September 10, 2010 - Modern Distribution Management

Day: September 10, 2010

MDM Interview: The Mechanics of a Hostile Takeover

For nearly a year now, Air Products has been fighting to buy industrial gases and hardgoods distributor Airgas. The fight has prompted the question: How likely is it that Air Products will succeed?

To learn more about the mechanics of undertaking a hostile takeover bid, MDM spoke with Jim Hill, executive chairman of Ohio-based Benesch and chairman of the law firm’s private equity practice. Hill provided background on the topic, examples of other deals, and the challenges inherent with this approach.

Commentary: Evolving Models of Efficiency

Remember those first-generation efforts in standardized numbering, bar-coding and other ways to automate through technology or process improvement? Remember the quality movement?

For those engaged in independent distribution channels 20 years ago, there was much discussion about how the channel had to tighten up to remain a viable part of the supply chain. Too many redundant activities were taking place at the manufacturer and distributor levels, and customers would migrate to more cost-effective supply sources if their current suppliers did not find ways to be more competitive. Oh, and distributor margins were going to have to squeeze to pay for this improvement.

The Value of Distributor Advisory Councils

Distributor advisory councils can provide a more formal avenue for distributors to add value to the channel by providing local market knowledge to manufacturers in a structured setting. This article looks at best practices in implementing a distributor advisory council and why manufacturers and distributors have benefited from participating in these groups.

By formalizing a process for increased communication and partnership, Distributor Advisory Councils are one way some manufacturers have strengthened their relationships with distributors.

Welding, cutting and safety products manufacturer Thermadyne for example started a distributor advisory council in 2005 to move from informal ad hoc meetings to a more formalized process for getting distributor feedback on markets, products and policies. Thermadyne’s advisory council meets twice a year, but other manufacturers’ councils may just meet once a year. Most have more informal contact throughout the year through teleconferences or email.

No ‘Perfect’ Sales Compensation Plan

This is an exclusive summary of Part 2 of the MDM Webcast series, Build an Effective Sales Organization for the recovery, available on DVD at This summary looks at the role sales incentives play in driving strategy.

Distributors have to balance a number of factors when designing incentive plans for their sales force. Among them: perceived fairness, sales goals, accountability and cost.

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