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Quarterly MDM-Baird Distribution Survey

Analysis: Geopolitical Impacts on Distributors’ Supply Chains

We analyze the qualitative results of our 1Q24 Baird-MDM Distribution Survey question that asked distributors about current or expected impacts from geopolitical issues.
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Market Insight Reports

MDM 4Q 2023 M&A Report

The report features in-depth articles that recap the year that was 2023 in distribution dealmaking, a full rundown of every deal we covered in October-December, the latest EBITDA trading multiples and more.

MDM 4Q 2023 MarketPulse Report

Find a wealth of data and analysis extracted from the 3Q23 Baird-MDM Industrial Distribution Survey, including trending charts and figures for revenue and expectations, plus plenty of interesting commentary.

MDM 3Q 2023 MarketPulse Report

Find a wealth of data and analysis extracted from the 3Q23 Baird-MDM Industrial Distribution Survey, including trending charts and figures for revenue and expectations, plus plenty of interesting commentary.

MDM 3Q 2023 M&A Report

Our 2023 third quarter M&A report features in-depth articles on activity by Ferguson and Veritiv, and chronicles the overall quarterly pace of new deals.
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Global Competition on a Local Level

This article is part of an ongoing series looking at The Shifting Competitive Landscape in wholesale distribution. Read this and other articles in the series at www.mdm.com/shiftinglandscape.

Cross-border M&A in wholesale distribution has accelerated in recent years, adding to an increasingly busy competitive landscape. The U.S. market continues to be attractive to Europe-based distributors seeking growth outside of their traditional markets. This article looks at this trend and the impact it has had on the market.

In recent years, Europe-based distributors have accelerated their expansion in the U.S. As a result, local and regional distributors are increasingly facing local competitors backed by resources they did not have access to previously.

“As Thomas Friedman says, the world is truly flat,” says Robert Stolz, who leads Wurth Group’s North American …

Technology
Commentary: Shifting Landscape, Shifting Relationships

If there’s anything I’ve learned in my time covering the wholesale distribution industry, it’s that distributors hold one thing above all else: relationships. Even in the shifting competitive landscape, relationships have an important role in this industry.

Sure today’s distributor may look a lot different than distributorships of the past. Once-local businesses are being bought up by larger national or …

Top Distributor Sectors
MDM Interview: Disintermediation & Channel Conflict

Principia Consulting’s Building Products Distribution 2012 study identifies the best growth opportunities in the sector through 2014 and provides strategies for value creation and competitive advantage.

Ken Jacobson, partner at Principia, spoke with MDM staff writer Angela Poulson about the study’s findings, including increased disintermediation and how distributors can stay competitive despite e-commerce’s role in accelerating this trend.

MDM: In Principia’s 2011 survey, 50 percent of building products distributors expected industry-wide growth of at least 5 percent in 2012. What are distributors’ expectations for 2013?

Ken Jacobson: It depends on the day of the week that you’re asking. It depends on the still-looming status …

Technology
Case Study: Engage Partners in ERP Transitions

Company Snapshot:




  • Global manufacturer with three Loctite Industrial production facilities in North America

  • 4,000 Loctite Industrial Group employees

  • Adhesives, sealants, and application equipment for OEM and MRO markets



When most distributors and customers hear about a supplier going through an ERP system change, their blood runs cold because, potentially, it can be devastating to business. There are far more stories about bad implementations than there are about good implementations.


When we learned we would be changing our ERP system, we were determined to make it as smooth a transition as possible. Since we sell approximately 95 percent ...
Finance
Audax Group Buys Lewis-Goetz
Private equity firm Audax Group has acquired industrial rubber distributor Lewis Goetz and Company Inc., Pittsburgh, PA. Lewis-Goetz operates from 48 locations throughout the U.S. and Canada.
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It sells industrial, hydraulic, and metal hose, conveyer belts, gaskets and seals, and related accessories and services.
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We are excited to have Audax Group as our partner," said David R. Goetz, Lewis-Goetz CEO. "Their experience sourcing and integrating add-on acquisitions will be an important asset for us as we continue to grow our business."
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Vetus Partners, featured in a recent MDM audio conference, advised Lewis-Goetz.
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Audax recently purchased UTEX Industries, Inc., Houston, TX, a manufacturer of complex gaskets and highly engineered ...
Finance
3M Buys Diamond Productions Inc.

