September 2008 - Modern Distribution Management

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September 2008

Rockwell Automation Announces Restructuring

Rockwell Automation, Inc., Milwaukee, WI, announced a restructuring plan to better align resources with growth opportunities and reduce costs in light of current and anticipated market conditions."
 
The plan is expected to generate costs savings of $75 million in fiscal 2009, growing to $85 million in 2010.
 
"These actions are consistent with the cost management approach we outlined in July. Although fourth quarter revenue is in line with expectations, we believe it is prudent to take steps to address our cost structure while continuing to invest to maintain our competitive differentiation and further strengthen our global presence," said Keith D. Nosbusch, CEO.
 
Restructuring includes: streamlining administrative and operations functions, realigning ...

Rockwell Automation Announces Restructuring Read More »

Canadian Price Indexes Fall in August

Source: Statistics Canada

In August, Canadian price indexes for manufactured goods and raw materials declined 0.2% and 7.7% respectively from July. The strong decrease in prices for petroleum products brought to a halt the uninterrupted monthly growth observed since the end of 2007.
 
The monthly decline of 0.2% in the Industrial Product Price Index (IPPI) in August was largely attributable to a 6.0% drop in prices for petroleum and coal products. Excluding petroleum and coal products, the prices of other industrial goods increased 0.8%, a rate of growth comparable to the average rate recorded in the previous two months.
 
Also contributing to the decline in August was a 3.1% drop in prices for primary metal ...

Canadian Price Indexes Fall in August Read More »

Supporting Multinational Customers Abroad: Anixter

With acquisitions in the past two months in Germany, France, Mexico and Wisconsin, Anixter International's global growth plan may not seem clear. Companies often focus on specific geographies where they want to build their presence. And while that is a consideration for Anixter, according to CFO Dennis Letham, there's a more important driver when making acquisition decisions.
 
"The real focus of each of these acquisitions is supporting the multinational companies that we serve as they expand globally,"Letham tells MDM in a recent conversation. "We want to support them ...

Supporting Multinational Customers Abroad: Anixter Read More »

Cardinal Health to Spin Off Clinical and Medical Products

Just three months after restructuring, drug distributor Cardinal Health, Dublin, OH, has announced that it will be spinning of its newly focused Clinical and Medical Products segment into a standalone medical technology business. The new public company will be based in San Diego, CA.
 
David L. Schlotterbeck, currently vice chairman of Cardinal, has been tapped as CEO of the as-yet unnamed company. George S. Barrett, who currently heads the Healthcare Supply Chain Services, will succeed R. Kerry Clark as CEO of Cardinal. Clark will retire after the spin-off.
 
Since 1996, Cardinal Health has built an industry-leading med-tech business that, as an independent company, would have the size and scale to stand on its own," Clark said. "This strategic decision will benefit ...

Cardinal Health to Spin Off Clinical and Medical Products Read More »

Drago: Decision to Sell Family Business ‘Didn’t Come Easy’

Executive Vice President Sam Drago of industrial distributor Drago Supply Company, Port Arthur, TX, recently answered some questions from MDM on his family's decision to sell to Motion Industries, a subsidiary of Genuine Parts Company.
 
Drago tells MDM that the decision to sell the business came after "years of thought, deliberations and several other offers from excellent companies. This business has been the central focus of our family for over 77 years, so the decision didn't come easy."

The key reasons for selling? According to Drago:

  1. The timing was right. The company has a history of business with ...

Drago: Decision to Sell Family Business ‘Didn’t Come Easy’ Read More »

Trade Commission Rules U.S., Chinese Companies Violated Legrand Patents

Pass &Seymour/Legrand, Syracuse, NY, achieved a legal victory when a U.S. International Trade Commission judge ruled that several Chinese and U.S. companies had violated patents held by P&S in the manufacture of ground fault circuit interrupters (GFCI).
 
The ruling will be reviewed by the entire International Trade Commission with a final decision expected by Dec. 24, 2008.
 
The original complaints, filed in August and December of 2007, alleged that safety features built into the GFCIs in question infringed upon six patents held by P&S. Fifteen companies in the U.S. and China were included in the complaints. Six U.S. companies settled with Pass &Seymour before the ruling.
 
The entire area of property rights management is probably the biggest thing any ...

Trade Commission Rules U.S., Chinese Companies Violated Legrand Patents Read More »

Illinois Tool Works Acquires Avery Weigh-Tronix

Illinois Tool Works Inc., Glenview, IL, has acquired UK-based Avery Weigh-Tronix, a manufacturer of industrial weighing products and systems. Terms of the transaction were not disclosed.
 
