2008 - Page 35 of 59 - Modern Distribution Management

2008

Canadian Wholesale Revenues: Modest Rebound in March

Source: Statistics Canada
 
Canadian wholesalers reported a modest rebound in sales in March, helped by higher deliveries of building supplies and machinery and electronic equipment. However, the increase was not enough to prevent a second consecutive quarterly decline in sales.

Sales increased by an estimated 0.6% to $42.7 billion, recouping some of the 2.1% decline reported in February.

On a quarterly basis, wholesale sales fell 0.8% in the first quarter, following a 0.3% decline in the fourth quarter of 2007. First quarter sales were affected by a large drop in the motor vehicles trade group, which registered its fourth consecutive quarterly decline, as well as continued weakness in the beleaguered lumber …

Canadian Wholesale Revenues: Modest Rebound in March Read More »

Former Lawson Products Salespeople Plead Guity in Kickback Scheme

Former Lawson Products salespeople pleaded guilty at the end of last week to giving kickbacks to government employees, according to the Chicago Daily Herald. The case involved seven employees of Lawson or its subsidiary Drummond American Corp. and some of the government employees who bought from them.
 
As reported previously at mdm.com, sales agents were indicted on federal fraud charges, allegedly paying kickbacks totaling $140,000 to employees of some of their customers, including suburban municipalities, school districts, a non-profit organization and private businesses. They disguised the kickbacks as purchasing incentives. In return, the sales agents allegedly obtained higher sales commissions based on greater volume and prices.
 
Government employees are …

Former Lawson Products Salespeople Plead Guity in Kickback Scheme Read More »

Performance Food Group Acquisition Complete

The acquisition of Performance Food Group Company, Richmond, VA, by The Blackstone Group and Wellspring Capital Management has been completed. The transaction is valued at $1.4 billion.
 
Performance Food Group is being merged with a wholly owned subsidiary of VISTAR Corporation, a specialty foodservice distributor controlled by affiliates of Blackstone and Wellspring.
 
The newly combined company, known as Performance Food Group, is expected to have revenues approaching $10 billion and more than 10,000 associates.
 
As a result of the merger, Performance Food Group Company’s common stock was delisted and ceased trading on the NASDAQ Global Select …

Performance Food Group Acquisition Complete Read More »

ERIKS Will Own 95% of Econosto May 30

As of May 30, 2008, ERIKS will hold 95% of shares in valve manufacturer Royal Econosto NV. The distributor will buy the company for €8.21 a share.
 
Econosto has two divisions: flow and sealing technology (the production, sale and distribution of valves, gaskets, sealing products, hoses, couplings, instrumentation systems, chemical seals, etc.); and Comfort and Environmental Technology (production and sale of domestic and industrial HVAC and energy systems and services.)
 
ERIKS and Econosto will terminate the listing of Econosto on Euronext Amsterdam as soon as practicable in consultation with Euronext …

ERIKS Will Own 95% of Econosto May 30 Read More »

Go Beyond `Brochureware’ Online

Web sites are becoming increasingly important for distributors as a way to connect with customers and provide valuable information about products and services. This article looks at how you can build a simple but effective site that allows you to interact with and inform potential and existing customers.
 
Building an effective Web site is not about selling online. It’s about providing another avenue for customers to connect with your company. So say experts in Web site development and optimization, as well as in the distribution industry.

Increasingly, Web sites are becoming more important to and expected by customers as they seek to learn more about your capabilities and potential fit as a supplier.
 
Go beyond brochureware”-using just a picture of …

Go Beyond `Brochureware’ Online Read More »

Case Studies: Saving Hard Dollars in MROP

Case Studies: Hard Dollar Savings in MROP
Feature: Competitive Advantage in MROP

There are many paths to reducing “hard-dollar”invoice expenditures for MRO materials. Here are examples of some of those provided in The 20% Solution:
 
Special Negotiated Discounts -To negotiate the best deal, it is essential to understand the needs, problems and objectives of each party. Example: An earth products processor required special cartridge filters for its calcining and grinding equipment.

These filters were ordered 20 at a time, at a cost of $450 each, plus freight and emergency premiums due to long lead times and lateness in …

Case Studies: Saving Hard Dollars in MROP Read More »

Competitive Advantage in MROP

Case Studies: Hard Dollar Savings in MROP
Case Studies: Soft Dollar Savings in MROP

The procurement of maintenance, repair, operating and production supplies (MROP) accounts for 20 percent of total spending in an organization, but consumes about 80 percent of the time, effort and expense in purchasing, according to The 20% Solution: A Practical Guide to Dramatic Cost Reduction in MROP Procurement, a new book by industry veteran Joel Roth. This article contains excerpts and case studies from Roth’s book.