3M, St. Paul, MN, has acquired Diamond Productions Inc., Wayne, NJ, a manufacturer of superabrasive diamond and CBN wheels and tools for dimensioning and finishing hard-to-grind materials in metalworking, woodworking and stone fabrication markets.

&nbsp ;
Diamond Productions Inc., &nbsp ; brings industrial metalworking strengths as well as new applications for stone processing to 3M's strong offering of grinding and finishing tools for the industrial and commercial markets.
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The combination of 3M and DPI expands the capabilities for dimensioning hard-to-grind materials to include stone, marble and concrete.
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The addition of DPI's metal, resin and vitrified superabrasives enhances 3M's cutting and grinding capabilities for such things as kitchen ...
Finance
JVA Partners Buys Kennedy Manufacturing
JVA Partners has acquired Kennedy Manufacturing Company, Van Wert, OH. Kennedy manufactures industrial tool storage products and medical carts.
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In the first half of 2005, Kennedy had emerged from Chapter 11 bankruptcy protection. The 100-year-old manufacturer had been hit hard by a tough manufacturing economy, global competition and tighter requirements with its bankers. It also faced rising steel prices.
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JVA Partners is a strategic investment company that has acquired a number of manufacturing companies throughout the Midwest. One of its holdings, HMC Holdings LLC dba Homak, is also in the tool storage business.
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We are excited about the prospect of adding Kennedy Manufacturing to our family of companies," said John Veleris JVA's Chairman. ...
Finance
Dana Corp. to Sell Fluid Products Businesses
Dana Corporation, Toledo, OH, received approval from the U.S. Bankruptcy Court for the Southern District of New York to sell two businesses that make up its fluid products unit.
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Its fluid products hose and tubing business will be sold to Orhan Holding A.S., a Turkish industrial firm and joint-venture partner of Dana. Orhan will pay $85 million.
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Dana's coupled products business will be sold to Coupled Products Acquisition LLC, a wholly owned subsidiary of Wanxiang (USA) Holdings Corporation.
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Dana expects to close the sale of both businesses by the end of July 2007.
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Dana is in 28 countries and reported 2006 sales of $8.5 billion, with more than half of this revenue derived from outside the U.S. ...
Finance
Pro-Build Buys Florida-based Dunn Lumber

Pro-Build Holdings, Denver, CO, supplier of building materials to professional contractors, has purchased The Dunn Corporation, a Daytona Beach, FL-based distributor of lumber, millwork, building products and Overhead Door Company systems in Central and East Coast Florida.

The Dunn Corporation is very excited about the opportunity to join the Pro-Build family of companies as we see substantial opportunities for our team members," said Sam Dunn, president, and former chairman of the NLMBDA. "& hellip; Because the employees are stockholders through ESOP ownership, they will share in the proceeds of the sale just as family members. It has always been the feeling of Barry and I that our people are our most important asset.

Dunn Lumber employs more than 120 people ...
Finance
Austin Hardware Acquires Fastener Distributor
Austin Hardware and Supply, Inc. has acquired JPC Specialties, a supplier of standard and specialty fasteners in Philadelphia, PA. The acquired firm will continue operations from its Philadelphia location under the name JPC Fasteners, an Austin Hardware Company.
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Mark Dudenhoeffer, president of Austin Hardware, said the acquisition broadens Austin's product line; before the acquisition, the distributor was supplying fasteners on a limited basis. JPC makes us a complete fastener resource," he said. Austin also plans to ramp up its vendor-managed bin-stocking programs with this acquisition.
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Austin Hardware is a supplier of specialty industrial and vehicular hardware. Primary industries served include truck body, trailer, specialty and recreational vehicle OEM ...
Finance
Platinum Equity Buys Weyerhaeuser’s Wholesale Centers in Canada
Platinum Equity, Los Angeles, CA, has purchased Weyerhaeuser Company's wholesale products distribution centers in Canada and established the distribution business as a standalone company named Broadleaf Logistics Company.


