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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

Quantum Profit Management(QPM)

Advanced Techniques for Distribution Companies


Quantum profit management qpm
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
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).








Key management metrics
Key Management Metrics

GP: Gross Profit

CTS: Cost-to-Serve

NBC: Net Before Compensation


Key management metrics1
Key Management Metrics

Gross Profit (GP)

- Cost-to-Serve (CTS)

= Profit (NBC)



Gross profit gp drivers
Gross Profit (GP) Drivers

Sales Volume

Pricing (Gross Margin %)

Product Mix

Customer Mix


Cost to serve cts drivers
Cost-to-Serve (CTS) Drivers

  • Transaction Counts

    • orders

    • picks (invoice lines)

    • invoices

    • shipments


Deltas
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.


Granular measurement
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.




Best profit predictor
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.


Best profit predictor1
Best Profit Predictor

report from WayPoint Analytics


Best profit predictor2
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)


Nbc ratios
NBC Ratios

Manage NBC+/NBC- ratios everywhere.

Increase gains, reduce losses.

Where important segments drive losses, work to change ratios.


Nbc nbc
NBC+ : NBC-

report from WayPoint Analytics


Nbc incentives
NBC Incentives

Recognize and remove current incentives that cause people to drive losses.

Create incentives that pay when people are contributing to company goals.


Nbc incentives1
NBC Incentives

report from WayPoint Analytics


Summary
Summary

Whale Curves

Key Metrics: GP / CTS / NBC

Deltas

Granular Measurement

Best Profit Predictor

NBC Ratios

NBC Incentives