We are in an era of many changes in business, but are these new and long-term changes or are they reactions to the times? I see elements of the business cycle's rythmic phases — prosperity, crisis, depression and recovery — as well as elements that are new and radically different.

There are six key areas I think about when I think of cycle or change — price, people, systems, services, inventory and receivables. These will always be important to our industry and how our business will be transacted.

The manner of establishing price is our lifeblood. I see this issue as both a cycle and a change. The present cycle, where customers want both price reductions and control, is tied to the economic conditions in North America. The change involves opportunities for functional prices based on specific account needs and desires. These will continue as we tailor responses to requests.

People will always be the most important issue we deal with and availability of great people will cycle with unemployment figures. The change is in the skills required and the services being offered. We must continue to train and educate our people and meet new demands. Management must work to understand the next generation to attract and retain talent.

Systems will continue to change and evolve and we must embrace e-business issues. The challenge with this technology is affording the initial and support costs of our investments.

To do this, we will need to understand and exploit the potential efficiencies and opportunities these systems offer.

Services is an area that is key and will become increasingly more important. We must work with our suppliers, coordinate our offerings and make them cost-effective for everyone. The present economic cycle does not justify the cost of services that cannot be fully utilized. Opportunities for change will continue as customers look outside their walls to suppliers to fulfill services that had been internal.

The present cycle reinforces addressing inventory investments at all levels of the supply chain. The change is how we utilize inventory. The economy will not support excess inventory and its cost. Our systems will enable economic models that work from both financial and service perspectives.

Receivables is the real challenge. I see the cyclical changes brought about by the economy. Of these, customer bankruptcies are the highest importance, because we should be paid for what we provide. In the current economy, customers will drag out payments, but their systems now enable them to push the edge for economic return. We must continue to develop models that meet this challenge. We will also increasingly find ourselves doing business across national borders and facing the challenges of international trade.

Business is in the middle of an economic cycle no one likes, but it is changing and we must change with it. Some of the changes are good and some have no easy answer. Industry will come out of this cycle better as we work with our suppliers and customers to achieve positive economic results while providing products and services through the exceptional people in industrial distribution.