Pennsylvania Lumbermens Mutual Insurance(PLM) Pays Dividend to NAWLA Insureds

PLM has recently announced that the NAWLA Safety Group Dividend Plan for the plan year of 1/1/07 through 12/31/07 experienced an adjusted loss ratio of 47% which translates into a 2.5% dividend payment to all NAWLA PLM participants or a total of $116,663.

If your company is not a PLM insurance participant and you want more information about PLM, visit www.plmins.com or call 800-752-1895.

The Seiders' Report: A Housing Overview by the NAHB's Chief Economist, (Aug. 19, 2008)

Highlights:

• Economic growth improved in the second quarter but serious weakness is bound to resurface later this year.  We now expect real GDP growth to slip back into the negative zone in the final quarter of this year and the first quarter of 2009, bringing an official recession “call” back onto the radar screen.  

• The labor market is weakening systematically, with payroll employment on a downward trend and the unemployment rate on the rise, and alternative measures of labor underutilization look even more serious.  Labor market conditions are bound to deteriorate further over the balance of this year and the early part of 2009, putting downward pressure on unit labor costs in the process.

• The Federal Reserve held monetary policy steady at the August 5 FOMC meeting, and the FOMC statement suggested that the Fed now views downside risks to growth and upside risks to inflation to be about in balance.  We expect the Fed to maintain the current “accommodative” monetary policy stance until the second quarter of next year.

• Credit market conditions have deteriorated considerably, reflected in widening quality spreads in corporate bond and mortgage securities markets as well as in tightening lending standards in the banking system.  A recent Federal Reserve survey documents a substantial cumulative tightening of bank lending standards for home mortgages and for loans to builders/developers.

• Available data show that the housing downswing still was “ongoing” at midyear, with a serious supply-demand imbalance still in force.  Furthermore, NAHB’s surveys of builders clearly show that the demand for new single-family homes continued to deteriorate in July and possibly also in August, held down by a rising tide of foreclosure sales at cut-rate prices.

• The Housing and Economic Recovery Act of 2008, signed into law by the President on July 30, should help stabilize housing and mortgage markets in the near term and provide longer-term support as well.  A temporary tax credit for first-time home buyers and a foreclosure prevention program for homeowners will help address the daunting supply-demand imbalance and help to support home prices in the process.

• NAHB’s housing forecast shows stabilization of home sales before the end of this year, aided by the new housing bill.  We expect housing starts to hit bottom early next year, and residential fixed investment should start up in the second quarter of 2009.  We’re projecting a solid housing expansion in 2010 as the production of new housing units climbs back up toward sustainable trend levels.

Source: HousingEconomics.com, NAHB
By David F. Seiders, Aug. 19, 2008
NAHB Chief Economist

BMHC pulls out from Florida
BMHC, the San Francisco-based pro dealer, has announced its decision to withdraw from the state of Florida due to the prolonged housing slump there. BMHC serves production builders in Florida through its SelectBuild division, which offers shell construction, concrete services, and truss and stair manufacturing.
Approximately 140 employees will be affected, according to BMHC. SelectBuild will fulfill all its contractual obligations as it closes down its operations over the next four months, the company said.
“The Florida market has weakened considerably, and we anticipate it will be some time before improvement is seen,” said Stanley Wilson, BMHC’s president and chief operating officer, in a prepared statement. He added that housing starts have dropped from a peak of 265,000 in 2005 to an estimated 61,000 in 2008.
SelectBuild operates from eight locations in Florida, according to BMHC’s 2008 annual report. It accounts for approximately 8 percent of BMHC’s annual revenues. There are no BMC West locations in Florida.
BMHC is currently in talks with its lenders regarding a failure to meet the covenants of its credit facility. Ranked 5th on the ProDealer Top 350 for 2007, BMHC’s sales dropped 28.7 percent last year, from $3.20 billion to $2.28 billion.

Source: Home Channel News
www.homeshannelnews.com

Source: Home Channel News, August 15, 2008

Softwood Export Council (SEC) News – Click here to view the latest news including a newsletter and calendar of export opportunities. NAWLA is an SEC member, leverage it! Click Here

Construction Forecast Now Worse

The forecast for the construction industry has turned gloomier, weighed down by the slowing economy, the beleaguered housing market and less available credit.

