May 2008 - Page 2 of 6 - Modern Distribution Management

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May 2008

First-Quarter Machine Tool Consumption Up 36.7%

Leave a Comment / Economic Trends, Research & Analytics, Subscriber Only /

March U.S. manufacturing technology consumption totaled $544.62 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 84.4 percent from February, and up 36.1 percent from the total of $400.19 million reported for March 2007.

With a year-to-date total of $1,183.75 million, 2008 is up 16.4 percent compared with 2007.

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

The March consumption numbers, as well as the first quarter as a whole, clearly demonstrate that the investment incentive stimulus package along with ...

First-Quarter Machine Tool Consumption Up 36.7% Read More »

MDM News Digest 3810

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Wolseley plc, distributor of plumbing and heating products to professional contractors and a supplier of building materials, reported overall that sales for the first nine months ended April 30, 2008, were up 2 percent and profit fell 23 percent. As a result of what the distributor called tough market conditions, Wolseley has made further cost reductions in North America since April 30, 2008. The distributor has closed 75 branches and reduced headcount by 200 at Ferguson and closed or consolidated an additional 15 locations in Canada, with a reduced headcount of 50 people. More
Womack Machine Supply Company has acquired California-based Applied International Motion LLC. The addition of ...

MDM News Digest 3810 Read More »

Commentary: Enlightening MROP Procurement

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Distributors have ample opportunity to take the lead (and build stronger customer relationships) in creating leaner and more productive supply channels. Author Joel Roth says he wrote The 20% Solution, some of it excerpted in this issue, to address the frustration of purchasing professionals who have difficulty dealing with MRO procurement. He gives the following recent example of how corporate buyers can go amiss:

A well-known international manufacturer of building materials tried for 15 years to install an effective integrated supply program for MRO. Three costly attempts failed. Their fourth attempt led to the following Request For Quotation: Time allowed for bidders to respond -13 working days. Total corporate spend on miscellaneous mill supplies -$1.2 million ...

Commentary: Enlightening MROP Procurement Read More »

Canadian Economic Output Slumps in February

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Source: Statistics Canada
 
Canadian economic output slumped again in February, after recovering in January from a steep decline in December. Several factors have contributed to the recent weakness in real gross domestic product (GDP).
 
The new Family Day holiday in Ontario shortened work hours in February for many firms. Weather also has been erratic, with record snow this winter in much of Eastern Canada and the coldest weather in years in Western Canada. Meanwhile, the US economy remained sluggish in the first quarter, as the worsening state of its housing market offset higher exports.
 
But mostly, growth in Canada has been restrained by large drops in auto assemblies. The recent volatility of auto production in Canada is in marked contrast ...

Canadian Economic Output Slumps in February Read More »

Grainger President on the MRO Market

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James Ryan, president and COO of Grainger, provided his observations on the MRO market at the Electrical Products Group 2008 Annual Conference. Ryan will become CEO on June 1:
 
Procuring MRO supplies historically has been a back-burner concern for most organizations. It's typically unorganized and unproductive. But that's changing. More and more people who operate facilities are seeing the time and the costs associated with managing MRO. Yet it can be a big challenge for them to reduce those costs, and eliminate the headaches. 

"As companies fight to be competitive in their industries, they want reliable partners who can help them identify savings and improve productivity. The opportunity is there for MRO suppliers with the skills and know-how to help in some of ...

Grainger President on the MRO Market Read More »

Update: Industrial Distribution Group After the Tornado

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Early in the morning May 9, Industrial Distribution Group's Belmont, NC, distribution center was hit by a tornado. The distributor suffered an estimated $5 million to $7 million in damages, CEO Charles Lingenfelter told MDM.

The office building, a separate facility, was not hit, but the distribution center was severely damaged. Inventory was damaged by water and flying debris. Fortunately, nobody was hurt because the tornado hit in the middle of the night.

Lingenfelter estimates it will take a minimum of four to six months to repair the facility in part due to lead times on required materials.

Until then, the distributor is utilizing a temporary distribution facility about four miles away that local officials helped the distributor find. IDG has had ...

Update: Industrial Distribution Group After the Tornado Read More »

Hagemeyer Releases Green Catalog

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Hagemeyer introduced a new Green Products catalog. The full-color catalog features industrial, electrical, and safety products from many of Hagemeyer's supplier partners that promote environmental sustainability.
 
Most competitors feature environmentally-friendly products from a single segment, usually electrical since lighting and energy provides such great opportunities,"says James Sipe, vice president of Product Strategy. "However, Hagemeyer has carefully selected an array of products to support broad customer sustainability goals. The catalog also showcases value-added services that set us apart, including complete turnkey solutions for lighting and energy audits, chemical recycling, and universal waste recycling such as lamps and ballast disposal."
 
