September 2008 - Page 3 of 4 - Modern Distribution Management

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September 2008

Illinois Tool Works Revenue Up 10.1% in Latest Quarter

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Illinois Tool Works Inc., Glenview, IL, reported an operating revenue increase of 10.1 percent for the three months ended August 31, 2008. The double-digit increase in revenue growth for the three months was due to contributions from translation and acquisitions.
 
On a segment basis, the company's three-month moving average percentage change for operating revenues, comprised of base revenues, acquisitions/divestitures and currency translation, is provided below:
 
Industrial Packaging: +16.6%
Power Systems and Electronics: +13.2%
Transportation: +4.8%
Construction Products: +3.2%
Food Equipment: +11.2%
Polymers and Fluids: +43.5%
Decorative Surfaces: +1.0%
All Other: +4.6%
 
On Aug. 11, 2008, the company announced a plan to divest its ...

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United Natural Foods Taps New CEO and President

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United Natural Foods, Inc., Dayville, CT, has tapped former Performance Food Group chief Steven Spinner as its new CEO and president.
 
Current President and CEO Michael S. Funk will be chairman of the Board and will remain actively involved in strategic growth initiatives and key customer and supplier relations.
 
Spinner worked as president and CEO of Performance Food Group, one of the largest broad-line foodservice distributors in the U.S., with sales of more than $6.3 billion in 2007. Performance Food Group was acquired by two private equity firms in ...

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Air Products to Increase Gases Pricing in North America

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Air Products will increase schedule pricing on liquid oxygen and liquid nitrogen by 8%, liquid argon and liquid and bulk hydrogen by 12% and liquid and bulk helium by 15% to 30% for merchant customers in North America, effective Oct. 1, 2008, or as contracts permit.
 
Air Products attributed the increases to a need to address continued cost pressures and the need for ongoing investment in infrastructure to improve operating efficiencies."
 
Cost pressures includes material, labor and energy costs and capital investment to meet ...

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Canadian Manufacturing Sales Advance 2.7% in July

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Source: Statistics Canada
 
Current dollar manufacturing sales in Canada continued their broadly-based advance in July, rising 2.7% to $54.1 billion, a fourth consecutive monthly increase. Manufacturers last reported four consecutive months of growth in the first half of 2002.

Overall, 17 out of the 21 manufacturing industries increased compared with June, accounting for over 97% of total sales.

Most of the sales gains in July were due to higher volumes, in contrast to the price-induced increases observed in recent months. In 2002 constant dollar prices, July sales increased 2.0% to $48.2 billion, the highest level since November 2007.

Durable Goods ...

Canadian Manufacturing Sales Advance 2.7% in July Read More »

Richard Bell to Retire from Gates Corp.

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Richard Bell, chairman of Gates Corp., Denver, CO, and COO of the Industrial and Automotive group of UK-based Tomkins plc, will retire on Dec. 31, 2008, after 43 years. Bell has held these roles since 2007.
 
Effective upon Bell's retirement, Jim Nicol, CEO of Tomkins plc, will assume the role of chairman of Gates Corp. and Alan J. Power will take on the role of Executive Vice President, Industrial and Automotive, where he will be responsible for all of the Group's Industrial and Automotive businesses other than Gates Corp.
 
Gates manufactures industrial and automotive products, systems and component with operations in 25 countries. Gates is part of the Industrial &Automotive group of Tomkins plc, a global engineering company with revenue of $5.8 billion in 2007. ...

Richard Bell to Retire from Gates Corp. Read More »

Border States Electric Agrees to Buy Harris Electric Supply Co.

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Border States Electric, Fargo, ND, has agreed to buy Harris Electric Supply Company with locations in Clarksville, Columbia, Cookeville, Hendersonville, Lebanon, Murfreesboro, and Nashville, TN.
 
Harris Electric provides electrical distribution, power monitoring and power quality, lighting, data communication, control and automation solutions to the residential, industrial/original equipment manufacturer (OEM), commercial construction, data communications, and utility markets. The transaction is expected to close in November.
 
Harris Electric Supply Company employs 120 and serves more than 1,900 customers. The Harris Electric Supply Company name will not change but will include A Division of Border States."
 
Border States provides products and services ...

