Industrial glove makers face increasing competition
DPS releases PocketFlash 2.0
Survey finds industrial manufacturers optimistic about 2004
Leland Powell Fasteners achieves ISO 9001:2000
Hernon Manufacturing process achieves quality certification
NFDA to hold annual meeting in Arizona
Sales climb for Motion Industries in fourth quarter
Industrial production increases in January
Texas A&M, YPS Group launch Sales Excellence Institute
ITW reports 8 percent growth in operating revenues
University of Industrial Distribution to take place in Indiana
DISC to develop margin-management solutions
Barnes reports favorable Q4, 2003 results
Study helps distributors gauge sales force effectiveness

Industrial glove makers face increasing competition
Low-cost products flooding the market from China and the Far East are posing a significant challenge to manufacturers of industrial protective gloves in Europe.

Recent analysis by Frost & Sullivan on the European industrial protective gloves market pegs annual revenues of the overall market at $1.3 billion in 2003, including gloves made out of leather, textile, polymer-textile, polymer and technical fibres. By 2010, revenues will have grown to merely $1.6 billion at a compound annual growth rate of 2.7 percent.

Although many of the manufacturers already relocated a good part of their production operations to Eastern Europe, Africa and Asia -- to benefit from lower labor costs and easy availability of raw material -- they are now ironically facing growing competition in the home market, as well as downward price pressures from cheaper gloves produced in China and the Far East.

Since this trend is rising in specific material segments such as those for cotton, leather and unsupported polymer gloves, many European manufacturers are choosing not to compete in these sectors and are instead focusing on the higher-value supported polymer-textile and knitted high-performance material segments. However, manufacturers in the Far East are quick to bring out cheaper imitations of any product innovations at much lower costs, placing European manufacturers at considerable risk.

European manufacturers are also highly dependent on distributors to deliver their products to the end-user. This dependence turned the distributors into a new breed of competitor that is wielding increasing power in the market. Some of these distributors may even source gloves from Far Eastern manufacturers and sell them under their own labels. This poses a distinct competitive threat to European manufacturers, compelling them to create strong brand differentiation in the mind of the purchaser.

Manufacturers that can identify and exploit rapidly developing niche segments may find new growth opportunities. 

"The challenges facing companies can be turned into opportunities with the right combination of products, services and management," said Frost & Sullivan Industry Analyst Brian Balmer.

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DPS releases PocketFlash 2.0
Software development, consulting and services company Data Processing Services Inc. (DPS) released version 2.0 of its DPS PocketFlash handheld e-business application for field sales reps and route sales drivers.

DPS PocketFlash runs on handheld devices with the Microsoft Pocket PC operating system and provides an extension of the popular sales force interface functions of the DPS Flash e-business application. Typical use begins with data synchronization to extract data from the ERP system to the handheld. Customer, product and pricing databases on the handheld may then be used for field order entry supporting deliver now (from truck) or deliver later (from warehouse).

PocketFlash holds transactions for later transmission to the ERP system, either through cellular connection, wireless local-area network (LAN) or modem/docking station. The same connection may also be used for real-time order inquiry that provides direct access to the order summary and detail from the ERP application.

DPS PocketFlash works in concert with the distributor's business management ERP system to put accurate information in the hands of their mobile workforce.

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Survey finds industrial manufacturers optimistic about 2004
Continuing with results seen in the third quarter, U.S. manufacturers remain upbeat and optimistic about the U.S. economy over the next 12 months, according to the PricewaterhouseCoopers Manufacturing Barometer.

Despite this outlook, the manufacturing sector continues to trail the consensus on positive economic indicators.

The barometer, which compared the views of industrial manufacturing senior executives with a cross-section of all businesses, found the manufacturing responses were consistently lower. Looking ahead, 78 percent of industrial manufacturing executives are optimistic about the economy's prospects over the next 12 months. The consensus view is more upbeat with 85 percent optimistic.

Growth barriers are numerous. Sixty percent of industrial manufacturing executives cite competition from foreign markets as a potential barrier to growth over the next 12 months, well ahead of the consensus of 38 percent. A distant second in importance, 39 percent see lack of demand as a barrier, slightly higher than the consensus view of 34 percent.

Other concerns around which the industrial manufacturing sector leads the consensus: decreasing profitability, cited by 34 percent (consensus, 28 percent); capital constraints, 27 percent (consensus, 21 percent); and monetary exchange rate, 20 percent (consensus, 16 percent).

