Lindsay Young, Author at Modern Distribution Management - Page 6 of 11

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Posts By Lindsay Young
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Is Economic Confidence Eroding in Canada?
It seems like eroded confidence in the economy is seeping into our northern neighbor's boardrooms. According to the second-quarter CICA/RBC Business Monitor report, only 6% of executives are more confident in the Canadian economy than they were a year ago.
 
The survey says that 23% of respondents are very optimistic about the economy, compared with 67% a year ago. Just under half of respondents said they had been negatively affected by the U.S. economy.
 
Respondents in Alberta and Manitoba/Saskatchewan were most optimistic about prospects in their provinces; those in Ontario responded with the least amount of optimism about their province. The province is facing manufacturing losses and impacts from the weak U.S. dollar.
 
The culprit, at least ...
Sales & Marketing
Pricing for Profitability

Implementing an effective pricing strategy can be one of the best ways to achieve better gross margin. This article outlines a pricing model developed by Texas A&M University's Supply Chain Systems Laboratory and provides a look at how some distributors are using it to update their pricing strategy.

About three years ago, F.W. Webb, a regional distributor of plumbing, heating, cooling and piping products, took a part of its legacy IT system and dedicated it to improving the customer and product information available to salespeople.

About a third of our prices were being set manually by salespeople,"says Lawrence Mohr, the distributor's now-retired senior vice president of information technology. "We needed a way to provide information to inside sales so ...

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Passing On the Business, If They’re Interested
The Wall Street Journal has a section dedicated to small business. Two articles stuck out to me this week: one on saving energy costs, and one on when and whether young people should join the family business.


The energy-savings article made this point: Energy is not going to get much cheaper than it is now, so now's the time to upgrade. Focus on the big stuff first, such as energy-efficient systems and lighting; or routing software to save on fuel costs. (A florist in the article says she has used online mapping tools such as MapQuest to determine the most efficient routes for her delivery drivers. She also cut down to one delivery a day.) The article is <a href=http://online.wsj.com/article/SB121530416949230331.html?mod=SmallBusinessRunningABusiness_feature_articles" ...
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Companies Paying Close Attention to Economic Trends
I sat in on a conference call with economist Alan Beaulieu on Friday, where he was discussing his latest industry association collaboration to put together a regular economic trends update for Heating, Air Conditioning, and Refrigeration Distributors International (HARDI). In addition to that announcement, he also took the time to address the current state of the U.S. economy and answered my question on the Canadian economy.
 
Beaulieu speaks at many distribution association events and his firm, the Institute for Trend Research, does analysis and regular reports for its clients on economic conditions.
 
He told those on the call Friday that he sees a ...
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Are Industrial Distribution & Manufacturing ‘Dying Industries’?
In my regular reading of the Wall Street Journal, I came across an interesting comment on a  column focused on helping parents help their children find a career path "that will lead to financial security." The reader's comment in response to a request for advice: "Do not pursue dying industries, such as journalism (no offense), the law (unless you can gain admittance to a top 10 school) or (most) industrial jobs."
 
The comment didn't fit with what I hear at various distribution association conferences, where industrial distributors and manufacturers often bemoan a lack of skilled workers with management potential. Industrial distribution and manufacturing are ...
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Commentary: Focusing on Profitability in a Time of Strained Sales Growth
When I started as editor of MDM in 2005, I was consistently writing news articles each quarter on double-digit sales increases. It's no surprise, given current economic conditions and financial market turmoil, that double-digit growth has been a rarity in recent quarters.
 
Most distributors focused on North American markets are recording single-digit growth. Those focused solely on construction-related markets have recorded steep declines and net losses -a fundamental change. Manufacturers with business abroad have seen double-digit growth, but when they break it down, North American sales are low single digits, flat or negative. As a result, many distributors and manufacturers are focusing on profitability.
 
As we wrote recently in MDM, distributors should make up ...
Top Distributor Sectors
Applied Industrial: Fluid Power a Growth Area for Distributor
Applied Industrial Technologies, Cleveland, OH, has made one of its largest acquisitions in the U.S. fluid power market with an agreement to buy seven distribution businesses from Fluid Power Resource LLC.
 
The purchase fits with Applied's strategy to continue building out its fluid power unit, according to Warren E. Bud"Hoffner, who oversees Applied's fluid power group.
 
