Lindsay Young, Author at Modern Distribution Management

Connecting with Customers Especially Important Right Now

It was a pleasure yesterday to take my car to a small repair shop that runs on high levels of customer service. The father-son team that runs the place competes against all sizes; in fact, I would guess most of their competitors are much larger. But I've known many to refer friends to the shop. In fact, I was referred myself, and will no doubt return the next time something threatens to fall off my car.

I left with a fixed car, a sense of trust and more money than expected left in my pocket, a rare combination these days on the way out of an auto repair shop. It was a nice reminder of the importance of a positive customer experience each and every time a customer sets foot in your shop.

While customer service is important in both boom and bust times, it could be ...

May 12, 2009

Finance

Why General Tool & Supply Sold to Motion Industries

Last week, Motion Industries, Birmingham, AL, a $3.5 billion subsidiary of Genuine Parts Company, announced it had acquired General Tool and Supply, a regional industrial supplies distributor based in Portland, OR. Motion has also acquired General Tool's subsidiary Industrial Tool and Supply, Tucson, AZ.

The company's president, Bill Derville, told MDM shortly after the announcement that though selling to Motion was part of an eventual exit strategy for himself and other key stakeholders, it would also bring other benefits to the long-time family-held distributor.

One benefit: growth opportunities.

Derville says that the move will help take the company to the next level with the ...

May 12, 2009

Features

Protecting Your Knowledge Base

MDM recently spoke with experts on the topic of institutional knowledge retention, and the importance of putting into place a framework for making knowledge transfer part of the company culture. This article looks at the key elements to keep in mind.

Many companies are running leaner these days.

The situation - driven by downsizing and retirements - can trigger a loss of knowledge critical to the business, an issue many managers are facing. That's something that managers everywhere in every industry overlook frequently when adjusting their work force, says David DeLong, author of "Lost Knowledge: Confronting the Threat of an Aging Workforce."

Factor into the equation higher turnover among younger ...

May 10, 2009

Finance

Behind the Motion Industries-General Tool Deal

Motion Industries has purchased another industrial supplies distributor, once again broadening its reach in the sector. The acquired company's leadership talks in this article about how they came to the decision to sell their business to the fast-growing Genuine Parts Co. subsidiary.

Motion Industries continues to grow its industrial supplies business, this time expanding its reach in the West. The $3.5 billion power transmission/bearings distributor, a subsidiary of Genuine Parts Co., announced May 7 it has acquired General Tool & Supply Co., Portland, OR. It is one of many industrial supplies-focused acquisitions the company has made in the past few years.

The acquisition of General Tool & Supply includes its sister company, Tucson, ...

May 10, 2009

Chemicals & Plastics Distribution

Q&A with Global Plastics Letter Publisher Mel Ettenson

Plastics industry veteran Mel Ettenson, publisher of Global Plastics Letter, will start to post occasional contributions to the MDM Blog based on his most recent issue or other happenings in the plastics industry.

Below is a quick interview I conducted with him to introduce him to MDM readers. His newsletter can be found at www.globalplasticsletter.com.

MDM: What is your history in the plastics industry?

Ettenson: I have been in the plastics industry for almost 50 years. Starting with several manufacturing companies in the plastics composites sector and then into marketing and distribution with several global plastic semi-finished shapes distributors including ...

May 4, 2009

Sales & Marketing

Analyze Customer Needs and the Resources You Need to Meet Them

Mike Emerson and Mike Marks of Indian River Consulting Group recently presented "Sales Force Compensation: Best Practices in Tough Times" in a free MDM Webcast sponsored by Sage. Emerson wrote a followup article for MDM, Align Selling Resources to the Market. In the article, published in the April 25, 2009, issue of MDM (found here), he encourages distributors to take a closer look at their customer base to determine what type of sales resource is appropriate for each customer based on that customer's needs.

For example, customers that require assistance when selected products need active involvement, while those that use internal capabilities to select products need passive involvement on the part of the distributor. ...

April 27, 2009

Paper Products & Packaging Distribution

Genuine Parts Company: Cost Cuts a ‘Balancing Act’

The four business units of Genuine Parts Co. - Automotive, Electronics, Industrial and Office Products - have drafted detailed and specific cost reduction plans, which each have implemented, according to Thomas Gallagher, CEO, in the company's latest conference call on its first quarter 2009 results.

