Questions to Consider Regarding Analytics

Do we understand our sources of competitive advantage and disadvantage

When considering analytics-related investments and strategies, distributors should ask themselves:

• Do we know which market segments and niches are growing most rapidly, which are most volatile, and the underlying factors driving the dynamics in each of those segments?
• Can we target with precision our sales and marketing activities and monitor and measure the results?
• Do we know which customers, products, services, and suppliers are (a) most profitable at an aggregate level, (b) most volatile over time in terms of profitability, (c) most strategic to the business (that is the customer is regularly purchasing a high volume of core inventory items), and (d) costly to serve?
• Can we rapidly model the impact to revenues and profits of incremental changes in pricing, at an individual customer, SKU, or supplier level?
• Do we understand our sources of competitive advantage and disadvantage? Can we mode the effect of changes in those dimensions of our our business?
• Are we able to assess whether or not we are making smart decisions across the business?
• Do we have a strategic plan for expanding our analytical capabilities? Are our IT and business strategic plans aligned with our analytical requirements? Does the plan include a human capital dimension?

ACTION POINT: Identify and use the analytic tools that will help you answer the questions above.