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Driving enterprise value in wholesale distribution
Lead from the middle
Traditional priorities of operational excellence and cost performance no longer appear to be the success mantra for wholesale distribution (WD) companies. Instead, Deloitte’s industry review shows that companies which have prioritized revenue quality over pure operations excellence have delivered breakthrough value, despite the recent challenges of economic uncertainty, increased competition, and globalization.
Deloitte’s research shows that focusing solely, or even primarily, on operational excellence will not help a WD company achieve greater return on operating capital (ROC). Instead, this should be accomplished through a laser focus on revenue growth and margin improvements. There are several key levers that may be optimized to help a company yield above-average ROC, including category management, product breadth, international sales, customer proximity, and sales force effectiveness.
The goal of this paper is to give WD companies aiming for superior performance a foundation for doing better than they might otherwise do by blindly following unexamined or untested suppositions about their results.