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2006 Annual Report<br />
CEOs Rate NAW Highly Effective<br />
91%<br />
Highly Effective<br />
Superior Networking<br />
and Meetings<br />
Uniquely positioned<br />
across all lines <strong>of</strong><br />
trade to promote<br />
critical information<br />
exchange and targeted<br />
benchmarking among<br />
noncompeting peers<br />
92%<br />
Highly Effective<br />
Effective Government<br />
Relations<br />
The only national voice for<br />
all <strong>of</strong> wholesale distribution<br />
in Washington, DC<br />
88%<br />
Highly Effective<br />
Top Industry Intelligence<br />
Excellent research, best<br />
practices, and practical<br />
information to keep<br />
wholesaler-distributors<br />
the most efficient<br />
and effective channel<br />
in distribution<br />
95%<br />
Highly Effective<br />
Immediate<br />
Communications<br />
Keeping Members<br />
informed,<br />
equipped,<br />
and in touch
The <strong>National</strong> <strong>Association</strong> <strong>of</strong> <strong>Wholesaler</strong>-<strong>Distributors</strong> is composed <strong>of</strong> Direct<br />
Member companies and a federation <strong>of</strong> international, national, regional, state,<br />
and local associations and their member companies, which collectively total<br />
more than 40,000 companies. In addition to its government relations program,<br />
NAW’s scope encompasses the activities <strong>of</strong> the <strong>Wholesaler</strong>-Distributor Political<br />
Action Committee, the NAW Institute for Distribution Excellence, and the<br />
NAW Service Corporation.<br />
Our Mission Statements<br />
<strong>National</strong> <strong>Association</strong> <strong>of</strong> <strong>Wholesaler</strong>-<strong>Distributors</strong><br />
To advocate its members’ interests on national public policy issues that affect<br />
the entire wholesale distribution industry. NAW assists merchant wholesalerdistributors<br />
to be the most efficient channel for bringing goods to market through<br />
benchmarking, strategic management information, networking, and high-level<br />
conferences. NAW serves as a mechanism, through its <strong>Association</strong> Executives<br />
Council, for the sharing <strong>of</strong> ideas, programs, and skills among the organization’s<br />
member national associations.<br />
<strong>Wholesaler</strong>-Distributor Political Action Committee<br />
To advance the election <strong>of</strong> pro-business candidates to federal <strong>of</strong>fice. NAW’s<br />
<strong>Wholesaler</strong>-Distributor Political Action Committee seeks to mobilize the<br />
involvement <strong>of</strong> wholesaler-distributors in the federal electoral process<br />
through financial contributions and political education activities, including<br />
candidate endorsements and get-out-the-vote programs.<br />
NAW Institute for Distribution Excellence<br />
To sponsor and disseminate research into strategic management issues<br />
affecting the wholesale distribution industry. The NAW Institute for Distribution<br />
Excellence aims to help merchant wholesaler-distributors remain the most<br />
effective and efficient channel in distribution.<br />
NAW Service Corporation<br />
To sponsor industry-wide service and product <strong>of</strong>ferings that benefit<br />
wholesaler-distributors.<br />
NOTE: The information included on the front cover is from the NAW Membership Survey Report,<br />
Dr. Stevan Holmberg, Pr<strong>of</strong>essional Management Research Group, Inc.<br />
Contents<br />
1 Leadership Message<br />
2 NAW Networks You with<br />
Your Peers<br />
5 State <strong>of</strong> the Wholesale<br />
Distribution Industry<br />
6 NAW Networks You with<br />
Government and the<br />
Electoral Process<br />
10 NAW Networks You with<br />
Industry Intelligence<br />
13 NAW Networks You with<br />
Business Products and<br />
Services Programs<br />
14 Membership<br />
15 Treasurer’s Report<br />
16 Leadership
Leadership Message<br />
NAW Is Your Strategic Business Partner<br />
What makes NAW unique and your strategic business partner in the wholesale<br />
distribution industry<br />
A Rich Constituency: Only NAW reaches across more than 100 diverse lines<br />
<strong>of</strong> trade.<br />
Best-<strong>of</strong>-Breed Member Companies: Our Company CEOs are industry leaders<br />
who are successfully growing their businesses.<br />
Superior Networking Among Peers: Only NAW unites peers and not competitors<br />
to address shared business issues and opportunities.<br />
Maximum Value, Minimal Time: NAW promotes winning bottom-line results<br />
through all <strong>of</strong> our programs and services, but we require only minimal time<br />
commitment from our Company CEOs.<br />
Raymon A. York, 2007 NAW Chairman <strong>of</strong> the<br />
Board (left); Robert A. Reynolds, Jr., 2006<br />
NAW Chairman <strong>of</strong> the Board (seated); and<br />
Dirk Van Dongen, NAW President.<br />
There is a lot to be positive about in our industry in 2007. After some tough<br />
years, the U.S. economy continues to move in the right direction. As you will<br />
read in the following pages, sales <strong>of</strong> all wholesaler-distributors reached $3.9<br />
trillion in 2006—that is a 10% increase over 2005. The latest Facing the Forces<br />
<strong>of</strong> Change®: Lead the Way in the Supply Chain report published by the NAW<br />
Institute for Distribution Excellence examines four key business-to-business<br />
trends: private label brands, demand-driven channels, new distribution pr<strong>of</strong>it<br />
models, and Internet trends for business customers, and discusses how<br />
wholesaler-distributors will respond to those trends over the next several years.<br />
The good news is that wholesaler-distributors will continue to evolve, innovate,<br />
and reinvent their role as intermediaries in business-to-business supply chains.<br />
NAW will continue to be your strategic business partner for growing and building<br />
your business. NAW remains the gold standard for effective and efficient<br />
networking. What makes NAW networking completely different from all other<br />
organizations is our proven capability to take immediate action on issues<br />
affecting our members, get the right people together to respond to those issues,<br />
and deliver highly effective results that our members expect for their investment.<br />
NAW’s exceptional programs, products, and services network you with<br />
• Your Peers<br />
• The Government and Electoral Process<br />
• Industry Intelligence<br />
• Business Products and Services.<br />
“We’ve reduced expenses by<br />
hundreds <strong>of</strong> thousands <strong>of</strong><br />
dollars a year—plus gained<br />
new customers and added<br />
product lines by networking<br />
through NAW.”<br />
Andrew Berlin, President/CEO<br />
Berlin Packaging<br />
On the following pages, we expand on these areas and show you the many ways<br />
in which NAW can assist your company to take advantage <strong>of</strong> the opportunities<br />
before you—so that you and your company can benefit from the value <strong>of</strong> NAW<br />
membership and our networking opportunities. This report is part a recap <strong>of</strong> the<br />
past 12 months and part a promise <strong>of</strong> what is planned in the coming months <strong>of</strong><br />
2007. You can stay up-to-date on all NAW activities by bookmarking and visiting<br />
www.naw.org <strong>of</strong>ten.<br />
2006 annual report 1
NAW Networks You With...<br />
As a federation <strong>of</strong> associations representing all lines <strong>of</strong> trade in the wholesale<br />
distribution industry, NAW is uniquely positioned to be the only portal for wide<br />
access to and exchange <strong>of</strong> information and services among noncompeting peers<br />
within its membership. What makes NAW so different from all other associations<br />
is that our dynamic programs are individually designed to promote networking<br />
and benchmarking for you and your peers across the entire industry.<br />
Peer Groups Like None Other<br />
NAW’s meetings provide powerful incentives for valuable information sharing for<br />
all members. NAW has created a number <strong>of</strong> “peer groups like none other” that<br />
<strong>of</strong>fer wholesale distribution executives matchless opportunities to meet with and<br />
learn from peers—but not competitors. Through observing what peers in other<br />
lines <strong>of</strong> trade are doing to grow their businesses, NAW member companies tell us<br />
that they are able to gain a competitive advantage in their own industry segments.<br />
Your Time Is Valuable<br />
NAW understands that the one thing<br />
wholesale distribution executives have<br />
least <strong>of</strong> is “time.” That is why our<br />
meetings are short but informationpacked.<br />
There is enough time built<br />
in for both learning experiences and<br />
networking in an intimate setting that<br />
provides a candid atmosphere for<br />
information exchange. All NAW<br />
roundtables and conferences (with<br />
the exception <strong>of</strong> the NAW Executive<br />
Summit and the Wholesale Distribution<br />
Manager’s Course) are held at the<br />
Hilton O’Hare in Chicago, which<br />
allows for quick in-and-out access<br />
for participants.<br />
Finding common ground: Billion dollar company executives talk about challenges and<br />
strategies that they tackle in their own companies in a noncompeting environment during<br />
an NAW Billion Dollar Company Conference. Lyle Heidemann, President/CEO, True Value<br />