"It's just a great fit for Applied, and we've always thought that,"Hoffner told MDM. "FPR ran these companies as standalone firms in each local or regional market. That fits very well with how we're structured."
 
The last large acquisition Applied made in the U.S. fluid power market was Spencer Industries Inc., Kent, WA, a regional fluid power distributor with about $65 million in ...
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Fuel Surcharges: Yes or No?
In a recent interview with MDM, Bill Snyder, vice president of channel development for Palatine, IL-based manufacturer Square D (Schneider Electric's North American operating division), had some interesting points to make about passing on the cost of fuel in the channel.
 
He says that Square D learned a lesson when fuel costs rose in previous years. The company had tried a fuel surcharge, which seemed logical at the time. But the distributors came back to Square D and said: "Wait a minute, you don't understand. You send me three pallet loads, you put a fuel surcharge on there. I break those pallets down and put it on the shelf, then I sell them to people. How do I transfer that?"
 
A good point. So ...
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Some Help Improving Fleet Efficiency
The ideas in this article posted on Outsourced Logistics may help you improve the efficiency of your fleet. The article was provided by Ryder System Inc., so does include some advertising. Still, with rising fuel prices challenging bottom lines, all advice helps.

Some of the tips in the article:


  • Train drivers to watch their speed, one of the largest single factors affecting fuel economy. Reducing speed to 55 mph from 65 can improve mpg by as much as 22%.


  • Improve tire maintenance.


  • Improve your preventive maintenance program overall.


  • Leverage ...
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More on Manufacturing: Finding Ways to Revive the Sector
The Wall Street Journal had an article similar to one I mentioned in a blog last week saying that manufacturing in some areas of the U.S. is coming back. Many factories have been revived, in part by upping the ante on the products made, according to the WSJ. The article focuses on one city as a case study: Manitowoc, WI. There, factories have started producing energy-efficient light fixtures and steel towers for wind turbines, along with ice-cream machines and bomb parts.
 
An old plastics company, Kaysun Corp., is moving into products it believes are insulated from overseas competition, such as plastic ...
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Will Inflation Bring Offshore Manufacturing Back to U.S.?
The recent cover story of IndustryWeek contends that some offshore manufacturing may return to the U.S. thanks to rising fuel prices and a weakened dollar, not to mention increased labor costs overseas. The magazine however was quick to say that it is too early to say definitively if this could happen on a large scale.
 
One logistics provider executive tells IndustryWeek that whether the U.S. becomes a "sourcing country" depends on the industry and the cost and bulkiness of the product. One supporting example provided in the feature: One manufacturer, Desa LLC, moved the company's retail heating unit manufacturing operations back to the U.S. after the cost of shipping them from China to ...
Top Distributor Sectors
Applied Industrial VP: ‘Fluid Power is Big Growth Area’
Applied Industrial Technologies, Cleveland, OH, this week made one of its largest acquisitions in the U.S. fluid power market with an agreement to buy seven distribution businesses from Fluid Power Resource LLC. The purchase fits with Applied's strategy to continue building out its fluid power unit, according to Warren E. Bud" Hoffner, who oversees Applied's fluid power group.
 
"It's just a great fit for Applied, and we've always thought that," Hoffner told MDM. "FPR ran these companies as standalone firms in each local or regional market. That fits very well with how we're structured."
 
The last large acquisition Applied made in the U.S. fluid power market was Spencer Industries Inc., Kent, WA, a regional fluid power distributor with about $65 million in sales. ...
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More on Wolseley: Possible Job Cuts
UK-based Wolseley will report on its sales and profits this Wednesday, July 16. (Look for coverage on mdm.com that day.) Wolseley owns Stock Building Supply and Ferguson in North America.
 
Apparently, at that time building materials, plumbing and HVAC distributor Wolseley is also planning to announce more job cuts after already laying off thousands this year. According to at least two top British newspapers -the Financial Times and the Telegraph -the company will shed hundreds of jobs." Of course, it's not news that Wolseley, along with other distributors with exposure to residential markets in the U.S., is struggling and not yet on the road to recovery.
 
