The 2020 Mid-Year Economic Update_long

Day: July 10, 2007

Creating a Board of Directors

Many privately held distributors have advisory boards, but they are comprised entirely of insiders. Or the board is convened merely as a formality or legality. But a so-called real board" could help in formulating and enforcing company strategy, as well as provide a venue to ensure your wishes are carried out after you retire or in the case of a disabling injury or death.

Julia Klein, president and CEO of building materials distributor CH Briggs Co., Reading, PA, created an advisory board for her third-generation business about 18 months ago.

"I can tell you, it's one of the best things I've ever done," she says. "We had what many family businesses had -a perfunctory family board where we would pretend to meet over dinner, once a year, and have our lawyer write ...

SYSCO Expands to Hong Kong

SYSCO Corporation, Houston, TX, foodservice marketer and distributor, announced its subsidiary for personal care amenities and other hotel operating supplies, Guest Supply, LLC, has acquired Austin Tatum, a personal care amenity company headquartered in Hong Kong.

The acquisition of Austin Tatum represents an important step for Guest Supply's and SYSCO's expansion into the international market," said Richard J. Schnieders, SYSCO's chairman and CEO. "With a local presence and infrastructure in place, Guest Supply will now be in a position to better service the Asian properties of its U.S.-based clients as well as increase its Asian client base and the number of product categories it sells in Asia."
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SYSCO distributes food products to restaurants, healthcare and ...

Kennametal, Kyocera in Pact

Kennametal Inc., Latrobe, PA, has signed a product supply agreement with Kyocera Corporation, Kyoto, Japan. The agreement includes initiatives such as private labeling, cross-licensing and sales and marketing.

The agreement is global in scope and is designed to complement the suppliers' existing product lines. Kennametal and Kyocera plan to grow sales of each others' product lines worldwide. Each company will also continue to sell its own products through established channels.

This agreement will enable each company to leverage the strength of the other in different geographical regions," said Yukihiro Takarabe, Kyocera Corporation executive officer and general manager of the Corporate Cutting Tool Group. "As Kyocera strives to expand its global footprint, ...

May Wholesale Revenues Up 8.7% Year-Over-Year

May 2007 sales of merchant wholesalers, except manufacturers'sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $357.2 billion, up 1.3 percent from the revised April level and were up 8.7 percent from the May 2006 level.
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The April preliminary estimate was revised upward $0.8 billion or 0.2 percent. May sales of durable goods were down 0.5 percent from last month, but were up 4.2 percent from a year ago.

Compared to last month, sales of motor vehicle and motor vehicle parts and supplies were down 5.3 percent. May sales of nondurable goods were up 2.9 percent from last month and were up 13.1 percent from last year. Compared to last month, sales of farm product raw materials were up 9.5 ...

MDM July 10, 2007

This is the pdf of this issue of Modern Distribution Management. Apply the full $24.95 pay-per-view cost toward an annual subscription (within 30 days of purchase), which includes two issues a month plus access to more than six years of online archives and market data. Call 1-888-742-5060 or email info@mdm.com to ...

MDM Inflation Index: May 2007

Modern Distribution Management's May Inflation Index, which measures a cross-section of industrial supplies, was up 0.18% from the previous month, and up 3.5% from May 2006.

Summary of&nbsp ; MDM Inflation Index for the past 12 months:

May 2007 Index 271.2
April 2007 Index 270.8
March 2007 Index 269.6
February 2007 Index 269.4
January 2007 Index 268.7
December 2006 Index&nbsp ; 267.1
November 2006 Index 266.5
October 2006 Index 265.9
September 2006 Index 265.6
August 2006 Index 265.2
July 2006 Index 264.0
June 2006 Index 263.0
May 2006 Index 262.1

Please click below to view a print-ready pdf of the&nbsp ; MDM Inflation Index for May 2007, listing the ten individual product categories that make ...

U.S. Market Analysis: Hose and Fittings

The industrial product group listed here - hose and fittings - represented a market in 2006 of $2.96 billion, according to estimates by Industrial Market Information, Minneapolis. These charts show the top ten industries, by SIC code, consuming these products; and the 2005 end-user consumption of these groups sorted by the nine government market regions.

Download this document below. For other market analyses in the MDM archives, go to the MDM Databank for a comprehensive ...

MDM News Digest 3713

Rexel, the Paris-based distributor of electrical supplies, has made three acquisitions in Belgium, the United Kingdom and the U.S. The moves follow Rexel's bolt-on acquisition strategy aimed at broadening its footprint in Europe and North America. In the U.S., Rexel bought Tri-Valley Electric Supply, with sales of $5.5 million in 2006 in Arizona.

Praxair Distribution, Inc., Danbury, CT, a subsidiary of Praxair, Inc., has acquired Wilson Welding & Medical Gases, Warren, MI. Wilson is a distributor of industrial, medical, specialty gases and related equipment and supplies. The business generated sales of $20 million in 2006 and has 72 employees.

Gases distributor Airgas, ...

Commentary: Look Beyond Sales

The three Ps of process, productivity and profitability separate companies that are doing OK from ones that perform in the top tier of peers. That will continue to be the key differentiator.

The performance analysis reports many distribution associations sponsor offer a wealth of benchmark data about how well your company is doing in a range of financial performance metrics. Historically, a relatively low percentage of distributors participate in these data aggregation programs. Yet these types of tools are critical to make any kind of real change stick in your business. How else can you create realistic goals and then the specific short- and long-term steps to get there?

The report card in the area of productivity is better. Several studies have shown that distributors ...

Survey: Electronic Invoicing Not Widespread

This is a summary of a recent research project on technology use conducted by Steve Epner, principal at Brown Smith Wallace consulting group.

The research project looked specifically at whether distributors in the survey sent or received electronic invoices. Less than a fifth said they did either, and even fewer sent or received a significant percentage of their invoices electronically; 150 responses were analyzed in a survey of MDM readers.

Epner also examined whether the age of the company's top management, the age of the company, its size and the markets served affected the decision to adopt this technology. In this survey, he found no significant connection between these factors and the use of electronic invoicing.

Results
Most ...

High Court: Price Agreements Allowed

The U.S. Supreme Court has ruled for the manufacturer in a pricing case that pitted the supplier against a retailer. The decision could prompt more suppliers to consider minimum resale price-setting programs.

The U.S. Supreme Court in June made it easier for manufacturers to set minimum resale prices by overturning the per se" illegality of minimum resale price agreements.

Instead, the Supreme Court ruled that challenges to minimum resale price agreements or contracts will be judged on a case-by-case basis by the "rule of reason," a more flexible legal doctrine that requires the challenger to prove price-setting was unreasonably anticompetitive and did economic harm.

"Per se" was a much stricter enforcement that assumed that minimum price setting ...

Machine Tool Consumption up 7.5% through May

May U.S. manufacturing technology consumption totaled $313.74 million, according to the American Machine Tool Distributors' Association and the Association For Manufacturing Technology. This total, as reported by companies participating in the USMTC program, was up 6.5% from April, but down 6.5% from the total of $335.52 million reported for May 2006. With a year-to-date total of $1,606.13 million, 2007 was up 7.5% compared with 2006.

These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.

Growth this year, while less robust than in 2006, has now stabilized in the high, single digit range," said John J. Healy, AMTDA president. "In addition, each of the regions in the U.S. has shown ...