Paul St. Germain, the business development executive for IBM’s wholesale distribution industry, shared his insights into business and economic trends affecting the wholesale distribution supply chain at the recent American Supply Association Industrial Piping Division Open House Breakfast Forum in Houston.
St. Germain urged distributors to take a comprehensive look at the value they provide in the marketplace and how that value is best communicated. “What is the differentiation they provide in the marketplace?” he asked in an exclusive video interview available at www.supplyht.com/video. “Not only should distributors determine that, but they should communicate that to their suppliers and customers. Show all the great things they do and try to show that in monetary terms of how they save customers money and how they provide great value in moving their suppliers’ products into the marketplace.”
Another key topic St. Germain discussed was the importance of e-commerce in today’s supply-chain space. “One of the challenges for a lot of distributors is looking at ways customers want to do business with them,” he said. “At one point it would have been nice to have an electronic commerce site. Now as competition is becoming easier and easier to do business with, it’s the response distributors need to make so they are easier to do business with through their e-commerce sites.
Earlier, Industrial Info Resources Executive Vice President Michael Bergen told audience members that shale-play development has the United States well-positioned in the energy industry.
“If you trail back a few years we’ve been through a power industry boom and we’re starting to come off that cycle primarily due to some of the renewable energy tax credits and what’s happening with coal and nuclear,” Bergen said in another video interview available at www.supplyht.com/video. “What we have witnessed now the last couple years is the development of shale plays. Those shale plays are positioning this country to become crude-dependent on itself and not bring in so many imports.”
Bergen added the abundance of natural gas is having a wide-ranging effect on the industry. “These unconventional shale plays are giving us a long-term flat price point for natural gas, which is attractive to many different industries outside of that,” he said. “Even industrial manufacturing in general where they rely on natural gas as a feedstock, we’re able to now produce product cheaper than when we sent manufacturing overseas. This is positioning the country to become a bigger export player. The front end of that is spending the money on those plants to actually develop that capacity.”
Bergen’s advice to industrial PVF distributors is simple. “The most important thing is establishing relationships with plant owners," he said. "Who is in the oil and gas space from production facilities to transportation through pipelines in the chemical sector? Establish relationships with engineering, procurement and construction firms. There are a number of companies playing in this market that are winning those contracts.”
ASA Director of Government AffairsDan Hilton kicked off the meeting with a Capitol Hill update. Hilton talked about recent headline topics such as marketplace fairness and tax reform, as well as environmental regulations related to fracking.