But as we saw the business decelerating even more in Industrial and Electrical, they had built contingency plans to take more costs out, which they have been working on, and they continue to refine the contingency planning to try to catch up with the declining revenue, he said.

But the company is cautious of not cutting too much. "It's a balancing act," says CFO Jerry Nix. "We don't want to go so far that ...

April 25, 2009

Technology

Pushing Ahead With a Warehouse Management System

In a survey for our recent special report, "The State of the Distribution Software Industry," available here, we found that many distributors are continuing to invest in warehouse and inventory management software applications. Particularly now, when efficiency and cost reduction is key, distributors are growing smarter about where they invest to ensure they get a sufficient ROI in a time when ROI is an absolute must.

A recent article in Supply and Demand Chain Executive (sdcexec.com) looked at plumbing, HVAC and PVF distributor Bardon Supplies Limited's decision to move forward with a WMS implementation in 2007; the new warehouse management system was finally in place earlier this year at one of the ...

April 21, 2009

Human Resources in Wholesale Distribution

Sudden Change Can Drive Insecurity in the Workplace

HR consultant Nancye Combs told me recently that remaining employees actually go through the grieving process when co-workers are laid off unexpectedly. She says that sudden change can create insecurity and fear. Which is why it's important to carefully plan layoffs and other cost-reduction driven changes, and to constantly communicate with those who are impacted, she says. The long-term viability of the business is at stake.

In the most recent issue of MDM, John Salveson of Salveson Stetson Group says that many companies have the attitude that those employees that remain "ought to be happy to have a job." But that's a simplistic short-term mentality, he says. He says that many leaders are so relieved to get through layoffs ...

April 21, 2009

Human Resources in Wholesale Distribution

Helping Employees Who Are Let Go

As this BusinessWeek article back in September 2008 points out (long before the widespread layoffs we are seeing now started), implementing layoffs is more than a legal issue or an economic one. The author of that article wrote: "At its core, downsizing is an ethical issue, and the good manager is concerned not just with protecting the company's financial and legal interests but also with honoring the dignity and integrity of the human beings who work on the front lines and who are the lifeblood of the organization."

To that end, in the recent downturn, many distributors want to help the employees out - they are "very concerned for the well-being of ...

April 14, 2009

Features

The Challenges in Downsizing

Distributors across many sectors face a decision many never faced before: whether to implement layoffs. This article offers insight from two distributors on deciding who, when and how, as well as expert opinion on best practices in this difficult time.

Business is off about 40 percent from a year ago for one industrial distributor in the Midwest. As a result, for the first time in 22 years, the owner has had to lay off roughly a fifth of his small staff. It was one of the worst days of my life, he says.

The fear in employees' eyes as they walked to the conference room the day the layoffs were announced was palpable, he says. The process has taken an emotional toll on him and the remaining workers. For many distributors, a dramatic drop in demand in the ...

April 10, 2009

Features

Top Concern Among Distributors: Maintaining ‘Survivor’ Morale

The owner of the industrial distribution company says he survived three layoffs at a manufacturing firm in the 1980s. The work didn't disappear, so he worked harder for less money and lived in fear of being in the next group of employees asked to leave. "People need to come to work happy and motivated," he says.

How layoffs are handled makes a huge difference in the productivity and morale of remaining staff. These days, layoffs are not unusual, which means that although they might not surprise those who are laid off, the fear of being laid off is always present. In a recent survey, 60 percent of respondents said they were afraid of losing their jobs.

Some companies have the attitude that those remaining "ought to be happy to ...

April 10, 2009

Human Resources in Wholesale Distribution

Bain Survey Sees Spike in Plans to Downsize

Bain & Company's just-released Management Tools & Trends survey says that 59 percent of executives interviewed globally plan to downsize in 2009; this is unsurprisingly up from 2008. Just 37 percent said they did not downsize in 2008 nor plan to in 2009.

An overview:

71 percent think that government regulation of business will increase over the next five years.
77 percent of North American respondents think that this will be the case

71 percent feel that the current downturn will change consumer behaviors for at least three years 70 percent are very concerned about meeting growth targets in 2009.

64 percent are planning for a downturn that will last at least ...

April 6, 2009

Economic Trends

How Did Manufacturing & Construction Fare in March Employment Reports?

