Speech from Industrial Supply Manufacturers Association president Ray Reynertson at the I.D.A. Annual Distributor and Manufacturer Business Expo in Chicago Nov. 22-24.

Last spring at the ISMA/I.D.A. Convention in New Orleans, my friend, Hardy Hamman spoke to us about his experience of coming to our great nation and being able to live “the American dream”. During his very positive story, it struck me that we simply do not hear much about what is right with America. News from the business world, like most news we hear, remains focused on the negative.

Certainly, greed has never been more fashionable. Examples abound from corporate America: executives of major corporations flaunting laws to fleece their employees and stockholders, illegal insider trading, deliberate falsification of financial reports, outlandish executive pay schemes, class action law suits against tobacco, firearms and fast food industries, are just a few of the headlines we continue to see, on a regular basis.

While all of these issues affect our business environment, of even more concern, is the spiraling cost of health, property and liability insurance and regulatory mandates that continue to stifle growth, and fuels the flight of manufacturing offshore, the most serious threat our industry has faced in it’s history.

The situation I have just described, does not sound encouraging. In our industry, one could argue that it has never been more difficult to succeed, than in today’s business environment.

So what is it that we can be positive about? I believe Hardy made that clear to us in New Orleans, it is the American dream. In its essence, the American dream is the opportunity to succeed, and that opportunity exists, for all of us here today.

Our good fortune is that we are participants in the U.S. economy, the largest and most dominating economic force in the world. The worldwide manufacturing reputation of U.S. companies, for quality and innovation is unparalleled, and the ready access we have to the powerful and dynamic U.S. market, is envied by all except the very largest foreign corporations. The opportunity is there, but there is a hook. The market, changing at an ever-faster rate, requires us to keep up, or better yet, step ahead of the changes. This begs the question, “Can you continue to do what you have always done and succeed?” I would suggest the answer to that is, not likely.

For manufacturers, innovation has never been more important. Creating new products and adding services that solve end-user problems, will separate your organization from the others, and bond your products to manufacturing processes, wherever they might be performed. Your efforts to export products, must take on a new sense of urgency, recognizing that manufacturing operations will continue to move offshore. Look to expand your customer base, by exploring new markets and uses for your products. Commit to a relentless pursuit of cost and lead-time reduction, it has to be ingrained in your company culture. Your timely ability to respond to end-user demand, utilizing the domestic supply chain, is a significant advantage over foreign sourcing. This has to be clearly and definitively explained to your customers. Embrace international quality standards as a means of continually improving your products and differentiating your company from foreign competition. Technology is one of your most powerful tools, make sure you utilize it to full advantage.

Distributors must become closer than ever with end-users and their suppliers. Simply put, you need to be indispensable to your customer by utilizing the expertise you possess and the services you provide. Invest in technology, to increase your capabilities and reduce costs. Develop strong business relationships with suppliers who add value to the mix of products and services you now provide your customers. Look for new ways to effectively communicate with your channel partners. Analyze your customer base to determine which customers are most likely to go offshore. This will help you to avoid surprises and to identify and concentrate on those customers likely to stay. Make sure your customers know that the service and response time domestic distribution provides are not available in India or China. Distribution in the United States is easily the most efficient in the world. Manufacturers are searching for effective distribution to help them export their products. Consider exporting your expertise by establishing a foothold with current customers moving offshore.

For our industry to thrive, it will take a concerted effort on the part of all channel members. As the two largest and most influential MROP trade associations, we must provide the leadership to help guide our industry. Through initiatives like the funding of the Trends in Distribution reports, the development of standards for electronic transfer of information and the sponsoring of industry summit meetings, we have taken a leadership position in the industry.

Our associations have also recognized the need for change that will better reflect this new environment. The focus of our associations has been on adding more value, for our membership, through meaningful changes to the Fall and Spring Convention formats.

One of the many changes to this year’s Spring Convention, to be held in Orlando, Fla., will be the introduction of a new name “The Industrial Supply Convention” or ISCON. The new name is broad enough to encompass all members of our industry and is enthusiastically supported by the leadership of both ISMA and I.D.A. For your convenience, a short video presentation featuring the many attractions Orlando offers, the brand new Gaylord Palms Hotel, headquarters for our convention, and highlights of the convention program is being shown in your room, on the closed circuit TV in this hotel.  

The theme for our first ISCON is “put some magic back into your business” and after three difficult years many of us are more than ready to find some magic. Make sure you join us next May in Orlando. We are putting the finishing touches on an excellent program, that will combine the opportunity to meet with your business partners and obtain real world solutions for bringing efficiency and cost savings to our channel.

I wish to conclude this speech with a personal thought, as well as speaking on behalf of the membership of ISMA.

All of us who knew Gary Buffington considered him a friend, and respected him for his total dedication to the industrial supply channel. His untimely death after three decades of service took Gary from us at the prime of his career and left a void that will be hard to fill.

It is altogether fitting and proper that his family, friends and associates create a living memorial to this outstanding advocate for our industry – the Gary L. Buffington Scholarship. Jim, on behalf of the Board of Directors and all members, ISMA is pleased to be a Charter Patron and to present its $10,000.00 contribution to the start-up fund for the Gary L. Buffington Scholarship.

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