Roth says that very few organizations have analyzed and identified improvement potential in MROP procurement beyond price quotes. However, …

Competitive Advantage in MROP Read More »

Case Studies: Saving Soft Dollars in MROP

Case Studies: Saving Hard Dollars in MROP
Competitive Advantage in MROP

Purchase order costs include the entire procurement cycle: requisitioning, sourcing, placing the order, expediting, receiving, transporting, stocking, paying and so on. There are numerous soft-dollar savings that distributors can help their customers achieve, including bar coding, storeroom management, vending machines and electronic customized catalogs.

Potential cash flow and other improvements may very well exceed hard dollar savings potential. Here is one example outlined in The 20% Solution:
 
Consolidated Invoicing -The vast bulk of work performed in most …

Case Studies: Saving Soft Dollars in MROP Read More »

Robert C. Fernley of Association Management Firm Fernley & Fernley Dies at 85

Nationally recognized association executive Robert C. Fernley, 85, died May 8. Fernley was Chairman of the Board from 1962 to 1988 of Fernley &Fernley, a fifth-generation association management firm now run by G.A. Taylor Fernley.

The firm was started by T. James Fernley, a hardware wholesaler, in Philadelphia. T. James’son, Thomas A. Fernley Sr., joined his father when, in 1909, a number of other national associations approached them to serve as their organizations’management team. Fernley &Fernley manages several distribution associations, including the Industrial Supply Association and the Gases and Welding Distributors Association. The Association Management Company Institute presented Fernley with its Distinguished Service Award in 2004.

Fernley was active in …

Robert C. Fernley of Association Management Firm Fernley & Fernley Dies at 85 Read More »

Tornado Hits Distributor’s DC

Early in the morning May 9, Industrial Distribution Group’s Belmont, NC, distribution center was hit by a tornado. The distributor suffered an estimated $5 million to $7 million in damages, CEO Charles Lingenfelter told MDM.

The office building, a separate facility, was not hit, but the distribution center was severely damaged. Inventory was damaged by water and flying debris. Fortunately, nobody was hurt because the tornado hit in the middle of the night.

Lingenfelter estimates it will take a minimum of four to six months to repair the facility in part due to lead times on required materials.

Until then, the distributor is utilizing a temporary distribution facility about four miles away that local officials helped the distributor find. IDG has had to …

Tornado Hits Distributor’s DC Read More »

MDM May 25, 2008

This is the pdf of this issue of Modern Distribution Management. Apply the full $24.95 pay-per-view cost toward an annual subscription (within 30 days of purchase), which includes two issues a month plus access to more than six years of online archives and market data. Call 1-888-742-5060 or email info@mdm.com to …

MDM May 25, 2008 Read More »

Commentary: Enlightening MROP Procurement

Distributors have ample opportunity to take the lead (and build stronger customer relationships) in creating leaner and more productive supply channels. Author Joel Roth says he wrote The 20% Solution, some of it excerpted in this issue, to address the frustration of purchasing professionals who have difficulty dealing with MRO procurement. He gives the following recent example of how corporate buyers can go amiss:

A well-known international manufacturer of building materials tried for 15 years to install an effective integrated supply program for MRO. Three costly attempts failed. Their fourth attempt led to the following Request For Quotation: Time allowed for bidders to respond -13 working days. Total corporate spend on miscellaneous mill supplies -$1.2 million …

Commentary: Enlightening MROP Procurement Read More »

MDM News Digest 3810

Wolseley plc, distributor of plumbing and heating products to professional contractors and a supplier of building materials, reported overall that sales for the first nine months ended April 30, 2008, were up 2 percent and profit fell 23 percent. As a result of what the distributor called tough market conditions, Wolseley has made further cost reductions in North America since April 30, 2008. The distributor has closed 75 branches and reduced headcount by 200 at Ferguson and closed or consolidated an additional 15 locations in Canada, with a reduced headcount of 50 people. More
Womack Machine Supply Company has acquired California-based Applied International Motion LLC. The addition of …

MDM News Digest 3810 Read More »

First-Quarter Machine Tool Consumption Up 36.7%

March U.S. manufacturing technology consumption totaled $544.62 million, according to the American Machine Tool Distributors’Association, and the Association For Manufacturing Technology.

This total, as reported by companies participating in the USMTC program, was up 84.4 percent from February, and up 36.1 percent from the total of $400.19 million reported for March 2007.

With a year-to-date total of $1,183.75 million, 2008 is up 16.4 percent 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.