Company, (left) and Richard Klau, President, Hajoca Corp.<br />
High Marks for Networking at NAW Meetings<br />
NAW members consistently rate networking in small groups as one <strong>of</strong> the most<br />
important benefits <strong>of</strong> NAW membership. In order to make each event <strong>of</strong> highest<br />
value to participants, NAW meetings and roundtables are targeted toward<br />
specific sizes <strong>of</strong> companies and by executive responsibilities. Our Large Company<br />
Conferences and Billion Dollar Company Roundtables focus on these firms<br />
because their collective success provides beneficial results for all-sized<br />
businesses in the wholesale distribution industry. NAW members recognize<br />
the value <strong>of</strong> benchmarking and networking with noncompetitors across all<br />
lines <strong>of</strong> trade as strategic tools to improve efficiency and effectiveness in specific<br />
operational practices. They rely on NAW meetings for practical, industry-wide<br />
knowledge and information by experts in the industry.<br />
“Ryerson Tull continues<br />
to benefit greatly from<br />
NAW’s benchmarking and<br />
networking programs. We<br />
receive valuable information<br />
from the NAW benchmarking<br />
process. And since it comes<br />
from operating executives,<br />
it’s not just conceptual, it’s<br />
actionable. Companies that<br />
are not involved don’t know<br />
what they are missing. We<br />
have found NAW to be the<br />
most effective organization<br />
<strong>of</strong> its kind.”<br />
Neil Novich, Chairman/President/CEO<br />
Ryerson Tull, Inc.<br />
2 naw
...Your Peers<br />
“The cost to fly to Chicago<br />
—$450! The cost to stay<br />
at the Hilton—$340!<br />
The cost to attend the<br />
conference—$1,155!<br />
The interactive networking<br />
with counterparts from my<br />
industry—PRICELESS!”<br />
Gerry Burnett<br />
Vice President, Purchasing and Logistics<br />
Laird Plastics<br />
NAW Large Company<br />
Emphasis Program<br />
The Large Company Emphasis Program<br />
continues to attract wholesale distribution<br />
executives looking to augment networking<br />
opportunities beyond their traditional<br />
industry segment. In 2006, the following<br />
networking events for firms with annual<br />
sales exceeding $100 million were well<br />
attended and received, and they will<br />
continue in 2007:<br />
• The Large Company CEO<br />
Roundtable—Open to the<br />
Chairman, President, CEO, COO,<br />
and Executive Vice President<br />
• The Large Company CFO<br />
Networking Conference<br />
• The Large Company Human<br />
Resources Networking Conference<br />
• The Large Company Technology<br />
Networking Conference<br />
Because the topics are based on survey<br />
responses from the large company<br />
community, that community has a<br />
vested interest in the content <strong>of</strong> each<br />
meeting. The events are energetic and<br />
informative because the groups are<br />
engaged and interactive. In many<br />
cases, members <strong>of</strong> the large company<br />
community are eager to be presenters<br />
on topics <strong>of</strong> keen interest. This continues<br />
the NAW theme <strong>of</strong> “networking and<br />
sharing without competitors” and is<br />
a key reason why these events are<br />
so successful.<br />
NAW meetings allow for networking across the wholesale distribution industry.<br />
Executives come together to discuss issues and share experiences that are familiar to<br />
all wholesaler-distributors.<br />
Billion Dollar Company “C” Suite Roundtables<br />
In 2006, NAW held five special one-day networking roundtables for our largest<br />
member companies to address the special issues they face as billion dollar<br />
companies. Participation in these twice yearly roundtables is limited to the<br />
senior executive in the following areas:<br />
• Billion Dollar Company CEO Roundtable<br />
• Billion Dollar Company CIO Roundtable<br />
• Billion Dollar Company Operations Roundtable<br />
• Billion Dollar Company Human Resources Roundtable<br />
• Billion Dollar Company CFO Roundtable<br />
Added to the above list in 2007 is this roundtable:<br />
• Billion Dollar Company Chief Legal Officer Roundtable<br />
These roundtables have been so well received that most <strong>of</strong> our billion dollar<br />
company members are represented at them. Executives tell us that because<br />
these roundtables are so powerful, they have them “burned into their calendars.”<br />
As with the Large Company Emphasis Program, our Billion Dollar Company<br />
Roundtables continue to promote “networking without competitors,” which is<br />
the unique value <strong>of</strong> NAW membership and an essential component to the<br />
growth <strong>of</strong> the wholesale distribution industry.<br />
“The mix <strong>of</strong> formal presentations, roundtable discussions,<br />
and informal networking created a great opportunity to<br />
focus on key issues facing my operation. I look forward<br />
to the next meeting.”<br />
Chris Sperry, Vice President, Distribution Operations<br />
W.W. Grainger<br />
2006 annual report 3
Your Peers (continued)<br />
NAW/Deloitte Strategic Alliance<br />
NAW regularly reaches out to network with organizations closely focused on the<br />
wholesale distribution industry and the advancement <strong>of</strong> our members’ businesses.<br />
One <strong>of</strong> our most important alliances is with Deloitte Consulting LLP and its<br />
wholesale distribution experts.<br />
Neil Gholson, Wholesale<br />
Distribution Global<br />
Segment Leader, Deloitte<br />
Consulting LLP, discusses<br />
how to improve margins<br />
with Don Houghton,<br />
President/COO, Reeb<br />
Millwork Corp., (right)<br />
and others at the NAW<br />
Executive Summit.<br />
In 2006, NAW and Deloitte continued to develop industry intelligence to assist<br />
wholesaler-distributors “to be so good at what they do that no one else will do it.”<br />
The Wholesale Distribution<br />
Manager’s Course<br />
Now in its 56th year, NAW’s Wholesale<br />
Distribution Manager’s Course (WDMC)<br />
at The Ohio State University (OSU) is the<br />
premier leadership development course<br />
for the entire wholesale distribution<br />
industry. For five intensive days in<br />
June, dozens <strong>of</strong> mid-level and senior<br />
managers—from companies under $5<br />
million to more than $1 billion in sales—<br />
network with and learn from each<br />
other and from the country’s deepest<br />
wholesale distribution teaching faculty.<br />
By the end <strong>of</strong> the week, the managers<br />
are grounded in the basics <strong>of</strong> wholesale<br />
distribution, they have developed new<br />
ideas for improving the performance<br />
and pr<strong>of</strong>itability <strong>of</strong> their companies,<br />
and they have sharpened their personal<br />
performance too.<br />
Led by Deloitte’s Neil Gholson, Wholesale Distribution Global Segment Leader,<br />
the firm demonstrated its continued prominence in the wholesale distribution<br />
industry through a new book and three key presentations at NAW meetings.<br />
• Driving Growth and Shareholder Value: The Distribution Value Map.<br />
The NAW Institute for Distribution Excellence and Deloitte published this<br />
dynamic new tool specifically for wholesaler-distributors. To read more about<br />
this book and two wall maps by Neil Gholson and Mark Schloegel <strong>of</strong> Deloitte,<br />
go to page 11.<br />
• How the Business Benefits from IT. In this presentation during the Large<br />
Company Technology Networking Conference, Neil Gholson discussed the<br />
value IT provides to wholesaler-distributors using empirical data and a case<br />
study to demonstrate the impact IT has on business. Deloitte has been<br />
working with clients to link investments and benefits with an approach called<br />
“Benefits Realization.”<br />
• Pensions and the Future: What You Need to Know. In this session during the<br />
Billion Dollar Company CEO Roundtable, Tim Phoenix and Brian Augustian<br />
<strong>of</strong> Deloitte addressed the trends that are causing companies to rethink the<br />
retirement benefits <strong>of</strong>fered to employees and what those <strong>of</strong>ferings include.<br />
Decisions must be made from the point <strong>of</strong> view <strong>of</strong> regulatory, compliance,<br />
cost, ROI, and new workforce segments, and this requires a new perspective.<br />
• Red Hot Mergers and Acquisitions: How Can You Take Advantage <strong>of</strong> This<br />
Market Deloitte’s Andrew Isgrig gave a perspective <strong>of</strong> the very hot financial<br />
markets during a session at the Financial Networking Conference. He outlined<br />
the M&A market and focused specifically on the wholesale distribution<br />
industry to include deal activity, rational, and multiples paid. He also focused<br />
on the private equity markets and what they are looking for from the wholesale<br />
distribution industry.<br />
4 naw<br />
During the weeklong course, participants<br />
break into work groups where they tackle<br />
and resolve real-world wholesale distribution<br />
challenges.<br />
“I loved this course and<br />
highly recommend it! It<br />
outlined ways for an<br />
organization to increase<br />
its operational effectiveness<br />
and provided tools for<br />
making members <strong>of</strong> every<br />
functional area strategic<br />
partners in the business.”<br />
Sue Raffensperger, MBA, SPHR,<br />
Senior Corporate Trainer<br />
Leadership and Pr<strong>of</strong>essional Development<br />
Skinner Nurseries, Inc.
