The 2020 Mid-Year Economic Update_long

Day: August 25, 2008

UPDATED: Zilliant, Advanous Announce Strategic Alliance

Zilliant, provider of price optimization and management software for manufacturing, high-tech, distribution and industrial service companies, has formed a strategic alliance with Advanous, a provider of pricing and margin management solutions to distributors.

We have identified the opportunity to merge that enterprise pricing software with distribution domain expertise," says Jon Ladle, president of Advanous. "We looked at what our technology does and what PROS, and Zilliant and others do, and we've found it to be complementary and not competitive in nature. As we looked at what additional value we can bring to distributors it's a natural extension of what we do to work with those vendors to maximize the value of their software to help distribution ...

MDM August 25, 2008

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: July 2008

Modern Distribution Management's July Inflation Index, which measures a cross-section of industrial supplies, was up 1.23% from the previous month, and up 6.03% from July 2007.
 
Summary of MDM Inflation Index for the past 12 months:
 
July 2008 Index 288.8
June 2008 Index 285.3
May 2008 Index 283.7
April 2008 Index 282.4
March 2008 Index 281.1
February 2008 Index 279.0
January 2008 Index 277.2
December 2007 Index 275.9
November 2007 Index 274.7
October 2007 Index 273.6
September 2007 Index 273.5
August 2007 Index 273.3
July 2007 Index 272.4

Please click below to view a print-ready pdf of the MDM Inflation Index for July 2008, listing the 10 individual product categories that make up the ...

McJunkin Red Man Corp. Files for Initial Public Offering

McJunkin Red Man has registered with the SEC for an initial public offering of its common stock for $750 million. The company will be listed under the symbol MRC."McJunkin Corp. and Red Man Tool and Supply merged in late 2007. At the time, Goldman Sachs owned a majority share of McJunkin.

McJunkin Red Man is a distributor of industrial and oilfield pipe, valve and fittings in North America, operating 250 locations in the U.S., Canada, Nigeria and Puerto Rico. The company has a significant presence in the oil and gas, chemical and petrochemical, refining processes, power company, manufacturing and mining industries.

According to the SEC filing, the company said it generates about 90 percent of its sales from the energy industry. In the SEC filing, McJunkin ...

MDM News Digest 3816

United Stationers Inc., Deerfield, IL, master distributor of business products, reported its wholly owned subsidiary, United Stationers Supply Co., has agreed to buy the New Jersey business of Emco Distribution, LLC, for $15 million. More
Industrial Rubber Products, Inc., Hibbing, MN, has agreed to be acquired by affiliates of two private equity firms: Lime Rock Partners, Westport, CT, and Thompson Street Capital Partners, St. Louis, MO. More
Transcat, Inc., Rochester, NY, a distributor of professional grade test, measurement and calibration instruments and accredited provider of calibration and repair services, has acquired ...

Barnes: New Products Help to Better Serve VMI Customers

Barnes Distribution, distributor of maintenance, repair, operating and production supplies and a business of Barnes Group Inc., launched its new master catalog, adding more than 4,200 new products to its regularly stocked items. The new products are in the welding, hose and fittings categories.

We're tailoring our product line to customers of our Vendor Managed Inventory services,"Brian Koppy, of Barnes'investor relations and communications, says. The addition of products in welding, hose and fittings also reinforces the vertical marketing strategy the company announced last year in the transportation, manufacturing, government and natural resources markets.

"As part of our market segmentation strategy, we are focusing on fewer market segment,"Koppy says. ...

Legislative Outlook 2009

This article looks at five key issues distributors and manufacturers should watch closely in the next year.
 
The U.S. House of Representatives plans to adjourn for the year on Sept. 26. And, with the August recess not over until Sept. 8, Jade West, senior vice president for Government Relations for the National Association of Wholesaler-Distributors, doesn't expect much more to get done before a new Congress takes its place in January.

