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Quantum Profit Management (QPM)

Quantum Profit Management (QPM). Advanced Techniques for Distribution Companies. Why?. QPM is the most effective way to manage a business for profitability. QPM keeps you focused on what really matters. QPM helps everyone pull together for real results. Whale Curves.

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Quantum Profit Management (QPM)

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  1. Quantum Profit Management(QPM) Advanced Techniques for Distribution Companies

  2. Why? QPM is the most effective way to manage a business for profitability. QPM keeps you focused on what really matters. QPM helps everyone pull together for real results.

  3. Whale Curves You have to understand whale curves if you want to understand the way your business really generates profits. You have to understand whale curves if you want to understand your profit potential. You have to understand whale curves if you want to know your vulnerabilities (and those of your competitors).

  4. Whale Curves

  5. Whale Curves

  6. Whale Curves

  7. Whale Curves

  8. Whale Curves

  9. Whale Curves

  10. Key Management Metrics GP: Gross Profit CTS: Cost-to-Serve NBC: Net Before Compensation

  11. Key Management Metrics Gross Profit (GP) - Cost-to-Serve (CTS) = Profit (NBC)

  12. Thinking About Spread

  13. Gross Profit (GP) Drivers Sales Volume Pricing (Gross Margin %) Product Mix Customer Mix

  14. Cost-to-Serve (CTS) Drivers • Transaction Counts • orders • picks (invoice lines) • invoices • shipments

  15. Deltas Your basic job is to create a difference (or delta). Positive and negative deltas sum to make your performance. Managing the deltas gives you direct control over your results.

  16. Granular Measurement Don’t draw conclusions from averages – dig into the numbers to find out what they’re made of. Look at service models at the granular level.

  17. Granular Measurement

  18. Granular Measurement

  19. Best Profit Predictor CTS (cost-to-serve) per revenue dollar is the best predictor of profitability. CTS% will have a broad variability across the company. CTS% vs GM% directly reports profitability.

  20. Best Profit Predictor report from WayPoint Analytics

  21. Best Profit Predictor CTS (cost-to-serve) per revenue dollar is the best predictor of profitability. CTS% will have a broad variability across the company. CTS% vs GM% directly reports profitability. CTS is driven by transaction counts.(orders / picks / invoices / shipments)

  22. NBC Ratios Manage NBC+/NBC- ratios everywhere. Increase gains, reduce losses. Where important segments drive losses, work to change ratios.

  23. NBC+ : NBC- report from WayPoint Analytics

  24. NBC Incentives Recognize and remove current incentives that cause people to drive losses. Create incentives that pay when people are contributing to company goals.

  25. NBC Incentives report from WayPoint Analytics

  26. Summary Whale Curves Key Metrics: GP / CTS / NBC Deltas Granular Measurement Best Profit Predictor NBC Ratios NBC Incentives

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