Distribution Research Consortia INDUTRIAL DITRIBUTION PROGRAM Dwight Look College of Engineering Optimizing Human Capital Development Achieving Distribution Competitive Advantage through People: Best Practices in Acquiring, Developing, Managing and Retaining Talent
OURCE TOCK TORE ELL HIP UPPLY CHAIN PLANNING UPPORT ERVICE UPPLY CHAIN PLANNING OURCE TOCK TORE ELL HIP upplier Management (trategic ourcing) Inventory Management ales Management Pricing Management Marketing Management UPPORT ERVICE Warehouse Fulfillment (Inbound) Warehouse Management Fleet Management Dispatch Management 3PL / Carrier Management Customer Order Fulfillment upply Chain Optimization Information Technology Finance Management Human Resource Management upplier election upplier Performance upplier tratification upplier Relationship Right Number of uppliers Inventory tratification What to Forecast? Demand Classification Forecasting Method When to Order? (Reorder Point) How Much to Order? (Order Quantity) Replenishment Policy Product Receiving Product Put-Away Product Placement Location Type Location Identification Product torage Cycle Counting ales Force tratification Mapping Customers and ales Force ales Compensation Techniques Customer tratification Cost-to-erve Assessment New Customer Identification Pricing Optimization Voice of Customer Market election and Target trategy Fleet Capacity Management Fleet Cost Assessment Routing Optimization Loading Optimization Carrier election and Performance Product Picking Order Delivery New Facility Location Network Optimization Resource and Asset Alignment (upplier - Inventory - Customer) ervice Level Optimization ystem Integration Credit Management Change Management Recruitment and Retention Attrition Total Landed Cost Payment Terms Quality and Flexibility Lead Time and Variability Fill Rate Growth Potential Inventory Mix Forecast Accuracy Fill Rate Total Landed Cost Accuracy and Efficiency pace Utilization Item and Location Accuracy BUINE PROCEE ales Force Mix Customer Mix Cost-to-erve and Right Price Time-to-Market Qualified Leads Per Marketing Activity Asset Utilization On-Time Delivery Accuracy and Efficiency Optimal Network Location Optimal Resource Deployment Optimal ervice Level Data Integrity Invoice Accuracy Past Due Tracking Efficiency Training Effectiveness (Benefit-to-Cost Ratio) Time and Cost-to-Hire Retention Rate FINANCIAL DRIVER Cost of Goods old Accounts Payable Inventory Inventory Cost of Goods old Warehouse Payroll Warehouse Rent Inventory Write-Off Accounts Receivable Marketing Expenses (Payroll, Promotion, Media) Fixed Assets (Plant, Property, Equipment) Transportation Expenses Warehouse Payroll Fixed Assets (Plant, Property, Equipment) Inventory Operating Expenses (Transportation and Warehouse) Inventory Accounts Receivable Additional IT Expenses Bad Debt (Write-Offs) Hiring and Training Cost Gross Margin Days Payables Outstanding Cash-to-Cash Cycle Time Working Capital Inventory Turnover GMROII Total Asset Turnover Cash-to-Cash Cycle Time Working Capital Inventory Turnover GMROII Total Asset Turnover Gross Margin Total Asset Turnover EBITDA Days ales Outstanding Gross Margin Total Asset Turnover EBITDA Total Asset Turnover EBITDA Total Asset Turnover Working Capital Inventory Turnover EBITDA Working Capital Days ales Outstanding Accounts Receivable Turnover EBITDA HAREHOLDER VALUE CAH FLOW 2008 upply Chain ystems Laboratory, Texas A&M University REULT FROM PREVIOU CONORTIA DITRIBUTOR FRAMEWORK Linking Business Processes and hareholder Value Business Processes Process Metrics Finance Elements Financial Drivers B U I N E P R O C E E H A R E H O L D E R V A L U E www.nawpubs.org www.naw.org/crdc http://supplychain.tamu.edu
Optimizing Human Capital Development The Council for Research on Distributor Best Practices will conduct its next Consortium on Optimizing Human Capital Development. Following the very successful Optimizing Channel Compensation and Optimizing Growth and Market hare consortia, this initiative will conduct research to develop practical methodologies and tools to optimize recruiting, training and retaining human capital. A two-day educational session will be developed based on the resulting knowledge, methodology and tools. What Is a Research Consortium? A Research Consortium is a collaboration of multiple companies, associations, universities or government agencies to conduct research with the objective of developing solutions to a problem or challenge common to everyone by pooling their resources for achieving a common goal. Why Join a Research Consortium? Many times companies cannot afford to invest in some research and development due to high cost and/ or lack of knowledge resources required to conduct the research. Research Consortia are an economical path to low-cost, high-quality research and development that is essential to the growth of companies. Consortia also allow for the sharing of best practices and strategies among the cutting-edge organizations that invest in such efforts. Who hould Join this Research Consortium? This Research Consortium will be beneficial to: Wholesaler-Distributors, Manufacturers who go to market through Wholesaler-Distributors Technology Providers who serve Wholesaler-Distributors and Manufacturers. Optimizing Human Capital Development 3
