It's clear from the Distribution Report in this issue that the role of America's inventory specialists continues to grow. Sixty-eight percent of purchasing pros we surveyed are buying more maintenance and operating supplies from distributors while only 19% are buying less. In addition, I find it fascinating that 43% are buying more production goods from distributors. I'm talking about products like electronics and plastic resins that go directly into manufactured goods. One giant example is the innovative agreement worked out by Deere & Co. in which the company sources massive amounts of flat-rolled steel used to make equipment ranging from combines to lawn tractors through a single service center. Previously Deere bought from several integrated mills.

The reason for the trend is that distributors really study buyers' requirements and move mountains to make business happen. Distributors maintain ownership of costly inventories and can supply product to manufacturing sites right on time—often with little notice. Increasingly, these are computer-to-computer operations. Value-added services, ranging from secondary operations to special packaging are proliferating, freeing plant space and highly paid workers for other duties.

The "you-asked-for-it, you-got-it" attitude is making distributors into royalty in the American supply chain, and adding a productivity kick not often recognized by leading business mavens.

Our cover report by Jim Morgan starting on page 29 adds a caveat, however. As the economic dominoes fell in 2001, prices from manufacturers collapsed almost across the board. Some buyers feel distributors at times did a poor job of promptly passing on those price decreases. On the other hand, many distributors were quick to pass on price hikes where they occurred. For their part, distributors feel buyers need to acknowledge that all the additional services come at a price, reports Susan Avery in a companion article (starting on page 34). Additionally, distributors feel buyers could do a better job in the overall cost-cutting effort by adhering better to generally accepted standards, such as the United Nations Standard Products and Services Code (UNSPSC).

Please visit www.purchasing.com to see our complete report on distribution trends. It includes reports on, and rankings of, chemicals, steel and electronics distributors. The steel and chemicals reports will be posted by mid-May and the electronics report will go online in early June.