May 2007 - Page 3 of 4 - Modern Distribution Management

May 2007

HeidelbergCement to Buy Hanson for $15.8B

HeidelbergCement AG, Heidelberg, Germany, has agreed to buy Hanson plc for about & pound; 8 billion (US$15.8 billion). The transaction forms the second largest building materials group worldwide.
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HeidelbergCement is one of the top producers of building materials worldwide, with its core products being cement, ready-mixed concrete and concrete products, aggregates, building materials and other products. It had sales in 2006 of & euro; 9 billion (US$12.2 billion).
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Hanson supplies heavy building materials to the construction industry, with sales of & pound; 4.1 billion (US$7.9 billion) in 2006. Its products fall into two categories: aggregates, which includes crushed rock, sand and gravel, ready-mixed concrete, asphalt and cement-related products; and building ...

HeidelbergCement to Buy Hanson for $15.8B Read More »

HD Supply Organic Sales Down 6.5%

The Home Depot, Atlanta, GA, reported first-quarter profit of $1 billion, compared with $1.5 billion in the same period in fiscal 2006.
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Sales for the first quarter totaled $21.6 billion, a 0.6% increase from the first quarter of fiscal 2006. Total sales in the retail segment declined 4.3% to $18.5 billion, and comparable store sales declined 7.6%.

Total sales in the HD Supply segment grew by 46% to $3.1 billion, reflecting sales from acquired businesses. Organic sales were down 6.5%.
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The housing market continues to be a challenge, and erratic weather conditions across the United States negatively affected our spring selling season," said Frank Blake, chairman & CEO.
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Earlier this year Home Depot announced that it was conducting ...

HD Supply Organic Sales Down 6.5% Read More »

First-Quarter Machine Tool Consumption Up 7.1%

March U.S. manufacturing technology consumption totaled $371.1 million, according to AMTDA, the American Machine Tool Distributors' Association and the Association For Manufacturing Technology.
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This total, as reported by companies participating in the USMTC program, was up 34.9% from February, and up 1.4% from the total of $365.89 million reported for March 2006. With a year-to-date total of $945.27 million, 2007 was up 7.1% compared with 2006.

These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.
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The U.S. Manufacturing Technology Consumption (USMTC) report, jointly compiled by the two trade associations representing the production and distribution of ...

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Core Inflation Unchanged in April

The Producer Price Index for Finished Goods increased 0.7 percent in April, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported.&nbsp ; This advance followed a 1.0-percent rise in March and a 1.3-percent increase in February.&nbsp ; In April, the index for finished goods excluding foods and energy remained unchanged for the second consecutive month.&nbsp ; At the earlier stages of processing, prices received by producers of intermediate goods rose 0.9 percent following a 1.0-percent increase a month earlier, and the crude goods index fell 1.5 percent after increasing 3.2 percent in March.

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Among finished goods, prices for consumer foods moved up 0.4 percent in April following a 1.4-percent increase in the previous month, while ...

Core Inflation Unchanged in April Read More »

Monthly Wholesale Trade: Sales and Inventories for March 2007

March 2007 sales of merchant wholesalers, except manufacturers'sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $346.3 billion, up 1.8 percent from the revised February level and were up 8.4 percent from the March 2006 level. The February preliminary estimate was revised downward $0.6 billion or 0.2 percent. March sales of durable goods were up 2.1 percent from last month and were up 6.6 percent from a year ago. Compared to last month, sales of computer and computer peripheral equipment and supplies were up 6.1 percent and sales of lumber and other construction materials increased 5.9 percent. March sales of nondurable goods were up 1.5 percent (+/-0.7%) from last month and were up 10.1 percent (+/-2.0%) ...

Monthly Wholesale Trade: Sales and Inventories for March 2007 Read More »

Regain Pricing Control

As customer bases shift, competition intensifies and commodity prices seesaw, it's more crucial than ever for distributors to maximize profitability by magnifying the value they provide for their customers and not competing on price alone. Increasing prices by 1 percent without hurting volume can improve profits as much as 11 percent, according to one pricing consultant.