What Are the Benefits? Consortium members will: have the opportunity to actively participate in groundbreaking research in one of the most crucial and timely challenges facing the industry and receive results, methodology and tools. be able to direct the scope of the research so that the results are actionable and sustainable. have an 18-month head start on competitors in understanding and implementing the new best practices developed in this consortium as well as a far deeper understanding of the best practices from workshops conducted directly with their organizations by the research team. have the opportunity to send up to 5 people from their organizations to one of the two educational programs delivered at Texas A&M University for no cost other than travel expenses during the 2015 sessions. The educational programs will be scheduled following the conclusion of the research. The educational sessions alone represent a $1 0,000 value. How to Register Ron chreibman Executive Director NAW Institute for Distribution Excellence 1325 G treet, NW, uite 1000 Washington, DC 20005 Office: (202) 872-0885 Fax: (202) 785-0586 E-mail: rschreibman@naw.org Web site: http://www.naw.org/crdbp F. Barry Lawrence, Ph.D. Program Director, Industrial Distribution Program, Director, Global upply Chain Laboratory 3367 TAMU, Texas A&M University, College tation, TX 77843-3367 Office: (979) 845-4984 Fax: (979) 845-4980 E-mail: lawrence@entc.tamu.edu Web site: http://id.tamu.edu 4 Optimizing Human Capital Development
Value to Members Distributors and manufacturers will gain competitive advantage by implementing the scientific Optimizing Human Capital Development methods and using the tools developed to maximize value propositions. Technology companies will gain the knowledge base, methods and tools that can be implemented in their systems. Deliverables In addition to the body of knowledge resulting from this research, consortium members will receive the following tangible outcomes: An implementation strategy, tools and methodologies for member firms to optimize their human capital development, specific to each company, based on workshops conducted with their teams A one-day workshop at Texas A&M A two-day educational seminar aimed at providing firms with knowledge about how they can apply the concepts, tools and techniques identified in the research 5 free seats in the educational program that follows. Consortium tructure and Fees The membership fee is $25,000 per company in this consortium. The fee will cover attendance in consortium meetings hosted by the Global upply Chain Laboratory at Texas A&M University and workshops with member firms to design the research solutions personalized to their needs. Optimizing Human Capital Development 5
Optimizing Human Capital Development Achieving Distribution Competitive Advantage through People: Best Practices in Acquiring, Developing, Managing and Retaining Talent Wholesaler-distributors often struggle with recruiting, developing and retaining sales talent. They also experience challenges with developing a leadership pipeline for growth and succession. uccessful distributors understand the importance of acquiring, developing, motivating and retaining talented employees, but often struggle to develop and implement successful programs. Texas A&M University has developed a consortium in alliance with the NAW Institute for Distribution Excellence that will investigate how distributors can optimize their human resources. The consortium will explore the following issues: 6 Optimizing Human Capital Development
The speed at which most distribution firms can grow (profitably) doesn t solely depend on the distributor s geographic reach, physical assets, product selection, access to capital or innovative services. It depends on its human resources. Human resources are the most significant factor in distributor success. Not on the balance sheet and only listed on the profit and loss statement as an expense, the value of human resources within a company is often underestimated. Distributors have expended tremendous energy in optimizing operations with information technology, facility development, inventory control, transportation management, and so forth. Human resources are often left behind due to a lack of resources for training, a poor understanding of the return-on-investment (ROI) for human resources development, and the perception that people are more expendable than other assets within the business. Organizational Planning and Development Translating a distributor s growth goals to human resources development strategies, plans and policies. Establishing processes to ensure growth is manageable and sustainable. Forecasting talent needs and aligning human resources needs with growth strategies. Human resources are similar to other resources and require strategic planning for deployment. Determining the right number of people and their skill level to meet current and future needs. Quantifying ROI and applying it to hiring and personnel deployment decisions. electing and implementing change management programs. Culture is a difficult thing to change. People develop opinions about what their firm s values are and how they serve customers, and will often resist change that threatens their belief systems. Effective change management in distribution environments has not been studied extensively to date. The blend of sales and operations with a heavy customer relationship emphasis makes change more difficult. Building the right human resources infrastructure that can adapt to rapidly changing market conditions. Optimizing Human Capital Development 7
olutions Approach Acquiring Talent Most distributors are facing a management gap. When baby boomers retire, there will be a shortage of middle management talent at many firms. Finding the right people will require collaboration with universities, and junior and community colleges, and moving away from standardized programs, trades, and competitor s former employees. Attracting top talent by creating a work environment, culture and reputation as one of the best places to work in the industry. Developing Talent Assessing the knowledge, skills and abilities (KAs) of current employees and anticipating the KAs needed of future employees. The KAs change as the organization grows. Models for different size firms and emerging growth plans are needed for rapidly expanding and changing market conditions. Developing best practices for how to structure training and learning programs for current and future employees. Determining the ROI on education and training. What forms of training have the greatest ROI? How can training be used for retention, innovation and growth? Retaining Talent Motivating and retaining key personnel is optimal. Identifying best practices in compensation, where human resources contribute the greatest value and how to motivate and capture that value. Creating career development opportunities that are aligned to strategic goals. Examining how to develop a talent pool matched to marketing strategies. chedule August 2013 April 2014: April 11, 2014: March July 2014: April October 2014: August December 2014: January March 2015: August eptember 2015: Consortium Marketing and Registration Consortium Kick-off Process Development Individual Workshops Best Practices and Tools Development Final Meeting Education essions