New construction starts are now projected to decline 11% nationwide this year to $558.5 billion, according to a report by McGraw-Hill Construction, a unit of McGraw-Hill Cos. In its previous outlook, made last October, McGraw-Hill had anticipated a 2% decline this year. New construction starts fell 8.6% last year — the first decline since 1991.

“Last October’s ‘Outlook’ focused on the tough environment facing construction in 2008, namely the slowing economy and tight credit conditions,” McGraw-Hill writes in the June report. “That environment has proven to be even more difficult than expected.”

The housing market remained the primary culprit, as homebuilders are still working through a big backlog of unsold homes while buyers are having a harder time getting mortgages.

McGraw-Hill now expects construction starts of single-family homes to decline 28% this year in terms of contract value to $143.95 billion, compared with the earlier forecast that single-family home construction starts would fall just 3%. Starts of multi-family projects, which include condominiums and apartments, are expected to drop 20% this year to $49.88 billion vs. an earlier forecasted decline of 8%.

The outlook for retail construction also has weakened. McGraw-Hill now projects contract value for new starts of stores and shopping centers to decline 14% to $25.3 billion, compared with a previous forecast that such construction starts would drop 7%.

The hardest hit region in total construction is the South Atlantic, where construction starts are projected to fall 17%, due largely to Florida. The next biggest projected declines are to be in the West region and the North Central region, which includes Illinois.

The lowered forecasts come as no surprise to those in the business, as even those who fared well in the first half of the year are having a harder time of things now.

“Our health care group is still going strong, but the corporate work has slowed,” says William Birck, president of Chicago-based contractor Reed Illinois Corp. “The first two quarters of the year were extremely busy for us. We were very fortunate.”

Mr. Birck says his firm and others were scrambling to add people in the past two years to handle the growth. But this year Reed and others are “trying to
maintain a steady overhead,” anticipating that business would be slowing.
Institutional construction, which includes health care and educational buildings, has been a bright spot. Another area where the forecast was increased was construction of hotels and motels. McGraw-Hill anticipates hotel construction to increase 5% from last year to $14.83 billion, compared with an earlier forecast that such construction would decline 9% this year.
Still, in this economy, even the dark cloud’s silver linings have a big touch of gray.

While the contract value of hotel and motel construction is to increase this year, square footage is to fall 10% from last year to 77 million square feet. And McGraw-Hill is expecting “a sharper downturn” for 2009.

“The hotel construction market is beginning to look more vulnerable,” McGraw-Hill writes. “The increase in the number of hotel rooms that will become available this year and next means that supply will be rising at a time when demand will be falling.”

Source:  Eddie Baeb, Aug. 25, 2008
www.Chicagorealestate.com
Crain’s Chicago Business

NAWLA Partners with IBHS for Member Benefit

NAWLA Member companies should know that NAWLA is a member of the Institute for Business and Home Safety (IBHS). As such, NAWLA members have direct access to the very best resource to guide them in protecting their businesses and their residence against disasters. The IBHS research in many areas also helps homeowners to build disaster resistant homes using conventional building materials sold by NAWLA members.

With several hurricanes traversing the Atlantic, this would be a good time to investigate how IBHS can help you. Visit www.ibhs.org and snoop around.

NAWLA Traders Market® …Be There All Day Thursday or miss a GREAT DEAL!

New this year for the NAWLA Traders Market®, November 6-8, in Chicago, is a full day of powerful and useful programming for Thursday. The day will kick-off with a General Session featuring Mike Ditka followed by The NAWLA Magellan Club Luncheon & Program and a business program on the Green Building Movement. Attendees will want to arrive in Chicago on Wednesday. Don’t forget that there are complimentary CME Group Tours on Wednesday and Thursday mornings. It all adds up to the “greatest offering” of the NAWLA Traders Market ever!

And, don’t forget … you will be able to network with your customers and suppliers like no other event in the industry. In these trying times, it is imperative to maintain existing relationships and to seek new business opportunities. To be able to do that in a just few days and in one location is invaluable. The NAWLA Traders Market® remains the “best bang for the buck” in the industry! Don’t delay! Booths and guestrooms are filling fast. Make your reservations TODAY! Click Here for more information or visit www.nawlatradersmarket.com.

