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Building Materials/Construction
NBMDA: Market Visibility Improves

Bill Delaney, president of family-owned specialty building products distributor Distributor Service Inc., Pittsburgh, PA, and current president of the North American Building Material Distribution Association (NBMDA) recently spoke with MDM Associate Editor Jenel Stelton-Holtmeier about the association, and trends, challenges and shifts in the building materials industry.

Delaney’s father founded Distributor Service Inc. in 1968; Delaney grew up in the business, which was a traditional two-step distributor serving independent lumberyards. During the 1980s, the company transitioned to industrial products and customers.

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Companies
Grainger’s E-Commerce Evolution

Grainger has long been known as ahead of the curve in its e-commerce initiatives. Here’s an in-depth look at the $6.2 billion MRO distributor’s journey and the lessons it learned along the way. This is part of an MDM series on trends in doing business electronically.

Today, Grainger is widely recognized as a leader among distributors in B2B e-commerce. But that wasn’t always the case.

The launch of Grainger’s first electronic catalog in 1995 marked a shift for the now $6.2 billion distributor of maintenance, repair and operations supplies. After all, the payback of such a move was still unknown, and that uncertainty could have prevented the heretofore “conservative” company from delving into that arena.

“The fact that [Grainger commissioned a team] to do this was unheard of at the time,”

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Companies
The Business Case for Better Data
Distributors and their suppliers want to improve efficiencies, save time and money, and reduce errors. One way to do this is to improve and standardize the way they use and send data. This article is the first of a series of MDM articles on current trends in doing business electronically.
 
About five years ago, PTDA member Baldwin Supply Co., Minneapolis, MN-based distributor of mechanical power transmission and electrical control products, adopted the association’s recommended format for receiving product data changes from its suppliers.
 
“It used to take us a month to update a price increase with some of our bigger manufacturers. Now we can do it in an hour or so,” says Baldwin Supply President Ron Herem, the Power Transmission Distributors Association board liaison to the Industry Relations Committee, which in collaboration with other associations developed the Product and Price Information Format.
 
“(PPIF) drastically reduced the time it took to do a pricing update. We used to have 2 and a half people – and that was pretty much all they did, and it was done manually.”
Baldwin’s experience is just one example of the impact of one of many data standardization initiatives taking place right now in distribution.
Companies
MDM Interview, Part 2: Applied Industrial Technologies’ Growth Plans

This is Part 2 of an interview with David Pugh, CEO of industrial distributor Applied Industrial Technologies. In this piece, Pugh talks about new markets, fluid power, e-commerce, integrated supply and the impact of the recession on channel relationships. Find Part 1 of this interview here.
 
MDM: You have made some key acquisitions in the fluid power segment. How does that fit into your growth plans going forward?
 
David Pugh: We started our fluid power growth in the mid-‘90s. I am not sure we truly understood the business when we headed into it because we pictured it to be a lot like bearing and power transmission. The manufacturers supplying the industry have a different mindset with regard to how they use distribution and how they authorize distribution. That was an eye-opener for us.
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Companies
MDM Interview: Applied Industrial on the Economy

MDM Editor Lindsay Konzak sat down with David Pugh, CEO of $1.9 billion Cleveland, OH-based industrial distributor Applied Industrial Technologies, at the annual National Association of Wholesaler-Distributors meeting January in Washington, D.C. Applied recently reported sales for the second quarter ended Dec. 31, 2009, were down 11 percent to $446.3 million from the same period last year.
 
In Part 1 of this interview, Pugh discusses how Applied is responding to current economic and market conditions. Part 2 of this interview will appear in the Feb. 25, 2010, issue of MDM.
Building Materials/Construction
Stanley Works-Black & Decker Merger Stays on Track

The proposed merger between tool manufacturers Black & Decker, Towson, MD, and The Stanley Works, New Britain, CT, continues to make progress, with the deal remaining on track for closing by the end of the first quarter or early in the second quarter, according to Black & Decker CEO Nolan Archibald. The shareholder vote for both companies has been set for March 12.

