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NEWS
THE NORTH SHORE WEEKEND | GLENVIEW, NORTHBROOK, DEERFIELD | 1/31– 2/1/15
MAIN STREET
Grainger, Baxter and others know how to deliver the goods ■ by
bob gariano
More than two thirds of the $8 trillion of goods that were produced in the United States in 2014 were distributed through our domestic supply-chain system of distributors to their ultimate end user. Sometimes called middlemen, resellers, or wholesalers, distributors are a vital intermediate layer in the flow of goods throughout the U.S. economy. What Silicon Valley is to semiconductors, Chicago’s North Shore is to the distribution industry. Distributors grew here because of the fundamental strength of the area’s road, inland waterway, and rail infrastructure, because of the region’s proximity to big communities of customers — and sometimes simply because of an inherent and fertile Midwestern entrepreneurial spirit. A good example: Bill Grainger and his sister started W.W. Grainger in the 1930s to provide electric motors to the new customers
who were adopting electric power sources for their shops and factories. In the decades that followed, Grainger sold everything from electric toy trains to kitchen utensils through their network of branches and catalogs. Today, Grainger — headquartered in Lake Forest — stocks and sells more than 500,000 items for commercial customers. The company’s market capitalization is approaching $18 billion. Technical advances can create distribution opportunities. Baxter, headquartered in Deerfield, boasts a market value beyond $40 billion. The company traces one of its corporate roots back to American Hospital Supply, which came into existence when plasma was developed as a blood-transfusion substance. American Hospital Supply was the plasma distribution expert. Market forces also create opportunities for new distribution businesses. Vernon Hills-based CDW has grown by distributing
an array of information technology products. CDW helps its customers integrate these products into modern informationtechnology systems. With $5 billion in annual revenues, privately owned MedlIne distributes more than 350,000 medical products to hospitals, doctors’ offices, and clinics. This Mundeleinbased company allows healthcare providers to concentrate on their patient services instead of using valuable resources to purchase the supplies needed in the modern healthcare profession. The administrative heavy lifting is left to the experts at Medline. There is much discussion today about how the Internet will destroy the need for distributors and wholesalers. But for agile and entrepreneurial distribution companies, Internet sourcing and purchasing will represent just another market change that can create opportunity for them. A personal experience illustrates this
point. Recently I determined that I needed to buy some corrugated boxes for a special, one-time need in my business. Searching the Internet I came across Uline’s website. Uline distributes a variety of packaging supplies, and I was able identify exactly the box that I needed and these were already available from their inventory. I called the customer service telephone number late Monday evening and was greeted by a delightful young lady who walked me quickly through the purchase process. The next morning I picked up the order at Uline’s Lake County warehouse. The order was exactly as I expected, and the whole transaction was handled with courtesy and accuracy. Distribution companies like Uline and other North Shore enterprises will continue to be the sources for contemporary and much-needed supply chain services. Main Street columnist Bob Gariano can be reached at bob@northshoreweekend.com. ■
MICHELE VOLD
847.712.0061 Michele.Vold@cbexchange.com Coldwell Banker Residential Brokerage
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