Broadleaf distributes a wide range of building materials, including engineered wood products, oriented strand board, panels, framing lumber, and plywood panels; appearance grade and other cedar products; and specialty products such as exterior siding, insulation, rebar, and roofing.

Headquartered in Vancouver, British Columbia, Broadleaf is Platinum's first Canada-based business. Jacob Kotzubei, the Platinum Equity executive who led the acquisition, said the strategic plan for Broadleaf would focus not only on sustaining current operations, but ...
Finance
Allied Building Products Acquires Roofing Distributor
Allied Building Products Corp., East Rutherford, NJ, has acquired roofing materials distributor Spartan Supply Co., Culver City, CA. Spartan will move to a new facility in West Los Angeles.
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The acquisition provides Allied access to a high-end, niche market. It will also fill in logistical gaps. On its Web site, Spartan says it specializes in high-end materials such as imported and domestic slates, specialty clay tiles and copper products, as well as standard roofing ...
Finance
R& M Manufacturing Buys Die Products Co.
R & M Manufacturing Co., LLC, St. Louis Park, MN, has acquired Die Products Company, a stamping and tooling company in Fridley, MN.
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R & M Manufacturing is a sheet metal fabricator, specializing in custom, short and medium run sheet metal parts.
&nbsp ;
The acquisition of Die Products is a strategic investment that increases the services that R & M and Die Products can provide our customers," R & M President Todd Dyste ...
Paper Products & Packaging Distribution
Pactiv Corp. Buys Prairie Packaging for $1B
Pactiv Corporation, Lake Forest, IL, has acquired Prairie Packaging, Inc., a manufacturer of disposable tableware products for $1 billion, or 7X EBITDA. Prairie's 2007 sales are expected to be $500 million.
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Prairie manufactures a broad range of tableware and foodservice products, including drink cups, portion cups, containers, cutlery, plates, and bowls. The company operates five manufacturing facilities in the U.S.
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Pactiv is a supplier in the consumer and foodservice/food packaging markets. Pactiv had 2006 sales of $2.9 ...
Technology
Activant Buys Canadian Software Provider

Activant Solutions Inc. has acquired Silk Systems Inc., including its wholly-owned subsidiary Silk Dimensions Systems Inc., computer software provider for the Canadian home improvement, wholesale distribution and building materials industries.
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The acquisition expands Activant's presence in the Canadian market while building on current technology and service offerings for customers across North America.
&nbsp ;
Hardware and home improvement centers, lumber and building materials and wholesale distribution are all key growth markets for Activant and are part of our larger corporate strategy of supporting customers across North America, including Canada," said Pervez Qureshi, CEO of Activant Solutions.
&nbsp ;
Silk Systems offers a business management ERP ...
Finance
Grainger’s Lab Safety Supply Acquires Fastener Distributor

Grainger, Chicago, IL, industrial distributor, announced its Lab Safety Supply subsidiary has acquired McFeely's Square Drive Screws, Lynchburg, VA. McFeely's, with sales of $9 million in 2006, is a business-to-business direct marketer of specialty fasteners, hardware and tools for the professional woodworking industry.

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This acquisition will enable LSS to further penetrate the woodworking and construction markets," said Chairman and CEO Richard Keyser.
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McFeely's will be marketed as an independent brand by LSS. It serves more than 70,000 customers including woodworkers, handymen, home improvement professionals, construction companies and cabinet makers.
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Grainger had 2006 sales of $5.9 billion. It has 600 branches, 18 distribution centers ...
Finance
Radiac Abrasives Acquires Bates Abrasives
Radiac Abrasives, Salem, IL, has purchased Burlington, WA-based Bates Abrasives, Inc. Bates Abrasives, a full-line, resin-bonded cut-off and grinding wheel manufacturer will continue to be run by previous owner and CEO, Paul Anderson. The company employs 55 people.
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The company will retain the Bates brand name with rough grinding target markets including forestry, natural stone, steel mills, foundries and metal fabrication. In addition to cut-off and grinding wheels, the company manufactures organic surface grinding segments, cylinders, nut-inserted disc wheels, flaring cups and cones and plugs.&nbsp ;

