A whole-company approach is what master strategist Grant Howard recommends for distributors who want to excel in a competitive marketplace. In this exclusive interview with TheUserGroup.org, he lists four steps executives can take to keep their businesses focused, productive, and strong.

Keep Your Customers at the Forefront

A company’s major objectives are profitability, longevity, and growth. But when distributors put all their emphasis on gross margin and return on assets, “it often leads into poor directions for the longevity of our company,” Howard warns.

“What often happens is that we’re so focused on the bottom line that we forget about the customers who actually keep us in business.” Executives can balance their objectives by turning their attention to vendor performance, employee productivity and, most important, the customer experience.

“The big areas we talk about today are the elements of a perfect order,” he says. “What is our fill rate? Do we have the right inventory when they need it? What’s our on-time delivery? And can we do this accurately, delivering the right product, the right quantity, and the right price?”

Metrics and Measurement: Too Much, Not Enough, or Just Right?

Distributors have access to far better business intelligence (BI) and business analytics (BA) than ever before, but Howard says many of them are still struggling to make good use of the tools that are available to them.

“A lot of companies just don’t measure, or they put out their objectives and go back at the end of the year to see if they’ve hit them,” rather than measuring more frequently and issuing course corrections as needed.

At the other end of the spectrum are the companies that “measure too much, or measure the wrong things,” he says. “They’re so overloaded with data and analysis that they lose sight of what their measurement is telling them,” going on an “unguided fishing trip” rather than “knowing what they’re looking for and checking their results.”

Infor has done its part by delivering the right software tools for BI and BA. TheUserGroup.org does the rest, creating a forum for members to learn from each other while bringing in podium presenters like Howard for expert guidance.

“You often see a company that says, ‘no, we can’t do that, it’s too hard,’ and then they meet someone who’s doing it,” Howard says. “When you talk to someone who’s successful, they’re excited about the results, and they tell you how it helped change their company, that gives you the impetus to do it yourself. Companies get to share at TUG, and that gets them on the path.”

Standardize Before You Optimize

There’s no point trying to optimize business processes that are already holding your business back. “Many companies think they can buy some technology, push the button, and it fixes whatever they’re trying to fix,” Howard says, but “technology just speeds up whatever you apply it to. If it’s a good process, technology will improve its accuracy, speed, and efficiency.” But with a poor process, or no process at all, “it only speeds up how quickly we can mess it up.”

The solution is to review and refresh business processes, get the right technology in place to support them, and make sure every employee knows how to make best use of the system. “Education is the key that ties our processes together with our technology, all leading to better accuracy, consistency, and efficiency within our companies,” Howard stresses. Which means the many distributors that lack formalized training and education programs are losing efficiencies and leaving money on the table.

Technology from End to End

In a bid to cut costs, many distributors have eliminated the technology operations staff who could take an end-to-end view of the enterprise and optimize business processes. Howard says that’s unfortunate, but “it’s not that we don’t have that body on payroll. It’s that we don’t have that way of thinking,” with the result that companies “chase fires, chase symptoms, rather than chasing root issues.”

Too many executives are so busy doing their business that they’ve forgotten how to look at their businesses, he adds. “They need to put together the right processes, utilize the right technology, and make sure employees know how to do it. It’s magical when that comes together.”

Visit the TUG website.

Thought leadership works best when everyone in an organization can contribute their unique knowledge and learn from each other. That principle—members helping members—has always been at the core of TheUserGroup.org’s success.

Now, we’re realizing that IT departments are the enablers for the knowledge and systems that will help their companies succeed. And that TUG is the place for everyone in those companies—from IT to purchasing, from sales and marketing to the executive suite—to get the business intelligence they need to anticipate and embrace the future.

In the end, it all comes down to bringing additional value to our members. If we can lift up one idea that helps everybody’s business get a little bit better, it’s a win for our entire membership.

The Wisdom to Lead Distribution

TUG is like a sports team that consistently impresses and exceeds expectations without relying on a single superstar to save the day. Very few of us stand out on our own. But as a group, we have the wisdom to lead distribution forward, in a way that goes beyond our strength in running our Infor products.

As a group, we know what it takes to run a distributorship, and we have a track record for helping each other do that better. That’s what thought leadership is really about. And it’s a key strength that points to the value TUG can offer to every part of a distribution business.

Delivering Value Every Day

At our annual conference, and in our year-round communication and member networking, we’ve always delivered the knowledge our member companies need to get the most out of their back-end ERP systems. But Dirk Beveridge made a wider point with his keynote address at TUG Connects! 2015.

He didn’t just speak to the IT professionals in the room.

He focused on the dynamics in a distributorship and the value employees need to bring back to their companies, every single day, to keep those companies competitive.

It’s more than keeping the computers running, keeping the lights on, and making sure everyone has a good login. It’s about bringing together all the parts of the organization and bringing back value to the distributorship as a whole.

Leading Through IT

TUG is developing the front-end, leading-edge thinking that will give them a strategic advantage in their markets, in whichever sandboxes they choose to position themselves as marketplace leaders. That’s how we assure the health of our companies and the health of our membership.

There are other associations in wholesale distribution, but TUG’s strength is that it leads through IT. That matters, because more and more business strategy decisions start off with a technological perspective.

IT is where distributors start thinking about how to communicate with the Millennial generation—and realizing that it’s less about Millennials, more about anyone who has access to Google search.

It’s a survival tool for distributors who sell their products with a printed catalogue, a call center, and sales reps knocking on doors, in an era when customers make 50 to 70% of the buying decision before we hear from them.

Rather than trying to confront those problems from the sales side, TUG starts with the department that has the infrastructure to deliver practical, lasting solutions. When we work from that starting point, then loop back through our tried and true approach to members helping members, there’s next to nothing our companies can’t do.

David White is Chairman of TheUserGroup.org and President of Kyana Packaging and Industrial Supply in Louisville, Kentucky.