Distribution

Helping distributors achieve excellence in an age of rapid change, growing competition, and rising expectations.

Now more than ever, distributors need to move fast to remain competitive. McKinsey Distribution brings unrivaled expertise, experience, and proprietary solutions to address our clients’ most pressing challenges and help distributors deploy distinctive strategies, improve financial performance, and prepare for a future of continued evolution.

McKinsey Distribution serves the leading distributors in every sector, including industrials, technology and electronics, food and beverage, healthcare, consumer, and materials.

27

of the top 30 distributors in North America served

3

of the top 5 distributors in every sector served

1,750+

distributor engagements since 2010

How we help clients

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As the supplier-consumer relationship continues to evolve, distributors are facing immense challenges. Our team helps clients grow their business by meeting these challenges head-on.

Alex Abdelnour, Partner, Atlanta

Examples of our work

Pricing journey

  • 250 basis points margin increase
  • Two years of consecutive quarterly margin expansion

We supported a leading industrial distributor on an end-to-end pricing journey to overturn several years of margin decline. Our insights identified solutions including introducing new policies, redesigning sales processes, and building capabilities and incentives for several hundred branches and associates.

Landmark merger integration

  • 2% return on sales-synergy improvement (50% greater increase than original goal)

We partnered with leading distributors across pre-merger planning and post-merger integration efforts and supported a newly combined entity in achieving a 2% return on sales-synergy improvement through a combination of cost reduction and commercial growth levers.

Advanced analytics

  • 2-4% increase in revenue
  • 6-12% overall reduction in sales expenses

We deployed machine-learning solutions at a global distributor of industrial supplies to accelerate profitable growth. We connected data sources such as customer relationship management, employee communication, finance data, HR data, and transaction information to identify drivers of sales success and pipeline conversion. These insights helped refine sales processes, sales-capability building, and sales-territory planning for greater profits.

Digital enablement

  • $250M+ incremental revenue
  • 25% faster time-to-market of new features

We partnered with a leading B2B parts distributor to enable an integrated digital marketing and sales transformation, designing a personalized customer journey for web and implementing a process of continuous, rapid customer experience improvement. We reduced feature time release by 4x through agile IT improvements and DevOps and introduced over 100 new web features that enabled incremental revenue from improved site performance, personalization, and digital marketing.

Cost improvement

  • Over $100 million in operations and supply chain savings
  • 50-basis-point improvement in EBITDA margin

We helped a leading industrial products distributor launch and execute a next-generation margin improvement program - optimizing its branch and distribution center network, boosting productivity in field operations and supply chain, and improving category management and supplier engagement. Our redesign of the network supported commercial service strategy and enabled growth by scaling sites with automation while speeding delivery to customers. With an updated inventory stocking and deployment strategy, the company optimized local assortment, improving its overall cost position.

Featured insights

Article

How distributors can build momentum in a slowdown

– The outperformers in distribution can gain ground during these unique, uncertain times—and enter the recovery poised to create even more value.
Article

Category management’s next horizon: How distributors can outperform

– As prices and customer expectations rise, category management separates distribution leaders from laggards.
Article

How distributors can self-disrupt to win in the new digital world

– Distributors can learn new strategies to make them effective in a world with increasingly powerful digital players.
Article

Defying cost volatility: A strategic pricing response

– While input cost increases and volatility are challenging, they present an opportunity to improve pricing and institutionalize... best practices—but margins will likely suffer if these are not executed in a strategic way.

Keep exploring

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