State <strong>of</strong> the Wholesale Distribution Industry<br />
Overview<br />
Sales <strong>of</strong> all wholesaler-distributors reached $3.9 trillion in<br />
2006, a 10% increase versus the previous year. The industry<br />
remains an important force in all major sectors <strong>of</strong> the U.S.<br />
economy, ranging from basic commodities to advanced<br />
technology components. (See Exhibit 1 below.)<br />
U.S. Wholesale Distribution Industry<br />
Annual Growth in<br />
Wholesale Distribution Revenues and U.S. GDP<br />
11.3%<br />
10.0%<br />
7.7%<br />
6.9%<br />
6.3%<br />
6.4%<br />
Major Sector (Largest to Smallest Sector Revenues)<br />
2006 Revenues ($B)<br />
Grocery and Foodservice Wholesale <strong>Distributors</strong> $447.2<br />
Oil and Gas Products Wholesale <strong>Distributors</strong> $417.8<br />
Pharmaceutical <strong>Wholesaler</strong>s $366.3<br />
Commercial Equipment and Supplies Wholesale <strong>Distributors</strong> $325.2<br />
Motor Vehicles and Motor Vehicle Parts Wholesale <strong>Distributors</strong> $323.9<br />
Industrial <strong>Distributors</strong> $320.9<br />
Electrical and Electronics <strong>Wholesaler</strong>s $289.4<br />
Other Consumer Products Wholesale <strong>Distributors</strong> $216.8<br />
Miscellaneous Durable Goods Wholesale <strong>Distributors</strong> $212.0<br />
Metal Service Centers $150.9<br />
Building Material and Construction Wholesale <strong>Distributors</strong> $134.8<br />
Apparel and Piece Goods Wholesale <strong>Distributors</strong> $127.8<br />
Agricultural Products Wholesale <strong>Distributors</strong> $121.7<br />
Beer, Wine and Liquor <strong>Wholesaler</strong>s $101.1<br />
Office Product <strong>Wholesaler</strong>s and Paper Merchants $95.2<br />
Chemicals and Plastics Wholesale <strong>Distributors</strong> $93.9<br />
Hardware, Plumbing, and Heating Equipment and Supplies $90.7<br />
Furniture and Home Furnishing Wholesale <strong>Distributors</strong> $68.1<br />
The wholesale distribution industry supports an impressive<br />
diversity <strong>of</strong> companies, with entrepreneurial family-run<br />
business competing directly with multi-billion dollar publicly<br />
traded powerhouses. There are only 13,000 distributors—<br />
roughly 5% <strong>of</strong> the total number—with annual sales greater<br />
than $25 million. The largest wholesaler-distributors have<br />
annual sales exceeding $80 billion.<br />
Growth<br />
Total $3,903.6<br />
The wholesale distribution industry has been growing faster<br />
than the overall U.S. economy during the recent economic<br />
expansion. In 2006, revenues <strong>of</strong> wholesaler-distributors<br />
increased 3.4 percentage points more than U.S. Gross<br />
Domestic Product (GDP). Pr<strong>of</strong>itability has kept pace with<br />
this growth, further testimony to wholesaler-distributors’<br />
value to their customers. (See Exhibit 2 top right.)<br />
The industry retains its vitality because wholesaler-distributors<br />
perform supply chain functions more effectively and efficiently<br />
than either manufacturers or customers. Manufacturers<br />
rely on distributors to communicate with their customers<br />
because wholesaler-distributors <strong>of</strong>fer flexibility, fast response<br />
to customer needs, consistency <strong>of</strong> service, and local presence.<br />
Thus, wholesale distribution remains the most significant<br />
channel to market for manufacturers and the most important<br />
supply chain for customers, particularly when there are<br />
many small customers and a wide variety <strong>of</strong> manufacturers.<br />
2004 2005 2006<br />
Wholesale Distribution Revenues<br />
Employment and Productivity<br />
U.S. GDP<br />
The wholesale distribution industry employs 1 out <strong>of</strong> 20<br />
private sector U.S. workers, but is helping to grow the<br />
nation’s productivity far in excess <strong>of</strong> the industry’s actual<br />
size. Multiple economic studies estimate that wholesale<br />
distribution has contributed more than 25% <strong>of</strong> the entire<br />
U.S. economy’s total productivity gains over the past 15 years.<br />
<strong>Wholesaler</strong>-distributors are leaders in using technology to<br />
reduce low value-added labor activities, such as order<br />
processing, billing, inventory control, delivery route<br />
scheduling, and warehouse management. As a result,<br />
productivity growth in wholesale distribution exceeded<br />
the overall business sector by 1.6 percentage points in the<br />
past 15 years and by 2.5 percentage points since 2001.<br />
(See Exhibit 3 below.)<br />
Average Annual Growth in Labor Productivity - 1991-2005<br />
1991-1995 1996-2000 2001-2005 1991-2005<br />
Non-Farm Business Sector 1.5% 2.5% 3.3% 2.5%<br />
Wholesale Trade 3.0% 5.1% 5.8% 4.1%<br />
The wholesale distribution industry’s gains are critical for<br />
U.S. global competitiveness given the importance <strong>of</strong> labor<br />
productivity to long-term economic growth. The industry’s<br />
improving fortunes are also directly benefiting the 5.1 million<br />
people employed in the industry. Average weekly earnings in<br />
wholesale distribution are 26% higher than average earnings<br />
in all private U.S. industries.<br />
Prepared by Adam J. Fein, Ph.D., President <strong>of</strong> Pembroke<br />
Consulting, Inc. He serves as a Fellow <strong>of</strong> the NAW Institute for<br />
Distribution Excellence.<br />
2006 annual report 5
NAW Networks You With...<br />
A principal benefit <strong>of</strong> your NAW membership is the daily, intensive networking<br />
NAW conducts on your behalf with federal legislative and regulatory bodies in<br />
Washington, DC. By engaging the policy-making process, NAW connects the<br />
wholesale distribution industry with leading federal policy makers whose decisions<br />
<strong>of</strong>ten impact the everyday operations <strong>of</strong> wholesale distribution companies.<br />
Your Voice in Our Nation’s Capital<br />
Through direct lobbying, grassroots lobbying, and leadership <strong>of</strong> coalitions, NAW<br />
supports legislation that helps you manage your business as you see fit and earn<br />
and retain pr<strong>of</strong>its, and opposes legislation that impedes these objectives.<br />
Similarly, NAW participates in agency rule makings undertaken to implement<br />
statutes enacted by Congress, with the goal <strong>of</strong> securing the minimum degree <strong>of</strong><br />
regulatory burden and cost to you and other wholesaler-distributors.<br />
NAW’s government relations department includes a team <strong>of</strong> lobbyists that<br />
carries the wholesale distribution industry’s message to federal policy makers.<br />
The team’s mission is to effectively convey the wholesale distribution industry’s<br />
views to Congress, the White House, and federal agencies.<br />
In 2007, NAW continues to vigorously advocate the interests <strong>of</strong> the wholesale<br />
distribution industry before the executive and legislative branches <strong>of</strong> the federal<br />
government and collaborates with <strong>of</strong>fice holders on a bipartisan basis whenever<br />
possible.<br />
Coalitions: Leveraging the<br />
Strength <strong>of</strong> Our Industry<br />
NAW’s coalition activities are predicated<br />
on the principle <strong>of</strong> “strength in numbers,”<br />
perhaps the ultimate example <strong>of</strong> the<br />
value <strong>of</strong> networking. NAW is a leader<br />
in organizing and managing coalitions<br />
to address the wholesale distribution<br />
industry’s public policy priorities in<br />
Washington, DC. NAW represents<br />
40,000 companies with places <strong>of</strong><br />
business in all 50 states and nearly<br />
all 435 congressional districts—an<br />
economic constituency that is large,<br />
diverse, and politically formidable. When<br />
wholesaler-distributors are allied through<br />
NAW with like-minded organizations<br />
and their networks, our effectiveness<br />
is substantially strengthened.<br />
2007 NAW Executive Summit: FACING THE<br />
FORCES OF CHANGE ®<br />
About 200 leaders from diverse wholesale distribution<br />
lines <strong>of</strong> trade came together in January 2007 in<br />
Washington, DC for NAW’s Executive Summit: FACING<br />
THE FORCES OF CHANGE ® . The overwhelming majority<br />
<strong>of</strong> attendees rated the meeting “excellent.” They told<br />
NAW that attending each year is mandatory because it<br />
gives them the opportunity at the start <strong>of</strong> a new year to<br />
discuss industry issues with each other and with top<br />
consultants.<br />
Here is a pictorial roundup <strong>of</strong> some <strong>of</strong> the major events<br />
at the 2007 Executive Summit. For a detailed agenda for<br />
the 2008 Executive Summit when it becomes available,<br />
visit www.naw.org.<br />
Adam J. Fein, Ph.D., President <strong>of</strong> Pembroke Consulting, provided an<br />
advance look at the NAW Institute for Distribution Excellence report<br />
Facing the Forces <strong>of</strong> Change®: Lead the Way in the Supply Chain.<br />
6 naw
...Government and the Electoral Process<br />
“I just used your E-Alert<br />
program to contact my<br />
Congressman. It is a<br />
FANTASTIC tool for<br />
composing a concise,<br />
personalized, and meaningful<br />
message and getting it out<br />
