Chicago —Besides conducting business on the show floor at National Manufacturing Week March 18-21, industry leaders discussed key supply chain trends.

Channel management company Frank Lynn & Associates and Click Commerce held a "Distribution Strategy Forum" to update key trends like integrated supply, joint branding strategies and channel pricing practices.

Company founder Frank Lynn said the percentage of industrial products sold through integrated supply contracts continues to rise, up more than 18 percent in 2001. He forecasts an increase to 25 percent this year.

Lynn said the leading integrated supply distributors are Bruckner Supply, part of WESCO International, and Industrial Systems Associates, part of Strategic Distribution, Inc., which each had revenues above $300 million last year. He expects that integrated supply will continue to make in-roads into large accounts and push into bigger, mid-sized accounts.

Robert Segal, a partner at Frank Lynn & Associates, discussed findings from a new report on brand strategy. The report found that both manufacturers and distributors are beginning to focus more attention on their brand strategies, the result of growing concerns that end users increasingly view products and distributors' services as commodities.

Segal said leading industrial firms are moving up what he called the "brand pyramid," shifting from an emphasis on product and price to higher-level customer needs such as total cost of ownership, delivering solutions and helping customers enter new markets.

Sam Shapiro, another Frank Lynn partner, highlighted an upcoming report on channel pricing practices, which addresses key compensation findings based on more than 150 manufacturers' pricing and discount programs.

Shapiro said manufacturers' total channel costs include discounts, terms, rebates, etc., which actually exceed revenue in many cases. Rather than simply taking back money from the channel, he emphasized the value of functional discounts — paying different levels of compensation to distributor partners based on the activities each performs.

Roy Kolstad, a vice president at Click Commerce, discussed the role of technology and manufacturer-distributor communications. Despite the dot-com collapse, he said e-business continues to make inroads with MRO suppliers and their customers.