McGladrey: Cautious Optimism Among Middle-Market Distributors

By Rob Starr, Content Manager, Big4.com

The findings from a newly released Monitor Distribution Report, sponsored by McGladrey LLP, the nation’s fifth largest provider of assurance, tax and consulting services, and the NAW Institute for Distribution Excellence finds that  Middle-market distributors are growing, but that growth – and the optimism that accompanies it – is tempered by a number of influences including faltering economies in Europe and elsewhere, rising commodity prices, competition from low-cost-country vendors, the continued housing crisis, health care law and uncertainties over which administration will lead the country following the November election.

Other interesting findings include:

A majority of organizations are planning to increase U.S. employment in the next 12 months, and a majority of those with international employees will also increase their ranks overseas. Finding new hires though, could pose issues for some distributors. Approximately one-third report that they find the skilled talent they require only some of the time or rarely. Many are launching their own training and development programs to address skills gaps. Nearly half will focus on adding personnel to customer service/support functions. With a growing workforce, of course, comes an expected rise in costs for wages, benefits and other variable compensation.

Customer satisfaction is a primary objective of process improvement, with 83 percent of respondents ranking it at the top of the list. Cost reduction, quality improvement, enhanced speed/timeliness, and other objectives were mentioned, as well. Customer service will be an area of focus for improvement initiatives over the next 12 months, as distribution is a customer-focused industry, and distributors are looking to improve activities that affect those functions.

In addition to the key findings outlined above, results from the 2012 Monitor provide a wealth of key data on middle market distributors, including predictions on sales increases for the coming year, projected increases for transportation, energy, raw materials, and other costs, and additional data on hiring plans for the next 12 months. Detailed breakdowns of industry segments, including automotive; food and beverage; chemicals, oil and plastics; industrial machinery, biotech and medical; metal fabrication; and more are incorporated. View Monitor distribution results.

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