The news on Wolseley comes as the UK and other parts of Europe are reportedly seeing major weakness in their ...
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Survey Finds Workers Expect Help Defraying the Price of Gas
A new survey has found that 84% of U.S. workers expect employers to take measures to help offset the rising cost of gas. The Opinion Research Corp. findings say that employees expect employers to: 


  • Institute or expand car-pooling programs -61%


  • Provide incentives for the use of mass transit -51%


  • Permit working from home -51%


  • Provide a gasoline allowance to cover additional commuting costs -42%


When the survey asked what employers had done to defray the cost of commuting, just 35% said they had taken any action. The most common measure was to include new or expanded car-pooling programs (18%). Others offered working from home (18%), ...
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Mitigating the Risks of Private Label
This article looks at the most common mistakes distributors make in private label and how they can protect their brand in the marketplace with successful branding.
 
It does not really matter what you call it -private label, private branding, store brand, white label, proprietary brand -coming through on the implied promise of quality or experience that comes with the product line should be front and center. Unfortunately, many distributors who have ventured into private label have not kept a sharp focus on a branding strategy and the risks if not done right.
 
Brand management, says Evergreen Consulting's Brent Grover, involves creating, growing and protecting a product or group of products sold under a particular name. Here are keys to successful branding, ...
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Distributors Respond to Flooding in the Midwest
Flooding in the Midwest is keeping distributors there busy helping customers recover from the extensive damage the waters brought.
 
One of the hardest hit was Cedar Rapids, Iowa's second-largest city. The AP reported that about 1,300 city blocks flooded and 24,000 people fled their homes.
 
In Eastern Iowa, where Cedar Rapids is located, distributors worked long hours to help customers minimize potential damage before and during the flooding.
 
In one case, a Ferguson employee made a late-night run in heavy rain to the HVAC/plumbing distributor's Waterloo, IA, distribution center -50 miles each way -to get mechanical plugs for contractors working to prevent floodwaters from seeping into the local hospital.
 
The distributor worked with ...
Top Distributor Sectors
Potential Settlement in Next Month in Grainger Lawsuit
We could be seeing a settlement in the next month between the U.S. government and Chicago, IL-based facilities maintenance distributor Grainger, who was accused in the whistleblower case of overcharging the government and illegally relabeling products manufactured in non-trade agreement countries so they could be sold to the U.S. government.
 
According to recent court documents, the U.S. and Grainger have been in settlement discussions; a proposed agreement is prepared to be authorized by government officials. In the documents, filed May 28, 2008, attorneys ask for 60 days to finalize the terms of the proposed settlement and finalize an amended complaint. The court approved.

Here's MDM's original report ...
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Rumors of Wolseley
Here's our take based on MDM's knowledge of the distribution world on the rumors flying around the Web about UK-based Wolseley plc, global building materials/plumbing/HVAC distributor and parent company to Stock Building Supply and Ferguson in the U.S.
 
According to some reports, Wolseley is at risk of breaching its bank covenants" -here's an article from the Telegraph. The company is significantly exposed to the U.S. residential markets and up until this year has been an aggressive strategic acquirer. To improve its financial situation, the company has been aggressively cutting costs in its U.S.-based businesses, closing branches and reducing staff. In its last ...
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Distributors Reach Out in Flood Zones
Many families are returning home to chaos in places like Cedar Rapids where more than a thousand city blocks were flooded. Distributors -national, regional and local -are stepping up, providing customers with service and inventory when and where it is needed to speed recovery.
 
Crescent Electric Supply Company, East Dubuque, IL, is offering a matching relief fund of up to $85,000. The company sent me an announcement today saying that anyone wishing to have Crescent match their donation to help victims of tornadoes and floods in Iowa, Wisconsin and Indiana should send a check made out to either The United Way Tornado and Flood Relief Response or The American Red Cross Central U.S. Tornado and Flood Relief Response to John Miller at Crescent Electric Supply, 7750 ...
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Now Not the Time to Shy Away from Price Increases
A recent survey by McKinsey Quarterly (found here) says that nearly half of all respondents don't expect their companies to raise prices over the next six months. The manufacturing sector was the one exception. 

On the manufacturing side, nearly 90% have seen an increase in the cost of inputs. And only in the manufacturing sector, McKinsey says, did a majority of respondents say their companies had raised prices and will continue to do so in the next six months.


My takeaway: Now is not the time to shy away from price increases. Suppliers are eager to pass on their rising ...

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