Radiac Abrasives is a manufacturer of bonded abrasive and superabrasive grinding ...
Finance
Trelleborg Buys North American Precision Seals Company
Trelleborg, Stockholm, Sweden, through the Trelleborg Sealing Solutions unit, has acquired precision bearing and sealing devices company Hydro-Components Research & Development Corporation, Streamwood, IL. The company employs 80 and has annual sales of SEK 50 million (US$7.2 million).
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HCRD manufactures high-precision components, focusing on large diameter seals and bearings.
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The acquisition helps Trelleborg expand in North America within the heavy duty vehicle segment.
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Trelleborg Sealing Solutions has annual sales of SEK 5.4 billion (US$778 million). It has production units in Brazil, Canada, China, Denmark, France, India, Italy, Japan, Malta, Mexico, Poland, Sweden, the UK and the U.S.
&nbsp ;
Trelleborg is a global industrial group ...
Finance
Praxair Acquires Wilson Welding
Praxair Distribution, Inc., a subsidiary of Praxair, Inc., Danbury, CT, has acquired Wilson Welding & Medical Gases of Warren, MI. Wilson is a distributor of industrial, medical, specialty gases and related equipment and supplies.
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Wilson operates a cylinder filling plant and retail store in Warren, retail stores in Macomb and Pontiac, and a beverage CO2 business in Flint, Michigan. The business generated sales of $20 million in 2006 and has 72 employees.
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Praxair, Inc. is a global industrial gases with 2006 sales of $8.3 billion. The company produces, sells and distributes atmospheric and process gases, and high-performance surface coatings. Praxair products, services and technologies bring productivity and environmental benefits to a wide variety of ...
Finance
Houston Investor Wins $36M in Acquisition Suit
A Houston, TX, investor who alleged that private investment firm Key Principal Partners, LLC and corporate parent Key Corp. secretly cut him out of a 2003 deal to acquire one of Hawaii's largest lumber suppliers has won a $36.5 million jury verdict against the companies.


A Honolulu circuit court jury found late Wednesday that the Key defendants breached their fiduciary duties, intentionally interfered in investor Richard R. Foreman's attempts to acquire Honsador Lumber Corp, and violated Hawaii's unfair competition statute.

Foreman alleged that he and a group of investors that included Key Principal Partners, LLC formed a partnership in 2003 to buy Honsador for $28 million. According to the lawsuit, Key wrongfully withdrew from the partnership and then secretly ...
Finance
Fletcher Building Buys Formica for $700M

Fletcher Building Limited, Auckland, New Zealand, has acquired Formica Corporation, Cincinnati, OH, for $700 million. Fletcher is a publicly traded material and construction company with revenues of US$4 billion.

The company has five operating units: Laminates & Panels, Building Products, Steel, Infrastructure and Distribution.

Formica will retain the South America operations and certain real estate in California.

Formica has 14 manufacturing and 33 distribution facilities across Asia, Europe and North America.


In the near term, Formica will be structured as a business unit within the Fletcher Building Laminates & Panels division. Frank Riddick will remain as president and CEO of Formica and the management team will remain with the ...
Finance
Private Equity Firm Buys Mark IV’s Fluid Handling Unit

Sun Capital Partners, Inc., Boca Raton, FL, private investment firm announced that one of its affiliates has acquired the automotive OEM fuel and fluid handling operations of Mark IV Industries, Inc., Amherst, NY/Airasca, Italy, which will operate under the name, Fluid Routing Solutions, Inc.
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FRS designs and manufactures highly-engineered fluid and fuel handling systems from six facilities in Florida, Michigan, South Carolina, Tennessee and Quebec. Products are sold to original equipment automotive manufacturers serving customers in North America, Europe, South America, Asia and the Pacific regions.
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Fuel system products include fuel filler assemblies, evaporation canisters, and coolant hoses primarily for original equipment channels. Fluid handling ...
Finance
Danaher Agrees to Buy ChemTreat for $435M

Danaher Corporation has agreed to buy ChemTreat Inc., a provider of water treatment products and services, for $435 million in cash.
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Headquartered in Glen Allen, VA, and with revenues of over $200 million in its most recent completed fiscal year, ChemTreat serves a broad set of end markets with a particular focus on boiler, cooling water and industrial waste water applications.
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Danaher is a manufacturer of Professional Instrumentation, Medical Technologies, Industrial Technologies and Tools and ...
Top Distributor Sectors
Machine Tool Consumption Down in January
January U.S. manufacturing technology consumption totaled $94.95 million, according to the American Machine Tool Distributors' Association and the Association for Manufacturing Technology. This total, as reported by companies participating in the USMTC program, was down 59.2% from December and down 71.9% from the total of $338.00 million reported for January 2008.

