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This is a part of the 2016 Distribution Trends Special Issue. The annual feature was researched and written by MDM based on interviews with dozens of distributors, industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this issue.
2016 Distribution Trends Special Issue
Perceived commoditization creates a challenge for distributors of hose and hose accessories. For example, Grand Junction, CO-based Munro recently had a customer come in and say they found a hose for 20 percent cheaper at different distributor and would stop buying from Munro, according to Katie Powell, general manager, business strategy. Even Munro didn't see an immediate difference, so the company reached out to the manufacturer who explained the difference. "It's just all about making sure you really have those conversations with your customers and then asking your vendors to help you better understand the differences in their product and what you're going up against," Powell says.
The industry is dealing with a "market shift." Manufacturers and distributors have to look to different end markets in order to remain profitable. For example, shifting from a focus on OEM manufacturer to replacement markets. "It's the same product that gets used, they just get used in a different way," says Scott Shane, CEO of Mid-America Fittings, Overland Park, KS. And the markets themselves have shifted, according to Don Fritzinger, president of Singer Equities. "In the 1980s it was steel, and look where that is now," he says. "Things cycle and we need to pay attention."
Competition for qualified workers remains high, resulting in higher demand for training and development. Changing customer expectations also means the training provided has to change. "Training has to be faster," says Jeffrey Scheininger, president, Flexline, Kenilworth, NJ. "What their fathers did with us is not going to stand."
Management and human resources spends more time on tactical elements, such as regulatory compliance and policy management, just to keep operating. Conversations at HR events focus far more on managing the tactical than creating strategic hiring and development plans, says John Salveson, Salveson Stetson Group. "I spend more time than ever on these things, and it's doesn't add value to my company," Flexline's Scheininger says.
Oil & gas continues to drag on the industry. "However, this hangover phase will pass," noted one distributor. Distributors looking to succeed when the hangover passes are investing now to capitalize on that market shift.