Kaplan and Norton s The Balanced corecard tied financial metrics to key processes and triggered a great deal of work on internal business processes. Recent studies have worked to tie customer processes to them as well. The challenge to both processes has been the last module: Learning and growth. This process will prove to be the most complicated of all since it involves our greatest resource: People. The consortium will seek to quantify and optimize these critical human resources. Organizational Development Organizational Planning Aquiring Talent Developing Talent Retaining Talent Growth goals to HRD strategies, plans & policies HR Process to ensure growth is manageable & sustainable Forecasting talent needs Talent deployment Change management Managing org culture ROI on hiring & deploying HR Agile HR infrastructure Filling the management gap Developing middle managers trategies to recruit from different sources Creating a great work environment, culture & reputation Assessing knowledge, skills and abilities (KAs) Mapping KAs to operational needs Training & learning programs Best practices in training Motivating & retaining key personnel Employee engagement Career development: Career paths, mentoring & development Employee interest alignment Consortium Deliverables Consortium members will participate directly in the research and gain a better understanding of the findings. The full report will be issued to each consortium member with all analysis performed on the firm itself with the firm s own data. Direct recommendations will be made for individual participating firms on: Developing and using distributor organization development methods and tools Creating a human capital development plan, processes and metrics Implementing and measuring human capital development interventions, programs and activities All tools created to complete the study and analysis for the study All consortium member company results and data shared with researchers will be kept confidential. Only general findings and best practices will be shared with other consortium members. Distributors will benefit from the research findings and from sharing best practices with other cutting-edge firms in the consortium. Manufacturers will benefit from a shared strategy development study with the distribution community. Optimizing Human Capital Development 9
About the Council for Research on Distributor Best Practices The field of wholesale distribution continues to experience dramatic change. Distributors have faced challenges in the form of expanding service offerings, pricing pressure, cost controls, and spiraling logistics costs for many years. To address these changes and challenges, the NAW Institute for Distribution Excellence and Texas A&M University s Industrial Distribution Program in January 2009 launched an alliance dedicated to furthering the understanding and application of best practices in wholesale distribution. In doing so, the NAW Institute and Texas A&M combine the research and brand power of two well-known organizations serving wholesaler-distributors. Together, the NAW Institute and Texas A&M have formed a new entity the Council for Research on Distributor Best Practices or CRDBP. The CRDBP is dedicated to furthering the understanding and application of best practices in wholesale distribution. The mission of the CRDBP is to assist wholesalerdistributors and their suppliers through creating strategies for competitive advantage. Leaders in Distribution Research For more than 50 years, the NAW Institute for Distribution Excellence has conducted cutting-edge research into strategic management issues affecting the wholesale distribution industry. The research is conducted with best practice wholesaler-distributors, and the NAW Institute publishes leading-edge research studies with practical application that it shares with wholesale distribution firms of all sizes and across all lines of trade. As the distribution industry continues to become more competitive, the need for higher levels of research to identify and document new best practices becomes ever greater. Texas A&M s Global upply Chain Laboratory (GCL) is the nation s premier distribution research lab. The GCL brings cutting-edge distribution and supply chain research solutions to the industry. The GCL provides total solutions for companies by providing research expertise, project execution support, IT implementation assistance, education and training for end users. 10 Optimizing Human Capital Development
REULT FROM PREVIOU CONORTIA Order this study: http://www.naw.org/smo Order this study: http://www.naw.org/po Order this study: http://www.naw.org/odp Order this study: http://www.naw.org/cs Optimizing Human Capital Development 11
For more information about the Optimizing Human Capital Development Research Consortium, contact: Ron chreibman Executive Director NAW Institute for Distribution Excellence 1325 G treet, NW, uite 1000 Washington, DC 20005 Office: (202) 872-0885 Fax: (202) 785-0586 E-mail: rschreibman@naw.org Web site: http://www.naw.org/crdbp F. Barry Lawrence, Ph.D. Program Director, Industrial Distribution Program, Director, Global upply Chain Laboratory 3367 TAMU, Texas A&M University, College tation, TX 77843-3367 Office: (979) 845-4984 Fax: (979) 845-4980 E-mail: lawrence@entc.tamu.edu Web site: http://id.tamu.edu INDUTRIAL DITRIBUTION PROGRAM 204 Fermier Hall, 3367 TAMU College tation, TX 77843-3367 PH 979-845-4984 FX 979-845-4980 WEB id.tamu.edu