Distributors looking to boost profitability and refocus on value should analyze and redesign their pricing strategy.

"If a sales force is out negotiating deals, there's very little control. They come back and say, 'I've got a deal at $90. I know our price is $100, but if we don't give them $90 we won't get the deal.' And everyone feels as if they are being held for ransom, says ...

Regain Pricing Control Read More »

Service-Oriented Architecture

Distributors have had wildly varying degrees of success in updating their legacy systems. Service Oriented Architecture provides an opportunity to preserve the value of legacy systems but doesn't pigeon-hole a distributor into an exclusively Web interface or Windows-based application. It also allows your system to adapt to technology that has yet to surface. Here's an overview.

It's 2007 and legacy systems have beaten the odds. Here we are, still plugging away on our green-screen applications, improving them, expanding them and making them work harder than ever before. How did this happen?

Dozens of silver-bullet green-screen-to-GUI tools have wandered into and back out of the marketplace. Many conversions have been performed, but there have been wildly ...

Service-Oriented Architecture Read More »

Growth Expected Through End of 2007

Economic growth in the U.S. is sustainable throughout the remainder of 2007, say the nation's purchasing and supply executives in their spring 2007 Semiannual Economic Forecast. Expectations for the remainder of 2007 are encouraging in both the manufacturing and non-manufacturing sectors. These projections are part of the forecast issued by the Business Survey Committee of the Institute for Supply Management& trade; (ISM).

Manufacturing Summary
The survey panel of purchasing and supply management executives remains optimistic with 62 percent of respondents predicting revenues to be greater in 2007 than in 2006. This is reflected in their expectations of a 5.6 percent net increase in revenues for the period. To support the revenue growth expectations, ...

Growth Expected Through End of 2007 Read More »

MDM News Digest 3709

GE Supply will now be named Gexpro. The name change follows the acquisition of GE Supply by Rexel, Paris-based distributor of electrical supplies. Gexpro, a $2.7 billion unit, will continue to operate as an independent Rexel banner in the U.S. More ...

Barnes Group Inc., Bristol, CT, has renamed its Associated Spring business segment Barnes Industrial. The Associated Spring brand will remain within the Engineered Springs SBU.&nbsp ; More ...

DXP Enterprises, Inc. has agreed to buy Delta Process Equipment, Inc., a $23 ...

MDM News Digest 3709 Read More »

U.S. MARKET ANALYSIS: Industrial Lubricants

Industrial Lubricants represented a market in 2006 of $3.2 billion, according to estimates by Industrial Market Information, Minneapolis.

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These charts show the top ten industries, by SIC code, consuming these products; and the 2005 end-user consumption of these groups sorted by the nine government market regions. ...

U.S. MARKET ANALYSIS: Industrial Lubricants Read More »

Identifying core value a core competency

When a distributor loses focus on its relationships with core customers and suppliers, the company opens a door to competitors, new and old. It's often not a case of mistreatment as much as benign neglect or not keeping up with shifting needs at the customer.

Increasingly, new competitors from different product sectors have found some good growth in other distributors'back yards with tangential products. And in some cases they can pick up some of the longstanding business that wasn't in their core by packaging a better value proposition. But too often distributors tee up those opportunities and don't recognize that it's happening.

That model is at full force as more cross-channel competition grows, and consolidators look to package as much volume as possible into their ...

Identifying core value a core competency Read More »

Manufacturers Remain Optimistic for 2007

Economic growth in the U.S. is sustainable throughout the remainder of 2007, say the nation's purchasing and supply executives in their spring 2007 Semiannual Economic Forecast. Expectations for the remainder of 2007 are encouraging in both the manufacturing and non-manufacturing sectors.
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These projections are part of the forecast issued by the Business Survey Committee of the Institute for Supply Management.
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Manufacturing Summary
The survey panel of purchasing and supply management executives remains optimistic with 62 percent of respondents predicting revenues to be greater in 2007 than in 2006. This is reflected in their expectations of a 5.6 percent net increase in revenues for the period. To support the revenue growth expectations, ...

