Why Day-to-Day Firefighting Douses Distributors’ Profit

Ask a distributor to describe their day-to-day, and there’s an excellent chance that they’ll use the term “fighting fires.” It makes sense that this term has become so popular – the work sounds urgent and important, even heroic.

And when you put a fire out, it delivers a psychological high. You feel accomplished and valued, and reacting means you’re thinking less and doing more.

But the “doing more” part is problematic. In an $11 trillion industry where 200,000 companies make less than a nickel of profit before taxes, constant busyness is bad for business. When leaders spend their time putting out operational fires, they’re not fixing the systems that start them — and that’s where real profit lives.

Consider what happens with literal fires: even if the firefighters get there right away and manage to preserve the structure, there’s still going to be damage, and that costs money. Firefighting may save the day, but prevention is what protects the building. It’s much better for everyone if nothing burns in the first place.

What firefighting looks like in distribution

When a distributor has a firefighting culture, it means that most teams are doing nothing but fighting fires, all day, every day. They’re chasing down order issues and overriding pricing. They’re manually fixing errors and expediting shipments to keep customers happy. And they’re reacting to exceptions that should have been flagged and prevented.

This kind of environment rewards activity, not outcomes. Your team may end the week with a long, impressive-looking list of problems solved, but how much profit did that chaos generate? When your systems aren’t designed to support the processes that drive profitability, people spend their time reacting to what breaks instead of creating real value.

Busyness and the illusion of productivity

The overwhelmed feeling can be easily mistaken for productivity. It creates a psychological reward loop: You’re constantly moving and shaking, and when you slap the right Band-aid on something, you get an emotional “win” that makes you feel essential, which motivates you to keep on moving and shaking.

I get it. It feels good to come through in the clutch. But, if your organization requires heroics just to get orders out the door, that’s a sign the system failed somewhere upstream.

If you listen to an elite athlete after completing a big comeback win, they often focus less on the accomplishment than on what they could have done better to avoid falling so far behind.

In contrast, most people believe they can do better if they just work harder, and the world reinforces this belief with top-line measurements. Lists and rankings create a kind of revenue mirage, rewarding the heroic scramble to save orders while missing the profit leaking out of the business.

I believe rankings can distract leadership from real profit levers; it’s hard to pull those when there’s a big, heavy firehose in your hands. When leadership is consumed by order-level exceptions, the business becomes strategically paralyzed; there’s simply no capacity left to fix the systems that create profit.

How firefighting stops distributors from taking command of profit

We estimate that up to 35%-40% of all orders in the distribution industry contain some sort of profit defect, whether it’s related to freight, a cost mismatch, undue pricing exceptions, or manual errors. Here’s why firefighting is bad for profit:

Activity hides margin defects. Temporary fixes feel good in the moment, but you end up losing sight of the deeper issues that require long-term solutions, such as:

• Outdated pricing
• One-time concessions that somehow became permanent
• Drifting freight terms
• SKU-level mismatches
• Resource-intensive manual interventions

You can’t improve what you can’t see. With those defects obscured by the mirage of productivity, you’re left guessing at how to increase value. Order-level visibility is the only accurate lens for profit.

Without visibility, you can’t manage your profit levers. One distributor I worked with had seen their business nearly collapse because they were chasing revenue and volume. Only later did they understand the need to run their business around contribution margin and operational efficiency, and that meant prioritizing clarity over activity.

It’s hard to break out of the firefighting mentality. Here’s what’s to blame:

• Leadership identity. “I take action, solve problems, and drive revenue. That’s what leadership looks like.”
• Industry expectations. “Revenue benchmarks matter — we can’t ignore what the industry measures.”
• Fear of slowing down. “With this much on our plate, stopping to scrutinize feels risky.”
• Tool limitations. “Our ERP doesn’t give us what we need, so we make up for it with effort.”
• Limited profit visibility. “Profit is important, but it’s not always clear where or how to prioritize it.”

The good news is that there’s a practical path forward.

Step 1: Shift your focus.

A profit-first mindset doesn’t mean doing less or growing more slowly. It means directing effort toward the work that creates economic value. Instead of measuring success by activity, leaders should ask:

• Which customers, orders, and activities truly contribute to profit?
• Where is effort being consumed without a return?
• What decisions would change if profitability were visible at the point of execution?

Step 2: Adopt order-level visibility.

Orders are the atomic unit of value. Every dollar of profit — or loss — is created at the order level, not in monthly summaries or blended averages. To understand where margins are leaking, leaders need forensic-level visibility into individual orders. That means seeing, for each order:

• The price actually realized, not just the list price
• The true cost, including freight, handling, and service effort
• Overrides, exceptions, and manual touches that erode margin
• Variability between “similar” orders that should perform the same but don’t

When profitability is only reviewed in aggregate, defects cancel each other out and remain invisible. Good orders mask bad ones. Volume hides waste. Teams stay busy, but leaders can’t pinpoint what to fix.

Order-level visibility turns profit from a lagging financial result into an operational signal, one that tells leaders whether their processes are working.

Step 3: Identify and eliminate profit defects.

For distributors, AI-powered software now makes this level of order-level visibility practical. Before AI, the amount of data that distributors generate was simply too much to build this level of visibility. But now, you can efficiently spot pricing inconsistencies, freight leaks, and cost mismatches at the order level. Inefficient manual processes and system gaps are much easier to pinpoint, as well.

Step 4: Build processes that prevent fires.

When fire departments aren’t fighting fires, they’re enforcing fire codes and educating the community on fire prevention. Distributors should be doing the same. Automate key processes, set up guardrails, and implement clean workflows. Teach your people how to get the most out of them. Fireproofing your operations will help you avoid the errors that eat into profits.

Step 5: Reinforce a profit-first culture.

With the right approach and tools in place, you can pass your new profit-first mentality down to your team. Train around contribution margin, not gut feel. Set expectations for quality, not sheer quantity and speed. Reward prevention, not heroics. If someone has to scramble to fix something, take the time to examine how it got to that point. Your top performers should be calm and efficient, not frantic and exhausted.

Are you profitable, or just busy?

Firefighting may feel productive and rewarding, but it will inevitably chip away at the bottom line distributors depend on.. Take a moment or two to slow down and assess whether that busyness is actually translating to profits. I suspect you’ll quickly realize that you could be doing a lot less work for a lot more rewards. Let go of the need to save the day, and save your margins instead.