quickly! Having the talking<br />
points side by side with the<br />
text <strong>of</strong> the message as I<br />
entered it made it SO EASY!<br />
I will be responsive to doing<br />
this in the future. Thanks!”<br />
J. Christopher Smith, Executive Vice<br />
President and Chief Operating Officer<br />
H.D. Smith Wholesale Drug Co.<br />
Grassroots Lobbying: Constituents Back Home<br />
Speak to Congress<br />
Our wholesale distribution industry plays an enormous role in achieving favorable<br />
legislative results when we speak to individual Members <strong>of</strong> Congress through the<br />
voices <strong>of</strong> constituents and voters from “back home” in the Members’ states and<br />
districts. NAW’s principle grassroots lobbying tool is the E-Alert Program. Through<br />
this program, NAW communicates with the senior management <strong>of</strong> both direct<br />
member companies and member companies <strong>of</strong> NAW-affiliated member<br />
associations that co-sponsor the program. They, in turn, communicate with<br />
their Senators and Representatives as these issues move through the legislative<br />
process. E-Alert, currently cosponsored by 45 member associations, enables<br />
wholesaler-distributors to easily identify appropriate federal legislators,<br />
conveniently craft a written advocacy message to them, and deliver it quickly,<br />
when it is needed most.<br />
NAW’s signature grassroots program is the Washington Action Network (WAN),<br />
which catalogs the personal relationships that exist between individual<br />
wholesaler-distributors and Members <strong>of</strong> both Houses <strong>of</strong> Congress. WAN enables<br />
the NAW government relations team to tap the industry’s top-level contacts with<br />
Representatives and Senators at the most critical points in legislative initiatives.<br />
Participation in WAN is also open to NAW member associations that opt to<br />
cosponsor the program. Today, 73 member associations participate.<br />
“The Best on K Street—the <strong>National</strong> <strong>Association</strong> <strong>of</strong><br />
<strong>Wholesaler</strong>-<strong>Distributors</strong>. The name may sound niche, but<br />
the <strong>Wholesaler</strong>s’ political operation is vast and powerful.”<br />
The Hill Newspaper<br />
“The Global Opportunity for U.S. Distribution” session focused on the<br />
upside <strong>of</strong> the globalization trend by examining the international business<br />
experiences <strong>of</strong> a panel <strong>of</strong> U.S. wholesaler-distributors who are succeeding<br />
in global markets. The panelists were (from left): Jay Brown, Vice President<br />
<strong>of</strong> Merchandising, Do it Best Corp.; Andrew Berlin, President/CEO, Berlin<br />
Packaging; and Steve Johnson, President/COO, Tucker Rocky Distributing.<br />
Alan Beaulieu <strong>of</strong> the Institute for Trend Research served as facilitator.<br />
Byron Potter, President/CEO <strong>of</strong> Dallas Wholesale Builders<br />
Supply Inc., and Sue York, Chairman <strong>of</strong> Ewing Irrigation<br />
Products, added their own perspectives to the Executive<br />
Summit program during a discussion roundtable where<br />
attendees networked directly with their wholesale distribution<br />
peers from other lines <strong>of</strong> trade.<br />
2006 annual report 7
Government and the Electoral Process (continued)<br />
Policy Agenda: Serving Our Members’ Interests<br />
The complete menu <strong>of</strong> NAW advocacy resources was at work on behalf <strong>of</strong><br />
wholesaler-distributors throughout the Second Session <strong>of</strong> the 109th Congress<br />
on a wide range <strong>of</strong> issues. Despite our best efforts on issues as diverse as health<br />
care, tax relief, and tort reform, polarization <strong>of</strong> the Congress along partisan fault<br />
lines proved to be a hurdle too high to clear for many items on the pro-business<br />
legislative agenda.<br />
Asbestos litigation reform, once a promising legislative prospect to replace the<br />
costly tort system with a trust fund to compensate victims <strong>of</strong> asbestos exposures,<br />
could not break free.<br />
<strong>Association</strong>/small business health plan (AHP/SBHP) legislation would allow<br />
trade associations to <strong>of</strong>fer group health insurance programs to their members on<br />
a multi-state basis. Repeatedly passed by the House <strong>of</strong> Representatives over the<br />
years, an NAW-backed bill made it out <strong>of</strong> the Senate’s Health, Education, Labor<br />
and Pensions (HELP) Committee for the first time, only to stall on the floor <strong>of</strong><br />
Congress’ upper chamber.<br />
Traction in the Senate was also elusive for the House-passed Lawsuit Abuse<br />
Reduction Act (LARA), a bill to penalize the filing <strong>of</strong> “junk” lawsuits and to scale<br />
back a plaintiff lawyer manipulation <strong>of</strong> the civil justice system known as “forum<br />
shopping.”<br />
Despite these disappointments, there were some significant successes. Congress<br />
passed and the President signed into law legislation that extends the reduced<br />
marginal income tax rates enacted in 2001 and 2003 on all levels <strong>of</strong> income,<br />
maintains the lower tax rates on capital<br />
gains and dividends, and continues the<br />
increase in first-year small business<br />
expensing.<br />
A second major victory turned back an<br />
attempt, initially suggested by Senate<br />
Republicans, to repeal the “last in, first<br />
out” (LIFO) accounting method.<br />
Today in the 110th Congress, “defense”<br />
is the watchword. Organized labor has<br />
seen its legislative wish list stalled<br />
through 12 years <strong>of</strong> GOP-controlled<br />
Congresses, and AFL-CIO-driven issues<br />
now top the agenda <strong>of</strong> the new Democrat<br />
majority that organized labor helped<br />
elect. The main prize is enactment <strong>of</strong><br />
“card check” legislation to abolish<br />
secret ballot elections in union organizing<br />
efforts. Several battles to “hold the line”<br />
can be expected on the tax policy front.<br />
LIFO is clearly in jeopardy as are the<br />
pro-growth tax cuts enacted in 2001<br />
and 2003. Chairman <strong>of</strong> the House’s<br />
tax-writing committee Rep. Charlie<br />
Rangel (D-NY-15) has publicly suggested<br />
that all are on the chopping block.<br />
During the reception preceding the <strong>Wholesaler</strong>-Distributor Political<br />
Action Committee Dinner, Robert Taylor, President/CEO <strong>of</strong> Do it Best<br />
Corp. (left), greeted Sen. Tom Coburn (R-OK) (right) and Rep. Mark<br />
Souder (R-IN-03).<br />
Robert A. Reynolds, Jr., Chairman/President/CEO <strong>of</strong> Graybar<br />
Electric Co. (left), enjoyed a conversation with Sen. Norm<br />
Coleman (R-MN) and former Sen. Jim Talent (R-MO).<br />
8 naw
“For more than 25 years,<br />
belonging to NAW is part<br />
<strong>of</strong> Carlson Systems’ risk<br />
management program<br />
regarding federal government<br />
legislation, regulations, and<br />
taxation that impact our<br />
business.”<br />
Don Carlson, Chairman<br />
Carlson Systems<br />
Political Action: Working to<br />
Elect Pro-Business Leaders<br />
Pro-business legislative victories, whether<br />
<strong>of</strong> an “<strong>of</strong>fensive” or “defensive” nature,<br />
depend on having women and men<br />
in the U.S. Senate and House <strong>of</strong><br />
Representatives who will cast probusiness<br />
votes, and on having a<br />
President who will lead on business<br />
issues. NAW’s <strong>Wholesaler</strong>-Distributor<br />
Political Action Committee (WDPAC)<br />
engages the political process and<br />
provides executives throughout the<br />
wholesale distribution industry with an<br />
important avenue for political action on<br />
behalf <strong>of</strong> business-friendly candidates<br />
for federal <strong>of</strong>fice.<br />
WDPAC maintains both a Political Action Fund (PAF) and a Corporate Political<br />
Education Fund (CPEF). The corporate contributions that CPEF receives enable<br />
WDPAC to contribute to federal candidates every “hard dollar” <strong>of</strong> personal<br />
money that PAF raises.<br />
PAF fund-raising was successful in the 2006 election cycle. In addition, three<br />
other major initiatives were undertaken in 2005 and continued through the<br />
2006 election year: the formation and operation <strong>of</strong> Team Allen (on behalf <strong>of</strong> the<br />
re-election <strong>of</strong> Virginia Senator George Allen), Team McGavick (to promote the<br />
election to the U.S. Senate <strong>of</strong> Washington State’s Mike McGavick), and Team<br />
Talent (on behalf <strong>of</strong> the re-election <strong>of</strong> Missouri Senator Jim Talent). Together,<br />
these three Teams raised $3 million, an amount that has gotten the attention<br />
<strong>of</strong> Washington, DC’s political community. Unfortunately, not every story has a<br />
happy ending. Despite the stellar successes <strong>of</strong> the Teams’ initiatives, none <strong>of</strong><br />
the three candidates were successful on Election Day.<br />
And despite the victories <strong>of</strong> the majority <strong>of</strong> WDPAC-endorsed candidates for<br />
the Senate and House <strong>of</strong> Representatives, pro-business Republican majorities<br />
