Distributor sales increase for PT/MC sector
HP Products acquires the Seybold Company
IBC adds supplier, holds strategic planning conference
SAP creates software, business unit for distribution
Danaher to tender offer for Linx Printing Technologies
Product quality/reliability rates highest among PT end users
Bacou-Dalloz respirator divisions consolidate
Dichtomatik North America purchases American Seal Inc.
Factory goods orders falter in August
ISA opens door for supplier/distributor relationships

Distributor sales increase for PT/MC sector
In August, U.S. distributors’ year-to-date sales of power transmission/motion control (PT/MC) products increased 10.8 percent compared to sales during the same period last year, according to trend data from the Power Transmission Distributors Association (PTDA).

Sales went up 6.7 percent over the previous month and grew 20.3 percent compared to August 2003.

Days sales in accounts receivables decreased 6.8 percent from July 2004 and were down 5.6 percent compared to the same month last year. Annualized sales-to-inventory ratio in August was 9, compared to 8 in 2003.

For August, the confidence level of U.S. distributors remained flat at 6.5 on a 10-point scale.

In August, U.S. manufacturers’ sales of PT/MC products increased 9.7 percent compared to sales for January through August 2003.

Sales were up 10.5 percent over the previous month and climbed 17.4 percent compared to August 2003. Compared to July, sales of mounted bearings, unmounted bearings, variable speed drives, positioning systems/linear motion products, gear products, and mechanical drive systems and other PT products and shaft couplings increased. Sales of standard industrial motors and clutches and brakes decreased.

Year-to-date orders of PT/MC products from U.S. manufacturers increased 12.1 percent compared to 2003. August orders were up 10.3 percent over July and climbed 17.9 percent compared to August 2003. Annualized sales-to-inventory ratio in August was 9.6, compared to 8.2 in 2003.

For August, the confidence level of U.S. manufacturers rose to 5.7 on a 10-point scale.

Click here to review the data from PTDA.

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HP Products acquires the Seybold Company
The Seybold Company of Cincinnati was acquired by HP Products Corp. of Indianapolis, marking the eighth acquisition by HP Products in recent years.

This continues HP's strategy of acquiring larger, strategic companies in the Midwest. 

“Seybold is a perfect fit for our company," said D. Ames Shuel, chairman and CEO of HP Products. "They have a very dedicated and experienced sales force, are strategically located in Ohio, and have essentially the same product lines that we offer. We will now be able to expand their expertise with our other divisions and offer their customers a broad array of products. We are committed to this market, and plan to expand rapidly in the coming years.”

Seybold/HP is a distributor of industrial and commercial cleaning products, paper, packaging, equipment and chemicals in the greater Cincinnati area. HP Products serves 10 states.

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IBC adds supplier, holds strategic planning conference
IBC recently added HCI Supply of Jackson, Tenn., as a new member to its IndustrialSupplyPlus division. The company also celebrated its fifth anniversary with a planning meeting and awards in Nashville, Tenn.

Since 1976 HCI Supply (originally called Hub City Industrial Supply) served the needs of industry in western Tennessee, northern Mississippi, and parts of Kentucky, Missouri and Arkansas. Through its five stocking locations and one hardware store, HCI Supply inventories more than 100,000 different products including fasteners, hand and power tools, abrasives, cutting tools and specialized power transmission supplies.

"HCI Supply covers a needed part of the country for IBC as we grow our national account platform throughout the U.S.," said Dan Burnham, executive vice president of business development for IBC. "Not only are they a natural fit for us geographically, they have the product mix, experience and technological infrastructure to be a strong supporter of national accounts and our marketing programs. I already see them emerging as one of the leaders in IBC for 2005."

This past week in Nashville, IBC unrolled the future roadmap for this five-year old industrial supply leader, while taking a moment to reward their top performers for sales excellence.

More than 160 people attended the three-day event. The agenda included a daylong member strategy meeting; an IBC Supplier-Mart focusing on preferred suppliers; and a dinner cruise on the Cumberland River aboard the General Jackson Riverboat. This was followed with one-on-one meetings between IBC members and IBC preferred suppliers, and a recognition dinner.

"IBC has come a long way in five years," said Ed Sullivan, president of IBC. "This meeting is such a great opportunity for us to thank our members and suppliers, while also working hand-in-hand with them to chart the future. One of IBC's goals has always been to stay ahead of the market innovation curve. Events like this help us gather a tremendous amount of information that we use to build programs, allowing our group to remain a critical supply channel in the industrial supply industry. In addition, this meeting was another important stride in continuing IBC's growth as a true national accounts leader in the MRO industry."

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SAP creates software, business unit for distribution
SAP AG unveiled SAP for Wholesale Distribution, a new solution made up of SAP's core enterprise software and new tailored applications made specifically for wholesale distribution.

