In an industry where speed, accuracy, and margin control can make or break profitability, building materials distributors are increasingly turning to lean distribution practices. But adopting lean isn’t just about trimming costs—it’s about creating a smarter, more agile operation that delivers better results for customers and the bottom line.
This case study highlights how a mid-sized regional distributor transformed its operations through lean principles—and saw significant improvements in efficiency, customer satisfaction, and profitability.
Company Overview
Name: Midwest Build Supply (MBS)
Industry: Building Materials Distribution
Locations: 7 branches across three states
Annual Revenue: $180M
Customer Base: Residential and commercial contractors
The Challenge: Waste, Inefficiency, and Slipping Service Levels
MBS was growing quickly, but success was breeding complexity. As the business scaled, so did the operational headaches:
Inefficient warehouse layouts and picking processes
Inconsistent inventory accuracy across locations
Frequent order errors and delivery delays
Rising operating costs without a matching rise in margin
Customer feedback revealed increasing frustration around missed delivery windows and incorrect shipments. Leadership knew they had to act before growth stalled.
The Strategy: Lean Distribution as an Operational Mindset
Rather than just tweaking isolated issues, MBS made a company-wide commitment to adopt lean distribution principles. The goal was to eliminate waste, improve flow, and create a more responsive supply chain from receiving dock to jobsite.
Key Lean Concepts Applied:
Value Stream Mapping: To visualize and streamline end-to-end workflows
5S Warehouse Organization: To standardize and clean workspaces
Just-in-Time Inventory: To reduce carrying costs and improve agility
Kaizen Events: To engage frontline teams in continuous improvement
Standard Work Instructions: To reduce variation in fulfillment processes
Implementation Highlights
🏗️ 1. Warehouse Redesign
Reorganized picking paths to minimize steps
Created fast-moving SKU zones near dock doors
Implemented barcode scanning to reduce errors
📦 2. Inventory Optimization
Reduced overstock by 22% across all branches
Shifted to vendor-managed inventory (VMI) on low-turn items
Used sales data to establish min/max restocking thresholds
🚛 3. Delivery Scheduling Overhaul
Launched digital routing tools to consolidate deliveries
Scheduled jobs based on site readiness and contractor preferences
Reduced “return-to-yard” deliveries by 40%
📊 4. Performance Monitoring with Lean KPIs
Order accuracy rate
On-time delivery %
Inventory turns per product category
Cost per order fulfilled
Warehouse labor utilization
The Results: Lean Leads to Measurable Wins
After 12 months of focused implementation, MBS saw tangible improvements:
MetricBefore LeanAfter Lean
Order Accuracy Rate93.5%98.2%
Inventory Carrying Costs$4.2M$3.3M
Average Fulfillment Time3.8 hours2.2 hours
Cost Per Order Fulfilled$23.10$18.50
On-Time Delivery Rate87%96%
And perhaps most importantly:
📈 Gross margin improved by 1.8%—driven by fewer errors, lower carrying costs, and higher throughput.
Key Takeaways for Distributors
Lean is not a one-time fix—it’s a continuous discipline.
Small changes, when standardized, create big results.
Your frontline team is your greatest asset in finding and fixing inefficiencies.
KPIs are essential—not just to track performance, but to drive accountability and momentum.
Lean distribution isn’t just about cutting costs—it’s about improving the customer experience.
Final Thoughts: Lean Is the New Competitive Advantage
For distributors like MBS, adopting lean practices turned chaos into clarity and reactive processes into proactive systems. By focusing on waste elimination, standardized operations, and continuous improvement, they didn’t just save money—they built a scalable, customer-focused foundation for growth.