in both Houses <strong>of</strong> Congress were swept out <strong>of</strong> power, the apparent victims <strong>of</strong><br />
an unpopular war in Iraq, ethical lapses on Capitol Hill, and a strong economic<br />
recovery, the benefits <strong>of</strong> which are yet to be adequately realized by middle- and<br />
lower-income workers and their families.<br />
WDPAC prepares for the 2008 election cycle in which races for the Presidency,<br />
33 seats in the Senate (22 Republican and 11 Democrat), and all 435 seats in<br />
the House <strong>of</strong> Representatives will be run. WDPAC’s goal remains unchanged:<br />
the elections <strong>of</strong> a President and a Congress that promote and enact pro-business<br />
legislative and regulatory policies.<br />
“A leader among the business lobbyists [is]...the <strong>National</strong><br />
<strong>Association</strong> <strong>of</strong> <strong>Wholesaler</strong>-<strong>Distributors</strong>.”<br />
The Wall Street Journal<br />
Rep. John Boehner (R-OH-08), Minority Leader <strong>of</strong> the House<br />
<strong>of</strong> Representatives, thanked supporters at the <strong>Wholesaler</strong>-<br />
Distributor Political Action Committee Dinner and shared his<br />
insights on the 2006 elections and what the Republicans need<br />
to do to regain their majority in the 2008 elections. More than<br />
20 Members <strong>of</strong> Congress attended the event.<br />
NAW President Dirk Van Dongen presented NAW’s 2007 Distinguished<br />
Leadership Award to former Sen. Jim Talent (R-MO) at the NAW<br />
Leadership Luncheon.<br />
2006 annual report 9
NAW Networks You With...<br />
There are many ways in which NAW performs the networking function without<br />
putting you face-to-face with other industry executives. Only NAW regularly<br />
connects you with the finest industry intelligence so you can benefit from the<br />
best thinking about wholesale distribution.<br />
NAW Institute for Distribution Excellence<br />
At NAW’s 2007 Executive Summit, we announced the<br />
rebranding <strong>of</strong> the Distribution Research and Education<br />
Foundation (DREF) to the NAW Institute for Distribution<br />
Excellence. Our goal in establishing the NAW Institute is<br />
to provide a comprehensive and cohesive unit <strong>of</strong> research<br />
and strategic knowledge for wholesaler-distributors that<br />
no other organization can replicate across all lines <strong>of</strong> trade.<br />
While the name and some <strong>of</strong> the activities have changed,<br />
the mission remains the same:<br />
“To sponsor and disseminate research into strategic management issues<br />
affecting the wholesale distribution industry. The NAW Institute for<br />
Distribution Excellence aims to help merchant wholesaler-distributors<br />
remain the most effective and efficient channel in distribution.”<br />
NAW members tell us repeatedly that our studies stand out as leading sources<br />
<strong>of</strong> insightful, practical, and cutting-edge guidance. The core strength <strong>of</strong> the<br />
NAW Publishing Program is that our resources deliver the critical information<br />
wholesale distribution executives need to be successful and to grow their<br />
businesses.<br />
The NAW Institute is aggressive in producing new books and multimedia<br />
products that can improve your company’s pr<strong>of</strong>itability. Visit www.nawpubs.org<br />
for frequent updates.<br />
The NAW Institute<br />
Fellows Program was<br />
established in 2001.<br />
It is intended to<br />
recognize outstanding<br />
individuals from<br />
the academic and<br />
consulting communities<br />
who do excellent work<br />
to expand the body<br />
<strong>of</strong> knowledge about<br />
the wholesale<br />
distribution industry.<br />
When it comes to<br />
research and authoring<br />
practical reports that<br />
can assist distribution<br />
companies to be more<br />
pr<strong>of</strong>itable, these Fellows<br />
are our crown jewels.<br />
NAW Institute for Distribution Excellence Fellows (from left):<br />
J. Michael Marks <strong>of</strong> Indian River Consulting Group; Adam<br />
J. Fein, Ph.D. <strong>of</strong> Pembroke Consulting, Inc.; Neil Gholson<br />
<strong>of</strong> Deloitte Consulting LLP; and Brent R. Grover <strong>of</strong> Evergreen<br />
Consulting, LLC.<br />
Facing the Forces <strong>of</strong> Change ® :<br />
Lead the Way in the Supply Chain<br />
Adam J. Fein, Ph.D.<br />
The first title to be<br />
published under<br />
the NAW Institute<br />
for Distribution<br />
Excellence in 2007 is<br />
the eighth edition <strong>of</strong><br />
the flagship industry<br />
report Facing the<br />
Forces <strong>of</strong> Change ® :<br />
Lead the Way in the<br />
Supply Chain. This report examines four<br />
key business-to-business trends: private<br />
label brands, demand-driven channels,<br />
new distribution pr<strong>of</strong>it models, and<br />
Internet trends for business customers.<br />
It also features never-before-published<br />
data on industry segmentation, emerging<br />
trends affecting the supply chain, sales<br />
management, supply chain technology<br />
forecasts, and much more. This study<br />
draws upon a broad set <strong>of</strong> data, including<br />
in-depth interviews with senior distribution<br />
executives, manufacturers, customers,<br />
analysts, pr<strong>of</strong>essors, and association<br />
executives. It also includes survey data<br />
on nearly 1,300 wholesale distribution<br />
and manufacturing companies.<br />
Here is a brief overview <strong>of</strong> the titles<br />
released in 2006:<br />
2006 Employee Compensation Report<br />
Every two years, NAW<br />
conducts a unique<br />
executive compensation<br />
survey that focuses on<br />
the largest wholesalerdistributors<br />
in the<br />
industry. This<br />
downloadable report,<br />
which focuses on data<br />
from 2,080 wholesaler-distributors from<br />
across all lines <strong>of</strong> trade, shows you how<br />
your company’s compensation program<br />
compares with those <strong>of</strong> other distribution<br />
companies. As part <strong>of</strong> this report,<br />
participants receive a customized<br />
report with their company’s data and<br />
comparisons to other firms.<br />
10 naw
...Industry Intelligence<br />
Working at Cross-Purposes: How<br />
<strong>Distributors</strong> and Manufacturers Can<br />
Manage Conflict Successfully<br />
Mike Marks, Tim Horan, and Mike Emerson<br />
This book takes a look<br />
at what really drives<br />
distributor-supplier<br />
relationships, how <strong>of</strong>ten<br />
they go bad, and why.<br />
It can help both<br />
distributors and their<br />
suppliers avoid the<br />
economic and other<br />
consequences <strong>of</strong> a core relationship<br />
turning sour by looking for ways to<br />
correct emerging problems before they<br />
become critical.<br />
“Finally, there is a roadmap<br />
for managing the relationship<br />
that honestly looks at the<br />
differing roles <strong>of</strong> distributors<br />
and suppliers.”<br />
Robert Dill, President<br />
Hisco, Inc.<br />
Price for Success: An Online Course for<br />
the Wholesale Distribution Sales Team<br />
In less than two hours, your employees<br />
will know pricing strategies that deliver<br />
pr<strong>of</strong>it, put a price on valued services,<br />
and have the confidence to talk price<br />
with your<br />
customers.<br />
Even if you<br />
use pricing<br />
pr<strong>of</strong>iles, your<br />
employees<br />
still need to<br />
understand<br />
the value you create with products,<br />
inventory, service, and delivery.<br />
2006 Wholesale Distribution Economic Reports<br />
Adam J. Fein, Ph.D.<br />
Each <strong>of</strong> these 18 innovative reports includes economic<br />
analyses <strong>of</strong> one <strong>of</strong> the 18 major wholesale distribution sectors<br />
within the $3.9 trillion industry, as well as the author’s expert<br />
commentary to help you interpret the sector data in light <strong>of</strong><br />
current macroeconomic trends. These reports supply a wealth<br />
<strong>of</strong> detailed channel benchmarking data, including revenue and<br />
employment growth trends, the number and size distribution <strong>of</strong> companies,<br />
gross margins, wages, and many other operating statistics.<br />
Smart Investments: Developing Top Performers<br />
in Wholesale Distribution<br />
Susan Levering, Ph.D.<br />
This book addresses the long-ignored aspect <strong>of</strong> the wholesale<br />
distribution industry—Training and Development. Winning<br />
companies approach s<strong>of</strong>t, people-oriented issues as they<br />
would any other business issue: They leverage training to<br />
achieve bottom-line business results. This book identifies<br />
five strategies successful wholesaler-distributors use and shows you how to<br />
incorporate them into your planning process and make your company more<br />
competitive in the marketplace.<br />
“This book showed me that I was investing my company<br />
training dollars wisely and that I am able to engage all <strong>of</strong><br />
my employees to move forward with a common vision.<br />
It is one <strong>of</strong> the few training and development books with<br />
a focus on the wholesale distribution industry.”<br />
