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This jam-packed issue includes nine articles that span Ferguson’s diversification and private brand strategy; QXO’s acquisition plans; research on labor trends; Fastenal’s AI tools; and much more.

Market Insight Reports

Find a wealth of data and analysis extracted from the 2Q24 Baird-MDM Industrial Distribution Survey, including trending charts and figures for revenue and expectations, plus plenty of interesting commentary.
See our Premium M&A articles from April-June 2024, including Sonepar’s acquisition journey; how dealmaking impacts MDM’s Top Distributors feature; and the latest EBITDA trading multiples.
See our in-depth M&A articles from the first three months of 2024, including the Home Depot-SRS blockbuster; the acquisition strategy for Ferguson and Border States; and the latest EBITDA trading multiples.

Case Studies

This report examines Fastenal’s strategic pivots over the past ten years – digital, self-service, product mix, sales specialization and more – that have created one of the highest performing North American distributors as measured across most financial benchmarks.
A series of antitrust lawsuits and other legal actions over the last several years will end up costing the largest three dental distributors in the U.S. upwards of $100 million in settlement fines and legal fees. Its an expensive lesson in how fairly common practices in distribution (and other industries) can turn into major liabilities.

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Anticompetitive conduct lawsuits over several years are adding up to an estimated $100 million or more in settlement and legal fees for the three largest U.S. dental supplies distributors. A Federal Trade Commission case is still underway. Heres a summary of the cases, how these companies got into trouble and lessons for distributors across all sectors.

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Since the Great Recession of 2008-2009, few publicly-traded companies have undertaken as much change in sales model, technology platform, process improvement and culture as Chicago-based Lawson Products. From 2009 to 2013, Lawson converted all of its sales representatives from a network of independent sales agents to sales employees, today numbering 1,000. MDM last talked with President and CEO Michael DeCata in 2014, who outlined the unique service-focused value proposition and changes taking place at the time. Four years after transitioning its sales model, we check in again for a progress report.

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BairdImage1

Since 2010, Robert W. Baird & Co., in partnership with Modern Distribution Management, has conducted quarterly surveys of distributors and manufacturers to gauge business trends and the outlook for the industry. This quarter’s survey polled approximately 500 industry leaders to determine the latest indicators on revenue and pricing based on fourth-quarter 2018 results and distributor and manufacturer expectations for first-quarter and full-year 2019.

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A year ago, at the beginning of 2018, all indicators suggested that the economic and stock market fundamentals were in place for a year of solid growth in the U.S. economy. And while that turned out to be the case for the first three quarters of the year, as 2018 ended the economic signals became more mixed, suggesting that the economy might be entering a period of slowdown. However, whether we are in for a soft landing or something more painful remains to be seen and depends on a number of moving parts.

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conflict-mineral-region

The first filing deadline for the conflict minerals provision of the Dodd-Frank Act is fast approaching. While the provision – requiring disclosure of the use of tungsten, tin, tantalum and gold sourced in and around the Democratic Republic of the Congo – only directly applies to public manufacturers, the actual impact is much broader than anticipated, and many distributors aren’t sure of the steps they need to take to comply.

This article examines the conflict minerals rule and how its effects are being felt all along the supply chain. It also provides practical information on how distributors can prepare for helping customers comply with the new rule.

This article includes:

  • An overview of the SEC Final Rule on Conflict Minerals
  • Analysis of the broader impact of the rule
  • Steps for creating a game plan to address the rule's impact

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Not a subscriber? Subscribe below or learn more. Subscribers also have access to the following related articles:

  • The Growing Cost of Product Liability
  • The Counterfeit Challenge
  • Global Markets Are Not Just for Large Companies Anymore

The distribution industry sometimes misjudges the short-term impact of disruptive events. Publisher Tom Gale's perspective provides his predictions on some recent disruptive announcements, including Amazon's plans for drone package delivery.

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Not a subscriber? Subscribe below or learn more. Subscribers also have access to the following related articles:

  • The Growing Cost of Product Liability
  • The Counterfeit Challenge
  • Global Markets Are Not Just for Large Companies Anymore
Guy-Blissett-QA

The role of distributors is changing, says Guy Blissett, wholesale distribution lead for IBM Corp. and author of The National Association of Wholesaler-Distributors’ 2013 edition of Facing the Forces of Change: Reimagining Distribution in a Connected World. New technologies and ways of leveraging them to engage with customers and supply chain partners are emerging every day. While today’s environment can be daunting, Blissett says, it’s also full of opportunity.

This interview includes Blissett's take on:

  • New technologies distributors should be watching
  • How new technologies can be used in distribution for a competitive advantage
  • The importance of innovation

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  • Generational Shift Drives Changes in Technology, Customer Expectations
  • MDM Interview: Avnet's Roy Vallee Reflects on Changes in the Industry
  • Commentary: Lions and Tigers and Drones, Oh My!

Distributors and manufacturers create initiatives and sign pledge to combat climate change.

This article includes:

  • How executives feel about developing a sustainable supply chain
  • Key motivators for companies to create sustainability initiatives
  • Concerns associated with sustainability

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  • MDM Interview: Creating a Sustainable Plastics Industry
  • Offshoring Debate Continues in Wake of Productivity Study
  • Deadline for Chemical Label Changes Looms
MA_Adhesives_Sealants_MRO

The MDM Market Analysis, based on data from MDM Analytics, includes consumption of adhesives & sealants MRO by end user in the U.S., plus the top end users by 6-digit NAICS.