"The industrial manufacturing sector has shown improvements, quarter-to-quarter, and going forward it is nearly as upbeat about the economic climate as other large U.S.-based businesses," said Dean Simone, managing partner of PricewaterhouseCoopers' U.S. Industrial Products industry program. "But, manufacturers continue to have comparatively lower momentum, are more fearful of competition from abroad and must overcome many more obstacles in order to achieve solid growth in the year ahead."

The barometer measured the opinions on subjects ranging from the domestic economy, barriers to growth, margins and pricing to new investment strategies, hiring plans and business initiatives under consideration.

Additional highlights include the following.

• On balance, margins of industrial manufacturers have improved, but remain below average; costs are lower than average, and pricing power is well below par.

• Manufacturers lead the consensus in plans for new product or service introductions over the next 12 months. But, on the debit side, they also lead in plans for closing or reducing facilities abroad.

• Forty-eight percent expect increased budgets over the next 12 months for new product or service introductions; likewise, 30 percent for research and development. These exceed consensus levels of 43 percent and 20 percent, respectively.

• Industrial manufacturers are well behind the consensus in planned net new hires over the next 12 months: 35 percent expect to add to their workforce (14 points behind). And, 31 percent are planning to further reduce their workforce (seven points more). On average, industrial manufacturing businesses expect to reduce their current workforce by an average of 1.7 percent over the next 12 months, compared to an increase of 0.3 percent for the consensus.

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Leland Powell Fasteners achieves ISO 9001:2000
Leland Powell Fasteners attained ISO 9001:2000 certification of its quality systems. The upgraded certification places greater emphasis on management involvement in the quality process and stresses continuous improvement.

The new certification was awarded after a comprehensive systems audit at the Martin, Tenn., facility. This followed months of concentrated effort by the Leland Powell team, led by Eddie Fuqua, quality assurance supervisor.

In business since 1967, Leland-Powell Fasteners manufactures and imports semi-standards and special thread forming and machine screws from .112-inch to .5-inch diameters up to 4.5 inches long and is a licensee of Lo-Driv self-tapping screws.  Leland-Powell Fasteners serves the lawn and garden, appliance, furniture, and truck markets, among others.

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Hernon Manufacturing process achieves quality certification
Hernon Manufacturing's Quality Management System achieved certification to the ISO-9001:2000 quality standard. NSF International Strategic Registrations Ltd. confirmed the registration Dec. 7, 2003.

Since 1999, Hernon's Sanford, Fla., facility was registered to the ISO-9002:1994 standard.

The international standard was updated and restructured in December 2000, significantly shifting from an element-driven to a process-driven approach to quality. The updated standard also increased emphasis on systems oriented toward customer satisfaction and documented continual improvement.

Hernon established specific objectives for each internal process involved in the design, development and production of high performance adhesives and sealants. Hernon also measures customer satisfaction.

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NFDA to hold annual meeting in Arizona
The National Fastener Distributors Association (NFDA) will hold its annual meeting April 27-May 1 in Scottsdale, Ariz., at the Marriott Camelback Inn. The five-day event will include a number of activities for NFDA members and their spouses.

The keynote address will be given by Barry Asmus, noted speaker, writer and consultant on political and business issues facing America.

For more information, visit www.nfda-fastener.org. 

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Sales climb for Motion Industries in fourth quarter
Motion Industries reported fourth quarter net sales of $561.4 million, up from $551 million during the same quarter in 2002. The Genuine Parts Co. segment generated operating profit of $40.5 million, compared to operating profit of $52 million during the prior-year period.

For all of 2003, Motion Industries posted net sales of $2.3 billion, up 0.3 percent from net sales in 2002. Operating profit reached $151.1 million during 2003, compared to $178 million during 2002.

"We are optimistic that the stronger sales trend in the final quarter will carry over into 2004," said Genuine Parts Co. chairman Larry Prince. "Genuine Parts Co. is in a position of market leadership in all our businesses, but we enter the new year with a determination and explicit plans to reach a higher level of growth."

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Industrial production increases in January
The industrial production index rose 0.8 percent in January from its December total, according to the Federal Reserve. The December index was revised downward and is now estimated to have been unchanged from the November reading, at 112.9 percent of its 1997 average. 

