Melissa Ralston Brad Bartlett estimate of each order for the companies in the under $10 million segment compared to the PPAI 100 companies. “The issue that immediately pops out to me is the ability of a business to generate profit with such small order sizes,” Bartlett says. “As we can see from the data, the way the PPAI 100 [companies] do this is to simply generate lots and lots of orders.” Note: Not enough suppliers making above $250 million reported data for this question to be accurately scored for that segment. Sample products are a necessary element of the industry, but research among these suppliers shows that a relatively small amount is spent in this area, suggesting streamlined and efficient processes in giving clients and distributors a sense of what they are purchasing. Turnover in factory positions tends to be higher than for office employees, and for most of 2022 and 2023, companies and employees have lived through what one expert described as “the recession that refuses to be.” Many employees were – and still are – willing to regularly look for opportunities that offer better pay or more favorable conditions than their current place of employment. TABLE 5 Sample Costs PPAI 100 Suppliers 1% Suppliers $250M+ 1% Suppliers $50M-$250M 1% Suppliers $10-50M 1% Suppliers Under $10M 2% TABLE 6 Factory Employee Turnover Rate PPAI 100 Suppliers 21% Suppliers $250M+ 49% Suppliers $50M-$250M 23% Suppliers $10-50M 11% Suppliers Under $10M 20% TABLE 7 Office Employee Turnover Rate PPAI 100 Suppliers 9% Suppliers $250M+ 10% Suppliers $50M-$250M 9% Suppliers $10-50M 6% Suppliers Under $10M 17% Office turnover rates can vary across companies and are likely to be affected by the environment and internal practices of each company. The higher turnover rate in the under $10 million segment might be attributed to a lower ceiling on average salaries and amenities compared to the largest suppliers. As suppliers grow, they undoubtedly invest in refining efficiency, the simple explanation for smaller suppliers struggling with on-time shipping compared to their larger competition. Smaller suppliers are also likely to turn out extremely unique, custom products. In any event, “on-time” is a difficult term to measure or define. Melissa Ralston, chief revenue officer of Koozie Group, told PPAI Media that certain realities prevent a perfect score in this regard. “I don’t think you could ever get to 99% or 100%,” Ralston says. “There will always be supply chain issues or a machine that breaks down. It could be that somebody called in sick that day who runs that machine, or weather conditions – a number of things. Maybe 98% is an attainable average, but I don’t think anything beyond that.” TABLE 8 On-time Shipping Percentage PPAI 100 Suppliers 97% Suppliers $250M+ 95% Suppliers $50M-$250M 96% Suppliers $10-50M 96% Suppliers Under $10M 87% The State of Growth 2023 | Must Read PPAI • DECEMBER 2023 • 73
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