|Letter from the President|
The ability to provide accurate and predictable pricing for orders made 2005 a very difficult year for manufacturers, distributors and customers alike. Suppliers of petrochemical products and copper, two widely used commodities in the electrical industry, saw unprecedented volatility in their supply and demand resulting in day-to-day price increases passing through the entire supply chain. While the reasons for these increases varied, they were in part heavily driven by (1) the expanded global economy already strengthened on account of the construction boom in China and India, (2) the price increase in the cost of a barrel of oil due to the impacts of Hurricane Katrina, and (3) the lack of refining capacity to compensate the world’s increased demand for oil.
For the first time in recent memory, suppliers to the manufacturers of products we distribute established costing methods that dictated pricing be set when a product is shipped rather than when it is ordered. This situation made it challenging to quote a job, get the purchase order, place the order, and have the product shipped and delivered to the customer at the original price quoted. Such methods also influenced price elasticity by placing additional pressure on manufacturers and distributors to maintain accurate and flexible inventory levels. Ultimately, our job within the supply chain is to have quality products from world class suppliers available to our customers at competitive prices and delivered with unsurpassed service levels. Although challenged with these obstacles in 2005, our dedicated employees faced them head on and, according to several customers including Entergy and Terex, Irby performed at a level “better than the best” and named us as their Supplier of the Year.
On a lighter note, I am pleased to announce Stuart C. Irby Company recently acquired Priester Supply Co. Priester is a 70+ year old, 10 branch utility distributor headquartered out of Dallas with a strong presence in Texas, Oklahoma, New Mexico, Colorado, Louisiana, and New England. We are excited about having the Priester employees join the Irby family. Together, we become the strongest utility distributor in our combined markets. Our continued commitment is to bring our customers quality products from world class manufacturers at competitive prices and to maintain our exceptional service levels. Together, we truly bring new meaning to the 1 + 1 = 3 equation!
This issue of Irby Circuit focuses on many of the key elements affecting both our businesses. Your feedback is welcome to help make this publication increasingly valuable to you and your company.