General Session
Presenter: Coach Mike Ditka
Thursday, November 6 • 9:00 a.m. – 10:00 a.m.
Open to all attendees

Yes, Da Coach will be in Da House! What else could be “more Chicago” than Mike Ditka, legendary NFL player and coach for the Chicago Bears. Your association has brought you the very best. Did you know that Ditka is one of only two athletes to have won Super Bowl rings as head coach, assistant coach and player? You won’t want to miss his presentation, ACE – Attitude, Character and Enthusiasm – where he demonstrates how a life of commitment and attention to the fundamentals resulted in victory and success both on and off the field and both personally and professionally.

NAWLA Magellan Club Luncheon & Program
“Around the World in 45 Minutes!”

Thursday, November 6, 11:30 a.m. – 1:00 p.m.
$89/person Member • $109/person Non Member

Join us for an up-to-the minute report on Global Timber Trade Issues. This is an optional program and fee includes speaker materials and lunch.

NAWLA Educational Program
University of Industrial Distribution (UID)

NAWLA participates with approximately 30 other Wholesaler Associations to offer the University of Industrial Distribution program held at Purdue University in Indiana. The Program is typically offered in March every year.  This past year, the March program, with 600 participants, sold out approximately three months in advance…yes, that’s right, three months!

Due to the overwhelmingly positive response and success of the UID, the AEA (Association Education Alliance) and NAWLA have decided to offer a second UID program. The program will be held December 2-5, 2008. The program is just an awesome offering with 17 instructors from distribution, sales management, personnel productivity, leadership, negotiation, purchasing and more and 25 different classes targeted to wholesalers.

Attached is the brochure and registration information for the December program.  Registration opens August 11.  There are only 250 spots available for the December program, and we expect the program to sell out quickly.  

If you or your employees are interested in attending this program, we urge you to register soon after the August 11 date. Click here for the full brochure and registration information.

Visit the NAWLA website for more information, or contact Stacey Woldt, NAWLA Manager of Meetings and Education at the NAWLA office at 847-870-7470 or email swoldt@nawla.org.

Green Building Movement & You
Thursday, November 6
1:00 p.m. – 5:00 p.m.
Open to all attendees
Ask these questions then get answers during this program. Why should the lumber industry care about the “green movement”?  Should my company be chain of custody (CoC) certified? How do I certify and what does it cost? What could it mean for my company’s bottom-line? Developed by the NAWLA Education Committee, this afternoon of critical programming will focus on chain of custody and certification from a “business perspective.” 

Green Building in North America: Drivers, Current State and Future Directions

Presenter: David H. Cohen, Ph.D., Professor, Faculty of Forestry, The University of British Columbia 
This presentation describes the drivers of green housing in North America including the “push” by designers and specifiers, growing regulatory requirements and the “pull” of consumers. These three often measure “green” differently. The current state of green housing and various certification schemes is summarized followed by a discussion of future directions, including expected changes in certification schemes and expected reactions to recession.

Nuts and Bolts of SFI® Chain of Custody

Presenter: Jason Metnick, Director, Market Access and Product Labeling, Sustainable Forestry Initiative®, Inc. (SFI®)
As green building markets and certified lumber become mainstream, learn how your company can get involved in the process.  Jason Metnick, Director of Market Access and Product Labeling, will discuss with you the Sustainable Forestry Initiative® (SFI) program and the steps to become SFI chain of custody certified. The SFI® chain of custody program ensures the integrity of the SFI product as it moves through the supply chain from the forest to the shelf.

Nuts and Bolts of FSC Chain of Custody

Presenter: David Bubser, Regional Manager, SMARTWOOD U.S. Region Office
Learn the basics about FSC and how the chain of custody certification process works.  This session will provide an overview of current trends and market opportunities, including information about the US Green Building Council’s LEED program.

Complete information for all NAWLA Presenters can be found on NAWLA’s Web site at www.nawlatradersmarket.com

NAWLA to offer Eight Valuable Educational Webinars for FALL 2008

NAWLA, in conjunction with the NAWLA Education Committee, will provide members the opportunity to participate in any one or more of eight upcoming webinars to educate you and your employees on several topics.  Included in the offerings will be a 4-part series on using the Chicago Mercantile Exchange (CME Group) Lumber Futures & Options Contracts.  You may register for the entire 4-part series at a discount, or, individually for $89 each. Go to www.nawla.org and view the Educational Programs/Webinars section for more information and registration forms.