SAP also announced the creation of a dedicated business unit, Wholesale & Trade, which will focus on the unique requirements of midsize and large companies in the wholesale distribution sector.

With its new solution and dedicated team, SAP is addressing an industry that, in comparison to other sectors in recent years, has seen less focus on leveraging IT to achieve business process improvements.

As today's wholesale and distribution companies strive to compete in a strongly consolidating sector, gearing up their IT landscapes has become a critical requirement for realizing new business models and processes. Designed as a modular solution, SAP for Wholesale Distribution enables companies to incrementally deploy business applications that meet the most pressing demands of their organizations, suppliers and customers, while creating a scalable IT infrastructure to seize the new opportunities continually arising in this quickly changing market.

Facing small margins, cost pressures and the emergence of new players such as logistic service providers, many wholesalers are outsourcing their core business operations and changing their business models. They are increasingly offering value-added services to tap new revenue sources, distinguish themselves from the competition and improve customer loyalty. Retailers and manufacturers are expanding operations internationally, opening the opportunity for wholesale distributors to offer localized services that address country-specific trade requirements.

Addressing a wide range of wholesale distribution segments, including industrial distribution, SAP for Wholesale Distribution comprises core components of mySAP Business Suite and new vertical functionality to support evolving business models at all levels of the organization across management, core business and wholesale support processes.

"Today's announcement underlines SAP's strategy to drive business innovation and intensify software specialization for the diverse business models and segments of the wholesale distribution industry," said Peter Kirschbauer, member of the extended management board, SAP AG. "By tailoring our proven applications and innovative best practices to wholesale and distribution businesses, SAP has created a standard solution that allows companies to incrementally bring their IT landscapes up to speed and stay on top of this dynamically changing global market."

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Linx is traded on the London Stock Exchange. This follows a recommended offer for Linx announced Oct. 5 by Illinois Tool Works Inc.

In accordance with standard U.K. practice, the offer will become unconditional upon acceptance by the holders of not less than 90 percent of the Linx shares (or such lower percentage not being less than 50 percent as Danaher determines) subject to regulatory approval and other customary closing conditions.

Linx, headquartered in St. Ives, Cambridgeshire, U.K., is a major competitor in the global coding and marking industry, supplying a focused range of industrial non-contact coding and marking equipment based on inkjet and laser technologies with fiscal 2004 revenues of approximately $93 million.

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Product quality/reliability rates highest among PT end users
U.S. and Canadian end users rate the importance of product quality/reliability as the most critical factor when buying one power transmission product over another, according to research conducted by the Power Transmission Distributors Association (PTDA).

The research assessed the needs and buying habits of customers of industrial power transmission products. Surveyed separately, U.S. and Canadian end-users were asked questions that addressed factors influencing product and vendor selection, willingness to pay for services and the role of price in the purchasing decision.

On-time delivery/accuracy is considered the most critical factor when both U.S. and Canadian end-users select one power transmission vendor over another vendor. Other popular U.S. and Canadian responses included technical support, expertise and responsiveness.

Fifty-six percent of U.S. end users said product knowledge was the most critical when asked to evaluate distributor and manufacturer salespeople characteristics. Canadian respondents also classified sales representatives’ product knowledge as most critical.

In order to isolate the role price plays in the overall purchase decision, respondents were asked how much of their decision is based in price vs. other factors. The average U.S. respondent bases 47 percent of the decision on price; the average Canadian buyer attributes 50 percent of his decision to price.

Seventy-eight percent of U.S. end users and 82 percent of Canadian end users currently receive expedited delivery from vendors, making it the most popular service received. Storeroom management and kitting were the least commonly received services in both markets.

Among those services for which U.S. end users currently are not charged but are willing to pay, training was mentioned by the highest percentage of respondents, followed by kitting, inventory management and engineering/design.

Other highlights from the research include:

• Nearly half of U.S. respondents contracted power transmission vendors (45 percent), but on average these individuals make 33 percent of their purchases from non-contracted local vendors.

• Contracts appear to be less prevalent in Canada, with only 31 percent of respondents reporting they use contracted power transmission vendors.

• Only 30 percent of U.S. respondents and 40 percent of Canadian respondents receive bonuses or incentives in addition to base salary. Among this group, productivity is the most common factor affecting the bonus achievement.

• Average spend on in-plant (MRO) requirements over the past year was $2 million in the United States. Average resale (OEM) spend was $1.7 million. Similar data was not available from Canadian respondents due to insufficient response.

For more information, visit www.ptda.org.

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Bacou-Dalloz respirator divisions consolidate 
Respiratory protection maker Survivair and Willson consolidated their product lines in the Americas, effective September 2004. Survivair and Willson are divisions of Bacou-Dalloz, a prominent manufacturer of personal protective equipment.