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Crane Co. Buys Delta Fluid Products

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Crane Co., a Stamford, CT-based diversified manufacturer of highly engineered industrial products, has purchased Delta Fluid Products Ltd., a designer and manufacturer of regulators and fire safe valves for the gas industry, and safety valves and air vent valves for the building services market, for $28 million in cash.
 
Delta Fluid Products, St. Helens, England, employs 220 people. Delta's 2008 sales are estimated to be $37 ...

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Textron to Exit Fluid & Power Business

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Textron Inc., Providence, RI, has agreed to sell its Fluid &Power business unit to Clyde Blowers Limited, a UK-based provider of power, materials handling, intermodal transport and logistics and pump technologies, for up to $645 million.
 
The sale will mark Textron's exit from the pump and power transmission industries.
 
Lewis B. Campbell, Textron CEO, said the move will allow Textron to focus its portfolio for more meaningful value growth, profitability and shareholder ...

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McJunkin Red Man Names New CEO

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McJunkin Red Man has named Andrew Lane as its CEO, effective immediately. Current CEO Craig Ketchum will serve as chairman of the Board of McJunkin Red Man Holding Corp. and H.B. Wehrle III would remain as chairman of the Board of PVF Holdings LLC.
 
Andrew Lane was COO of the Halliburton Company, a supplier to the energy industry, from 2004 to 2007.
 
We are excited to have Andrew join us as Chief Executive Officer as we head towards the next stage of our business," said Ketchum. "I am pleased to see Andrew come on board. His two decades of experience at Halliburton will no doubt be valuable as we look to expand within North America and globally."
 
Headquartered in Tulsa, OK, and Charleston, WV, McJunkin Red Man is a North American distributor of ...

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Keeping the Sales Force Motivated – Even When Sales Fall

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A recent article at inc.com says that the best way to boost sales force morale is to make "tough strategic choices" -not through benevolence. The article gives the example of IVO Appliance, a $12 million company that sells computer server systems that let employees access corporate software via the Web. One of the company's executives saw that the salespeople were "spinning their wheels" when sales fell in previous downturns. He tells the magazine: "You can completely demoralize a salesperson if they're selling in a segment that's doing poorly, no matter what you do. It's harder to get prospects and it's a longer sales cycle." Eventually, reps make fewer phone calls when they should be ...

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Firing Customers: A Good Idea?

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In my recent interview with Robert Kaplan, he addressed how he feels about firing customers. He says it should be the last option. He recommended examining your own processes first, ensuring you are efficient in dealing with these customers. Then try pricing special services, which may prompt a change in customer behavior. And then talk to the customer about ways his behavior can change -such as increasing the average order size. If all else fails, suggest the customer find another supplier or raise your price.
 
"But there are a whole series of things you can do to transform unprofitable customers to profitable ones," Kaplan says.
 
Read the interview with Kaplan, Take Strategy to the Front Lines,

Firing Customers: A Good Idea? Read More »

Labor Productivity Improves in Wholesale Sector 2006-2007

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Labor productivity -defined as output per hour -increased in the wholesale sector in 2007 by 2.1 percent from 2006 to 2007, according to a new report from the Bureau of Labor Statistics. Unit labor costs increased as well.
 
Between 1987 and 2007, labor productivity in wholesale trade increased at a 3.3 percent average annual rate.
 
2006-2007
Output per hour grew in 12 of 19 detailed wholesale trade industries in 2007. (See table below.) Commercial equipment wholesalers experienced the largest productivity gain, 13.7 percent.
 
Sectors seeing decreases were motor vehicles and parts, lumber and construction supplies, metals and minerals, druggists'goods and miscellaneous durable and nondurable goods.
 
Unit labor costs fell in seven ...

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MDM News Digest 3817

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Motion Industries, the industrial parts group of Genuine Parts Company, Atlanta, GA, has acquired Drago Supply Company, a regional industrial supplies distributor headquartered in Port Arthur, TX. Drago Supply has eight locations in Texas, Arkansas and Louisiana. More
 
DXP Enterprises, Inc., Houston, TX, has acquired Massachusetts-based PFI, LLC, for $65 million. PFI distributes fasteners, rivets and hose clamps. The company has locations in Georgia, North Carolina, Illinois, Ohio, Texas, California, Massachusetts and Florida. More
 
Interline Brands, Inc., Jacksonville, FL, ...