Bobby Cohen, CEO<br />
Daycon Products Co., Inc.<br />
Driving Growth and Shareholder Value: The Distribution<br />
Value Map<br />
Neil Gholson and Mark Schloegel<br />
Known as DVM, this breakthrough tool—consisting <strong>of</strong> a<br />
book and two poster-size wall maps—touches every part<br />
<strong>of</strong> a wholesaler-distributor’s business and can help chart<br />
a path to higher operational efficiency and overall<br />
pr<strong>of</strong>itability. No matter what your line <strong>of</strong> trade, DVM<br />
will help you debate ideas and priorities for your<br />
organization, refine your strategy, and plan and execute<br />
your tactical performance improvement efforts.<br />
Looking Ahead<br />
In addition to the all-new Facing the Forces <strong>of</strong> Change ® book, here are some <strong>of</strong> the topics planned for publication in 2007:<br />
• 2007 Wholesale Distribution Economic Reports • 5 Fundamentals for Distributor Sales Management<br />
• Improving Distributor Pr<strong>of</strong>itability • Financial Management for All Levels <strong>of</strong> Wholesale Distribution<br />
• Lean Distributing<br />
2006 annual report 11
Industry Intelligence (continued)<br />
NAW SmartBrief<br />
NAW SmartBrief is the wholesale distribution<br />
industry’s free e-newsletter that close to 50,000<br />
executives depend on daily for the latest industry<br />
information. NAW SmartBrief conveniently delivers<br />
in an easily to navigate format, the most recent<br />
industry headlines, summaries, and links to<br />
original news stories to subscribers by e-mail<br />
four times a week. Sections cover distribution<br />
news and trends, best practices, the small<br />
business manager, sales, hot topics, executive<br />
life, industry job listings, weekly surveys, a blog,<br />
and a free research tool to look up information<br />
about specific companies. Ask NAW ®<br />
Using this robust desktop resource, NAW direct members can get<br />
answers to their unique questions or glean feedback about issues<br />
that affect their mission-critical projects. Questions can be directed<br />
toward specific types <strong>of</strong> firms. NAW keeps all user information<br />
strictly confidential. As more and more wholesaler-distributors use<br />
Ask NAW ® , it is becoming one <strong>of</strong> their most valuable “need to know”<br />
tools for getting comparison data and real-time information beyond<br />
their traditional lines <strong>of</strong> trade.<br />
Here is a cross section <strong>of</strong> the types <strong>of</strong> questions posed by networkers<br />
on Ask NAW ® :<br />
“NAW SmartBrief saves me<br />
countless hours that I would<br />
otherwise spend in reviewing<br />
specific published articles<br />
related to our industry. With NAW<br />
SmartBrief, I can review this<br />
information in a matter <strong>of</strong> minutes.”<br />
Chip Hornsby, Group Chief Executive<br />
Wolseley PLC<br />
12 naw<br />
• Does anyone have a recommendation for an accounts payable<br />
audit/pr<strong>of</strong>it retrieval firm that has a particular understanding <strong>of</strong><br />
the distribution sector<br />
• Do you use mandatory arbitration agreements with your non-union<br />
employees for employment-related disputes If not, are you<br />
contemplating implementing an Alternative Dispute Resolution<br />
policy<br />
• I am considering an outside consulting firm or purchasing a<br />
package designed to help develop job classifications and salary<br />
structure. Any recommendations<br />
• What percentage <strong>of</strong><br />
your expense budget<br />
is dedicated to<br />
fostering new business<br />
development activities<br />
• What criteria are used<br />
for commission programs<br />
for outside sales<br />
personnel<br />
• How are commissions<br />
calculated<br />
“Ask NAW provided me<br />
with feedback that would<br />
have taken many phone<br />
calls and much time to<br />
gather on my own. I<br />
believe your membership<br />
will find great value in<br />
using this benefit. Thank<br />
you for providing it.”<br />
Brad Thrall, President/CEO (retired)<br />
Border States Electric Supply
NAW Networks You With...<br />
Business Products and Services Programs<br />
NAW Service Corporation<br />
NAW networking also means connecting<br />
you with programs that reduce your<br />
operating costs. The NAW Service<br />
Corporation leverages the collective<br />
purchasing power <strong>of</strong> firms across the<br />
entire wholesale distribution industry<br />
to find and <strong>of</strong>fer high-quality business<br />
programs designed to meet the specific<br />
needs <strong>of</strong> wholesaler-distributors at very<br />
favorable prices. To learn more, visit<br />
www.naw.org.<br />
Other NAW Business<br />
Partnerships<br />
Freight and Air Shipping<br />
NAW members can save on all types <strong>of</strong><br />
shipping services—small packages and<br />
documents—heavy North American<br />
freight—international air freight services<br />
—with the leading carriers in the<br />
industry.<br />
Rental Cars<br />
HERTZ.<br />
The NAW/Hertz<br />
Business<br />
Account Program enables enrolled<br />
member companies to receive special,<br />
low negotiated rates and a one-year<br />
complimentary Hertz #1 Club Gold ®<br />
membership for all employees who<br />
travel. In addition, individual company<br />
rental activity is tracked and companies<br />
earn one Free Rental Day Certificate for<br />
every 15 days <strong>of</strong> qualifying rentals.<br />
Property and Casualty Insurance<br />
THE HARTFORD.<br />
NAW’s strategic partnership with<br />
The Hartford Insurance Company<br />
provides wholesalerdistributors<br />
with<br />
access to superior<br />
business insurance<br />
coverage and<br />
service. To ensure<br />
that the independent<br />
agents servicing our companies have a<br />
heightened understanding <strong>of</strong> the needs<br />
<strong>of</strong> wholesaler-distributors, The Hartford<br />
has joined NAW in developing and<br />
training a special alliance <strong>of</strong> network<br />
agents.<br />
Bank Card Processing<br />
SOLVERAS. NAW teamed<br />
up with Solveras Payment Systems to<br />
provide<br />
wholesalerdistributors<br />
with the<br />
latest credit<br />
card processing technology, negotiated<br />
group discounts, and a full range <strong>of</strong><br />
processing options, including a<br />
secure virtual terminal that allows<br />
wholesaler-distributors to manage<br />
transactions from any Internet access.<br />
Health Care Insurance<br />
FLEXIBLE BENEFIT SERVICE<br />
CORPORATION (FBSC) provides<br />
a health care<br />
program that<br />
enables our<br />
industry’s<br />
employers and<br />
their employees to save on their<br />
premiums through innovative, taxadvantaged<br />
alternatives to financing<br />
medical insurance, such as a Health<br />
Reimbursement Arrangement (HRA)<br />
or a Health Savings Account (HSA).<br />
2006 annual report 13
NAW International and <strong>National</strong> <strong>Association</strong> Membership<br />
Marc Fortin, President <strong>of</strong> the <strong>National</strong> Convenience Store <strong>Distributors</strong><br />
<strong>Association</strong> (Canada), and John Buckley, Executive Vice President <strong>of</strong><br />
the Industrial Supply <strong>Association</strong>, discussed issues <strong>of</strong> mutual interest<br />
with others at their discussion roundtable during an NAW <strong>Association</strong><br />
Executives Council meeting.<br />
American Machine Tool <strong>Distributors</strong>’ <strong>Association</strong> ................AMTDA<br />
American Nursery & Landscape <strong>Association</strong>.......................ANLA<br />
American Supply <strong>Association</strong> .............................................ASA<br />
American Veterinary <strong>Distributors</strong> <strong>Association</strong> ......................AVDA<br />
American Wholesale Marketers <strong>Association</strong> ........................AWMA<br />
Appliance Parts <strong>Distributors</strong> <strong>Association</strong>, Inc. .....................APDA<br />
Associated Equipment <strong>Distributors</strong>.....................................AED<br />
<strong>Association</strong> for High Technology Distribution ......................AHTD<br />
<strong>Association</strong> for Hose & Accessories Distribution..................NAHAD<br />
<strong>Association</strong> <strong>of</strong> Millwork <strong>Distributors</strong> ....................................AMD<br />
<strong>Association</strong> <strong>of</strong> Pool & Spa Pr<strong>of</strong>essionals (The) ....................APSP<br />
<strong>Association</strong> <strong>of</strong> Woodworking & Furnishings Suppliers..........AWFS<br />
Aviation <strong>Distributors</strong> & Manufacturers <strong>Association</strong> ..............ADMA<br />
Bearing Specialists <strong>Association</strong> ..........................................BSA<br />
Bicycle Product Suppliers <strong>Association</strong>................................BPSA<br />
Ceramic Tile <strong>Distributors</strong> <strong>Association</strong> ..................................CTDA<br />
Cleaning Equipment Trade <strong>Association</strong>...............................CETA<br />
Commercial Vehicle Solutions Network...............................CVSN<br />
