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In The News:

Rebuilding year

February 25, 2003
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The strong December numbers for machine tool distributors, as reported in this issue, ordinarily is a pretty good leading indicator for the rest of the industrial markets, based on previous recessions. Certainly the machine tool sector led other distribution lines of trade going into this industrial recession, and we can keep our fingers crossed that history is predictable rather than a cruel teacher in 2003. But after the past few years, very few distributors are resting the future of their companies on "ordinary" events.


That's true across all business sectors. There are certainly some positive indicators and reports coming out of more markets than just a few months ago. The bottom line success stories are with companies that are doing two things pretty well. They are finally reorienting the measurements they use to profitability, as illustrated in the case study by Bruce Merrifield. After a few years of spinning its wheels while trying to increase its return on net assets across a lot of branches, this company finally took a different tack and started to get some promising results.


At the same time, never has basic blocking and tackling been so important as all of our readers report how closely they are watching costs, while trying to build back some business with the customer base. The impact of the last few years won't fade quickly even if we do get a strong bounce sometime this year. So many companies had to change structurally with a very different focus than just a few years ago. This is really the rebuilding year where we will see some strong industry leaders emerge. And increasingly, the niche opportunities for regional players ヨ not the megalogistics ヨ seem brighter this year than in the past few years.

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