Date: Tues., Sept. 23                      
Human Capital - How your organization can be so good it cannot be ignored
Presenter: Rick Grandinetti, Vision Planning, Inc.
Website: www.visionplanninginc.net

Date: Tues., Sept. 30                      
Selling in a Down Market
Presenter: James Olsen, President, Reality Sales Training, Inc.
Website: www.reality-salestraining.com

NAWLA 4-Part Webinar Series
Managing Lumber Price Volatility – Using CME Group Lumber Futures & Options Contracts
Presenter: Errol Baxter, CME Group (former Associate Director, Commodity Products)
Date:  Tues., Oct. 7, Futures: Hedging and Risk Management
Date:  Tues., Oct. 14, Futures: Hedging Examples                       
Date:  Tues., Oct. 21, Options: Basic Concepts and Terms
Date:  Tues., Oct. 28, Options: Options & Futures Combination Strategies

Date: Wed., Nov. 19                        
How to Add 2% to Your Bottom Line Immediately!
Presenter: Chris Rader, Rader Solutions
Website: www.radersolutions.com
                             
Date: Tues., Dec. 16                        
The Four Personality Gears and How to Sell to Them
Presenter: James Olsen, President, Reality Sales Training, Inc.
Website: www.reality-salestraining.com

Sign up for one Webinar at $89/registrant (logged on computer), or
Sign up for the entire 4-part series at $270/registrant (logged on computer). You may also select one, two or three of the CME Lumber  Futures & Options Webinars at $89 each.

For complete descriptions of each Webinar, registration
and cancellation policies and for further general
information, please visit NAWLA’s Website
at www.nawla.org.

Welcome NAWLA’s newest members for the month of September.

Wholesaler
Beatriz Fernandez  
Iber Lumber           
P.O. Box 11657      
San Juan, PR  00922
Phone: 787-788-5584
Fax: 787-788-8149
Website: www.iberlumber.com
Verifiers: Bill White, Elof Hanson                        
Dennis Allen, Klumb Lumber
Iber Lumber is a Wholesaler of Fir and Spruce, Southern Yellow Pine, Plywood, Doors, and other wood-related products.

Wholesale Branch
Steve Cotaya
Snavely Forest Products      
14315 W. Hardy Rd.                  
Houston, TX  77060                   
Phone: 281-445-0011               
Fax: 281-445-0715
Website : www.snavelyforest.com                      

Service Affiliate
Michael Behe
USRail.desktop
3000 Valley Forge Circle, G-15
King of Prussia, PA  19406
Phone: 610-783-1352
Fax: 610-783-1350
Website: www.usraildesktop.com
Verifiers: Mike Phillips, Hampton Affiliates
USRail.desktop provides software and data, along with support services to companies in the lumber and panel products industry who ship product by rail.

Capital Lumber welcomes Micah Lloyd, Account Manager for its Healdsburg Division. Micah brings over 4 years of sales experience, previously for Chicago Title as Regional Sales Director.

Riley Creek Lumber Company Announces Acquisition of JD Lumber Company
Laclede, ID - Marc Brinkmeyer, owner of Riley Creek Lumber Company announced today that Riley Creek will acquire the JD Lumber sawmill plant, property, equipment and certain timber contracts.  “JD Lumber has a long, successful history in Priest River, providing jobs and wood products for people for 27 years,” he said. “We have nothing but respect and admiration
for the JD Lumber leadership and employees.”  “The current climate in which we do business is extremely tough,” said Brinkmeyer.

The current state of the housing market, expected reduced demand for lumber in the next 12 – 24 months and high fuel prices are all key contributing factors in the difficult climate forest products businesses are facing.  These factors combined have forced the remaining sawmill facilities to operate even more efficiently and productively. Acquiring the JD Lumber sawmill and its assets represents an opportunity to improve productivity levels at the company’s Laclede and Moyie Springs sawmills by re-establishing second shifts at both facilities. “We will evaluate the pportunities with respect to the JD mill purchase in the spring,” Brinkmeyer said.

Major Idaho Lumber Companies Merge
(Coeur d’ Alene, Idaho): Bennett Forest Industries and Riley Creek Lumber are pleased to announce the merger of their lumber companies. This merger will be completed September 1, 2008. The combined company will operate four Idaho based lumber manufacturing facilities located in Chilco, Grangeville,  Laclede, and Moyie Springs.