Copper & Brass Servicenter <strong>Association</strong> .............................CBSA<br />
Door & Hardware Institute..................................................DHI<br />
Electrical Apparatus Service <strong>Association</strong>, Inc. .....................EASA<br />
FEWA – Marketing & Distribution <strong>Association</strong> .....................FEWA<br />
Fluid Power <strong>Distributors</strong> <strong>Association</strong>, Inc............................FPDA<br />
Food Industry Suppliers <strong>Association</strong>...................................FISA<br />
Foodservice Equipment <strong>Distributors</strong> <strong>Association</strong> .................FEDA<br />
Gases and Welding <strong>Distributors</strong> <strong>Association</strong>........................GAWDA<br />
General Merchandise <strong>Distributors</strong> Council ..........................GMDC<br />
Health Industry <strong>Distributors</strong> <strong>Association</strong> .............................HIDA<br />
Healthcare Distribution Management <strong>Association</strong> ...............HDMA<br />
Heating, Airconditioning & Refrigeration <strong>Distributors</strong><br />
International ....................................................................HARDI<br />
Independent Distributor <strong>Association</strong>...................................IDA<br />
Independent Sealing <strong>Distributors</strong>........................................ISD<br />
Industrial Compressor Distributor <strong>Association</strong> .....................ICDA<br />
Industrial Supply <strong>Association</strong>..............................................ISA<br />
International <strong>Association</strong> <strong>of</strong> Plastics <strong>Distributors</strong> .................IAPD<br />
International Foodservice <strong>Distributors</strong> <strong>Association</strong>...............IFDA<br />
International Sanitary Supply <strong>Association</strong>............................ISSA<br />
International Truck Parts <strong>Association</strong>..................................ITPA<br />
Irrigation <strong>Association</strong> (The).................................................IA<br />
Lawn & Garden Marketing & Distribution <strong>Association</strong>..........LGMDA<br />
Machinery Dealers <strong>National</strong> <strong>Association</strong> .............................MDNA<br />
Material Handling Equipment <strong>Distributors</strong> <strong>Association</strong> ........MHEDA<br />
Metals Service Center Institute ...........................................MSCI<br />
Motorcycle Industry Council...............................................MIC<br />
Music <strong>Distributors</strong> <strong>Association</strong>............................................MDA<br />
<strong>National</strong> <strong>Association</strong> <strong>of</strong> Chemical <strong>Distributors</strong> .....................NACD<br />
<strong>National</strong> <strong>Association</strong> <strong>of</strong> Electrical <strong>Distributors</strong>......................NAED<br />
<strong>National</strong> <strong>Association</strong> <strong>of</strong> Flour <strong>Distributors</strong>, Inc.....................NAFD<br />
<strong>National</strong> <strong>Association</strong> <strong>of</strong> Sign Supply <strong>Distributors</strong> .................NASSD<br />
<strong>National</strong> <strong>Association</strong> <strong>of</strong> Sporting Goods <strong>Wholesaler</strong>s ...........NASGW<br />
<strong>National</strong> <strong>Association</strong> <strong>of</strong> Uniform Manufacturers &<br />
<strong>Distributors</strong>......................................................................NAUMD<br />
<strong>National</strong> Beer <strong>Wholesaler</strong>s <strong>Association</strong> ...............................NBWA<br />
<strong>National</strong> Fastener <strong>Distributors</strong> <strong>Association</strong>..........................NFDA<br />
<strong>National</strong> Grocers <strong>Association</strong>..............................................NGA<br />
<strong>National</strong> Insulation <strong>Association</strong>...........................................NIA<br />
<strong>National</strong> Kitchen & Bath <strong>Association</strong> ..................................NKBA<br />
<strong>National</strong> Marine <strong>Distributors</strong> <strong>Association</strong>.............................NMDA<br />
<strong>National</strong> Paper Trade <strong>Association</strong>, Inc. ...............................NPTA<br />
<strong>National</strong> School Supply & Equipment <strong>Association</strong>...............NSSEA<br />
<strong>National</strong> Wood Flooring <strong>Association</strong>....................................NWFA<br />
North American <strong>Association</strong> <strong>of</strong> Floor Covering<br />
<strong>Distributors</strong>......................................................................NAFCD<br />
North American <strong>Association</strong> <strong>of</strong> Utility <strong>Distributors</strong> ...............NAAUD<br />
North American Building Material Distribution<br />
<strong>Association</strong> ......................................................................NBMDA<br />
North American Horticultural Supply <strong>Association</strong>................NAHSA<br />
North American Meat Processors <strong>Association</strong>.....................NAMP<br />
North American Wholesale Lumber <strong>Association</strong>, Inc. ..........NAWLA<br />
NPES The <strong>Association</strong> for Suppliers <strong>of</strong> Printing,<br />
Publishing & Converting Technologies ..............................NPES<br />
Office Products <strong>Wholesaler</strong>s <strong>Association</strong>.............................OPWA<br />
Optical Laboratories <strong>Association</strong>.........................................OLA<br />
Outdoor Power Equipment Aftermarket <strong>Association</strong> ............OPEAA<br />
Outdoor Power Equipment & Engine Service<br />
<strong>Association</strong> Inc. ...............................................................OPEESA<br />
Pet Industry <strong>Distributors</strong> <strong>Association</strong> ..................................PIDA<br />
Petroleum Equipment Institute...........................................PEI<br />
Post Card & Souvenir <strong>Distributors</strong> <strong>Association</strong> ....................PCSDA<br />
Power Transmission <strong>Distributors</strong> <strong>Association</strong>, Inc................PTDA<br />
Pr<strong>of</strong>essional Beauty <strong>Association</strong> .........................................PBA<br />
Recreational Vehicle Aftermarket <strong>Association</strong> .....................RVAA<br />
Safety Equipment <strong>Distributors</strong> <strong>Association</strong>, Inc. ..................SEDA<br />
Security Hardware <strong>Distributors</strong> <strong>Association</strong>.........................SHDA<br />
Textile Care Allied Trades <strong>Association</strong> .................................TCATA<br />
United Products Formulators & <strong>Distributors</strong><br />
<strong>Association</strong> ......................................................................UPFDA<br />
Water and Sewer <strong>Distributors</strong> <strong>of</strong> America............................WASDA<br />
Wholesale Florist & Florist Supplier <strong>Association</strong> ..................WF&FSA<br />
Wine & Spirits <strong>Wholesaler</strong>s <strong>of</strong> America. Inc.........................WSWA<br />
Woodworking Machinery Industry <strong>Association</strong> ....................WMIA<br />
14 naw
NAW Regional, State, and Local <strong>Association</strong> Membership<br />
Associated Beer <strong>Distributors</strong> <strong>of</strong> Illinois ................................ABDI<br />
<strong>Association</strong> <strong>of</strong> Ingersoll-Rand <strong>Distributors</strong> ..........................AIRD<br />
<strong>Association</strong> <strong>of</strong> Service & Computer Dealers<br />
International ....................................................................ASCD<br />
Beer Industry League <strong>of</strong> Louisiana......................................BILL<br />
California Beer & Beverage <strong>Distributors</strong> ..............................CBBD<br />
Canadian <strong>Association</strong> for Pharmacy Distribution<br />
Management ..................................................................CAPDM<br />
Canadian Institute <strong>of</strong> Plumbing & Heating ..........................CIPH<br />
Electro-Federation Canada, Inc. ........................................EFC<br />
Greater North Dakota Chamber <strong>of</strong> Commerce ....................NDCC<br />
Los Angeles Fastener <strong>Association</strong> ......................................LAFA<br />
Maryland <strong>Association</strong> <strong>of</strong> <strong>Wholesaler</strong>-<br />
<strong>Distributors</strong>, Inc. ..............................................................MAW<br />
Michigan <strong>Distributors</strong> & Vendors <strong>Association</strong> ......................MDVA<br />
Midwest <strong>Distributors</strong> <strong>Association</strong> ........................................MDA<br />
Mississippi Malt Beverage <strong>Association</strong>................................MMBA<br />
<strong>National</strong> Convenience Store <strong>Distributors</strong><br />
