ED SCOTT REPORTS TO BOARDIn an invited presentation to ASA's Board of Directors on January 25, industry icon and market expert Ed Scott, Jr. offered a recap of key market indicators for 2002 and shared some projections with his audience. He addressed residential and commercial building markets, and offered the following forecast for the industrial segments.
Scott's forecast of where anticipated growth would be focused can be found in his breakdown below:
HOME DEPOT'S NEW MANIFESTOOn of the most compelling elements of Scott's report to ASA Board members concerned plans recently announced by Bob Nardelli, CEO and president of Home Depot. In a release issued late in 2001, the company announced that it expects to grow revenues between 15 and 18 percent annually from 2002 through 2004, keeping the company on track to double its size to $100 billion in revenues by 2005.
"In addition to expansion of the existing Home Depot, our company will reach for new relationships with homebuilders, commercial and industrial customers. We have the ability to leverage our operations by creating tremendous efficiencies, adding new technology and capabilities through acquisitions like Your 'other' Warehouse," said Nardelli.
He also announced that in 2002 the company will unveil "HD Supply" and test several Home Depot Pro stores to focus more resources on reaching out to larger commercial and industrial customers. "In addition, Home Depot Pro stores will offer professional customers product assortments and service typically associated with wholesale supply houses," the release went on to say.
CAN WHOLESALERS COMPETE?The initiatives announced by Home Depot underscore the need for the wholesale channel of distribution to work even harder at retaining its market. Supply chain initiatives, including EDI and VMI, for example, can help create a more level playing field by employing technologies similar to those HD counts on to hold down its costs of doing business.
ASA's efforts to create a standard product database (tentatively called SourceData) continue to go forward. A Task Force convened in January to identify the parameters of the file, including the data fields and basic information that would need to be included.
This database will be a critical part of the equation for wholesalers and manufacturers who want to institute cost-saving tools in their purchasing, shipping, invoicing and inventory processes.
Due to the nature of our fragmented industry (multiple, independent distributors of varying sizes and product mixes), we are unable to command the kinds of "custom-tailored" efficiencies Home Depot has instituted with their vendors. Therefore, we must build a common platform (a standard database, using standard transaction protocols, etc.) that all wholesalers and manufacturers can share in order to realize the same benefits. That's what this database really is all about.
ASA's Center for Advancing Technology continues to support the initiatives that will help wholesale distributors remain competitive. Most of the pieces of this puzzle already exist: standard EDI transaction sets (EDI Express) are already established; software vendors like Eclipse, Prophet 21, NxTrend and Mincron have readied their systems to accommodate true EDI; and through turnkey set-up assistance offered through ASA's partner MISG, wholesalers can get up and running quite quickly. The remaining piece of the puzzle is a database of product information that will enable all of these other pieces to work together like clockwork.
Your Call to ActionNardelli is a tough, bright, Jack Welch-trained CEO committed to imposing the famous Welch-like discipline on the "Big Orange." He stated in a recent issue of Money that "retail never sleeps" and that he works harder at Home Depot than he did at GE.
Today's wholesaler can ill afford delays in integrating IT into his operations, improving service in areas that retailers can't replicate, and rigorously training his staff. He must use all of his resources to search out and eliminate every redundant cost.
Contact the Center for Advancing Technology today to find out how: 1-800-608-7308 or email firstname.lastname@example.org.
Many supervisors, trainers and new employees are convinced that product knowledge training provides the quickest, most easily observable impact on performance. For every employee in our industry, learning the basics of pipe, valves and fittings is a prerequisite to competitive customer service. Learning the basics of how a distributor works and makes money is also critical to an employee's being able to contribute to the bottom line.
Revised PVF CD-ROMsThis month the Foundation is introducing a revised version of its 3 PVF CD-ROM training courses. In addition to several content corrections and graphics enhancements, each new CD will feature a single, higher-quality, 60-question exam that replaces the former 3 short exams per CD. Employees will again be able to e-mail their exams to the Foundation for correction.
Building Business LiteracyOne of the most frequent laments we hear from distributors is that employees don't understand the basics of the business, and the need to make a profit. "When are our sales people going to understand the difference between margin and markup?" seems to be a refrain we hear from many wholesalers.
In response to this need, the Foundation has started developing a new short course that introduces employees to the basics of the distribution business. The role of the distributor, customer service, a primer on the economics and critical ratios of the business, pricing principles and the importance of the individual employee in improving the bottom line will be included.
