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Parker Merchanting Business Transformation Case Study

• Aug 05, 2020

Parker Merchanting Case Study

Parker Merchanting is part of the Rexel group who are wholesale distributor of electrical consumable products to the construction  and industrial sectors. Headquarters in Paris and publicly owned with gross revenue of 13.3 billion Euros with a workforce of 27,000 employees operating in 26 countries. Parker Merchanting is the UKs safety and site supplies consumable division to the construction sector, operating from 20 branches with it UK head office in Leeds including a national call centre.
  • Sales Revenue for UK division had declined by 41% from 2008 to 2012, which adversely affected the safety division net profit contribution to Rexel Group.
  • In 2013 a third of the divisions turnover was due to be out of contract including the largest account.
  • UK division multi sale channel offer was not effective in term of trade counter and E commerce.
  • Customer complaints were at an all time high in terms of lack of product availability, inconsistent next day delivery performance and poor customer service experience in terms of day to day interaction with call centre.
  • Margin performance had eroded due inconsistent pricing strategy.
  • Product range was uncontrolled resulting in too many suppliers and too many SKU's
  • Inventory stock control was not sufficiently robust resulting in stock availably of core product being at 85% levels, which led to increased back orders, and excessive costs being in-cured through use of third party carriers.
  • Service performance from centralised DC was at best inconsistent which adversely affected the divisions ability to provide next day delivery service.
  • Employee engagements levels were at all time low as recorded in Rexel 2012 employee survey.
  • Rexel Group IT strategy required Infor ERP system, to be upgraded to M3, without creating an undue risk to the safety divisions performance. The UK divisions  had a track record of not embracing transformational change projects effectively and subsequent business performance had been adversely affected. 
  • Developed transformational strategy for Parker Merchanting to reverse sales and profit decline by focusing on 4 key pillars of Sales Growth, Margin Growth, Service / Operational Excellence and Employee Engagement.

Employee Engagement

  • Completed 9 block review to ensure that business had the right people and teams in place, which resulted in a restructure of the senior leadership team and external sales team.
  • Engaged with all stakeholders so they brought into the strategy and understood their roles in its successful execution.
  • Introduced engagement strategy which included formal reward and recognition schemes which included national sales awards, launched success factors appraisal system, rolled out product and system training plan for all employees,  launched monthly teams brief and newsletters to improve communication.

Sales Growth

  • Restructured new business tender team and personally mentored them in development of e-auction strategy.
  • Up skilled external National and Regional sales team from traditional farmers into hunters.
  • Launched New Markets Sales Strategy for Rail, FM and Industrial sectors.
  • Launched New Product Strategy for Face Fit Testing and New Own Brand "Graft Gear".
  • Developed and launched E-Commerce sales Channel.
  • Implemented Trade Counter Channel refurbishment and relaunch Strategy.
  • Launched OMINI channel monthly added value sales promotions for trade counter, call centre and e-commerce.

Margin Growth

  • Implemented category management and supplier tiered rebate structure
  • Developed and implemented Pricing strategy which re categorised low volume contract prices to off contract trade price sales.
  • Retrained Call centre, trade counters and regional sale teams to adopt the concept of trade price minus discount when they processed off contract sales enquires and orders.
  • Implemented robust process for the management of annual supplier increases and  reviewing products classified as contract priced products.

Service / Operational Excellance

  • Engaged with Supply Chain Director who oversaw the Centralised DC and developed a Service Level Agreement which addressed histroic service issues.
  • Developed and implemented S&OP inventory demand planning strategy to manage SKU's number and improve overall product availability utilising ABC principle.
  • Designed and implemented a Service excellence strategy utilising "Fish Principles" and a "Customer Charter" which was launched and trained into all members of the branch, trade counter and call centre teams.
  • Developed transformation strategy for adoption of E-commerce and M3 ERP implementation
  • Developed Operational Excellence strategy utilising Lean principles which addressed historic service issues of back orders, inconsistent On time Delivery performance, stock outs and miss picks.





  • As Divisional Managing Director, led a transformational business turnaround and restructured the business model with the objective of reversing declining sales which had fallen by 41% during the “credit crunch”. Reducing OPEX by £500K, increased gross margins by £1.5M and generating £2.8M free cash flow benefits were achieved by optimising working capital. Following the restructure, the business kicked on to achieve 20% top line growth and returned to profitability.
  • Successfully project managed Parkers migration onto Rexel new ERP (manufacturing) system, M3, which was viewed as the most successful IT transition of any Rexel Business
  • Developed new product offer by launching new Training and Consultancy service in 2013, which resulted in Parker Merchanting winning the BSIF Service excellence award in 2015
  • Successfully implemented S&OP system which resulted in availability of core line being improved to 99%, whilst overall stock holding was reduced by 20%.
  • Successfully improved On time Delivery Performance to 98%
  • Customer service levels improved to 81% overall satisfaction which was measured by research survey conducted by TLF
  • Developed and launched category management strategy with preferred suppliers which resulted in the margin performance being improved by 500bps
  • Devised new “own label” strategy including sourcing Supply Chain partners in the Far East to supply a new ‘own label’ safety consumable range; which increased profit margins to 80%+
  • Personally retained one of the largest clients for another three-year contract (£12M net to the business)
  • Successfully launched e- commerce channel and increased sales volumes to 20% viva the digital route.
  • Refurbished and relaunched trade counter channel and increased sales volumes to 12% viva this channel
  • Successfully mentored tenders team and sales team in adoption of solution selling principles which generated £20M of new business in construction, rail, industrial and FM sectors



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