The 2020 Mid-Year Economic Update_long

Posts By Adam Fein

The economic outlook looks very grim right now. The housing-led slowdown that began in 2007 has now turned into a deep U.S. recession that looks likely to be the longest and deepest downturn since the 1930s.

Unprecedented financial and credit market volatility has reduced prospects for a quick turnaround. Both U.S. Gross Domestic Product (GDP) and the wholesale distribution industry's revenues will decline this year.

As I see it, the companies with the will, the skill, and the till have the best chance of surviving the downturn and coming out with a better position on the other side:

  • The skill to manage their businesses well despite a crisis; ...
The non-profit NAW Institute for Distribution Excellence just released the 2008 Wholesale Distribution Economic Reports, so it's a good time to check up on the general economic situation for wholesale distribution industry, review the performance of building products and industrial distribution in 2007, and check in on the economic outlook.
 
The evidence of a slowdown is inescapable at this point. The residential construction boom will take at least a few years -not a few months -to unwind. Both home sales and residential construction activity are unlikely to rebound until mid-2009 and possibly later. Meanwhile, industrial distributors will face an overall slowing market, although some manufacturing sub-sectors will experience robust growth in 2008. ...

In the new research study Facing the Forces of Change: Lead the Way in the Supply Chain," the author found that the demand-driven supply chain philosophy is taking root in the business-to-business supply chains in which wholesaler-distributors play a major role.

Usually, manufacturers only see orders from wholesaler-distributors, and the distributors, in turn, only see orders from their customers; neither party has visibility into the market consumption (true demand) for a product.

The uncertainty and variability caused by a lack of true demand information leads every participant in the supply chain to stockpile extra inventory. It is caused by a combination of poor or inaccurate forecasts, promotional purchases by the channel, and other failures to provide true ...

Private label products—products branded by a wholesaler-distributor—represent a break from the more traditional wholesale distribution approach of reselling manufacturers' branded products. In our new research study, Facing the Forces of Change®: Lead the Way in the Supply Chain, we found that private label strategies by wholesaler-distributors will expand substantially over the next five years.

Private labels will strengthen wholesaler-distributors' relationships with their customers. However, they will strain distributors' relationships with their suppliers by challenging the wholesale distribution channel's traditional ...

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