We will introduce the program at the ASA convention in Toronto in October with a Train-the-Trainer session. Volunteers to serve as a reviewer for the program are welcome.
Endowment Fund Working for YouSince the Endowment Fund was launched in 1998, ASA leaders have worked very hard to move the fund toward its goal of $10 million. As a result of that leadership and an incredible level of member generosity, the Campaign total of dollars received and pledges has now climbed to within $600,000 of that goal.
The purpose of the endowment is to generate earnings that will support program development and industry education. Over the past few years, endowment earnings have supported:
- Development of 5 CD-ROM ProductPro courses
- An increased role in the ASA convention
- Technology education initiatives through the ASA Center for Advancing Technology
- Regional Education and Young Executive programs
- Access to hundreds of online courses and discounted programs
- Program discounts for contributors to the fund.
Wholesalers who haven't yet participated in the campaign are urged to contact the Foundation at 312-464-0090 or email email@example.com for more information.
INDUSTRY SPOTLIGHTOur Personal Profile this month sets its focus on H. Steven Anderson, President of Central States Industrial Supply, Inc., (CSIS) headquartered in Omaha, Nebraska. He also happens to be the President-Elect of ASA, who'll take office in 2003. He served a two-year stint as ASA's Treasurer and was elected to his current office in 2001.
CSIS stocks and sells industrial pipe, valves and fittings and offers valve automation. Its CPI Division sells industrial process pumps, does pump build-outs and skid-mounts equipment for industrial customers. It also operates a pump service and repair business. It serves the markets in Nebraska, Iowa, western Illinois and the Dakotas and is currently consolidating its four locations into two, which will be in Omaha and Cedar Rapids, Ia.
Anderson's partner, Dick Stenger, founded CSIS in 1971. Steve joined the firm in 1972 after four years with Metal Goods in Memphis, a distributor of stainless steel and non-ferrous metal products. Prior to that, Steve served four years in the U.S. Air Force after earning his marketing degree from Memphis State University.
Steve and his wife, Gretchen (who last year served as Chairwoman of the Partners of ASA), have been married 24 years and have two children, Ben, 20, and Kate, 18. Steve also has four adult children from a previous marriage. He likes to read, boat, fish and "tries" to play golf.
When we asked him why he gives his time to ASA, he said, "There's no better way to learn about your industry and profession (as well as your limits) than to get involved with peers, especially if you're able to work closely with the best and the brightest. Also, participating in some service to the industry was a goal I set for myself some time ago, and getting involved with ASA is the best way I know to do that."
INDUSTRY SUPPLY CHAIN SUMMITWhen is an ASA Annual Convention not a usual ASA Annual Convention? In 2002, when it will take on a whole new look and focus. This year's event will center around a day-long "Supply Chain Summit," and will feature a variety of industry figures and professionals talking about how our wholesale supply channel can become more effective and competitive.
Adam Fein, Ph.D., of Pembroke Consulting, has been retained to help put together a program that'll combine a mix of professional presenters and panels of industry executives, all centered around this theme. All members of the audience, including wholesalers, manufacturers and manufacturers reps, will be encouraged to participate in this whole-day intensive "workshop."
Some customary features of ASA's past programs will be set aside to accommodate this high-powered session, but our most popular events will remain. The Opening Party will continue to offer two hours of meet-and-greet opportunity, as well as a "spread" worthy of kings. An All-Member Luncheon will bring all ASA members and Associate Members together for the first time.
The ASA Convention and Supply Chain Summit will take place October 29-31, 2002 at the Royal York Hotel, Toronto. It'll provide a perfect lead-in to the debut of ISH North America, which will be held at the National Trade Center in Toronto, October 31st through November 2. For more information about ISH North America, visit www.ish-na.com.
PASSPORTS NO LONGER OPTIONALThose planning to attend this year's ISH North America and ASA Convention in Toronto are encouraged to obtain their passports now. While travel from the U.S. to Canada might be accomplished using a regular photo ID, upscaled security measures have made re-entry into the United States just a little harder. U.S. Customs and Immigration officials are urging all travelers to present passports at airports and other border checkpoints.
You can obtain a passport application online by going to: http://travel.state.gov and scrolling down under Services to click on: Print Passport Applications.