January 2009 - Page 5 of 6 - Modern Distribution Management

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January 2009

MDM Interview: Creating a ‘Sense of Urgency’

Leave a Comment / Economic Trends, Research & Analytics, Features, Strategy, Management, Top Distributor Sectors, Subscriber Only /

Harvard Business School Professor John Kotter recently spoke with MDM Editor Lindsay Young about his new book, A Sense of Urgency. Kotter has researched and written a series of leading books on change management including Our Iceberg is Melting, a tale of business change told in fable form. Kotter says one of the biggest mistakes organizations make when pursuing change is not creating a high enough sense of urgency among employees to spark the needed shift in direction. The current economic situation has exasperated change efforts in many companies.

As Kotter says in his latest book, A Sense of Urgency: At the beginning of any effort to make changes of any magnitude, if a sense of urgency is not high enough, and complacency is not low enough, ...

MDM Interview: Creating a ‘Sense of Urgency’ Read More »

Commentary: Cash is King. Control Expense. Focus.

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The above is shaping up to be the theme for 2009. It's also the message so far from a strong response to a profitability survey MDM is conducting (see end of article for link if you haven't filled it out). We will have a full survey report (with participants' getting the first executive summary) in February, but I'd like to share a few early indicators, coupled with feedback on what we're hearing from distributors.

This first full week of 2009 brought more bad news for manufacturing globally. In the U.S., wage and hiring freezes are starting to go into effect for 2009. Many distributors are targeting cost reduction of 5-10 percent this year, including headcount, to match anticipated revenue drops. With shaky indicators starting off the year, ...

Commentary: Cash is King. Control Expense. Focus. Read More »

Why LTL May Be A Better Option

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Distributors can improve shipping predictability and decrease costs by reevaluating how they receive product from their suppliers. This article looks at how LTL is a little-considered option but can cost half that of parcel delivery and a third of overnight air deliveries.

Beyond renegotiating existing contracts, many wholesale distribution executives don't consider changes that can be made to shipping procedures to save money and improve cash flow.

It's like this is the way we've been doing it for so long, we don't think that there is another way, says Doug Savage, president of Bearing Service Inc., Livonia, MI.

But reevaluating shipping options and processes to get product from the manufacturer to the distributor can lead ...

Why LTL May Be A Better Option Read More »

2009: A Buying Opportunity

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Despite the credit crunch and tough times, a company with the capital may want to take advantage of conditions to make strategic acquisitions. Here's a look at best practices in acquisitions to ensure success in this strategy.
While the current economic environment and financial market meltdown have most business owners focused on conserving cash, controlling/reducing headcount and holding on for dear life, most of the wealthiest individuals in the world (including Mr. Buffet) will likely tell you that it is in these uncertain times that fortunes are made.
Our belief is that this is true for distribution and industrial businesses that have the capital and courage to pursue strategic acquisitions in 2009. Valuations have meaningfully decreased and most of the ...

2009: A Buying Opportunity Read More »

MSC Industrial Aims to Grow Market Share Despite Conditions

Leave a Comment / Companies, Top Distributor Sectors, Facilities Maintenance (MRO), Subscriber Only /

MSC Industrial Direct Co. Inc., distributor of metalworking and MRO supplies to industrial customers, reported sales for its fiscal 2009 first quarter were $433 million, down 1 percent from $437.6 million in the prior-year quarter.

Profit for the quarter was $45.1 million, down from $46.9 million. The distributor could not provide much guidance for future quarters, however. Our forecasting is about as cloudy as it's ever been, David Sandler, president and CEO, told analysts in MSC's quarterly earnings call.

Sandler said that customers reported conditions worsened substantially in the first quarter; very few customers are growing. He said that orders and revenues are down, and customers are reducing inventories. Shutdowns over the holiday were ...

MSC Industrial Aims to Grow Market Share Despite Conditions Read More »

MDM News Digest 3901

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Building Materials Holding Corp., San Francisco, CA, announced it will close several additional facilities in an effort to continue to align costs with current market conditions. BMHC will close all of its operations located in Northern Nevada. Market consolidations will occur in Oregon, Washington, California, Texas, Colorado and Arizona. More
Airgas, Inc., Radnor, PA, has acquired Great Lakes Oxygen, also doing business as Welder's Supply, Westside Welders Supply, Great Lakes Propane, and Lake Erie Iron and Metal. Since the beginning of its fiscal year in April, Airgas has completed 13 transactions with acquired annual revenues of more than $200 million.

