March 17, 2009 - Modern Distribution Management

March 17, 2009

Behind the Surprising Uptick in February Housing Starts

Housing starts went up unexpectedly in February (+22.2% from January), but were still down 47.3% from February 2008. And while to some this might trigger some hope that we’re reaching the bottom, as the Chicago Tribune and other papers around the country have noted, most of the gain came from the multifamily sector, which includes apartments and condominiums. Starts in that sector rose more than 80%; single-family homes only gained 1.1%. On the bright side, that 1.1% is an improvement over the double-digit drops we have been seeing the past several months.
 
Economists are mixed as to whether the slight …

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Finding Opportunity in Inventory

Distributors are slimming down.
 
The sudden drop in sales in November left many distributors with too much inventory and not enough demand. Maximizing cash flow has become the name of the game. To do this, distributors are paring down and better managing inventory. They are shortening their forecasting time frame (to consider just the past three months rather than the past half year or more), analyzing their replenishment processes (in many cases ordering more frequently), improving communication with vendors and returning to basic best practices in inventory management. Many are also digging more deeply into their technology tools to find ways to increase efficiencies in the inventory management …

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Actuant Sales Fall 25% In 2Q

Actuant Corp., Milwaukee, WI, reported sales for the second quarter ended Feb. 28, 2009, were $300 million, down 25% from 2008. Core sales declined 27%. Profit for the quarter declined 86% to $3.2 million.
 
For the first six months, sales were $680 million, 17% lower than the prior year period. Profit was down 70% to $$14.8 million.
 
Normal seasonal weakness in the second quarter was compounded by he global economic conditions. The diversified industrial company will continue to implement restructuring and cost reduction actions to help offset the weaker demand, said CEO Robert C. Arzbaecher. We have reduced headcount, consolidated facilities, eliminated shifts and established short work week schedules to better align our production, inventory and costs with …

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