Distribution must make a decision regarding its role in the specialty contracting supply chain.  It can continue its historical role as wholesale/retail combination and hope for profitability, or it can choose to manage the channel by providing low cost products and services.  
Profitability can only come through system productivity.  System productivity depends on recognition and elimination of waste in the current operations and can be further improved by operational process innovation.
The cost drivers (CDs) of distributors can be impacted by identifying and addressing internal inefficiencies, effects of customer interactions, and the impact of suppliers on price and delivery.  By managing the following elements, distributors can improve their bottom line by better than 30%:
1.	First-time pass yield of order taking and delivery
2.	Identification and reduction of waste
3.	Customer point of entry
This paper suggests a methodology for improving the system productivity through management of these elements.