Avery Weigh-Tronix will be a wholly owned subsidiary of ITW and part of the company's Test and Measurement group. Last year, the ITW Food Equipment group acquired the retail side of the business, Avery Berkel. In keeping with ITW's decentralized business structure, Avery Weigh-Tronix will maintain its brand and operate as a separate business.
 
With $16.2 billion in revenues, ITW is a diversified and value-added manufacturer of highly engineered components and industrial systems and consumables. The Company consists of approximately 825 business units in 52 countries and employs ...

Illinois Tool Works Acquires Avery Weigh-Tronix Read More »

L&P Plastics Acquired

Monomoy Capital Partners has acquired L&P Plastics, LLC from Leggett &Platt, Inc.
 
L&P Plastics, a non-core operating division of Leggett &Platt, manufactures and designs  custom plastic components for the power tool, medical device, furniture and automotive industries. The company has more than 400 employees and provides a full range of tooling, molding and assembly services, including injection molding, gas-assisted molding, insert molding and structural form molding.
 
L&P Plastics'larger customers include Briggs &Stratton, GE Medical, Caterpillar, Humanscale, Leggett &Platt and Key Safety Systems. The company will be part of a growing Monomoy manufacturing portfolio that includes Compass Automotive Group, Inc, a manufacturer of safety-critical auto parts, ...

L&P Plastics Acquired Read More »

US Electrical Services Buys Maurice Electrical Supply

Maurice Electrical Supply Company Inc., Washington, D.C., has been acquired by US Electrical Services, Inc., which is owned by Consolidated Electrical Distributors.
 
Maurice has been a family-owned independent distributor since 1922.
 
Chairman and CEO Bruce Kogod will continue with the company as will the entire senior management team. I'm very excited to join the USESI Company and continue to grow our business in the Mid-Atlantic"said Kogod. "This decision was made because it is the best situation for the entire Maurice family of employees as well as the shareholders. The synergies make this a great opportunity to compete and win more business for years to come. Our future is very bright, and I have a big stake in the success of the new company."
 
The ...

US Electrical Services Buys Maurice Electrical Supply Read More »

Durable Goods Orders Decrease in August

New orders for manufactured durable goods in August decreased $9.9 billion or 4.5% to $208.5 billion, the U.S. Census Bureau announced . This was the largest percentage decrease in new orders since January 2008 and followed three consecutive monthly increases including a 0.8% July increase. Excluding transportation, new orders decreased 3%. Excluding defense, new orders decreased 5.0%.
 
Shipments
Shipments of manufactured durable goods in August, down following two consecutive monthly increases, decreased $7.7 billion or 3.5% to $210.1 billion. This was the largest% decrease in shipments since December 2002 and followed a 2.3% July increase.
 
Unfilled Orders
Unfilled orders for manufactured durable goods in August, up thirty of the last ...

Durable Goods Orders Decrease in August Read More »

Final Estimates: GDP Grows at Rate of 2.8% in 2Q

Real gross domestic product -the output of goods and services produced by labor and property in the U.S. -increased at an annual rate of 2.8% in the second quarter of 2008, (that is, from the first quarter to the second quarter), according to final estimates released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.9%.
 
The GDP estimates are based on more complete source data than were available for the preliminary estimates issued last month. In the preliminary estimates, the increase in real GDP was 3.3%.
 
The increase in real GDP in the second quarter primarily reflected positive contributions from exports, personal consumption expenditures (PCE), nonresidential structures, federal government spending, and state and local ...

Final Estimates: GDP Grows at Rate of 2.8% in 2Q Read More »

MDM Interview: Updating Legacy Systems

Luke Bucklin, president of Sierra Bravo Corp., has worked with distributors for more than two decades, most recently in updating legacy systems using Service Oriented Architecture (SOA). SOA allows companies to adapt their current systems to modern technology. Here's what Bucklin is seeing in the current market for SOA and what distributors should expect.
 
MDM: How do companies go about modernizing their legacy systems, and how do you help them to do that?
 
Luke Bucklin: Legacy systems have changed with the customer over time. They eventually realize that the system is not modern. It doesn't integrate cleanly with e-mail or their CRM application. They can't print invoices the way they want them to look. It's a constant challenge. ...

MDM Interview: Updating Legacy Systems Read More »

State of the Distribution Software Industry, Part I: The Impact of Consolidation

To better understand the dynamics in the distribution software market, MDM spoke with distributors and more than a dozen software providers. This is the first in a series of articles based on those interviews. This article focuses on the relatively recent consolidation in distribution software and its impact on the distribution industry. Part II of this series will run Oct. 10, 2008.
 