Manufacturers Remain Optimistic for 2007 Read More »

Barnes Distribution Sales Grow 23% in 1Q

Barnes Group, Bristol, CT, sales rose 20% to $361 million in the first quarter 2007. Profit was up 50% to $27.7 million from the year-ago period.
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Sales at Barnes Distribution were $152.5 million in the first quarter 2007, up 23% from $124.4 million in the same quarter a year ago, as a result of $22.7 million of incremental sales from the KENT acquisition and organic sales growth of $3.7 million.
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Organic sales grew in large part as a result of price increases and continued growth in Corporate and Tier II accounts. Foreign exchange positively affected sales by $1.7 million in the first quarter 2007.
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Sales at Barnes Aerospace were $91.2 million in the first quarter 2007, up 36% from the same period a year ago as original equipment ...

Barnes Distribution Sales Grow 23% in 1Q Read More »

84 Lumber Buys Denver-Area Companies

84 Lumber Company, Eighty Four, PA, has purchased two Denver-area companies to add its network of more than 475 stores and 22 truss manufacturing plants.
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JAC & Company is a seven-year-old company which provides installation services, such as framing and trim, to professional contractors. Front Range Panel is a wall panel component manufacturing plant which supplies the professional home building and construction market.
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The two companies will now operate under the 84 Lumber banner as an 84 Lumber component manufacturing plant and as an 84 Lumber installed services hub.
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This strategic acquisition allows us to greatly expand the services we offer to the professional contractor market in the Denver Metropolitan area," said Frank
Cicero, ...

84 Lumber Buys Denver-Area Companies Read More »

Beacon Roofing Supply Sales Decline 11% in 2Q

Beacon Roofing Supply, Inc., Peabody, MA, reported sales in the second quarter 2007 dropped 11% to $286.9 million. The decline was partially offset by acquisitions made since the second quarter of last year.
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Declines occurred across three major product lines: residential, non-residential and complementary products. Complementary product sales declined the least at 5.1%.
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The existing market sales decline can be attributed to harsher winter conditions this year in the Northeast, Midwest and Canada, reduced new home construction activity in certain markets, and a flattening of inflation. In addition, Beacon reported a significant slowdown in reconstruction and reroofing activities in the markets that experienced damages from Hurricanes Katrina and Rita.
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Beacon Roofing Supply Sales Decline 11% in 2Q Read More »

Industrial Distribution Group 1Q Sales Fall 3.7%

Industrial Distribution Group Inc., Atlanta, GA, reported sales in the first quarter 2007 were $135.1 million, down 3.7% from the same period a year ago. Profit was $1.5 million, equal to a year ago.

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For the first quarter, revenues from Flexible Procurement Solutions, IDG's integrated supply offering including storeroom management, were $81.1 million, an increase of 0.7% from the first quarter 2006. FPS revenues were 60% of total first-quarter revenues as compared with the 57.4% reported in first quarter 2006.

As of March 31, 2007, the company had 336 total FPS sites, including 100 storeroom management arrangements. New FPS customers generated incremental revenue of $9.1 million for the first quarter of 2007, partially offset by a continued decline in ...

Industrial Distribution Group 1Q Sales Fall 3.7% Read More »

Wholesale Revenues Up 1.8% from February

Sales
March 2007 sales of merchant wholesalers, except manufacturers'sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $346.3 billion, up 1.8 percent (+/-0.5%) from the revised February level and were up 8.4 percent (+/-1.3%) from the March 2006 level. The February preliminary estimate was revised downward $0.6 billion or 0.2 percent.&nbsp ;
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March sales of durable goods were up 2.1 percent (+/-1.0%) from last month and were up 6.6 percent (+/-2.0%) from a year ago.&nbsp ; Compared to last month, sales of computer and computer peripheral equipment and supplies were up 6.1 percent and sales of lumber and other construction materials increased 5.9 percent.&nbsp ;
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March ...

Wholesale Revenues Up 1.8% from February Read More »

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