While specific collaboration is prohibited until the merger closes, integration teams have been put into place to “ensure that we achieve the synergies” available from the joint company, Stanley CEO John Lundgren said during the company’s fourth quarter earnings call. Fourteen teams were created to help integrate the various businesses within Stanley and Black & Decker.

“Collaboration to the extent that we’ve …

Features
Shorten & Strengthen the Selling Cycle

This article provides a tool for managers to use with their salespeople to improve project management skills and ensure no customer commitments fall through the cracks.

As a “good sales manager,” I jumped in to help a salesperson prepare for a joint call that we were scheduled to make on a key account. We defined the call objective, went through the pre-call planning process, the anticipation of questions and objections from the customer, and role-played the “what if,” in anticipation of the perfect sales call.

The proposal was flawless, the value proposition was sure to help the customer reach their goals, and the timing could not have been better. We went into the call with high expectations and excitement about the positive outcome that we were sure to get. After greeting the customer, and before we began to talk …

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Features
Segment Financial Trends

Every year the Profit Planning Group prepares an analysis of distribution financial performance for its financial benchmarking clients. The company prepared a summary of the finding exclusively for readers of Modern Distribution Management. The information focuses on 2008, which is the last year for which complete financial information is available.

Given recent economic turbulence, 2008 may seem like ancient history. But the financial results for 2008 provide useful insights for distributors and their suppliers. They provide a clear picture of how firms responded to economic challenges. They also reflect the limits of such data.

This analysis covers 40 lines of trade in distribution. The results for distribution are divided into three groups:

  • Industrial — Lines of trade in distribution that primarily service the factory floor or commercial facilities.
  • Construction — Lines of trade that primarily serve the construction trades.
  • Consumer — Lines of trade that sell consumer products or sell products utilized by retailers in their operations.
Companies
Airgas on Strategic Accounts, Private Label, & Acquisitions

Airgas, Radnor, PA, outlined its growth strategies and successes in its annual analyst meeting in December. Here is an overview of the key areas covered by the gases and welding hardgoods distributor.

Product and Segment Focus
According to Airgas, about 30 percent of its total sales go to customer segments that are “growing faster than GDP.” Strategic products, a group of five product areas, account for 40 percent of sales. Those are: Bulk, Medical, Specialty Gas, CO2/Dry Ice, and Safety Products. These product areas have grown faster than Airgas’ other core business, COO Michael Molinini told analysts, and the areas cater to “favorable customer segments.”

One growth driver for these areas is cross-selling. For example, …

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Features
Rehiring for the Recovery

MDM readers say they are prepared to do “more with less” as they move into what could be the start of a recovery. This article looks at current job growth expectations across industries, as well as signs to look for that indicate it may be time to start hiring again.

With recovery now making headlines more than recession, attention has shifted toward what that recovery could look like. Debate continues over when the U.S. and global economies will rebound, but a dominant belief is that when recovery does occur, one thing it may be lacking is jobs.

Distributors and manufacturers are planning to do “more with less” in 2010, according to the results of MDM’s annual Reader Survey conducted in December. More than a third …

Features
Creating an Ownership Culture

The author of this article, the 20-year owner and CEO of a fluid sealing distributor, talks about the rewards and challenges in transforming the culture of his company to one where the employees took ownership and went beyond their normal daily activities to do what is best for the company.

I once had the pleasure of hearing Retired General Arnold Schwarzkopf speak on the topic of leadership. To paraphrase, leadership is getting others to do what they would not ordinarily do, voluntarily. In an ownership culture, employees voluntarily do activities they would not normally be expected to perform.

In visiting hundreds of companies, I have observed wildly different corporate cultures. It doesn’t take long in a visit to sense a strict authoritarian …

Features
Exclusive Summary: MDM Readers Outline Plans to Improve Profitability

Profitability has become the key focus for distributors over the past 12 months, as top-line sales growth has dropped off due to a severe decline in many end-markets in 2009.

Most respondents to a recent Modern Distribution Management-Activant survey are optimistic and expect individual company profitability to be greater in 2010 versus 2009.

In the survey, respondents also outlined where they would focus in each of four areas to improve profitability in 2010.

To improve processes and personnel productivity, …

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