The 2020 Mid-Year Economic Update_long

Day: March 10, 2009

An Unintended Consequence of Lean

For years, lean has been a hot topic among manufacturers as a way to streamline businesses, operate more efficiently and cut costs.
But now that the recession is in full swing and uncertainty about the end looms, companies who have gone lean are facing an unintended consequence of that course of action: With a workforce that has already been trimmed and specially trained, where can you cut to save money?
Broad-based layoffs aren't an option in those situations, according to a recent article at (read the full article here). Companies like Parker Hannifin have been trying to make cuts in other ways - such as reducing hours or cutting pay - but that may ...

MDM News Digest 3905

Industrial distributor Lewis-Goetz and Company, Inc., Pittsburgh, PA, has acquired Transport Parts Inc., a Minneapolis-based distributor of industrial hose and accessories serving the transportation and industrial markets of Minnesota. The acquisition extends Lewis-Goetz's footprint into the northern Midwest. More
Huttig Building Products, Inc., reported sales of $671 million for 2008, down 23.3% from 2007. The distributor of building materials recorded a year-end loss of $35.4 million, compared to a loss in 2007 of $8.2 million. For the fourth quarter 2008, sales were $126 million, down 30% from fourth quarter 2007. A loss of $15.4 million was recorded for the ...

Manufacturing, Construction Employment Continues to Fall in February

Widespread job losses continued in the manufacturing sector in February, with a decline of 168,000 jobs, according to the Bureau of Labor Statistics.
Much of that decline was in durable goods, which was down 132,000. Specifically, fabricated metal products had a 28,000 decrease, and machinery fell by 25,000.
Employment in nondurable goods manufacturing fell by 36,000 in the month.
Construction lost 104,000 jobs in February; employment in that industry has fallen by 1.1 million since peaking in January 2007.
Two-fifths of that decline occurred in the past four months. Employment fell in both the residential and nonresidential sectors in February.
Employment declined in most major industry sectors in February, with the ...

Steep Decline in Canada Employment

Canada lost nearly 322,000 manufacturing jobs from 2004 to 2008, with more than one in seven manufacturing jobs disappearing over the period. More than 1.5 million jobs were created in the rest of the economy during this period, according to a recent report from Statistics Canada.
The losses resulted in the erosion of the share of manufacturing jobs in the economy. In 2004, manufacturing represented 14.4 percent of total employment; in 2008, the proportion was 11.5 percent.
Almost all manufacturing industries have seen a sharp decline since 2004. Of the 23 studied, only six showed job growth from 2004 to 2008, including transportation equipment - excluding automobiles and automobile parts (9.2 percent), oil and coal ...

Wolseley to Exit Stock Building Supply

Wolseley examines options for its beleaguered U.S. building materials business unit, which despite dramatic cost reductions continues to be a significant drag on the group's overall performance.
UK-based distributor Wolseley plc is once again looking to exit its U.S.-based Stock Building Supply operations, this time by Aug. 1, 2009. Even after extensive cost-cutting measures last fall that included reducing headcount by an additional 3,000 and closing 86 branches, the business lost $246 million last year.
Stock Building Supply is heavily reliant on housing starts in the U.S., which declined from around 750,000 in Oct. 2008 to about 460,000 in January.
Enough is enough, John Whybrow, chairman of the board, says in a Webcast ...

BlueLinx Launches Ecoproduct Line

BlueLinx Corp., Atlanta-based distributor of building products, has launched a portfolio of what it calls ecoproducts called PureBlue.
The distributor is launching the line through an online "virtual show" March 30. The distributor is presenting educational conferences on green from industry experts, product knowledge training, brand-name exhibitor booths and a resource center with workshop presentations to download.
The conference will run for 90 days with months on various parts of the supply chain. Dealer month starts the show off and ends April 30. Builder month runs from May 11 until June 7. Architect month runs June 13-24.
In addition to these educational programs, BlueLinx ...

MDM Interview, Part 2: Graybar – The People Factor

MDM Editor Lindsay Young sat down with Graybar Senior Vice President and CFO Beatty D'Alessandro at the January meeting of the National Association of Wholesaler-Distributors. The second part of this interview focuses on how Graybar is addressing the recruitment, retention and training of its employees. Part 1, published Feb. 25, 2009, can be found online at
MDM: What does Graybar do to encourage its employees to continue their education and training?
Beatty D'Alessandro: We offer tuition reimbursement plans for employees in undergraduate and select graduate programs. We also provide all employees with extensive training that helps them work more effectively. 
Our training programs ...

Distribution Models in Flux

Arguably, there has never been so much stress put on so many wholesale distribution businesses. By necessity many distributors are revising the models that have served well as successful growth engines - for decades in many cases. Revision is an understatement for some, as they see revenues drop double digits and radical changes in customer buying behavior.
Some distributors are making changes out of necessity. Others have built a business based on long-term strategic plans, and they have the most options for coming out of this current downturn stronger. These options have the potential to yield significant market share and competitive advantage over the next 12-24 months.
We are in a major transitional period in this industry as companies adapt to these ...

Inventory Reductions On Tap

Effective inventory management practices are gaining importance as distributors reduce inventory levels in response to demand drops and a renewed focus on cash flow. This article examines best practices for approaching the task.
In mid-November, sales for many distributors - with few exceptions - plummeted. Distributors were caught with excess inventory in an environment of much lower demand.
Many distributors are now working down inventory to maximize cash flow. And they have returned to a focus on the basics: accurate forecasting, reliable safety stock parameters, improving communication with vendors and getting a good handle on the product that is already in their warehouses so they can avoid overstocking.
A top concern for ...

Grainger Sees 10% Sales Drop in February

Chicago, IL-based Grainger, facilities maintenance distributor, reported daily sales in February 2009 fell 10% versus February 2008, the result of weak demand across all customer end-markets and geographies.
Foreign exchange negatively affected sales by 2 percentage points.
U.S. branched-based operations were down 9%; Acklands-Grainger in Canada was down 19% (but up 1% in local currency); and Lab Safety Supply was down 4%.
Grainger had 2008 sales of $6.9 ...

MDM March 10, 2009

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 to ...