MDM News Digest 3901 Read More »

Monthly Wholesale Trade & Inventories: November 2008

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November 2008 sales of merchant wholesalers were $349.2 billion, down 7.1 percent from the revised October level and were down 7.6 percent from November 2007, according to the U.S. Census Bureau. The October preliminary estimate was revised downward $1.3 billion or 0.4 percent. November sales of durable goods were down 6.1 percent from last month and were down 9.4 percent from a year ago.

Compared to last month, sales of motor vehicle and motor vehicle parts and supplies were down 10.6 percent and sales of electrical and electronic goods were down 8.8 percent. Sales of nondurable goods were down 7.9 percent from last month and were down 6.1 percent from last year. Sales of petroleum and petroleum products were down 25.1 percent from last month and sales of chemicals and allied ...

Monthly Wholesale Trade & Inventories: November 2008 Read More »

U.S. Market Analysis: Saw Blades

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The industrial product group listed here - Saw Blades - represented a market in 2008 of $1.36 billion, according to estimates by Industrial Market Information, Minneapolis. These charts show the top ten industries, by SIC code, consuming these products; and the 2008 end-user consumption of these groups sorted by the nine government market ...

U.S. Market Analysis: Saw Blades Read More »

Canadian Building Permits Down Nearly 12% in Oct.

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Source: Statistics Canada

Canadian contractors took out $4.8 billion in building permits in November, down 11.8% from October, the result of widespread declines in both residential and non-residential sectors. It was the third double-digit decrease in four months.
 
Intentions fell in all provinces except Alberta, Saskatchewan and Nova Scotia.
 
November's level, the lowest since February 2007, was 22.6% below last year's monthly average.
The value of non-residential permits fell 15.2% to $2.1 billion, the second consecutive monthly decrease. This drop occurred mainly as a result of declines in Quebec, Ontario and British Columbia.
 
In the residential sector, the value of building permits declined ...

Canadian Building Permits Down Nearly 12% in Oct. Read More »

November Wholesale Revenues Down 7.1% From October

Leave a Comment / Economic Trends, Research & Analytics, Free, News, Subscriber Only /

November 2008 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 $349.2 billion, down 7.1 percent from the revised October level and were down 7.6 percent from the November 2007 level, according to the U.S. Census Bureau.

The October preliminary estimate was revised downward $1.3 billion or 0.4 percent. November sales of durable goods were down 6.1 percent from last month and were down 9.4 percent from a year ago. Compared to last month, sales of motor vehicle and motor vehicle parts and supplies were down 10.6 percent and sales of electrical and electronic goods were down 8.8 percent. Sales of nondurable goods were down 7.9 percent from last ...

November Wholesale Revenues Down 7.1% From October Read More »

Refocusing Your Business for New Economic Realities

Leave a Comment / Economic Trends, Research & Analytics, Human Resources in Wholesale Distribution, Free, Operations, Strategy, Subscriber Only /

One commentator on the Harvard Biz Twitter feed recently wrote: Downturns are as much about psychology as about GNP, about withering confidence as about shrinking employment. (See the feed here.) It may be hard to grasp the idea that some of what is happening may be controllable in the current market - especially with today's unemployment jumping to 7.2%. But there is certainly no shortage of advice on managing through a downturn out there - and every author says there are ways to seize on opportunities despite the tough times.
 
Another article on the topic popped up this week in BusinessWeek, titled

Refocusing Your Business for New Economic Realities Read More »

MSC Industrial Sales Down 1% in 1Q

Leave a Comment / Free, Companies, Top Distributor Sectors, Facilities Maintenance (MRO), News, Subscriber Only /

MSC Industrial Direct Co. Inc., distributor of metalworking and MRO supplies to industrial customers, reported sales for its fiscal 2009 first quarter were $433 million, down 1% from $437.6 million in the prior-year quarter.
 
Profit for the quarter was $45.1 million, down from $46.9 million in the year-ago period.
 
David Sandler, president and CEO, said that market conditions continued to deteriorate during the quarter. "Having managed through market cycles in the past, MSC moved quickly to control spending and maximize profitability despite the effects of overall market conditions on our sales levels," he said.
 
Sandler also reported that customer feedback indicates that conditions have continued to deteriorate, with many ...

MSC Industrial Sales Down 1% in 1Q Read More »

New Report Analyzes Past Year’s Recessionary Performance

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We've heard before that the recession started earlier than anybody had thought. Manufacturers Alliance/MAPI released the following today:
 
A Manufacturers Alliance/MAPI report argues that the current U.S. economic recession began as early as January 2008 rather than in the widely presumed latter stages of 2008.
 