However, distributors and manufacturers may want to keep their eye on a few critical issues going into the next session.
 
Energy
The prices of finished energy goods -including home heating oil, gasoline and lubricating oils among others -increased 28 percent from July 2007 to July 2008, according to ...

Latin American Market Opportunities

An analysis of the three major markets in Latin America -Mexico, Brazil and Argentina -forecasts solid growth for manufacturing markets in the region for the remainder of 2008 and into 2009. The author of that analysis, based in the region, spoke with MDM about what sectors are driving the growth.
 
All sectors of manufacturing in Latin America will likely see some growth in 2009, but automotive manufacturing has had particular strength partly due to internal demand in Brazil and Argentina, says Fernando Sedano, author of the Manufacturers Alliance/MAPI Latin America Outlook 2008-2009.

Mexico, the third market included in the analysis, has seen slower growth because of its close economic ties to the U.S., but has begun to make up ground through exports to ...

Commentary: Managing the Customer Service Life Cycle

Every business tends to put on a full-court press to get customers in the door. Many have processes to build existing customer relationships into larger ones. Fewer businesses have a process for saying goodbye or retrieving ex-customers. But in tightening markets, distributors often see customers jump to a lower-price competitor. How often do you experience a customer returning after a year, or after they realize the better value your company delivers? What percentage of lost"customers return?

These issues came to mind following an unpleasant experience closing the account with our credit card processor. I switched to a more cost-competitive service after four-plus years (three-year agreement with automatic annual renewal) with an Omaha-based affiliate of my local banking ...

MDM Interview: Trends in Inventory Management

Effective inventory management practices often get lost in the shuffle when sales are soaring. But distributors can improve profitability by tightening their inventory management practices. This interview reviews current inventory management trends. Jon Schreibfeder, president of Effective Inventory Management, spoke with MDM recently about how more distributors have recognized the importance of inventory management to their business success.


MDM: How are distributors currently approaching inventory management in light of uncertain economic conditions?
 
Jon Schreibfeder: People are really tightening their belts. They are much less likely to invest in speculative inventory. They are much more concerned about selling what they buy rather than ...

A Look at Housing Production Numbers

Just as distributors are keeping a closer eye on their inventory in uncertain times, single-family home builders are also doing so by slowing the pace of new production by nearly 3% in July, according to the Commerce Department and reported by the National Association of Home Builders. NAHB says this is the lowest rate of single-family housing starts since January 1991. (See housing starts numbers for July here.)
 
The president of NAHB says: "Though some may be inclined to focus only on the negative angle of this report, there is definitely a bright side. The actions that home builders are taking right now to keep a lid on new production are slowly but surely helping to bring supply and demand back into ...

Sperian Protection to Buy Combisafe

Sperian Protection has agreed to buy Combisafe International AB, Northampton, UK, a developer and supplier of height safety and access systems.
 
Combisafe expands Sperian's current fall protection system portfolio. It also reinforces Sperian's presence into the fast growing Middle-East market with their operations in Dubai and further expands Sperian's presence in the Northern European Market.
 
Combisafe is majority controlled by Fairford (Sweden).
 
Sales were 293 MSEK (32 MEUR) in 2007. The purchase price will be 590 MSEK (63 MEUR) at closing. ...

Kennametal Agrees to Buy Tricon

Kennametal Inc., Latrobe, PA, has agreed to acquire Tricon Metals &Services, Inc. Closing is planned for October 2008. Tricon will become part of Kennametal's Advanced Materials Solutions Group (AMSG).
 
Tricon is a provider of custom wear solutions specializing in consumable proprietary steels for the surface and underground mining markets, including hard rock and coal. Solutions include cladded products, wear pins, shafting and custom fabricated replacement components.
 
The acquisition will help Kennametal leverage its presence in emerging markets and achieve geographical balance," according to Kennametal. In addition, Tricon's strength in surface mining balances Kennametal's strength in underground mining ...