The 2020 Mid-Year Economic Update_long

July 25 2008

Volume 38, Issue 14 - 07/25/2008

Volume:

38

Issue:

14

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Features

For years, manufacturers have used the concept of lean to improve efficiencies in their operations. Now distributors are moving forward with their own lean initiatives - looking at ways to reduce costs by improving internal processes. In this article, a dental supplies distributor shares its experience with lean.

At the beginning, going lean seemed so simple to Chuck Cohen, president of Wilkes-Barre, PA-based Benco Dental: Assign someone to identify waste and work with employees to eliminate it.

But when some employees seemed unable to overcome the "We do that already" attitude, he realized it wasn't so simple.

"Lean is the most seductive yet complicated process I've ever been involved in," Cohen says. "It's really easy to do OK at it. It's ...

The idea that a lean operation -one that continually identifies and eliminates wasteful activities to reduce internal costs -can be a more profitable one has long been accepted by manufacturers. Distributors are now starting to apply that idea to their operations. Dr. Perry Daneshgari, president of MCA Inc. and co-author of Lean Operations in Wholesale Distribution, now available from the National Association of Wholesaler-Distributors (www.nawpubs.org), recently spoke with MDM about how the distributor mindset is changing.


MDM: Is lean is something that you're seeing a lot more of in distribution?
 
Perry Daneshgari: I see more sparks of interest, but is it being applied more? Not yet, but there ...

Evergreen Consulting CEO Brent Grover recently interviewed Andrew E. Randall, president of TriState Capital Ohio, Cleveland, OH, about distributor relationships with bankers in a tough climate, where credit markets are tight, and financial institutions have become cautious and conservative.
 
Randall says this environment may continue for another 12 months or so but will create opportunities for banks not affected by current economic challenges to look at well-structured and well-priced opportunities. Randall offered up a recent transaction as an example: a senior debt financing for an acquisition by Supply Chain Equity Partners, a private equity group based in Cleveland, OH, with an exclusive focus on wholesaler-distributors. The transaction typified the type of borrower ...
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 ...
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 ...
Chicago, IL-based Grainger reported sales of $1.8 billion for the second quarter ended June 30, 2008, up 10 percent over the second quarter 2007. Profit increased 8 percent to $113 million. More
 
The Fastenal Company, Winona, MN, reported sales for second quarter ended June 30, 2008, were $604.2 million, up 16.3 percent over the prior-year period. Profit was up 26.4 percent. Sales for the first six months were up 16 percent from the first six months of 2007. Profit was up 26.2 percent. More

UK-based Wolseley plc, distributor of plumbing and heating products to professional contractors and supplier of '

These select product groups provide a snapshot of inflation trends based on the Producer Price Index from the U.S. Bureau of Labor Statistics. Second quarter 2008 is compared with second quarter 2007, and first quarter 2008 with second quarter 2008. Graphics depict trend for that product from the start of 2007.
 
The product groups in this report:  





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This is the pdf of this issue of Modern Distribution Management. Apply the full $24.95 pay-per-view cost toward an annual subscription (within 30 days of purchase), which includes two issues a month plus access to more than six years of online archives and market data. Call 1-888-742-5060 or email info@mdm.com to ...
Modern Distribution Management's June Inflation Index, which measures a cross-section of industrial supplies, was up 0.54% from the previous month, and up 4.99% from June 2007.
 
Summary of MDM Inflation Index for the past 12 months:
 
June 20058 Index 285.3
May 2008 Index 283.7
April 2008 Index 282.4
March 2008 Index 281.1
February 2008 Index 279.0
January 2008 Index 277.2
December 2007 Index 275.9
November 2007 Index 274.7
October 2007 Index 273.6
September 2007 Index 273.5
August 2007 Index 273.3
July 2007 Index 272.4

Please click below to view a print-ready pdf of the MDM Inflation Index for June 2008, listing the ten individual product categories that make up the ...
PDF Download

For years, manufacturers have used the concept of lean to improve efficiencies in their operations. Now distributors are moving forward with their own lean initiatives - looking at ways to reduce costs by improving internal processes. In this article, a dental supplies distributor shares its experience with lean.

At the beginning, going lean seemed so simple to Chuck Cohen, president of Wilkes-Barre, PA-based Benco Dental: Assign someone to identify waste and work with employees to eliminate it.

But when some employees seemed unable to overcome the "We do that already" attitude, he realized it wasn't so simple.

"Lean is the most seductive yet complicated process I've ever been involved in," Cohen says. "It's really easy to do OK at it. It's ...

The idea that a lean operation -one that continually identifies and eliminates wasteful activities to reduce internal costs -can be a more profitable one has long been accepted by manufacturers. Distributors are now starting to apply that idea to their operations. Dr. Perry Daneshgari, president of MCA Inc. and co-author of Lean Operations in Wholesale Distribution, now available from the National Association of Wholesaler-Distributors (www.nawpubs.org), recently spoke with MDM about how the distributor mindset is changing.


MDM: Is lean is something that you're seeing a lot more of in distribution?
 
Perry Daneshgari: I see more sparks of interest, but is it being applied more? Not yet, but there ...

Evergreen Consulting CEO Brent Grover recently interviewed Andrew E. Randall, president of TriState Capital Ohio, Cleveland, OH, about distributor relationships with bankers in a tough climate, where credit markets are tight, and financial institutions have become cautious and conservative.
 
Randall says this environment may continue for another 12 months or so but will create opportunities for banks not affected by current economic challenges to look at well-structured and well-priced opportunities. Randall offered up a recent transaction as an example: a senior debt financing for an acquisition by Supply Chain Equity Partners, a private equity group based in Cleveland, OH, with an exclusive focus on wholesaler-distributors. The transaction typified the type of borrower ...
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 ...
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 ...
Chicago, IL-based Grainger reported sales of $1.8 billion for the second quarter ended June 30, 2008, up 10 percent over the second quarter 2007. Profit increased 8 percent to $113 million. More
 
The Fastenal Company, Winona, MN, reported sales for second quarter ended June 30, 2008, were $604.2 million, up 16.3 percent over the prior-year period. Profit was up 26.4 percent. Sales for the first six months were up 16 percent from the first six months of 2007. Profit was up 26.2 percent. More

UK-based Wolseley plc, distributor of plumbing and heating products to professional contractors and supplier of '



<td style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; BORDER-LEFT-COLOR: #d4d0c8; BORDER-BOTTOM-COLOR: #d4d0c8; PADDING-BOTTOM: 0in; WIDTH: 208.9pt; BORDER-TOP-COLOR: #d4d0c8; PADDING-TOP: 0in; ...
This is the pdf of this issue of Modern Distribution Management. Apply the full $24.95 pay-per-view cost toward an annual subscription (within 30 days of purchase), which includes two issues a month plus access to more than six years of online archives and market data. Call 1-888-742-5060 or email info@mdm.com to ...
Modern Distribution Management's June Inflation Index, which measures a cross-section of industrial supplies, was up 0.54% from the previous month, and up 4.99% from June 2007.
 
Summary of MDM Inflation Index for the past 12 months:
 
June 20058 Index 285.3
May 2008 Index 283.7
April 2008 Index 282.4
March 2008 Index 281.1
February 2008 Index 279.0
January 2008 Index 277.2
December 2007 Index 275.9
November 2007 Index 274.7
October 2007 Index 273.6
September 2007 Index 273.5
August 2007 Index 273.3
July 2007 Index 272.4

Please click below to view a print-ready pdf of the MDM Inflation Index for June 2008, listing the ten individual product categories that make up the ...