The employment numbers out today from the Bureau of Labor Statistics are not great - we have now hit 8.5% unemployment nationally. Since December 2007, the U.S. has lost 5.1 million jobs, with two-thirds of that decrease happening in the past five months. Job losses were widespread.

Wholesale trade saw a decline of 31,000 in March, with nearly all the decline in durable goods.

How did manufacturing and construction fare?

According to data found here, manufacturing employment in March fell by 161,000, with widespread losses among component industries. Factory employment fell by 1 million over the past six months. The largest decreases in March were in fabricated ...

April 2, 2009

Human Resources in Wholesale Distribution

Legal Risks in Layoffs

In doing research for an article on downsizing to be published in our next issue of MDM April 10, I came across this piece on the WARN Act from Fisher & Phillips LLP. MDM has tapped Fisher & Phillips as a source in the past for some of our articles on legal issues employers face.

As the author of this timely article points out: "When times are tough, the last thing a struggling business needs is a class-action lawsuit claiming the former employees are entitled to 60 days' additional pay under federal or state law."

The federal WARN Act (Worker Adjustment and Retraining Notification Act) governs how employers handle laying off large ...

April 2, 2009

Research & Analytics

Dell Computer Recognizes Value of Selling Through Distributors

Dell Computer Inc. seems to recognize the value of wholesaler-distributors in expanding its reach in the small and medium-sized business markets. The build-to-order computer giant will be working with Ingram Micro Inc. and Tech Data Corp. to target new customers in those markets, according to this article at itchannelplanet.com.

At first, Dell will provide the distributors with desktops and a few notebooks from its Vostro line, as well as some monitors and limited hardware warranties. Down the road, the computer-maker may expand the products offered through distribution.

Ingram Micro President Keith Bradley said in <a ...

March 31, 2009

Economic Trends

Commentary: A Positive Spin on News in a Negative Time

In a short time, we have grown accustomed to reading (and in my case, writing) articles and headlines filled with words like, decrease, "decline" and "fall." That's why when, as reported this month, housing starts saw a slight increase, and new orders for durable goods went up, the words "unexpectedly" and "surprising" started to appear. Confidence went up, at least a little - badly needed in our battered economy.

That said, as soon as the word "increase" and all its synonyms came back, however briefly, there were plenty of economists and analysts ready to moderate our excitement that things might finally be hitting rock bottom. "The modest signs of stability in the U.S. economy are ...

March 25, 2009

Human Resources in Wholesale Distribution

Execs: Right Leadership, Training Key to Retaining the Right People

Two recent MDM interviews offered some perspective on retaining quality employees.

Graybar Senior Vice President and CFO Beatty D'Alessandro told me (at the recent NAW meeting in January) that the company keeps its focus on drawing employees who take a long-term view. He says finding the right people with the right values is crucial from the get-go, but that providing the right training and the right opportunities are just as important in keeping the right people in place. He says: "The model is built around people who are going to come and stay versus people who job-hop around the industry."

In the latest issue of MDM, Grainger's new president of international businesses, Court Carruthers, says that nurturing employee development is a passion of his. A ...

March 24, 2009

Economic Trends

Behind the Surprising Uptick in February Housing Starts

Housing starts went up unexpectedly in February (+22.2% from January), but were still down 47.3% from February 2008. And while to some this might trigger some hope that we're reaching the bottom, as the Chicago Tribune and other papers around the country have noted, most of the gain came from the multifamily sector, which includes apartments and condominiums. Starts in that sector rose more than 80%; single-family homes only gained 1.1%. On the bright side, that 1.1% is an improvement over the double-digit drops we have been seeing the past several months.

Economists are mixed as to whether the slight ...

March 17, 2009

Free

Finding Opportunity in Inventory

Distributors are slimming down.

The sudden drop in sales in November left many distributors with too much inventory and not enough demand. Maximizing cash flow has become the name of the game. To do this, distributors are paring down and better managing inventory. They are shortening their forecasting time frame (to consider just the past three months rather than the past half year or more), analyzing their replenishment processes (in many cases ordering more frequently), improving communication with vendors and returning to basic best practices in inventory management. Many are also digging more deeply into their technology tools to find ways to increase efficiencies in the inventory management ...

March 17, 2009

Posts By Lindsay Young

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