Distribution Turns to Data to Increase Margins & Recover Rebates

"The sky is the limit once you see what your data can do for your system." - Director of FP&A, Almo

Ongoing market volatility and inflation brings added pressure to the distribution industry in the form of decreased customer purchases, increased inventory and transportation costs, labor shortages, and reduced borrowing capacity (LaceUp, 2021). As a result, North American distribution leaders must rely on operational efficiencies to maintain and increase profit margins, and digital transformation to support those efforts has become essential. Distributors must stay agile, increase visibility into their supply chains, and conduct scenario planning that allows them to pivot quickly and strategically as changes occur (Blaylock, 2021). In short, they must become data-driven operations.

Blue Margin helped distribution client, Almo Corporation, in their pursuit of data-driven operations by implementing dashboards to provide critical visibility into operations, inventory management, and company performance against goals. The case study below illustrates how executive dashboards enabled Almo to manage by exception, address operational inefficiencies, and uncover manufacturing rebates leading to a 7-10% increase in profitability.

Founded in 1946, Almo Corporation is the largest independent distributor of appliances, consumer electronics, professional A/V equipment, furniture, and housewares in the United States with 9 regional distribution facilities and over 2.5 million square feet of warehousing.

Power BI Case Study - Distribution

Almo wanted to develop a data-driven operation, extract business insights from their legacy AS400 system, and integrate varied data sources into cohesive reporting for better insight into division and companywide performance against goals and prior year performance. Additionally, they sought to integrate product management into daily operations by removing process siloes, and to adopt scorecards to set and track stretch goals to drive progress.

Scott Landsberg, Director of FP&A, along with the executive team, wanted to “embrace and invest in change” that would “ignite a culture of growth” and encourage individual accountability.

Operational Efficiency and Inventory Management

Disconnected data sources made ad hoc reporting time-consuming and business insights difficult to digest. Disparate sources and Excel spreadsheets are unable to track trends and performance against goals the way a shared, real-time dashboard can, so Blue Margin designed Power BI dashboards to integrate operational data from across the company for a clear picture into business performance against the value creation plan.

Moving inventory data into Power BI allowed the Almo team to drill down into data points by SKU, brand, or part, and analyze purchase orders by customer. Landsberg says this drill down capability “has been life-changing for Almo."

Another benefit of centralized reporting was the opportunity to incorporate product management into daily operations. Once siloed, the product management team now has shared visibility on a single reporting tool that tracks performance against KPIs, surfacing opportunities for process improvement and collaboration.

In addition to overall business performance clarity, dashboards provide individual contributors visibility into their area’s performance against goals, driving a sense of ownership and role accountability across the company.

From Manual Reporting to Automated Dashboards

As Landsberg puts it, “The old way is not always the best way.” The company has evolved from .CSV exports to automated scorecards and a stronger sense of team across the company. Almo’s Power BI dashboards have been adopted in finance, accounting, product management, operations, and sales. According to Forbes, "effective rebate management is crucial for any distribution business", and the sales report alone “increased Almo's profitability 7-10%” by surfacing details to recover rebates from manufacturers.

Not only has Almo experienced operational and cultural benefits, but their partnerships have also benefitted as their reporting suite demonstrates to those partners that they’re “at the forefront of innovation.”

About Blue Margin

Blue Margin helps private equity and mid-market companies quickly convert data into automated dashboards, the most efficient way to create company-wide accountability to the growth plan. We call it The Dashboard Effect, the title of our book and podcast. Our mission is to deliver breakthroughs early and often - within your timeline and budget.