BENSALEM, PA . — Strategic Distribution, Inc., which began life during the e-commerce blitz four years ago, recently announced the resignation of CEO Ron Whitaker, a "turnaround executive" brought in by the board of directors in September, 2000, to help right the ship. Board member Don Woodring has stepped in as CEO.

After the crash of the dot-coms and the industrial economy, many would-be customers chose to stand back and rethink the benefits of integrated supply to their businesses, said Woodring. In the two years since Wood-ring's hiring, the company survived a shakeout of companies involved in integrated supply, and customers' need for this kind of program has never been greater, he added. Along with Duffy Shea, COO, and Whitaker, Woodring came on board as part of the turnaround team.

"Ron left because he feels the business is stable. He remains on our board. It's really that simple," he said.

For SDI, like most companies, the biggest impact on business is the economy, and Woodring thinks it will turn around at the end of 2003. He said he thinks integrated supply is about to take off as well. Industrial supply is changing and the company's features are in line with those needs again. Buyers are concerned with overall costs, not just price per piece.

"Customers are much more focused on services, so we are also. Inventory management is paramount and we have a logistics expert now on staff," Woodring said.

SDI has two priorities when it comes to technology, he adds: the right people and flexibility.

"We hired [Ron Fijalkowski] last year [who was] recognized as one of the top CIOs in the country. Also, technology plays a critical part in supply chain management," he said. "We've tried to pinpoint where demand will come from and we think it is inventory control."

In MRO selling, much of the demand is erratic, says COO Shea, and suppliers must guarantee that critical spare parts are on hand. There are not a lot of flexible inventory control systems available, so supplying that capability involves a partnership between people who know the products and software that can be customized, Woodring said.

In doing so, SDI is poised to continue to grow. Its model for satisfying customers and making a profit is supplying a total program solution, "which really revolves around pricing for the value of the total," Woodring said.

The company is becoming more selective in taking on customers, Shea added. In the last two years, SDI turned down contracts that would not be profitable, and that is difficult to do, he said.

"The market for SDI will change to clients who want a total offering," he said.

SDI has 60 in-plant stores in the U.S. and Mexico and 500 employees. SDI is encouraged by results in Mexico so far.

Where is integrated supply going?

"Integrated supply is a growing, new market compared to MRO industrial supply," Shea said. "Clients and integrators both got into some of that business for the wrong reasons and now, after the shakeout, it will start growing again in a second spurt that is about to happen."