These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.

There's no way or reason to try to sugar coat these numbers - they are the lowest since the program began in 1996, said Peter Borden, AMTDA president.  "While a few small pockets of activity have continued, most everyone ...
Subscriber Only
Conference Board Employment Trends Index Falls Sharply
The Conference Board Employment Trends Index fell sharply in February. The index now stands at 91.0, decreasing 3.2% from the January revised figure of 94.0, and down 21.7% from a year ago.
 
Over the past year, the Employment Trends Index has declined faster than at any other time in its 35-year history, with the most severe decreases taking place since the Fall, said Gad Levanon, senior economist at The Conference Board. "As job losses persist, the drop in overall earnings makes a rebound in consumer spending unlikely for the next few months. The decline in employment will only moderate once companies anticipate some revival in domestic and global economic activity."
 
The 19-month-long decline in the Employment Trends Index is seen in all ...
Top Distributor Sectors
Wolseley Looks to Exit Stock Building Supply Business
UK-based distributor Wolseley plc is once again looking to exit its U.S.-based Stock Building Supply operations with a deadline of Aug. 1, 2009.


Even after extensive cost-cutting measures last fall that included reducing headcount by an additional 3,000 and closing 86 branches, the business lost $246 million last year.
 
Stock Building Supply is heavily reliant on housing starts in the U.S., which declined from around 750,000 in Oct. 2008 to about 460,000 in January. Enough is enough, John Whybrow, chairman of the board, says in a Webcast on the Wolseley site. "We cannot go on with markets deteriorating like that."
 
Wolseley said it prefers a joint venture partner for the business, though closing Stock - the worst-case ...
Top Distributor Sectors
Wolseley Confirms It’s Considering Issue of New Equity
Acknowledging press reports in recent months, UK-based building materials and plumbing/HVAC distributor Wolseley plc has confirmed that it has held "discussions to consider the merits of an issue of new equity."
 
"Any decisions will be communicated to shareholders through the appropriate channels at the appropriate time," Wolseley said in a press release.
 
London's Financial Times reported this week that hopes were high that Wolseley would unveil a 1.2 billion pounds rights issue (roughly US$1.5 billion).
 
Wolseley continues to be burdened by high debt levels. It recently announced its net debt had grown to 3 billion pounds (US$3.7 ...
Subscriber Only
Latest Fed Beige Book: Economic Weakness Deepens
The Federal Reserve Board's latest Beige Book report was released this week, and the results are in line with reports from other agencies: the U.S. economy continued to deteriorate in January and February.
 
The report, a compilation of commentaries from each of the 12 Federal Reserve Districts, states that 10 of the 12 districts indicated weaker conditions or declines in economic activity, while Philadelphia and Chicago reported their regional economies remained weak.
 
Here's the overview: (Read the full report.)
 
Deterioration was broad-based, with only a few exceptions, including basic food production and pharmaceuticals. ...
Top Distributor Sectors
Wolseley’s Chip Hornsby: Realism, Fortitude Key In Today’s Times
Chip Hornsby, CEO of Wolseley plc, recently spoke at the National Association for Wholesaler-Distributors executive summit about Managing in Today's Turbulent Economic Environment. In his speech, he offered five concepts executives need to live by in order to address looming questions brought about by today's economic uncertainty.
 
Realism: Clearly identify problems for what they are and immediately assess them for the damage they potentially can cause.
 
Fortitude: "Do what has to be done to deal head-on with our business problems, no matter how unpleasant."
 
Proactivity: "Address issues early, directly, and often."
 
Perseverance: "See ...
Top Distributor Sectors
Construction Spending Falls 3.3% in January
Construction spending during January 2009 was estimated at a seasonally adjusted annual rate of $986.2 billion, 3.3% below the revised December estimate of $1,020.0 billion. The January figure is 9.1% below the January 2008 estimate of $1,085.4 billion.
 