Both Riley Creek and Bennett Forest Industries are long-time family owned and operated companies focused on serving their customers and employees, investing in their facilities, and remaining committed to their forest products heritage. “The common core values and mission both companies share make this merger a unique opportunity for building a strong lumber franchise which is better positioned for providing a higher level of service to our customers and employees,” said Scott Atkison. Atkison has been named President of the combined company.  Marc Brinkmeyer, owner of Riley Creek Lumber, will guide the new organization as Chairman of the Board. “This merger is the culmination of decades of effort from the Bennett and Brinkmeyer families –
one company will now carry on our great traditions as we take better advantage of our combined manufacturing and marketing capabilities.”
“We have been in the lumber business for the past five decades and although current operating conditions are about as tough as I have ever experienced, the opportunities in front of our combined companies have
me as excited about our future as I can remember,” said Dick Bennett, owner of Bennett Forest Industries.

Bennett will serve the company as a Director and continue providing the company with his industry knowledge and wisdom.

Industry Veterans Bill Evasick and Lyle Tompkins Join Russin Lumber Corp.

(Montgomery, NY) -  Russin Lumber Corp. is proud to announce the appointments of Bill Evasick and Lyle Tompkins as outside sales representatives for the company. Both new additions to the Russin Lumber sales team have extensive backgrounds in the building products industry.

Bill Evasick is charged with the responsibility of outside sales representative for the Connecticut market area. Bill brings over 35 years of industry experience to Russin Lumber including sales and sales management positions with major retail and wholesale lumber organizations. Bill has a Bachelor of Science degree in Forestry, Wood Science and Technology from the University of Massachusetts Amherst.  Bill and his wife Linda reside in Milford, Connecticut. The couple have two grown children and three grandchildren.

Lyle Tompkins is charged with the responsibility of outside sales representative for the growing upstate New York territory. Lyle has 22 years of experience including sales, sales management and general management positions in the retail lumber and building material industry. Lyle purchased a retail lumberyard at a very young age and significantly grew the business until selling the company earlier this year. Lyle has lived in upstate New York his entire life. Lyle, his wife Clare and stepson Michael reside in Hannacroix, New York.

Building Material Distributors, Inc. announces Mike Teresa as Executive General Manager of Building Products

Galt, CA (August 28, 2008) – Building Material Distributors, Inc (BMD, Inc.) is pleased to announce that Mike Teresa joins BMD as Building Products Executive General Manager. Teresa, former Chief Operating Officer of Shasta Industries, Arizona, brings almost 20 years of general management expertise to this new position.

"We are excited to welcome such a seasoned professional to our Building Products Division," said Garry Tabor, President and CEO of BMD, Inc. "Mike has a wealth of industry experience and will provide key leadership in his new position at BMD."

Mike is a graduate from California State University in Sacramento. He resides in Rocklin, CA with his wife Debra and their three children.

Tough times are producing some surprising business bedfellows

Competitors often find it hard to be civil to one another in public. But few rivalries have been as nasty as that between two New York newspapers, the New York Post and the Daily News. The “Daily Snooze”, as the Post dubs its rival, takes great pleasure in rubbishing its arch-enemy, and vice versa. Scurrilous gossip about the Post’s owner, Rupert Murdoch, is avidly reported by the Daily News; its proprietor, Mortimer Zuckerman, has been the target of less than flattering coverage in the Post. And the two titles like to bicker over which has the bigger circulation.
Yet behind the scenes executives from both papers are talking about working together in some areas, such as distribution, in an effort to slash costs. Nor are they the only rivals thinking the previously unthinkable. With the global economy on the rocks, businesses everywhere are desperately searching for ways to save money or boost revenue—even if they require collaboration with the enemy.
Arrangements in which firms compete vigorously with one another, while also co-operating in specific areas—known in management jargon as “co-opetition”—are not new. Carmakers have long collaborated on vehicle platforms, engines and so on to achieve economies of scale. And airlines have shared check-in, gate management and other facilities.
But given the dire state of both those industries, there are likely to be more such deals. In July BMW, which makes the Mini, and Fiat, which produces the rival MiTo under its Alfa Romeo brand, said they were considering joint production of components and systems for their vehicles. “There has definitely been an uptick in co-opetition,” says Barry Nalebuff, a professor at Yale School of Management and the co-author of a book on the subject.

