1. BUSINESS PROCESS ASSESSMENT
Frameworks for business processes and financials related to distribution functions were prepared. The business process framework is structured as a collection of “7S” process groups – Source, Stock, Store, Sell, Ship, Supply Chain Planning, and Support Services. The financial framework is defined based on four financial drivers – Asset Efficiency, Cash Flow, Profitability, and Revenue Growth.
Each of the “7S” process groups was further expanded which resulted in 42 business processes critical to any distributor function. The financial framework was expanded into 10 financial metrics. The workbook (shown above) was developed to assess the 42 distributor business processes and serve as a guidance to identify process gaps.
2. GAP IDENTIFICATION (BUSINESS PROCESS & PROFITABILITY)
Common, good, and best practices were defined for each of the identified business processes. These benchmarks served as an assessment platform to evaluate business process performance. Cross-channel benchmarking numbers for the 10 financial metrics were also used to benchmark financial results. The deliverable, “Distribution Process Gap Report”, enables distributors to assess their branches and potential acquisition targets
3. SHAREHOLDER VALUE MAP
Having identified the business process gaps, distributors need to understand the importance of those gaps by linking the corresponding business processes to shareholder value. Each business process is linked to shareholder value. The ‘Supply Chain Profitability Framework’ was developed depicting each of the 42 business processes and their connection to shareholder value. This framework helps to understand the impact of various distribution functions on shareholder value and the interaction between the major process groups.