Take a snapshot in 1995 of software for distributors. The picture is fragmented. For the most part, there were small providers, most focused on one or two product sectors. The landscape today looks very different from even five years ago -not to mention the vast shift we've seen over the past decade.
 
Consolidation of software providers in the early part of this decade resulted ...

State of the Distribution Software Industry, Part I: The Impact of Consolidation Read More »

Health Care Premiums Rise 5% in 2008

Premiums for employer-sponsored health insurance rose to $12,680 annually for family coverage this year -with employees on average paying $3,354 out of their paychecks to cover their share -and the scope of that coverage has changed, with many more workers now enrolled in high-deductible plans, according to the 2008 Employer Health Benefits Survey by the Kaiser Family Foundation and the Health Research &Educational Trust.
 
Premiums rose a modest 5 percent this year, but they have more than doubled since 1999 when total family premiums stood at $5,791. During the same period, workers'wages increased 34 percent and inflation rose 29 percent.
 
This year many workers are also facing higher deductibles in their plans, including a growing number with general plan ...

Health Care Premiums Rise 5% in 2008 Read More »

Commentary: Software Evolution Has Been Good for Distributors

Some of us attended Gordon Graham seminars in the 1990s. He is widely regarded as the father of distribution inventory management principles and the driver for getting those principles built into most of the first- and second-generation distribution software packages. He helped define state-of-the-art in information technology for distributors for more than a generation. What a new world today by contrast.
 
Consider that in the mid-1990s, only a few providers had revenues more than $10 million. The three biggest were Prophet 21, NxTrend and Eclipse. Prophet 21, estimated to be the largest, reported 1996 revenues of $36 million. By 2005 when it was sold to Activant, its revenues were pushing $90 million. Today it is part of a company several times larger (and includes ...

Commentary: Software Evolution Has Been Good for Distributors Read More »

MDM News Digest 3818

Global electrical distributor Sonepar Group, Paris, France, has appointed Paul Klasing as president of Sonepar USA, effective Jan. 1, 2009. Klasing succeeds Tony Burr who has been appointed to a new global role focusing on strategic initiatives for the Sonepar Group. More
 
United Stationers Inc., Deerfield, IL, master distributor of business, jan-san and industrial products, has tapped Stephen A. Schultz to the position of group president, LagasseSweet and ORS Nasco. Todd A. Shelton has been promoted to president of LagasseSweet after serving since 2005 as its COO. William K. Scheller, senior vice president and president of ORS Nasco Inc., the company's industrial supplies division acquired in ...

MDM News Digest 3818 Read More »

Wolseley Considers Selling Stock Building Supply

UK-based Wolseley plc has started a fundamental review"of Stock Building Supply's impact on its overall results, which continued to suffer due to the struggling housing market in the U.S. The company may sell the unit.

"We must acknowledge that further large-scale reduction of Stock will inevitably eat into the infrastructure of the business,"said Chief Executive Chip Hornsby. "It is also abundantly clear that conditions in the new residential market will continue to get worse before it gets better so riding out the storm is not an option for us."

Stock posted a trading loss of £123 million (US$227 million) for fiscal year 2008. The magnitude of the of loss masks the strong performances of other members of the group, Hornsby said.

Wolseley Considers Selling Stock Building Supply Read More »

U.S. Market Analysis: Fluid Power MRO

The industrial product group listed here - Fluid Power MRO - represented a market in 2007 of $32.1 billion, according to estimates by Industrial Market Information, Minneapolis. These charts show the top 10 industries, by SIC code, consuming these products; and the 2007 end-user consumption of these groups sorted by the nine government market ...

U.S. Market Analysis: Fluid Power MRO Read More »

Monthly Wholesale Trade: July 2008

July 2008 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 $410.6 billion, down 0.3 percent from the revised June level, but up 16.5 percent from the July 2007 level. The June preliminary estimate was revised upward $0.7 billion or 0.2
percent. July sales of durable goods were up 0.2 percent from last month and were up 9.4 percent from a year ago. Sales of nondurable goods were down 0.7 percent from last month, but were up 23.0 percent from last year. Sales of petroleum and petroleum products were down 5.9 percent from last month.
 
Inventories. Total inventories of merchant wholesalers were $441.3 billion at the end of July, up ...

Monthly Wholesale Trade: July 2008 Read More »

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