On May 1, in co-operation with the Pacific-Western region, we completed our second "Essentials of Profitable PHCP Distribution" workshop. This one in Palm Springs was our largest class ever and included an eclectic mix of 46 principals, executives, branch managers and relatively new employees. In presenting the program, Dr. Kathryne Newton, our traveling professor, generated the strongest responses and most enthusiastic table talk from two areas that are worthy of a closer look.
The strongest reaction came late in the course from the surprising increase in profit a company can achieve from a 1% improvement in pricing, cost of goods sold, unit sales and operating expenses. Assuming a 2% net profit before taxes,
returns look like this:
1% Improvement
Profit Increase
Pricing 47.5%
Cost of Goods Sold 37.5%
Unit Sales 10.0%
Operating Expenses 11.5%