As a result of the consolidation, reusable respirators will now be offered only under the Survivair brand, while the Willson brand concentrates on disposable respiratory products. There will be a brand transition period for reusable respirators through the end of 2004 and a total switchover within 2005.

"This consolidation makes sense from a number of perspectives," said Rick Sustello, vice president of strategic marketing for Bacou-Dalloz respiratory products. "End-users and distributors will be offered a broader, more complete range of respiratory products, and in most cases, reduce their overall inventory requirements. Plus, reduced manufacturing requirements will allow us to focus on developing new products and providing better customer service."

According to the consolidation plan, the entire respiratory product lines from both companies were evaluated on the basis of benefits to the user, and the best products were selected to remain in each line. These include air purifying respirators (APR), powered air purifying respirators (PAPR), supplied air respirators (SAR), and self-contained breathing apparatus (SCBA), which will now be marketed only under the Survivair brand name. Disposable respiratory products will be marketed exclusively under the Willson brand.

A major benefit, according to Sustello, is that now Survivair has the greatest range of facepieces to fit an entire workplace with one cartridge system. Both bayonet and threaded style are now available for most Survivair APR products, dramatically simplifying and reducing distributor and end-user's inventory of cartridges and filters.

"All NIOSH approvals for the majority of Willson APRs will be maintained and converted to the Survivair brand, making this a seamless transition for Willson users," Sustello said. "Only the name will change. The result of all this is that together we can now offer one of the industry's most comprehensive systems of respiratory products in a way that makes sense both economically and functionally. We think it makes for a better fit."

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Dichtomatik North America purchases American Seal Inc.
The Dichtomatik North America division of International Seal Company Inc. acquired the assets of American Seal Inc. of Houston. International Seal is a wholly-owned subsidiary of Freudenberg-NOK General Partnership.

Terms of the agreement were not disclosed.

The new acquisition will substantially increase Dichtomatik’s O-ring product line with more than 12,000 sizes and materials. The company will also utilize American Seal’s Houston facility to enhance regional distribution to the south central market with its full range of products.

“Dichtomatik’s goal is to be the only sealing supplier our customers need by offering the best quality, highest value and largest selection of products in the industry,” said John E. Rice, CEO of Dichtomatik Americas. “The strategic acquisition of American Seal further expands our vast product portfolio and ensures that we can satisfy all of our OEM and aftermarket customers’ needs.”

Rice added: “This is a perfect synergy for both companies. Dichtomatik will immediately utilize the complete range of O-ring products in stock at the Houston facility and plans to enlarge the American Seal location with the most extensive line of oil seals, fluid power seals and other stock standard products.”

Dichtomatik North America was founded in 1978 to complement its European predecessor, Dichtomatik of Hamburg, Germany, which is known as the largest and strongest European supplier of non-branded, generic and standard cataloged O-ring, oil seal and fluid power seals.

The 2002 acquisitions of Transcom and Nu-Seals Inc. brought new expertise in custom molded rubber products, as well as a significant product offering in fluid power seals, helping to further strengthen Dichtomatik’s position as a one-stop shop for all types of standard and custom-produced sealing products.

American Seal Inc. was founded in 1984 and supplies O-rings, X-rings, backup rings, encapsulated O-rings, O-ring kits, cord and extrusions.

Dichtomatik North America operates from Shakopee, Minn., with locations in Markham, Ontario; Round Hill, Va.; San Luis Obispo, Calif.; and Henderson, Nev. The European business is operated from Hamburg, Germany, with additional locations in England, Italy, The Netherlands, Austria, Sweden and France.

As a generic seal supplier in North America and Europe, Dichtomatik’s principal focus is on the replacement market selling through distributors. It also has a growing business for original equipment applications using standard oil seals, O-rings and fluid power seals, and is capable of replacing commoditized brand products with lower cost sealing products produced in the Asian market.

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Factory goods orders falter in August
New orders for manufactured goods decreased in August by 0.1 percent, or $300 million, to $370.5 billion, according to the Commerce Department. This followed a 1.7 percent July increase.

New orders for manufactured durable goods also decreased in August, by 0.3 percent, or $600 million, to $198.5 billion. This was revised upward from a $900 million decrease.

Transportation equipment had the largest decrease, $4.4 billion, or 7.4 percent, to $55.1 billion. The decrease in transportation equipment offset increases in other industry categories.

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ISA opens door for supplier/distributor relationships
Industrial Supply Association (ISA) president Tom Berger is asking distributors who will attend the Business EXPO to invite all of their manufacturer/supplier partners to attend.

"Invitations from key distributors will be the most effective way to build supplier attendance," Berger said in a letter to distributors. "We want to make it simple for you to invite your supplier partners and give them a compelling reason to accept your invitation."

For more information about how to invite your manufacturer/supplier partners, contact John Buckley at .

"By working together, we can make the ISA the MROP association of choice and make this convention the best ever," said Berger.

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