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  • MDM Pricing Trends Report: Third Quarter 2015
  • Market Analysis: Safety Products Consumption in the United States
  • Third Quarter 2015 Financial Metrics & Trading Multiples

Distributors historically have had trouble gaining market access to Asia, but it remains a compelling destination for U.S. companies because of the regions population and growing economic prosperity. Any company looking to undertake an Asian expansion must be strategic in its approach.

This article includes:

  • Challenges to gaining market access in Asia
  • Opportunities in Asia
  • Best ways of accessing Asia

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  • Global Companies Pose Threat in U.S.
  • Rebranding Road Map
  • Destination: Mexico

Modern Distribution Management's monthly Industrial Inflation Index measures a cross-section of industrial supplies.

This index includes:

  • Abrasives Products
  • Cutting Tools
  • Power Transmission Equipment
  • Fasteners
  • Valves, etc.
  • Power Tools
  • Material Handling Equipment
  • Belting
  • Hand Tools
  • Misc. Metal

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Not a subscriber? Subscribe below or learn more. Subscribers also have access to the following related articles:

  • MDM Pricing Trends Report: Third Quarter 2015
  • MDM-Baird Distribution Survey: Grinding to a Halt
  • Market Analysis: Safety Products Consumption in the United States

The Power Transmission Distributors Associations 2015 Industry Summit featured three keynote speakers sharing their experiences around inspiration, motivation and leadership.

This article includes:

  • How to embrace limitations
  • 5 Ways to differentiate
  • How to ask the right technology questions

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Not a subscriber? Subscribe below or learn more. Subscribers also have access to the following related articles:

  • Tackling the Profitability Yo-Yo
  • Industry 4.0: Technology-Driven Change
  • Rebranding Road Map
Quarterly-MDMBaird

Robert W. Baird & Co., in partnership with Modern Distribution Management, conducted a survey of about 500 distributors and manufacturers to gauge business trends and the outlook for the distribution industry in diverse sectors. Here is a summary of third-quarter results and distributor and manufacturer expectations for fourth quarter and 2016.

This article includes:

  • Revenue, inventory and pricing expectations
  • Sector breakdown
  • Analysis of trends affecting sales and operating performance

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Not a subscriber? Subscribe below or learn more. Subscribers also have access to the following related articles:

  • CFO Global Business Outlook: Labor Markets Tighten
  • Market Analysis: Machine Tool Accessories Consumption in the U.S.
  • 3Q2015 Financial Metrics & Trading Multiples

This report was formerly called the Inflation by Commodity Group Report.

This report is researched and produced by MDM editors. View the First Quarter 2015 report here.

These product groups provide a snapshot of inflation trends based on the Producer Price Index from the U.S. Bureau of Labor Statistics. Third quarter 2014 pricing levels are compared with third quarter 2015 and second quarter 2015 with third quarter 2015.

To view this report, log-in and click on download link below the product listing to access the print-ready PDF.

Not a subscriber? Subscribe today for immediate access.

Industrial

  • Abrasives
  • Adhesives & Sealants
  • Metal Cutting Machine Tools
  • Metal Forming Machine Tools
  • Pumps, Compressors, & Eqmt
  • Ind. Material Handling Eqmt
  • Rubber & Plastic Hose
  • Rubber & Plastic Belts & Belting
  • Ind. Rubber Products, nec
  • Metal Valves (not fluid power)
  • Personal Safety Equipment & Clothing
  • Steel Mill Products

Construction

  • Softwood Lumber
  • Hardwood Lumber
  • General Millwork
  • Gypsum Products
  • Hardboard, Particlebd, Fiberbd
  • Plywood
  • Plastic Construction Products
  • Wood Ties, Siding, Shingles,
  • Shakes

Electrical

  • Electrical Machinery & Eqmt
  • Electronic Components & Accs
  • Integrating and Measuring Instruments
  • Motors & Generators
  • Wiring Devices
  • Transformers & Power Regulators
  • Switchgear, Switchboard, etc., Eqmt
  • Communications & Related Eqmt
  • Electric Lamp Bulbs & Parts

Other Related Electrical

  • Lighting Fixtures
  • Nonferrous Wire & Cable
  • Fabricated Ferrous Wire & Cable

Power Transmission/Bearing

  • Mechanical Power Transmission Eqmt
  • Ball & Roller Bearings
  • Plain Bearings & Bushings
  • Speed Changers, Drives & Gears

Fluid Power

  • Fluid Power Eqmt
  • Fluid Power Valves
  • Fluid Power Hose/ Tube Fittings
  • Fluid Power Pumps & Parts
  • Fluid Power Actuators/ Accum/ Cylinders

Plastics

  • Plastic Resins & Materials
  • Plastic Products (Overall)

Fasteners

  • Nuts, Bolts, Screws, Rivets, Washers (overall)
  • Aircraft Fasteners
  • Externally Threaded Fasteners
  • Internally Threaded Fasteners
  • Nonthreaded Metal Fasteners

Hardware

  • Hardware (overall)
  • Builders’ Hardware

Tools

  • Hand & Edge Tools
  • Power-Driven Hand Tools
  • Tools, Dies, Jigs, Molds, Fixtures
  • Cutting Tools & Accs (overall)
  • Precision Measuring Tools
  • Small Cutting Tools

Gases/Welding

  • Industrial Gases
  • Welding Machinery/ Equipment

Paper

  • Pulp, Paper & Allied Products (overall)
  • Sanitary Paper Products
  • Boxes
  • Packaging Products from Plastic

HVACR/Plumbing

  • Air Cond. & Refrigeration Eqmt
  • Heating Eqmt
  • Plumbing Fixtures & Fittings

To view this report, log-in and click on Download pdf below the product listing.

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