The March consumption numbers, as well as the first quarter as a whole, clearly demonstrate that the investment incentive stimulus package along with …

First-Quarter Machine Tool Consumption Up 36.7% Read More »

Tightened Credit Markets, Economy Play Role in Bidding War for IDG

The tightened credit markets and the economic downturn were center stage in the bidding for Industrial Distribution Group Inc., Atlanta, GA, according to a proxy statement recently filed by IDG with the SEC about its plan to be acquired by Luther King Capital Management.

In fact, Platinum Equity, which was originally the winning bidder for the industrial distributor, had first bid $12 a share in December 2007 but reduced its offer to $10 a share in mid-January. The private equity firm cited risk in improving IDG’s MROP and integrated supply business due to an overall decline in the industrial economy.

This prompted investment banking firm Robert W. Baird &Co. to go back to five bidders for new written proposals. Among the five bidders was WESCO, who showed an interest in …

Tightened Credit Markets, Economy Play Role in Bidding War for IDG Read More »

Grainger President on the MRO Market

James Ryan, president and COO of Grainger, provided his observations on the MRO market at the Electrical Products Group 2008 Annual Conference. Ryan will become CEO on June 1:
 
Procuring MRO supplies historically has been a back-burner concern for most organizations. It’s typically unorganized and unproductive. But that’s changing. More and more people who operate facilities are seeing the time and the costs associated with managing MRO. Yet it can be a big challenge for them to reduce those costs, and eliminate the headaches. 

“As companies fight to be competitive in their industries, they want reliable partners who can help them identify savings and improve productivity. The opportunity is there for MRO suppliers with the skills and know-how to help in some of …

Grainger President on the MRO Market Read More »

Canadian Economic Output Slumps in February

Source: Statistics Canada
 
Canadian economic output slumped again in February, after recovering in January from a steep decline in December. Several factors have contributed to the recent weakness in real gross domestic product (GDP).
 
The new Family Day holiday in Ontario shortened work hours in February for many firms. Weather also has been erratic, with record snow this winter in much of Eastern Canada and the coldest weather in years in Western Canada. Meanwhile, the US economy remained sluggish in the first quarter, as the worsening state of its housing market offset higher exports.
 
But mostly, growth in Canada has been restrained by large drops in auto assemblies. The recent volatility of auto production in Canada is in marked contrast …

Canadian Economic Output Slumps in February Read More »

Tightened Credit Markets, Economy Played Role in IDG Deal

The tightened credit markets and the economic downturn were center stage in the bidding for Industrial Distribution Group Inc., Atlanta, GA, according to a proxy statement filed this week by IDG with the SEC about the distributor’s plan to be acquired by Luther King Capital Management.
 
In fact, Platinum Equity, which was originally the winning bidder for the industrial distributor, had first bid $12 a share in December 2007 but reduced its offer to $10 a share in mid-January. The private equity firm cited risk in improving IDG’s MROP and integrated supply business due to an overall decline in the industrial economy.
 
This prompted investment banking firm Robert W. Baird &Co. to return to five bidders for new written proposals. Among the five bidders was …

Tightened Credit Markets, Economy Played Role in IDG Deal Read More »

ISM Survey: Average Salaries for Supply Chain Professionals

According to the Institute for Supply Management’s third salary survey, average salaries for supply chain professionals were:
 
Chief Purchasing/Supply Management/Sourcing: $128,821
Vice President, Purchasing/Supply Management/Sourcing: $210,419
Director, Purchasing/Supply Management/Sourcing: $125,833
Manager, Purchasing/Supply Management/Sourcing: $90,088
Experienced staff member (3 or more years of experience): $68,537
Entry-level staff member (less than 3 years of experience): $49,682
 
Additional findings:
Respondents who hold one or more certifications reported an average salary that was higher than those who do not. Overall, those who hold one or more certifications earned an average of $94,648, while those who do not hold a …

ISM Survey: Average Salaries for Supply Chain Professionals Read More »

Industrial Distributors Should See Positive Growth in 2008, Albeit Slower

According to Adam Fein, author of the 2008 Wholesale Distribution Economic Reports, 2008 will be a positive year for industrial distributors, though growth will be slower and uneven across the country. Industrial distributors are tied more closely to the industrial manufacturing economy than any other wholesale distribution sector, Fein writes in the latest issue of MDM. (Click here to view the issue.)

Revenues of industrial distributors rise and fall with manufacturing activity, though the link has become slightly weaker in recent years as more traditional industrial distributors diversify into …

Industrial Distributors Should See Positive Growth in 2008, Albeit Slower Read More »

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