Issue link: https://www.e-digitaleditions.com/i/655792
32 FEDA News & Views factor must be scaled to refl ect the actu- al change, either positive or negative. For DSO, the fi rm improved by about 15 per- cent during the course of the last year. These two axes position each variable in terms of impor- tance and improve- ment. The fi nal factor in the exhibit is that the size of the circles refl ects the relative impact that each of the critical profi t variables has on prof- itability. In this par- ticular instance, the gross margin circle is the largest and the DSO (days' sales out- standing) is the smallest. Again, all of this information is company specifi c. The exhibit provides an instantaneous feedback mechanism for management. It indicates how well the fi rm is doing compared to its peers, how performance is changing and how important each factor is. It is a roadmap for improving Industry Insights continued results. The dynamic performance dashboard shown in Exhibit 2 provides a mecha- nism to help participants move from understanding fi nancial issues to taking action on those issues. It converts the static historical dashboards into a plan- ning dashboard. The top provides informa- tion on the six most important metrics in distribution. Three are overall performance measures—return on assets, profi t margin and asset turnover. The other three are the most important of the CPVs—gross margin percentage, operating expense percentage and sales growth. What makes the dashboard unique is that each participant has the potential to make changes in 14 different areas, each of which is identifi ed in yellow at the bottom. The cumulative changes have resulted in shifts in the performance metrics at the top. For example, the top factor (Return on Assets) has risen to 10.9 percent from what it was previ- ously. With an interactive dashboard, FEDA is now providing a package that moves benchmarking from a method of pre- senting historical data to one that helps fi rms improve performance. It makes benchmarking dramatically more impor- tant to the membership. What's even better: The enhance- ments are provided at the same price the PROFIT Report has always had—it is free. It is a great way for FEDA distribu- tors to really get serious about improv- ing their performance. What makes the dashboard unique is that each participant has the potential to make changes in 14 different areas, each of which is identified in yellow at the bottom. The Next FEDA Profi t Survey The FEDA Profi t Survey will be mailed to the FEDA membership n early June. It's free but you have to participate in order to receive the survey results.