinking people, and provide guidance, education and certification of those companies, and the consultancies that guide them.

• Celebrate the 2020 companies and share the strategies and tactics that make them successful.

2020 Vision

• Develop a vision of the success drivers of a top-tier wholesale distribution company in the year 2020.

• Build an organization to help communicate the success elements, and to certify companies that have them in place.

• Certify the consultancies and advisors qualified to help companies implement the elements.

2020 Vision (cont'd)

• Benchmark and publicize the performance levels and standards of the top-tier companies.

• Celebrate and publicize the success of the 2020 Vision companies.

• Help the financial community understand, recognize and prioritize 2020 Vision companies.

2020 Benefits

• industry-leading profits / cash flow• status / recognition for company leaders• higher stock value• recognition by investors• recognition by banks

2020 Companies Will...

• be executing on clearly-defined and articulated business models

• have defined business strategies (not everything to everyone)

• use big data to define strategy and allocate effort / resources

• have a leadership structure that elevates profit management and improvement (CPO)

2020 Companies Will... (cont'd)

• have widespread adoption of Quantum Profit Management

• have LIPA for granular profit measurement• have strategic pricing / margins• have company-wide profit-based incentives• have customer / market demographics• have data-driven marketing plans

2020 Companies Will... (cont'd)

• be digitally integrated with their dominant suppliers and large-profit customers

• be executing on a strategy to communicate digitally

• be marketing online• train their customers to make them more

profitable• have a communication program for millennials

2020 Companies Will... (cont'd)

• have an education program to develop personnel

• be top-tier in benchmarks• be executing a plan to increase the company's

valuation• have a comprehensive feedback mechanism

to prioritize drive continuous improvement

2020 Metrics

• NBT above 10% (higher in certain sectors)• NBC/FTE 2x or more of industry average• sales comp below 50% NBC• others relative to market or other 2020

companies

20/20 Certification

• conceptual framework• objective standards• certification authority• qualified consultants / instructors• certify 2020 companies

20/20 Concept Communication

• industry thought / opinion leaders• APIC speakers• top-performing companies• high-visibility companies• media• educational institutions• financial institutions

2020 Advisory Board

• Tom Gale• Steve Epner• Brent Grover• Al Bates• Dirk Beveridge

• Barry Lawrence• Jonathan Byrnes• Lindsay Konzak• Bruce Merrifield• Guy Blissett

Timeline

• concept meeting• develop initial advisory team• gather, narrow and refine base elements of

20/20 company• document measurable objective standards• develop "how to" plan for executing and

achieving each element

Timeline (cont'd)

• develop branding / publicize concept• certify partners• announce / publicize companies certified as

2020 companies• announce awards for companies that meet

standards

Notes

• for the top performers, not the lowest common denominator (or everyone)

• could provide benchmarks

2020 VISION

2020 Vision