At 113.8 percent of its 1997 average, overall industrial output in January was 2.4 percent above its January 2003 level. The rate of capacity utilization for total industry increased from 75.6 percent in December to 76.2 percent in January.

Manufacturing output increased 0.3 percent in January and was 2.3 percent above its year-ago level. The factory operating rate rose 0.2 percentage point, to 74.6 percent, and was 5.4 percentage points below its 1972-2003 average.

The output of durable goods rose 0.6 percent. The gains among the subsectors included increases of about 1 percent in the output indexes for computer and electronic products, motor vehicles and parts, fabricated metal products, and wood products. 

The indexes for the following groups all rose by smaller amounts: nonmetallic mineral products; machinery; electrical equipment, appliances, and components; furniture and related products; and miscellaneous durables.

"The strong growth reported in January 2004 industrial production was primarily in the electric and natural gas utility production," said Daniel J. Meckstroth, chief economist for the Manufacturers Alliance/MAPI. "A cold snap in the weather temporarily boosted utility production and may have depressed manufacturing output."

He added: "The industrial production reports adds to the conflicting and confusing signs recently coming from the manufacturing sector. Confidence and opinion surveys -- MAPI Business Outlook Survey, ISM report, the Fed Beige Book -- point to a strong rebound in manufacturing activity but orders, production, employment data coming from the statistical agencies are showing only a moderate rebound."

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Texas A&M, YPS Group launch Sales Excellence Institute
Texas A&M’s Industrial Distribution Program and The YPS Group jointly launched the Texas A&M Sales Excellence Institute (SEI). The objective of the SEI is to generate an 8 percent to 12 percent annual incremental increase in sales performance for participating industrial distributors. 

“Distributors are telling us that selling in today’s business climate is very different and far more difficult,” said Ben Zoghi, executive director of Texas A&M’s Read Center. “They recognize that the quick-fix approach of traditional sales seminars falls short of their requirements to address competition and complexity. They are demanding a more methodical approach that can ensure long-term, continuous improvement.”

The Sales Excellence Council and the Sales Process Enhancement Workshop are the SEI’s initial offerings.

“Both of these are grounded in proven process engineering principles,” said Todd Youngblood, managing partner and CEO of The YPS Group. “The whole focus is on identifying sales best practices, measuring and holding individuals accountable for effective execution of them and relentlessly improving overall performance."

Several additional sales seminars and workshops using this sales process engineering methodology are available and under development. Contact Brian Reynolds at or for more information.

To learn more about sales best practices from The YPS Group and Progressive Distributor magazine, click here.

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ITW reports 8 percent growth in operating revenues
Illinois Tool Works Inc. reported an operating revenue increase of 8 percent for the three months ended Jan. 31. Operating revenues for the three-month period consisted of 4 percent growth from acquisitions, a 6 percent contribution from currency translation and flat base business revenues.

The growth in revenues in the three-month period was offset by a combined 2 percent decline in leasing and investments and intercompany revenues.

On a manufacturing segment basis, the company's three-month moving average percentage change for operating revenues, comprised of base business and acquisitions, is provided below.

For the first quarter of 2004, the company continues to forecast a range of 73 cents to 81 cents for income per diluted share from continuing operations. For full-year 2004, the company continues to forecast a range of $3.66 to $3.96 for income per diluted share from continuing operations.

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University of Industrial Distribution to take place in Indiana
The University of Industrial Distribution (UID) will take place March 7-10 at Indiana University/Purdue University Indianapolis (IUPUI). 

The Specialty Tools and Fasteners Distributors Association (STAFDA), along with 20 other hard-goods associations, will present the four-day management school as an intensive educational experience for members.

Although industrial is in the program’s name, the UID coursework spans all aspects of the distribution channel. Participants may choose from more than 20 separate courses to create their own curriculum.

Classes are taught by 15 recognized industry experts, including Al Bates, Joe Ellers, Peter Land, Bill McCleave, John Monoky, Don Rice, Tim Underhill and Mike Workman. In addition, STAFDA sales expert Dave Kahle will present new courses on How to Become a Master of Distributor Sales and Mastering the Basics of Sales Management.

Other topics include
• Leveraging the Cost Base in Distribution;
• Branch & Operations Management for Distributors;
• Negotiation Skills for Distributors;
• Planning & Managing the Distributorship for Greater Profits; and
• Productivity Tactics for Branch Managers.

