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Cost-to-Serve Math and the New Paradigm

Dr. Kerri Laryea, President — iKlarity

• personnel development • leadership training • business math for distribution • cost-to-serve math • cost-to-serve in distribution

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In this video interview, iKlarity president Kerri Laryea sits down with Bruce Merrifield to discuss Bruce's new Cost-to-Serve (CTS) Math Training Course and explain why distributors will find it so useful when switching to a CTS mindset.

"When Bruce and I first met to discuss the challenges in teaching CTS math, he mentioned that it was a major paradigm shift for many distributors," Kerri said. "Clients and customers have a hard time going from thinking in one way to being able to implement these ideas into their organization."

"A large part of that comes down to the fact that balance sheets have been around forever," Bruce explained. "Financial management, ERP, and just about everything is geared towards balance sheets, which is what companies have always relied on to run their business."

"However, balance sheets only show one angle of your business," Bruce said. "For instance, what's the CTS for an individual customer on 147 picks on a given line item? Sometimes you'll pick 10 of them, other times it's 100 of them, and sometimes it's just 1 of them. Under the old system, nobody knows. That's just considered the cost of running your business."

"Thanks to big data, we can now look at the value profit equation from every line item, add it up to customers, to territories, and so on," Bruce continued. "It's a new world where we get to see things we've never seen before. We're a little like Adam in the Bible where he got to name all of those creatures because nobody else was around yet."

"I've intuitively known a lot of these concepts and I've been practicing it in a rough way, but I never had the precision that WayPoint Analytics provides," Bruce said. "So even I've been living out on the edge trying to coin words for new ideas and concepts."

"The CTS math course is important because people in the distribution industry – from the guys at the top all the way down to front line service people – need to thoroughly understand these concepts to more effectively manage infrastructure costs," Bruce said. "To have those kinds of conversations and discussions, your team is going to need a new vocabulary, new building block concepts, and different dynamics."

"We've put a lot of stuff into this course," Bruce explained. "It's like Microsoft Word where users can get a lot of benefit out of just using 10% of the software, but you'll also have power users who know and use everything. Some distributors will want all of their employees to learn every module and get 100% on each test. These are the guys who will do really well. However, the course is designed so that you can also get some benefit from just watching these modules while you're on your treadmill."

For more information about Dr. Kerri Laryea, visit: www.iklarity.com