Finally, and at long last, we are entering a time of high growth. This information comes not just from anecdotal reports from distributors across the country but also from some pretty respected economists. While speaking to the National Association of Wholesale/Distributors Executive Summit, economist Alan Beaulieu of ITR Economics confirmed much of what distributors were noticing in their local territories: business is expanding.
Executives in every industry are forced to confront the immediate future, and yet, they must ensure that the longer view — a strategic plan — is in the mix to ensure the business thrives. And the glue to all this planning is, unsurprisingly, the finances.
Newport News, Va. — Ferguson’s parent company Wolseley plc, an international distributor of plumbing and heating products to professional contractors, announced its financial results for the first half of the 2017 fiscal year alongside a name change and the upcoming retirement of CEO Frank Roach.
"Our biggest challenge and a goal I had set for the company was to shift as large a percentage of the new construction part of our business, nearly 95 percent, to the add-on and retrofit part of the industry. We have been very successful in doing so because 40 percent of our business is now retrofit and add-on."
Even though the theme, workforce, is not our yearlong focus in Distribution Center, I still find the topic one of unending fascination. It’s not surprising that we have a regular stream of stories that I hope are helpful on this topic.
There is nothing new about distributor compensation issues. As far back as the 1960s, wholesalers have been concerned about innovative approaches to motivating salespeople. The environment back then was different; warehouses were smaller, inside sales were untrained, and phone systems were inefficient.
Many distributors intend to provide better customer service in 2017 than in the past. For the outside observer, the question becomes: What precisely does improved customer service mean?
During this past year, I read “The Power of Habit,” a marvelous book by Charles Duhigg. Boiling it down, he says you can create habits to achieve goals, almost regardless of the purpose. Create the habit, adhere to it, and you have a greater chance of achieving your goal. The book resonated with me because it seemed like a simple way to improve and become more efficient without immersing myself in a great deal of complexity.
This summer, HARDI distributors reported the strongest consistent growth since the easy comparisons following the Great Recession. The National Bureau of Economic Research tells us that ugly downturn existed from 2008 through the middle of 2009. The beginning and end of recessions are not like turning a lamp on and off. The ability to identify our economic prospects is a gradual process, like when the sun is rising or setting. After the economic sun started to rise in 2009, it was not until the back half of 2010 that a recognizable improvement began to reach HARDI members and turn TRENDS sales growth to positive.
A forecast in this day and age is actually always going to be wrong because the reality is complex. On a global scale, one needs to conduct economic forecasts that will almost never hit the true outcome. This is similar to sales forecasts and logistics forecasts that depend on other factors to come true. They will be off. But that’s OK. Because one who views a forecast only as something that absolutely has to come true does not understand forecasting.