Let’s be frenemies

Economic pressures have also brought New York’s feuding dailies to the negotiating table. Even in good times, the Post lost millions of dollars a year and the Daily News struggled to turn a modest profit. Now, with advertising migrating to the internet and the economy slowing, things look even bleaker. (On August 5th News Corporation, the Post’s parent, reported healthy profits for the last quarter of its fiscal year, but warned that next year’s growth would be “less robust”.)
While newspapers are already carrying fewer ads, parcel-delivery companies fret they may soon be carrying fewer packages. Faced with an ailing American economy, two such firms, DHL and UPS, are planning to collaborate in the express-delivery market there. Under the terms of a proposed ten-year deal, UPS, which has some excess capacity in its American air-freight network, would carry DHL’s packages on its planes inside America—and between the United States, Canada and Mexico—for a fee of up to $1 billion a year.
The impetus for the deal came from DHL. Its American express-delivery business is bleeding red ink. By working with UPS and restructuring its own ground-delivery network, the German-owned firm plans to slice its losses in America from a forecast $1.3 billion this year to $300m by 2011. As for UPS, it could do with the cash: its second-quarter operating profit shrank by 18%, to $1.45 billion, owing to rising fuel costs and the stagnant American economy.
Crafting co-opetition deals is a tricky business, not least because potential partners need to swallow their pride first. Firms also need to be very clear about what will and will not be covered by a deal. “You have to figure out exactly where you are co-operating and where you are competing, and not get your staff confused,” says Harold Sirkin of the Boston Consulting Group.
Newspapers, for instance, tend to differentiate themselves by their editorial content and the quality of their advertising-sales operations. So editorial and advertising departments of rival papers must be kept separate if they are to retain their distinctive identities. But distribution, printing and back-office operations are easier to consolidate without blurring brands—which is why the Post and the Daily News are exploring such possibilities.
Clarity is also essential when it comes to persuading antitrust watchdogs that a link-up is benign. Sometimes even the whiff of co-opetition can cause other firms to cry foul—as Microsoft did a few months ago when it emerged that Yahoo!, an internet firm, was planning to outsource a chunk of its search-advertising business to Google, its main rival. Would-be partners must be able to show that it is in customers’ best interests for them to co-operate.
UPS and DHL stress that their proposed deal just covers air freight; they will still compete in all the other bits of the express-parcel business, including ground collection and delivery. (They also point out that FedEx, another competitor, carries express packages by air for the US Postal Service.) “When this deal is finalised, nothing will change the fact that we are a rabid competitor of DHL,” says a UPS executive. DHL says it will bite back by using the savings from the UPS deal and from reconfiguring its ground network to offer a cheaper alternative to services from UPS and FedEx.
Frank Appel, the boss of Deutsche Post World Net, DHL’s parent, is confident that a deal with UPS can be reached before 2009. But it could be blocked by a legal challenge from unions which are furious that the firm is closing its air hub in Wilmington, Ohio, triggering thousands of lay-offs. Mr Appel says he needs to stanch DHL’s huge losses in its American express service now to prevent many more job losses in future.
As for the Post and the Daily News, it seems unlikely that any deal would encompass areas, such as advertising, that would worry trustbusters. And merging the editorial teams would be unthinkable—which means readers will still be able to enjoy the tabloids taking potshots at one another in print.
SAN FRANCISCO
From The Economist print edition
www.Economist.com

THE POTENTIAL UPSIDE OF A DOWNSIDE ECONOMY

It's hard to believe much good could come out of a current business economy that is mostly notable for high fuel costs and low profits, but there is a potential benefit that lurks beneath the surface for business owners in the lumber and building materials industry.  What is this potential benefit?  Current gift and future estate tax savings that could ultimately be worth hundreds of thousands and even millions of dollars, depending on the value of one's company.  

The key in accomplishing this is a formal business valuation. Valuations are performed for various reasons.  One of the primary reasons a business owner values his or her company is for the purpose of transferring interests in the business to the next generation and other family members.  With the slowing economy, many businesses are worth less today than they were years past. When the economy rebounds, many of these businesses will surge in value.

Therefore, now is an especially good time to value a business for estate and gift planning purposes.  The lower business value may allow for the tax advantaged transfer of a much larger percentage of the business than what could have previously been transferred - when the business was performing at a much greater level. 