Private Construction
Spending on private construction was at a seasonally adjusted annual rate of $682.6 billion, 3.7% below the revised December estimate of $709.0 billion.

Residential construction was at a seasonally adjusted annual rate of $291.5 billion in January, 2.9% below the revised December estimate of $300.3 billion. Nonresidential construction was at a seasonally adjusted annual rate of $391.0 billion in January, 4.3% below the revised December estimate of $408.7 ...
Subscriber Only
Canadian Manufacturing Sales Fall 8% in December
Canadian sales declined 8.0% to $44.2 billion in December, reflecting almost equal decreases in both volume and price, according to Statistics Canada. This was the largest monthly percentage decline since the start of the current series in January 1992.
 
Constant dollar manufacturing sales, measured in 2002 prices, decreased by 4.4% in December.
 
By Sector
Declines were widespread in December, as sales fell in 20 of 21 manufacturing industries. The printing and related support activities industry recorded the only increase (+0.1%).
 
Manufacturing sales in the petroleum and coal products industry fell 18.4% to $4.4 billion. Sales have decreased by almost $3.8 billion ...
Subscriber Only
Canadian Wholesale Revenues Fall 3.4% in December
Canadian wholesale sales declined 3.4% to $42.8 billion in December, the largest month-over-month decrease since August 2003, according to Statistics Canada. In terms of the volume of sales, wholesale sales fell 3.6%.

Canadian wholesalers sell to both the domestic and international markets, and are active importers and exporters. The decline in sales reflected both lower export demand for Canadian goods, a significant part of which flows through wholesale markets, and weaker sales in Canada.

In December, five out of seven sectors, which account for about two-thirds of wholesale sales, reported declines. The machinery and electronic equipment sector declined 4.5% in December. The automotive products sector declined 3.4% ...
Subscriber Only
Warren Buffet Finds Reason to Be Hopeful in Annual Letter
Berkshire Hathaway Chairman Warren Buffet found reason to be optimistic in his 2008 annual letter to shareholders (released at the end of February and available here).
 
He uses a slew of graphic metaphors - "By year-end, investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game." - but threw in some optimism, reminding his shareholders that the country has "faced far worse travails in the past." Among those: two great wars, a dozen or so panics and recessions; virulent inflation leading to a 21½% prime rate in 1980; and the Great Depression, when unemployment was between 15% and 25% for ...
Subscriber Only
Graybar & Other Wholesalers On Fortune’s Most Admired List
Fortune magazine's annual World's Most Admired Companies list is out.

Of any wholesaler-distributor, Graybar showed up the most. The electrical distributor ranked No. 1 in diversified wholesalers, but also found itself in the top 10 on several breakout lists, including management quality, long-term investment, financial soundness, quality of product and services, use of assets, people management and innovation.

(An interview with Graybar CFO Beatty D'Alessandro was featured in the Feb. 25, 2009, issue of MDM. Read it here.)


Foodservice distributor Sysco also made the financial ...
Top Distributor Sectors
Industrial Outlook: Just 1 of 24 Industries in Report Will Grow in 2009
The latest Manufacturers Alliance/MAPI U.S. Industrial Outlook forecasts that growth will occur in one of 24 industries covered in the report in 2009: aerospace products and parts. The reports says that 19 of the 24 industries is expected to expand in 2010, with housing starts growing by 84%.
 
Four industries will see negative change in 2009 and 2010, according to the outlook, with mining and oil and gas field machinery the weakest. That industry is expected to fall 13% in 2009 and 24% in 2010. Other declines are expected in domestic electronic computer equipment, private nonresidential construction, and electrical equipment.
 
Read the full report at <a href=http://www.mapi.net" ...
Top Distributor Sectors
Timken To Streamline Operations
The Timken Company, Canton, OH, is realigning its organization to improve efficiency and reduce costs. As the company streamlines its operating structure, it expects to cut its salaried workforce by up to 400 positions in 2009.
 
Over the past 15 months, the company has lowered production and cut its manufacturing workforce by approximately 2,500 positions. Other steps, such as short work weeks and reduced operating hours, have been taken to better align output to demand.
 
