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Article Excerpt
WHOLESALE DISTRIBUTION contributed more than 25 percent of the U.S. economy's total productivity gains over the past 15 years. Surprisingly, only four sub-sectors of the wholesale industry supplied most of the growth since 2001. Ongoing technology investments by distributors bode well for future productivity gains throughout the industry.
Productivity is fundamental to economic growth. The U.S. economy has been able to produce more goods and services over time by making production and distribution more efficient, not simply by adding more labor time. Output per hour, the most commonly cited labor productivity statistic, captures the combined effect of changes in technology, capital per worker, level of output, capacity utilization, managerial skill, and many other factors.
Productivity is also crucial to profitability in wholesale distribution because employee compensation costs--salaries, commissions and benefits--represent 60 to 70 percent of total operating expenses. Distributors are at the forefront of using technology to reduce repetitive, low-value-added activities such as order processing, billing,...
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