<strong>Association</strong> ......................................................................NACDA<br />
New York State Beer <strong>Wholesaler</strong>s<br />
<strong>Association</strong> ......................................................................NYSBW<br />
North-American <strong>Association</strong> <strong>of</strong><br />
Telecommunications Dealers............................................NATD<br />
North Central <strong>Wholesaler</strong>s <strong>Association</strong>................................NCWA<br />
Ohio <strong>Association</strong> <strong>of</strong> <strong>Wholesaler</strong>-<strong>Distributors</strong> ........................OAWD<br />
Pacific Southwest <strong>Distributors</strong> <strong>Association</strong>..........................PSDA<br />
Southern <strong>Wholesaler</strong>s <strong>Association</strong> ......................................SWA<br />
Western <strong>Association</strong> <strong>of</strong> Fastener <strong>Distributors</strong> ......................WAFD<br />
Western Suppliers <strong>Association</strong>............................................WSA<br />
Wholesale Beer <strong>Distributors</strong> <strong>of</strong> Texas ..................................WBDT<br />
Wholesale Beer & Wine <strong>Association</strong> <strong>of</strong> Ohio........................WBWAO<br />
<strong>Wholesaler</strong>s <strong>Association</strong> <strong>of</strong> the Northeast............................WANE<br />
Don Frendberg, Executive Vice President/COO <strong>of</strong> Heating,<br />
Airconditioning & Refrigeration <strong>Distributors</strong> International, shared<br />
association experiences with Ralph Suppa, President <strong>of</strong> the<br />
Canadian Institute <strong>of</strong> Plumbing & Heating, at the January 2007<br />
<strong>Association</strong> Executives Council meeting in Washington, DC.<br />
Treasurer’s Report December 1, 2005 – November 30, 2006<br />
Revenue<br />
Total: $6,783,000<br />
NAW: $5,204,000 Includes dues, publications, seminars, annual meeting, and coalitions<br />
NAW/SC: $1,133,000 Includes insurance, car rental, long-distance telephone, overnight delivery,<br />
credit management, market research, and other programs<br />
WDPAC: $281,000 Includes Political Action Fund, Corporate Political Education Fund<br />
NAW Institute for<br />
Distribution Excellence: $165,000 Includes contributions, publications royalties<br />
Expenses<br />
Total: $6,783,000<br />
NAW: $4,513,000 Includes publications, seminars, annual meeting, operations, provision for<br />
reserves and government relations<br />
NAW/SC: $1,768,000 Includes insurance, car rental, long-distance telephone, overnight delivery,<br />
credit management, market research and other programs, operations<br />
and provision for taxes<br />
WDPAC: $304,000 Includes candidate contributions, operations<br />
NAW Institute for<br />
Distribution Excellence: $198,000 Includes project grants, operations<br />
William A. Parsley, 2006 NAW Treasurer<br />
2006 annual report 15
Leadership<br />
2007 NAW<br />
Board <strong>of</strong> Directors<br />
Chairman <strong>of</strong> the Board<br />
Raymon A. York<br />
Ewing Irrigation Products<br />
Chairman-Elect<br />
C.S. “Chip” Hornsby<br />
Wolseley PLC<br />
First Vice Chairman<br />
Randy Lindberg<br />
United Natural Foods, Inc.<br />
Second Vice Chairman<br />
Robert N. Taylor<br />
Do it Best Corp.<br />
Immediate Past Chairman<br />
Robert A. Reynolds, Jr.<br />
Graybar Electric Company, Inc.<br />
Secretary<br />
Dennis G. Hatchell<br />
Alex Lee Inc.<br />
Chairman, Subcommittee on Budget<br />
and Finance, and Treasurer<br />
Sydney “Tucker” Jones III<br />
Hudson Valley Paper Company<br />
Chairman <strong>of</strong> the AEC<br />
G. A. Taylor Fernley<br />
Fernley & Fernley/Gases and Welding<br />
<strong>Distributors</strong> <strong>Association</strong><br />
Chairman-Elect <strong>of</strong> the AEC<br />
Robert Renkes<br />
Petroleum Equipment Institute<br />
Past Chairman <strong>of</strong> the AEC<br />
Donald L. Frendberg<br />
Heating, Airconditioning & Refrigeration<br />
<strong>Distributors</strong> International<br />
2007 <strong>Wholesaler</strong>-Distributor Political Action Committee<br />
Board <strong>of</strong> Directors and Officers<br />
Chairman <strong>of</strong> the Board<br />
James K. Risk III<br />
Kirby Risk Corporation<br />
Secretary and Executive Director<br />
Jade West<br />
<strong>National</strong> <strong>Association</strong> <strong>of</strong><br />
<strong>Wholesaler</strong>-<strong>Distributors</strong><br />
Treasurer<br />
Dirk Van Dongen<br />
<strong>National</strong> <strong>Association</strong> <strong>of</strong><br />
<strong>Wholesaler</strong>-<strong>Distributors</strong><br />
Don Carlson<br />
Carlson Holdings Inc.<br />
Andre Lacy<br />
LDI, Ltd.<br />
William A. Parsley<br />
Carswell Distributing Company<br />
W. Grady Rosier<br />
McLane Company Inc.<br />
Raymon A. York<br />
Ewing Irrigation Products<br />
2007 NAW Institute for Distribution Excellence<br />
Board <strong>of</strong> Directors and Officers<br />
Chairman <strong>of</strong> the Board<br />
Byron Potter<br />
Dallas Wholesale Builders Supply Inc.<br />
Vice Chair<br />
Donald L. Frendberg<br />
Heating, Airconditioning & Refrigeration<br />
<strong>Distributors</strong> International<br />
Mark Allen<br />
International Foodservice <strong>Distributors</strong><br />
<strong>Association</strong><br />
Andrew Berlin<br />
Berlin Packaging<br />
Dan Blaylock<br />
Adams-Burch Inc.<br />
Charles Cohen<br />
Benco Dental Co.<br />
John Garfinkel<br />
International Sanitary Supply <strong>Association</strong><br />
David Griffith<br />
Modern Group Ltd.<br />
Deborah Hamlin<br />
Irrigation <strong>Association</strong><br />
Tim Holt<br />
<strong>National</strong> School Supply & Equipment<br />
<strong>Association</strong><br />
Julia Klein<br />
C. H. Briggs Company<br />
Mark Kramer<br />
Laird Plastics, Inc.<br />
Andre Lacy<br />
LDI Ltd.<br />
Richard McCarten<br />
Electro-Federation Canada Inc.<br />
William A. Parsley<br />
Carswell Distributing Company<br />
Bob Roberts<br />
Roberts Oxygen Company, Inc.<br />
* * *<br />
Secretary<br />
George Keeley<br />
Keeley, Kuenn & Reid<br />
Executive Director<br />
Ron Schreibman<br />
<strong>National</strong> <strong>Association</strong> <strong>of</strong><br />
<strong>Wholesaler</strong>-<strong>Distributors</strong><br />
President and Treasurer<br />
Dirk Van Dongen<br />
<strong>National</strong> <strong>Association</strong> <strong>of</strong><br />
<strong>Wholesaler</strong>-<strong>Distributors</strong><br />
16 naw
NAW Staff<br />
Jim Anderson<br />
Vice President–<br />
Government Relations, NAW<br />
Political Director, WDPAC<br />
janderson@nawd.org<br />
Sasha Beckford<br />
Receptionist, NAW<br />
sbeckford@nawd.org<br />
Beth Rivera Cruz<br />
Vice President/Controller, NAW<br />
bcruz@nawd.org<br />
Carl Farr<br />
Senior Vice President–<br />
Corporate Relations, NAW<br />
cfarr@nawd.org<br />
Kimberly Gaskins<br />
Computer Operations Assistant, NAW<br />
kgaskins@nawd.org<br />
Joy Goldman<br />
Director–Administration, NAW<br />
Manager–Internal Operations, WDPAC<br />
jgoldman@nawd.org<br />
Susan Hodge<br />
Manager–Computer Operations,<br />
NAWSC<br />
shodge@nawd.org<br />
Edward Joynes<br />
Chief Information Officer, NAWSC<br />
ejoynes@nawd.org<br />
David Mikulka<br />
Manager–Mailroom Operations/<br />
Printing Services, NAW<br />
dmikulka@nawd.org<br />
Dana Neill<br />
Director–Member Services, NAW<br />
dneill@nawd.org<br />
Thuy Nguyen<br />
Senior Accountant, NAW<br />
tnguyen@nawd.org<br />
Wendy Pasley<br />
Office Assistant, NAW<br />
wpasley@nawd.org<br />
John Peter<br />
Vice President–<br />
Corporate Relations, NAW<br />
jpeter@nawd.org<br />
Ron Schreibman<br />
Senior Vice President–<br />
Strategic Direction, NAW<br />
Executive Director, NAW Institute<br />
for Distribution Excellence<br />
rschreibman@nawd.org<br />
Ruth Stadius<br />
Director–Communications, NAW<br />
rstadius@nawd.org<br />
Mary Ann Thompson<br />
Senior Accountant, NAW<br />
mthompson@nawd.org<br />
Jeremy Tunnell<br />
Director–Web Operations, NAW<br />
jtunnell@nawd.org<br />
George Valiga<br />
Vice President/General Manager,<br />
NAWSC<br />
gvaliga@nawd.org<br />
Dirk Van Dongen<br />
President, NAW<br />
President/Treasurer, NAW Institute<br />
for Distribution Excellence<br />
President, NAWSC<br />
Treasurer, WDPAC<br />
dvandongen@nawd.org<br />
Vicky Walsh<br />
Manager–Communications<br />
Administration, NAW<br />
vwalsh@nawd.org<br />
Jade West<br />
Senior Vice President–<br />
Government Relations, NAW<br />
Executive Director, WDPAC<br />
jwest@nawd.org<br />
1725 K Street, NW<br />
3rd Floor<br />
Washington, DC 20006<br />
Tel: 202-872-0885<br />
Fax: 202-785-0586<br />
E-mail: naw@nawd.org<br />
Web: www.naw.org
1725 K Street, NW<br />
3rd Floor<br />
Washington, DC 20006<br />
RETURN SERVICE REQUESTED<br />
Tel: 202-872-0885<br />
Fax: 202-785-0586<br />
E-mail: naw@nawd.org<br />
Web: www.naw.org<br />
“Bell Microproducts and our key management staff have<br />
benefited greatly from our NAW membership. We have used<br />
the available tools and reports to great value in the running<br />
<strong>of</strong> our business. The NAW representation on important<br />
Washington issues has proven effective for our industry.”<br />
Don Bell, President/CEO<br />
Bell Microproducts