We are taking actions to align our organization for effectiveness and to right-size our cost structure to increase our competitiveness in today's global markets, said James W. Griffith, president and CEO. "Our focus now is to align our administrative and sales functions ...
Subscriber Only
Arrow Electronics To Name Long CEO
The board of directors of Melville, NY-based Arrow Electronics, Inc. will name Michael J. Long CEO at the company's annual meeting on May 1, 2009. Long will replace William E. Mitchell, who has held the post since 2003.
 
An 18-year veteran of Arrow, Mr. Long has served as president, COO and a director of the company since March 2008, with responsibilities for all of the company's business operations.
 
Mike's commitment to driving profitable growth and talent development and his outstanding record of achievement have been critical to Arrow's strong financial and market position, Mitchell said. "His solid leadership in our global operations and success in delivering on Arrow's strategic initiatives will ensure ...
Subscriber Only
Manufacturing Contracts in February
The manufacturing sector contracted again in February, according to the latest Manufacturing ISM Report on Business from the Institute for Supply Management.
 
ISM reported: "Manufacturing continues to decline at a rapid rate ... While production has slowed its rate of decline, employment continues to fall precipitously. Prices continue to decline, but price advantages are not sufficient to overcome manufacturers' apparent loss of demand. Survey respondents appear generally pessimistic about recovery in 2009. Some express hope that the stimulus package will help their industry."
 
None of the 18 manufacturing industries in the survey reported growth.
 
A transportation equipment manufacturer said that customers are being cautious about ordering ...
Top Distributor Sectors
For Grainger, Product Expansion Will Continue to Be A Priority
Chicago-based facilities maintenance distributor Grainger won't be slowing its product expansion anytime soon. According to Fred Costello, vice president-product management, the strategy is a priority going forward.
 
This year, Grainger's catalog is 64,000 SKUs thicker, or 33% larger than last year's. Grainger now has 240,000 SKUs available in print, and 300,000 on its Web site. The goal of the product expansion is to fill gaps in its already broad offering and reach out to new customers, in an effort to become a "one-stop shop," Costello tells me.
 
MDM Publisher Tom Gale recently wrote in the Feb. 25 issue of MDM that Grainger has a history of building market share in downturns; Grainger's ...
Subscriber Only
Fourth-Quarter GDP Fell 6.2% in Latest Estimates
Real gross domestic product - the output of goods and services produced by labor and property located in the U.S. - decreased at an annual rate of 6.2 percent in the fourth quarter of 2008, (from the third quarter to the fourth quarter), according to preliminary estimates released by the Bureau of Economic Analysis. 
 
These GDP estimates are based on more complete source data than were available for the advance estimates issued last month. In the advance estimates, the decrease in real GDP was 3.8 percent.
 
The decrease in real GDP in the fourth quarter primarily reflected negative contributions from exports, personal consumption expenditures, equipment and software, and residential fixed investment that were partly offset by a positive ...
Subscriber Only
Commentary: Grainger Moves Are Worth Watching
W.W. Grainger has increased the number of SKUs in its catalog 33 percent, year-over-year. The massive scale of Grainger's product expansion over the past few years indicates a reorientation of Grainger's traditional model.
 
Five years ago, Grainger invested in a multiyear branch expansion program in the top 25 major metro markets. The goal was more local sales people and larger, more merchandise-oriented branches. In 2003, the company set an aggressive 7-10 percent annual growth rate target, and this effort was the engine. The company saw an opportunity to take market share from competitors by increasing presence in local markets.
 
The effort was all about increasing customer service. The recent product expansion effort has come with an increased focus ...
Technology
Strategies for Surviving the Recession

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; ...
Subscriber Only
Grainger Plans to Continue Rapid Product Expansion
Chicago, IL-based facilities maintenance distributor Grainger has added 64,000 products to its catalog, along with 27,000 more to its Web site. The additions to the company's catalog are a 33 percent increase over last year's 180,000. (Some products were also removed this year.)
 
Grainger now has 240,000 products in its catalog and 300,000 online.
 
In an interview with MDM, Fred Costello, vice president - product management, says Grainger will continue adding products over the next several years.
 
Every catalog will continue to see a similar increase, Costello says.
 
"Product line expansion is a Grainger priority. … I can say with confidence that our Canadian and Mexican business units are also ...

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