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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.
Blockchain technology has broad application and disruptive potential across all economic sectors, distribution included. However, issues of cooperation, governance and standardization mean that adoption at scale is likely several years away. This article provides a brief history of blockchain technology and looks at some of its longer-term implications for the distribution industry.

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Alex Moazed was a speaker at MDMs recent forum on Amazon Business. This article is excerpted from the book Modern Monopolies: What it Takes to Dominate the 21st-Century Economy, which he co-wrote with Nick Johnson. Alex has long championed the idea that the largest B2B distributors from non-competing verticals should band together to build an industry-run marketplace that is a direct competitor to Amazon Business.

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The wholesale distribution industry is making the transition to e-commerce, but it is doing so slowly. Early adopters of transaction-enabled websites are not only positioning themselves well for the future but are also gaining a competitive advantage in the shorter term. This article is drawn from a white paper based on research conducted by Modern Distribution Management (MDM) and sponsored by BigCommerce. To request a copy of the full report, use the link provided at the end of this article.

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Innovation has become a buzzword thats had the tar and meaning beaten out of it. Thats unfortunate, because it cuts to the heart of how distributors are going to find growth and market share in 2019. As the favorable economic tailwinds of 2018 start to show signs of shifting, the time to determine whats going to drive revenue in 2019 is now.

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When Jergens Industrial Supply (JIS), a division of Jergens, Inc., first launched its Wi-Fi enabled button-based ordering system JIS Express earlier this year, general manager Matt Schron viewed it as a trial to see if customers would like having an Internet of Things (IoT) solution to manage their inventory. Individual products are paired with a physical button that logs a re-supply request each time a customer pushes it, similar to Amazons Dash button in the consumer market.

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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

Subscribers should log-in below to read this article.

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

  • Distribution M&A Playbook, pt. 3: Integration Best Practices
  • Grainger’s Pricing Initiative, pt 2: The Quest for Optimization
  • Commentary: Harvey’s Stark Reminder on Disaster Planning
legal-slider

Noncompetition clauses are gaining traction once again as distributors try to protect the investments they make in employee training and development. But more cases involving these clauses are also making their way into courts around the U.S. This article examines how restrictive clauses are being used and provides best practices for implementing such covenants.

This article includes:

  • Common issues with noncompete and restrictive covenants
  • Enforcement of restrictive clauses
  • Best practices to improve enforceability and compliance

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  • Behind the Deal: Anixter & HD Supply
  • Distributors Combine Traditional, New Means for Recruiting
  • The Counterfeit Challenge
backside graduation hats during commencement success graduates o

Advertising in a campus recruiting office or staffing a booth at a college job fair isn’t enough for distributors that hope to successfully recruit the next generation of workers. This article examines how a deep relationship between a distributor and university program can yield innumerable benefits for the company, its recruits and the college it partners with – as well as the industry as a whole. Part 2 will look at how distributors use internships to bolster their position on college campuses and fast-track training for new hires.

This article includes:

  • How industrial distribution programs got their start
  • Examples of how to go beyond college job fairs
  • Benefits of building a relationship with colleges

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  • Manufacturing’s Millennial Dilemma
  • Succession Planning: Positioning for the Future
  • Making the Case for Social Media in B2B

What worked 20 years ago for recruiting and retaining talent doesnt work today.

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  • Distributors Change Tune on Generational Shift
  • Mayer Electric: Protecting the Goose that Laid the Golden Egg
  • Succession Planning: Executing the Strategy

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

Subscribers should log-in below to read this article.

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

  • MDM Pricing Trends Report: Second Quarter 2015
  • Global Industrial M&A Activity Keeps Pace in 2Q15
  • Market Analysis: Abrasives Consumption in the United States
Anixter_HD

Anixter International Inc. recently announced it would acquire HD Supplys Power Solutions division, one of its core lines of business. This article looks at how the $825 million deal benefits both companies.

This article includes:

  • What led Anixter to the decision to buy
  • Why HD Supply wanted to sell its Power Solutions division
  • What is next for Anixter

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

  • M&A Competition Heating Up
  • Amazons B2B Move Reduces Threat
  • Second Quarter 2015 Financial Metrics & Trading Multiples

Fiscal 2015 was an acquisitive year for HVAC & plumbing distributor Ferguson, Newport News, VA. The distributor more than tripled the number of completed acquisitions it saw in fiscal 2014. CEO Frank Roach recently spoke with Editor Jenel Stelton-Holtmeier about the companys acquisition strategy and how it fits into the overall growth strategy.

This article includes:

  • Ferguson's growth strategy
  • Discussion of current M&A conditions and activity
  • Ferguson's approach to integration

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  • MDM Interview: TTI's Strategic Approach to Global Growth
  • Second Quarter 2015 Financial Metrics & Trading Multiples
  • MDM Interview: Creating a Culture of Innovation
MA_abrasives

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

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

  • MDM-Baird Distribution Survey: Headwinds Intensify
  • Market Analysis: Plastics Consumption in North America
  • Global Companies Pose Threat in U.S.
2Q2015-MDM-Baird-survey

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 second-quarter results and distributor and manufacturer expectations for 2015.

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:

  • MDM Industrial Inflation Index
  • Market Analysis: Plastics Consumption in North America
  • 2Q2015 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. Second quarter 2014 pricing levels are compared with second quarter 2015 and first quarter 2015 with second 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.

International manufacturers have their eye on the U.S. market, especially as the economy continues to strengthen, but an extensive investment in technology and services could give them a competitive edge.

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  • M&A Competition Heating Up
  • Destination: Mexico
  • Good News, Bad News for U.S. Economy

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

Subscribers should log-in below to read this article.

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

  • Second Quarter 2015 Financial Metrics & Trading Multiples
  • Offshoring Debate Continues in Wake of Productivity Study
  • Market Analysis: Plastics Consumption in North America

Unpredictable supply chain disruptions such as natural disasters and labor disputes garner the biggest headlines, but the predictable disruption of a channel partner changing its business system can cause some of the biggest headaches. Despite a potential for upheaval, distributors and manufacturers can take strategic precautions to minimize problems.

This article includes:

  • How to assess the problem
  • Solutions for minimizing predictable disruptions
  • Supply chain strategies for success

Subscribers should log in below to read this article.

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

  • Distributors Seeking 'Lean' Supply Chain
  • Case Study: The Disruptive Holiday
  • MDM Interview: Redefining Competitive Advantage

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