Optimizing Distributor Profitability: The value of best practices

In 2007-08, Texas A&M's Global Supply Chain Laboratory conducted a survey of 350 distribution firms which revealed that of all assets employed, three of the top four assets are inventory, customers, and suppliers.  With that as the premise, researchers and practitioners participating in a consortium organized by the Global Supply Chain Laboratory set out to determine how to best leverage these assets in such a way as to maximize distributor profitability.  The consortium members determined that these critical questions needed to be answered:

• Can companies achieve the Return-on-Investment (ROI) requirement implied by double-digit EBITDA (Earnings before Interest, Taxes, Depreciation, Amortization) multiples in most acquisiti...

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