The UID school is open to all STAFDA membership categories. Tuition is $995 before Feb. 20 and $1,095 after that date. For additional information, contact the STAFDA office at
or visit the UID Web site at www.univid.org.

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DISC to develop margin-management solutions 
Software developer Distributor Information Systems Corp. (DISC) launched an initiative to help distributors increase their profitability by implementing new pricing strategies.

"What we're developing is not a traditional software product, in the sense of a one-size-fits-most tool, but one that achieves a customized, strategic solution for each distributor, with the potential for some shared implementation and monitoring tools,” said Bobbie Warner, operations manager of DISC's customer services group.

The catalyst for the initiative was a request by a company that uses DISC's enterprise resource planning (ERP) software. The distributorship wanted DISC's help in finding a way to manage its margins. When DISC executives discussed the idea casually with the presidents of other firms, the response was strong. These specialty industrial distributors were clearly concerned about eroding gross margins and unprofitable customers.

In keeping with its customer-driven development procedure, DISC kicked off its margin management initiative by inviting users to join a customer advisory group.

"During the latter half of 2003, we surveyed our customer advisory group twice to gain insight into some of the problems encountered by distributors who have already tried to implement strategic pricing," said Warner.

"Among other things, we determined that opinions were mixed with regard to activity-based costing (ABC)," she said. "Some executives considered it critical to the project, while others felt it was too complicated for their people. Given that split, we decided to implement margin management both with and without ABC, to give our customers a choice."

DISC's customer advisory group will be involved throughout the four phases of the margin management project.

"As always, we are both delighted and proud to partner with our users in developing solutions that address the challenges of specialty industrial distributors," said DISC president Jan Chapin.

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Barnes reports favorable Q4, 2003 results
Barnes Group reported fourth quarter net sales of $220.3 million, up from net sales of $183.6 million during the fourth quarter of 2002. The company generated net income of $7 million for the quarter, or 29 cents per share, compared to net income of $4.8 million, or 25 cents per share, during the prior-year period.

For all of 2003, Barnes Group reported net sales of $890.8 million, up from sales of $784 million in 2002. Net income reached $33 million, or $1.49 per share, vs. $27.2 million, or $1.42 per share, during 2002.

Sales at Barnes Distribution were $98.3 million for the fourth quarter, up $30.8 million, or 46 percent, from $67.6 million in the previous year. Kar Products, which Barnes Group purchased in February 2003, contributed $27.3 million of sales in the most recent quarter. 

Barnes Distribution generated operating profit of $1 million in the fourth quarter of 2003, compared to an operating loss of $300,000 in the fourth quarter of 2002.

For all of 2003, sales at Barnes Distribution were $400.7 million, up from $286.7 million in 2002; Kar Products contributed $108.3 million to the 2003 sales total. Operating profit was $16.5 million for 2003, up from $7.5 million in 2002.

"During the fourth quarter, we accelerated the consolidation of Kar Products into a new Barnes Distribution network, and as of today have essentially completed our original consolidation plan in the U.S., leaving most of the integration effort behind us," said Barnes Group president and CEO Edmund M. Carpenter. "Sales from our other key sales initiatives, including national and regional customer development efforts, e-commerce platforms and Tier 2 relationships, more than doubled from a year ago, to approximately $6 million."

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Study helps distributors gauge sales force effectiveness
A new study by The YPS Group Inc. and Progressive Distributor magazine can help distributors determine how well their sales forces compare to their competitors. The study asked industrial distribution executives to rate how well their sales forces execute a core set of 44 sales best practices and also asked how effective each of the practices could be if executed extremely well.

The study discovered that fully 99 percent of the respondents believe they can achieve substantially greater results by improving the quality of execution of each of the 44 best practices. By reading results of the study, distributors can compare how well their sales staffs perform vs. standard benchmarks.

“You don’t become the best sales rep or sales team simply by beating your chest and declaring it as fact,” said Todd Youngblood of The YPS Group in Atlanta, author of the Sales Best Practices Benchmarking Assessment. “You must measure yourself against objective standards for performance of all critical sales activities that lead to greater revenue. Then you must implement specific actions to address your weaknesses.”

“The Sales Best Practices Benchmarking Assessment is a valuable tool that every distributor should utilize,” said Rich Vurva, editor of Progressive Distributor. “The report’s results provide distributors with a unique set of tools to measure and continuously improve the effectiveness and performance of their sales teams."

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