The ...

Hagemeyer Releases Green Catalog Read More »

Wolseley Closes 75 Ferguson Branches, Cut Headcount

Leave a Comment / Finance, Mergers & Acquisitions, Plumbing Products & PVF Distribution, Free, Companies, Top Distributor Sectors, Building Materials/Construction, HVACR, News, Subscriber Only /

Wolseley plc, distributor of plumbing and heating products to professional contractors and a supplier of building materials, reported overall that sales for the first nine months ended April 30, 2008, were up 2% and profit fell 23%.
 
As a result of what the distributor called tough market conditions, Wolseley has made further cost reductions in North America since April 30, 2008. The distributor has:
 
-closed 75 branches and reduced headcount by 200 at Ferguson
-closed or consolidated an additional 15 locations in Canada, with a reduced headcount of 50 people
 
Given the continuing tough market conditions, our response has been to take further action to lower the cost base and improve cash flow, while continuing to pursue our longer term strategic ...

Wolseley Closes 75 Ferguson Branches, Cut Headcount Read More »

Brady Corp. 3Q Organic Sales Down 1%

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Brady Corp., Milwaukee, WI, sales for the third quarter 2008 were $381.9 million, up 10.3% from the prior-year period. Organic sales were down 1%.
 
Regionally, sales increased 14% in Brady Americas, 20% in Europe, 1% in Asia/Pacific and remained flat in Direct Marketing &People Identification Americas.
 
Profit for the quarter was up 18.5% to $34.4 million.
 
Sales for the nine months ended April 30, 2008, rose 12.6% to $1.126 billion. Profit for the nine-month period was $97.4 million, up 17.2% compared to $83.1 million in the prior ...

Brady Corp. 3Q Organic Sales Down 1% Read More »

Industrial Distributors Should See Positive Growth in 2008, Albeit Slower

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According to Adam Fein, author of the 2008 Wholesale Distribution Economic Reports, 2008 will be a positive year for industrial distributors, though growth will be slower and uneven across the country. Industrial distributors are tied more closely to the industrial manufacturing economy than any other wholesale distribution sector, Fein writes in the latest issue of MDM. (Click here to view the issue.)

Revenues of industrial distributors rise and fall with manufacturing activity, though the link has become slightly weaker in recent years as more traditional industrial distributors diversify into ...

Industrial Distributors Should See Positive Growth in 2008, Albeit Slower Read More »

ISM Survey: Average Salaries for Supply Chain Professionals

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According to the Institute for Supply Management's third salary survey, average salaries for supply chain professionals were:
 
Chief Purchasing/Supply Management/Sourcing: $128,821
Vice President, Purchasing/Supply Management/Sourcing: $210,419
Director, Purchasing/Supply Management/Sourcing: $125,833
Manager, Purchasing/Supply Management/Sourcing: $90,088
Experienced staff member (3 or more years of experience): $68,537
Entry-level staff member (less than 3 years of experience): $49,682
 
Additional findings:
Respondents who hold one or more certifications reported an average salary that was higher than those who do not. Overall, those who hold one or more certifications earned an average of $94,648, while those who do not hold a ...

ISM Survey: Average Salaries for Supply Chain Professionals Read More »

Tightened Credit Markets, Economy Played Role in IDG Deal

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The tightened credit markets and the economic downturn were center stage in the bidding for Industrial Distribution Group Inc., Atlanta, GA, according to a proxy statement filed this week by IDG with the SEC about the distributor's plan to be acquired by Luther King Capital Management.
 
In fact, Platinum Equity, which was originally the winning bidder for the industrial distributor, had first bid $12 a share in December 2007 but reduced its offer to $10 a share in mid-January. The private equity firm cited risk in improving IDG's MROP and integrated supply business due to an overall decline in the industrial economy.
 
This prompted investment banking firm Robert W. Baird &Co. to return to five bidders for new written proposals. Among the five bidders was ...

Tightened Credit Markets, Economy Played Role in IDG Deal Read More »

Quarterly Forecast: Exports Brighten Manufacturing Outlook

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Hopes for something more than a temporary rebound in the U.S. economy anytime soon could be frustrated, but the manufacturing outlook in particular might be somewhat brighter due to continuing strength in exports, according to a new report.
 