MDM News Digest 3817 Read More »

U.S. PT/MC Sales Down; Canadian Sales Up From June

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U.S. distributors'overall sales of PT/MC products fell 1.1 percent in July 2008 compared to June 2008. When matched up against sales in the same month last year, sales in July 2008 were up 10.2 percent. Accounts receivable collection days increased 2.6 percent since June 2008. The confidence index of U.S. distributors for July dropped 0.2 points to 5.4 (on a 10-point scale).
 
Canadian distributors were the only category reporting a gain in sales in July 2008, posting a 2.0 increase over June 2008. Sales over the same period last year were up 6.4 percent. Accounts receivable collection days dropped dramatically, by 19.3 percent compared to June 2008. In July 2008, the confidence level of Canadian distributors was held constant for the sixth consecutive month at 5.7 (on a ...

U.S. PT/MC Sales Down; Canadian Sales Up From June Read More »

PrimeSource to Buy Compass International

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PrimeSource Building Products, Inc., Carrollton, TX, distributor of building materials and construction fasteners, will buy Compass International Inc., distributor and originator of MARKER and DARTS fasteners.
 
Compass is headquartered in Anaheim, CA, with offices in Chicago, IL, Houston, TX, and Atlanta, GA.
 
PrimeSource is very pleased with this acquisition as it allows us to expand our already robust product offerings and consolidate them under the Pro-Twist brand. This deal will afford easy distribution of all current Compass International products through our local PrimeSource distribution centers located from coast-to-coast," says Ken Fishbein, Co-Chief Executive Officer of PrimeSource. 

Compass International's MARKER family includes drywall, ...

PrimeSource to Buy Compass International Read More »

United Stationers Makes Leadership Changes

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United Stationers Inc., Deerfield, IL, master distributor of business, jan-san and industrial products, has tapped Stephen A. Schultz to the position of group president, LagasseSweet and ORS Nasco.

In this new role, he will assume responsibility for setting and monitoring the delivery of strategic goals and objectives for both business units. Schultz joined Lagasse, the company's janitorial and breakroom supplies division, in early 1999 and has served as its president since 2001.
 
Todd A. Shelton has been promoted to president of LagasseSweet after serving since 2005 as its COO. Shelton joined Lagasse in 2001, directing its financial and operational functions. In his new role, he will be responsible for leading LagasseSweet in the development and execution of ...

United Stationers Makes Leadership Changes Read More »

Machine Tool Consumption Falls June to July

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July U.S. manufacturing technology consumption totaled $303.44 million, according to AMTDA, the American Machine Tool Distributors'Association, and AMT - The Association For Manufacturing Technology. This total, as reported by companies participating in the USMTC program, was down 21.5% from June but up 5.7% from the total of $287.02 million reported for July 2007. With a year-to-date total of $2,655.14 million, 2008 is up 15.5% compared with 2007.

These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.

Despite the consecutive 1.3% increases in Durable Goods orders for June and July, manufacturing technology orders turned down sharply in July, with much of the downturn in ...

Machine Tool Consumption Falls June to July Read More »

MDM Interview: Take Strategy to the Front Lines

Leave a Comment / Strategy, Management, Top Distributor Sectors, Subscriber Only /

Many leaders understand the importance of matching strategy with operations, but few companies have systems in place to actually do so, according to Robert Kaplan and David Norton, creators of the widely used Balanced Scorecard performance measurement tool and leading advocates for customer profitability analysis. Kaplan recently spoke with MDM Editor Lindsay Young about the challenges inherent with effective strategy implementation in a wholesale distribution company.
 
In their latest book, The Execution Premium: Linking Strategy to Operations for Competitive Advantage, Kaplan and Norton present a formal systems approach to implement strategy at every level of an organization. The authors'six steps, as shown in the graphic on page 4 of this issue, ...

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More Optimism in MDM Survey

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The twice-yearly MDM Survey on the Economy was conducted during the last two weeks of August. A similar survey was conducted in February. Here's what MDM found overall, as well as a breakdown in distributor and manufacturer responses.
 
Concern over the state of the U.S. economy has grown among MDM readers over the past six months even as more believe conditions may soon stabilize.
 
Concern over the current state of the economy grew most among manufacturers who responded to the survey, with 25.4 percent saying they were very concerned"and 59.7 percent answering "concerned."In February, those numbers were 25 percent and 50 percent, respectively.
 
Distributors showed slightly less concern, with 24.1 percent being "very concerned"and 56.2 percent ...

More Optimism in MDM Survey Read More »

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