 Rich Vurva Editor/Publisher |
Back to basics
by Rich Vurva
While the rest of the nation was preoccupied by news about the economic bailout of Wall Street last month, another story that's important to the distribution industry went practically unnoticed. Two key industries that comprise the primary customer bases for distributors - manufacturing and construction - experienced major job losses. Manufacturers shed 51,000 jobs in September, while the construction sector lost 35,000 jobs during the month.
Manufacturing payrolls have been falling for several months. The industry now employs 13.38 million workers, down from 13.57 million in May. Construction payrolls totaled 7.12 million by the end of September, compared to 7.24 million in May.
The job losses mean there are now 86,000 fewer workers who need to be equipped with hand and power tools and the assorted accessories those tools require, such as abrasive discs and flapwheels, cutting tools, taps and dies. They won't be needing safety eyewear, hard hats, gloves and other personal protective equipment.
The economic turmoil that stemmed from the housing downturn and the subprime mortgage mess in the United States is spreading to other parts of the globe as well. That's bound to have a negative effect on U.S. exports, which had been a bright spot for the U.S. economy in the past six months.
All of this negative news means 2009 will likely be a year in which companies will be cautious about their spending. That will put more pressure on distributors to make sure their costs are in line, because customers will be taking a close look at their cost structures in order to remain competitive. It will also create opportunities for distributors to demonstrate their value to their customers. Now more than ever, customers will be looking for ways to do things better, faster, cheaper.
It's time for distributors to get back to basics and demonstrate their value in the supply chain.
This editorial appeared in the November/December 2008 issue of Progressive Distributor. Copyright 2008.