The Manufacturers Alliance/MAPI Quarterly Economic Forecast predicts that inflation-adjusted GDP growth will slow to 1.3% in 2008 before improving to 1.9% in 2009. The 2009 forecast is down from 2.5% projected in the February outlook. By supplying major assumptions for the economy and running simulations through the Global Insight Macroeconomic Model, the Alliance generates unique macroeconomic and industry forecasts.
 
The 2008 recession looks like it is going to be milder and more prolonged rather than normal,"said Daniel J. ...

Quarterly Forecast: Exports Brighten Manufacturing Outlook Read More »

Werner Ladder Buys Green Bull

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Werner Co., Greenville, PA, has acquired Green Bull Inc. from Green Bull Loan Acquisition, LLC. The assets purchased include the Green Bull brand and certain intellectual property, manufacturing operations and equipment in Louisville, KY, finished goods inventory, and certain warehouse and facility leases.
 
Werner will be operating the Louisville, KY, manufacturing plant and manufacturing products to support both the Werner and Green Bull brands and customer base.
 
Green Bull is a supplier of climbing products to the industrial market.
 
Werner Co. is a manufacturer and distributor of ladders, climbing equipment and ladder ...

Werner Ladder Buys Green Bull Read More »

The Home Depot Sales Fall 3.4% in 1Q

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Atlanta, GA-based The Home Depot, home improvement retailer, reported sales in the first quarter 2008 were $17.9 billion, a 3.4% decrease from the prior-year period, reflecting negative comparable store sales of 6.5%.
 
The housing and home improvement markets remained difficult in the first quarter; in fact, conditions worsened in many areas of the country," CEO Frank Blake said.
 
Profit was $356 million, compared with $1 billion last year.
 
These results reflect a nonrecurring charge of $543 million due to the recently announced closing of 15 stores and removal of 50 stores from the future growth pipeline. Excluding this nonrecurring charge, the company reported profit of $697 ...

The Home Depot Sales Fall 3.4% in 1Q Read More »

Sonepar USA Buys ESSCO

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Sonepar USA, Philadelphia PA, a subsidiary of Sonepar, has acquired ESSCO Wholesale Electric in Arizona.
 
ESSCO Wholesale Electric, distributor in Arizona and California, is a full-line commercial and residential contractor supply house. The company is a 14-branch operation.
 
This expansion of our footprint with a well-established company such as ESSCO is a great move for Sonepar USA, and a major opportunity for strengthening our position on the West Coast,"said Sonepar USA President Tony Burr.
 
Sonepar USA will now operate 253 branches in 35 states.
 
Sonepar USA is a member of the Sonepar group. The group has 1,450 branch locations globally and 2007 annual sales of $15.3 ...

Sonepar USA Buys ESSCO Read More »

Manitowoc Company Ups Bid for Enodis

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The Manitowoc Company, Inc., Manitowoc, WI, has increased its offer for commercial foodservice equipment maker Enodis to $2.4 billion, including the assumption of Enodis' net debt of $245 million.
 
In the first week of May, Illinois Tools Works Inc. made an offer of $2.1 billion plus the assumption of debt.
 
Enodis reported revenues of $1.6 billion for fiscal year ended Sept. 30, 2007. The company's product line includes food equipment mainly for fast food restaurants, institutions and supermarket/grocery stores. Major products include cooking equipment, ice and beverage dispensing equipment, and stand-alone refrigeration as well as refrigerated display ...

Manitowoc Company Ups Bid for Enodis Read More »

Anixter Taps New CEO

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Anixter International Inc., Glenview, IL, has appointed Robert J. Eck president and CEO effective with the retirement of Robert W. Grubbs on June 30, 2008. Grubbs has worked for Anixter for 30 years.

Sam Zell, chairman of Anixter, said: With Bob Eck's 18-year Anixter career that has included diverse and increasing responsibilities, we expect a smooth transition and a continuation of the strategies that have contributed to the company's ...

Anixter Taps New CEO Read More »

Industrial Distribution Group 1Q Sales Down 5.7%

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Atlanta, GA-based Industrial Distribution Group, Inc. reported first-quarter revenues of $127.3 million, compared with $135.1 million in the year-ago period, a decline of 5.7%. Profit was $0.9 million, compared with $1.5 million last year.
 
For the first quarter, revenues from Flexible Procurement Solutions, IDG's services-based supply offerings that include storeroom management, were $78.6 million, a decline of $2.5 million or 3% compared to the first quarter 2007.
 
New sites implemented since the first quarter of 2007 generated incremental revenue in the first quarter of 2008; however, these new site revenues were more than offset by the non-renewal of certain sites in the fourth quarter of 2007, for which the company said it did not seek renewal because of ...

Industrial Distribution Group 1Q Sales Down 5.7% Read More »

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