In The 2008-2009 Recession Began One Year Ago,Chief Economist Daniel J. Meckstroth provided four data points to support MAPI's contention that the recession started in January 2008 and that abrupt deterioration from the credit crunch in September 2008 merely dealt a final body blow" to economic ...

New Report Analyzes Past Year’s Recessionary Performance Read More »

IMARK Group and Equity/EDN Merge

Leave a Comment / Finance, Mergers & Acquisitions, Free, Top Distributor Sectors, Electrical, News, Subscriber Only /

Electrical supply marketing groups Equity/EDN Marketing Group, Concord, OH, and IMARK Group have joined as of Jan. 1, 2009.

The combination of IMARK / Equity/EDN creates an organization with an 18% market share in the electrical supply industry, according to a press release, with combined revenues approaching $15 billion.  The groups say that greater economies of scale will provide members with lowered operating costs, improved member returns, and added economic value for new and existing IMARK/Equity/EDN Members.

 

According to its Web site, IMARK is a member-owned marketing group with 176 independent electrical distributors in the U.S., including more than 70 distributors that rank in the top 200 in the country. IMARK distributors have more than ...

IMARK Group and Equity/EDN Merge Read More »

SPX Sells GSE Scales to Illinois Tool Works

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SPX Corp., Charlotte, NC, has sold its GSE Scales product line in the test and measurement segment to Illinois Tool Works Inc., Glenview, IL.
 
SPX is diversified manufacturer, producing cooling systems for power plants; custom engineered process equipment that assists a variety of flow processes including food and beverage manufacturing, oil and gas exploration, distribution and refinement and power generation; handheld diagnostic tools that aid in vehicle maintenance and repair; and power transformers that regulate voltage for electrical transmission and distribution by utility ...

SPX Sells GSE Scales to Illinois Tool Works Read More »

New Orders for Manufactured Goods Fall 4.6% in November

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New orders for manufactured goods in November, down four consecutive months, decreased $18.7 billion or 4.6% to $384.6 billion, the U.S. Census Bureau reported in the preliminary report on manufacturers' shipments, inventories and orders. This followed a 6% October decrease.

Excluding transportation, new orders decreased 4.2%. Shipments, also down four consecutive months, decreased $22.1 billion or 5.3% to $393.8 billion. This was the largest percent decrease since the series was first published on a NAICS basis in 1992 and followed a 3.6% October decrease. Unfilled orders, down two consecutive months, decreased $5.3 billion or 0.6% to $815.4 billion. This followed a 0.9% October decrease.
 
The unfilled orders-to-shipments ratio was 5.82, up from 5.69 in October. ...

New Orders for Manufactured Goods Fall 4.6% in November Read More »

Airgas Buys Great Lakes Oxygen

Leave a Comment / Finance, Mergers & Acquisitions, Free, Gases & Welding Equipment, Companies, Top Distributor Sectors, News, Subscriber Only /

Airgas, Inc., Radnor, PA, has acquired Great Lakes Oxygen, also doing business as Welder's Supply, Westside Welders Supply, Great Lakes Propane, and Lake Erie Iron and Metal.

Great Lakes Oxygen, a distributor of industrial gas and welding supplies, generates annual sales of more than $15 million through locations in Cleveland, Painesville and Brook Park, OH. Facilities include retail showrooms, warehouses, fill plants, a specialty gas laboratory and an acetylene plant.

Since the beginning of its fiscal year in April, Airgas has completed 13 transactions with acquired annual revenues of more than $200 million.

Airgas is a U.S. distributor of industrial, medical, and specialty gases, and hardgoods, such as welding equipment and supplies. Airgas is also ...

Airgas Buys Great Lakes Oxygen Read More »

U.S. Construction Spending in November Down 0.6% From October

Leave a Comment / Economic Trends, Research & Analytics, Free, Top Distributor Sectors, Building Materials/Construction, News, Subscriber Only /

U.S. construction spending in November 2008 was $1,078.4 billion, 0.6% below the revised October estimate. November is 3.3% below November 2007. Year-to-date, construction spending is $998.4 billion, 5.3% below the same period in 2007, according to the U.S. Census Bureau of the Department of Commerce.
 
Spending on private construction was at a seasonally adjusted annual rate of $756.4 billion, 1.5% below the revised October estimate. Residential construction was at a seasonally adjusted annual rate of $328.3 billion in November, 4.2% below October. Nonresidential construction was at a seasonally adjusted annual rate of $428.2 billion in November, 0.7% above October.
 
In November, the estimated seasonally adjusted annual rate of public construction spending ...

U.S. Construction Spending in November Down 0.6% From October Read More »

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