After making a presentation on the topic at the Savannah, GA, Gases and Welding Distributors Association’s Spring Management Conference in April 2016, we wrote an article for the August 2016 issue of CryoGas International titled, “Operating Performance Improvements for Gas & Welding Distributors”.
We suggested in both that, from our studies of distributor P&L’s, there was significant room for profit improvement, particularly in costs and productivity of gas distribution and overall selling-marketing functions. We also stressed that there were significant opportunities for unit cost reduction in the $/trip and $/cylinder metrics in trucking packaged gases. (Note: Paul Matlock had written a similar but more detailed article on that in the CryoGas International Aug/Sep ’09 issue.)
In our August 2016 article, we asked the question, “Do we really know the hours and minutes of labor, cubic feet and pounds of material, and the specific equipment that should be used to do the work required?” We also noted that a combination of improvement initiatives in packaged gas distribution could yield an EBITA increase of as much as 13 percent. Since late 2016, and from that base of experience, we are proceeding with our Profit Improvement Project with G&W Distributors.
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