The MHEDA Distributor Statistical Comparisons (DiSC) Report provides some key insights into exactly how the high-profit firms generate better profit numbers. It focuses intently on the key profit drivers – growth, gross margin, expenses, inventory turnover and accounts receivable collections. The report provides a roadmap for any firm wanting to improve its financial performance.
Recently, MHEDA partnered with the Mackay Research Group to administer and improve the DiSC Report. Several MHEDA Board Members worked with the Mackay Group to improve areas of the report that had been lacking previously and make the report a useful tool for dealers in all segments of the material handling industry.
We had the opportunity to speak with four of the Board Members who provided input about the DiSC Report and who have used the report in their strategic planning to discuss how the report has improved and how MHEDA Members should be using the report. Thank you to Tom Albero, Doug Carson, Scott Lee and Scott Hennie for your help with this article.
The MHEDA Journal: You’ve participated in the DiSC Report with MHEDA for years through your company. Why do you continue to participate every year?
Tom Albero: We participate every year because we believe that the data from these reports help us become better year after year.
Doug Carson: Traditionally for years now, our primary OEM, MCFA, has utilized the tool to measure the performance of our dealership against their operational excellence parameters for their distribution network. We’ve been using this tool for so long many of the metrics are engrained in our management vernacular.
Scott Lee: The DiSC Report is the one tool containing information about businesses just like ours. We use it to compare ourselves to other industry leaders in the areas of Gross Profit Margin, overall employee expenses, and net profit.
Scott Hennie: Participating in the DiSC report allows me to measure and benchmark our performance to comparable companies in our industry.
TMJ: How has the DiSC Report been beneficial to your company?
TA: What does not get measured, does not succeed. We have generated multiple key performance indicators from this report and track them now on a weekly basis.
DC: It ensures that we are keeping pace with the top performers in the industrial truck distribution networks, not just our OEM, but industry wide. It readily identifies areas for improvement upon which we can focus.
SL: Without this tool, there is no way to determine if you’re leaving money on the table or worse, overspending compared to others.
SH: The DiSC report provides information to determine what areas we can improve our business, what areas we need to focus on for improvement and to challenge our business model against others to see where we might be able to make significant improvements in our process and/or structure.
TMJ: Last year, the Mackay Research Group and MHEDA made some changes to the DiSC Report. How did these changes improve the DiSC Report in your mind?
TA: The ability to sort and look at the reports in different ways has been very helpful.
DC: The spreadsheet presentation is much more user friendly and allows for easier comparison of our company’s specific metrics against our peers.
SL: On the Engineered Systems side, it was tailored to our specific business. It now only includes the information relevant to our structure. In the past, there were so many categories, people in our vertical market placed information in different areas causing the outcome to be less helpful.
SH: Because the engineered systems business doesn’t typically carry the assets that the industrial truck business does and we don’t have the transactional business of parts, service and rental, the DiSC report for the E.S. segment was simplified to better reflect personnel/financial ratios that are meaningful to our business.
TMJ: For MHEDA Members who choose not to participate in the DiSC Report, what do you feel they’re missing out on?
TA: We used to not participate and it left us in the dark on a lot of areas we should have focused on. We thought we were doing great. Once we started to participate we realized that we had so much room for improvements. Over the years we picked 2 or 3 areas to work on each year. Our Profits have improved dramatically.
DC: The DiSC report is one of the primary benefits of MHEDA membership. For the price of time to fill out your company’s survey, you’re provided a management tool for every department’s financial and operating metrics comparing you to the entire spectrum of MHEDA members. It shines a management spotlight on areas for improvement in your company.
SL: As a business leader, if you’ve ever had the thought “I wonder how we’re doing compared to others in our industry?”, then you are missing out. While it’s very important to set individual company goals and measurements, it’s also helpful to know how others are doing.
SH: The opportunity to honestly and transparently measure their business against peers and identify areas of strength and weakness to help facilitate strategic goals, business planning and process development.
TMJ: Anything else you’d like to say about the DiSC Report, the changes that were made, or the benefits to MHEDA members?
TA: Your company information is strictly confidential. My suggestion would be just to try it one year, embrace whatever the report is telling you and see what benefit you get out of it. We refer to this report constantly throughout the year and view it as one of the many great things we get out of being a MHEDA member.
DC: If you haven’t participated in the DiSC survey, take the time to request this year’s survey and examine the overall data provided to all members. While your company’s information won’t be in the survey, you will readily recognize the value in having the survey next year with your company’s data.
SL: We see it every year. The successful MHEDA members are taking part in the DiSC Report. They aren’t successful just because they take part but, it’s one of the contributing factors which allows them to make decisions moving their business in a positive direction.
SH: The DiSC report is one of the more valuable benefits of being a MHEDA member. If you are willing to make an honest evaluation of your business, the report helps expose areas of opportunity as well as reinforce areas of success.