Peterson to STAFDA: Economy Requires Distributors to Reinvent Themselves

John Wolz

Today’s troubled economy requires companies to reinvent themselves, Rick Peterson told Specialty Tools & Fasteners Distributors Association 32nd annual convention delegates in his “Distributor State of Industry” speech.

Beyond the economic, oil, war and disaster volatilities of the past year, STAFDA is facing the “first nationwide housing crash since the 1930s – and no one knows where it will end,” Peterson observed. As of August residential construction is down 38% from the previous year. Economists are beginning to agree that the U.S. has entered a recession.

“History tells us recessions are frequent and short lived before the business cycle self-corrects and prosperity returns,” Peterson noted. And, “though weakening,” at $14 trillion the U.S. economy “is hardly in a state of collapse.”

Lower interest rates “should make business loans easier to obtain once the dust settles.”

Residential construction may be down, but there are still plenty of non-residential building and infrastructure projects. STAFDA distributors “will need to shift their sales emphasis to commercial, industrial and other market sectors.”

Peterson, the 2008 STAFDA president, explained how his own distributorship has changed over the decades since All-West Fasteners Inc. opened in 1978 with two guys in a sparsely stocked south Seattle industrial area warehouse.

All-West initially supplied shipyards, fabricating shops and construction companies. During the 1980s, with “smokestack” customers closing or moving, “we re-invented ourselves as a supplier of aircraft fasteners and military specification hardware and later electronic hardware as electronics manufacturing expanded in the Pacific Northwest.

Peterson advised distributors to find new ways to add value to supply relationships. All-West added vendor managed inventory to keep production lines running and to “minimize the total cost of supply. Our VMIL program has played a key role in the growth of our company.” A successfully operating VMI program gives buyers confidence to add additional products into the system, Peterson added.

Editor’s Note: Additional coverage from Peterson’s speech plus other STAFDA programs will be in an upcoming issue of FIN.
�2008 FastenerNews.com