Each citizen of the United States is allowed to make an annual tax free transfer to an unlimited number of individuals $12,000 of money or money's worth.  Additionally, each citizen of the United States is entitled to a $1 million lifetime transfer amount, free of gift tax, exclusive of the annual allowable amount.  The ultimate benefit of having a low value on a lifetime transfer now is not only does it remove the current value from the donor's estate, but it also removes the future appreciation that would have been included in the donor's estate for estate tax purposes upon the donor's passing.  Think about it, if a business interest was transferred today at a value of $1 million and appreciated to $5 million over the course of time, this would result in a potential federal estate tax savings of at least $1 million based upon current tax law, had that asset remained in the donor's estate.

Source: Terrance K. Resnick and Leon B. Resnick

Resnick Associates, an estate, business succession and life insurance planning firm

Phone: (717) 652-2929, (913) 681-5454 or ResnickAssoc@aol.com

Business-school gurus take lessons from an unexpected source

As the warrior king who defeated the Mughals and founded the Maratha empire of Western India in the 17th century, Shivaji Bhosle is remembered as a tactical genius as well as a benevolent ruler. The direct descendants of his Malva-caste soldiers are also developing a reputation for organizational excellence.

The Cult of the dabbawalas

Using an elaborate system of color-coded boxes to convey over 170,000 meals to their destinations each day, the 5,000-strong dabbawala collective has built up an extraordinary reputation for the speed and accuracy of its deliveries. Word of their legendary efficiency and almost flawless logistics is now spreading through the rarefied world of management consulting. Impressed by the dabbawalas’ “six-sigma” certified error rate—reportedly on the order of one mistake per 6m deliveries—management gurus and bosses are queuing up to find out how they do it.
The system the dabbawalas have developed over the years revolves around strong teamwork and strict time-management. At 9am every morning, home-made meals are picked up in special boxes, which are loaded onto trolleys and pushed to a railway station. They then make their way by train to an unloading station. The boxes are rearranged so that those going to similar destinations, indicated by a system of colored lettering, end up on the same trolley. The meals are then delivered—99.9999% of the time, to the right address.
Harvard Business School has produced a case study of the dabbawalas, urging its students to learn from the organization, which relies entirely on human endeavor and employs no technology. For Paul Goodman, a professor of organizational psychology at Carnegie Mellon University who has made a documentary on the dabbawalas, this is one of the critical aspects of their appeal to Western management thinkers. “Most of our modern business education is about analytic models, technology and efficient business practices,” he says. The dabbawalas, by contrast, focus more on “human and social ingenuity”, he says.
Firms, both Indian and foreign, are similarly curious. Tata, Coca-Cola and Daimler have all invited dabbawalas to explain their model to managers. Last month it was the turn of delegates at an accountancy conference in Dubai. There are even plans within the organization to create a consulting business. The dabbawalas, who all receive the same pay, are also seen as paragons of “bottom up” social entrepreneurship. C.K. Prahalad, a professor at the University of Michigan’s Ross School of Business, says they show how a home-grown business can help lift workers at the “bottom of the pyramid” out of poverty. They also contradict the stereotype of developing-world laborers as low-wage economic victims.
In Salman Rushdie’s 1988 novel “The Satanic Verses”, one of the main characters, Gibreel Farishta, worked as a dabbawala before going on to become a film star. The deliverymen no longer need a career change to get noticed.
From The Economist print edition

USGBC Opens Door To Ending FSC's Green Wood Monopoly

Proposal would set standards for certification programs that would qualify for LEED points
The U.S. Green Building Council (USGBC) issued for comment today a proposal that in effect would end the Forest Stewardship Council's (FSC) monopoly as the only certification system whose wood qualifies for points under the LEED green construction system.
The action starts a process that could end one of the biggest complaints dealers have about LEED: That it doesn't give points for wood certified by the Sustainable Forestry Intiative (SFI), Canadian Standards Association (CSA) or similar groups that tend to be much more supported by the timber industry. However, the change is unlikely to bring about the end of some other stomach-churning issues related to green construction--in particular, the need to get chain of custody certification.
USGBC will take comments on the proposal until Sept. 8. USGBC's Materials and Resources Technical Advisory Group then will review the comments and decide whether to put the changes up for a vote by the entire USGBC membership. All LEED programs would be affected by the vote. If the proposal is approved, certification schemes seeking to be recognized by USGBC then would have to have their programs reviewed and approved. All that could take until the middle of next year.
According to an executive summary of the proposal, the proposed new language would make non-FSC certification systems eligible to earn points under LEED provided they meet measurable benchmarks in four areas: governance; technical standards/substance; accreditation and auditing; and chain of custody and labeling.
"The proposed evolution of the certified wood credit in LEED will help focus the forest certification conversation on outcomes and performance," Brendan Owens, USGBC's vice president of LEED technical development, said in a statement.
While groups such as SFI have argued that their standards are at least as good - if not better - than FSC's in many levels, the proposed benchmarks reflect USGBC's preference for certification systems that follow the spirit if not the letter of FSC's rules. For instance, according to a not-for-circulation draft made available to ProSalesby SFI, the benchmarks state:

• timber interests can't make up more than one-third of the certification group's board;
• use of genetically modified organisms would be banned;
• natural methods of pest control are preferred over chemicals; and
• certification systems must "promote the long-term health and well-being of communities within or adjacent to the forest management area."

Lumber interests have complained about the FSC monopoly under LEED since the first standards were issued. Lumberyard groups have complained particularly about how the standard was unfair and unworkable because it was so hard to get FSC-certified wood--a result of many major timber companies' refusal to abide by FSC standards and instead promote other standards, particularly SFI. USGBC has formally been reviewing this issue for more than two years.
"SFI Inc. is pleased to see this next step in the evolution of the LEED program," an SFI spokesperson said. " It reflects the reality, that even with over 50 forest certification programs worldwide, there are still only 10% of the world's forests certified to any program."
Source: PROSALES Information Service
Publication date: August 8, 2008
By Craig Webb

The Differences Between Green Globes and LEED

The two commercial green building standards have many similarities, but there are some spots that they don't share
The famous Coke vs. Pepsi debate can compare to the competition between green building standards. Most standards are made of the same basic ingredients, but they are battling it out to become the preferred product.
While the Coke vs. Pepsi race remains close in the United States, there seems to be a clear leader in commercial green building programs. And some obvious characteristics do set the systems apart. But, like Coke and Pepsi, many people are still unsure as to which system is better.
Run by the U.S. Green Building Council, 31 states recognize the LEED green building standard, and 1,212 commercial new construction projects have been certified under that system. Green Globes, run by the Green Building Initiative, is recognized in 18 states, and only 15 buildings have gained certification.
The systems, however, are more similar than they are different.
Both standards cover similar grounds, such as site sustainability, energy efficiency, water efficiency, resource efficiency, and indoor environmental quality. They have four possible levels of certification, require third-party certification, and have a minimum amount of points that builders must attain in each section.
But there are differences. One issue holds particular importance with dealers: forest certification systems. Green Globes awards points for a variety of certification systems, including the American Tree Farm System, the Forest Stewardship Council, the Sustainable Forestry Initiative, and other programs that the Programme for the Endorsement of Forest Certification recognizes. LEED only recognizes FSC-certified wood, but the USGBC is working to include other certifications.
A big issue that worries professionals is the added cost of building green. Some say Green Globes is cheaper than LEED. Green Globes certification costs usually range from $3,000 to $7,000, says Mark Rossolo, director of state and local outreach for the Green Building Initiative. LEED certification for New Construction costs $2,000 on average, but certification fees for buildings of more than 500,000 square feet can go beyond $20,000. The paperwork for Green Globes can be completed online, and the online system offers feedback. This reduces some of the "soft cost" of green building, says Rossolo.
Some say Green Globes is also more flexible. The system has a protection against "nonapplicable criteria." If a builder marks a criterion as nonapplicable, then he or she will be excused for not gaining points in those areas. For example, if a building code overrides a criterion, then the criterion can be marked as nonapplicable. Another example would be if a building does not have elevators and a criterion deals with improving elevators.
However, some argue LEED is more effective.
LEED for New Construction requires that buildings "exceed ASHRAE 90.1 2004 by at least 14%, which can lead to significant energy reduction," says an American Institute of Architects' report comparing three green building rating systems. Green Globes encourages energy reduction, but does not require it. LEED also calls for a minimum indoor air quality performance, while Green Globes does not. LEED makes it mandatory that builders have "some documentation of the initial building energy and operational performance through fundamental commissioning," says the AIA report, but Green Globes does not.
Green Globes does include points related to life-cycle assessment, while the current version of LEED does not. Life-cycle assessment analyzes how green a product is from its manufacture to the day it is no longer in use. An upcoming version of Green Globes will include a built-in tool that calculates how environmentally friendly a product is according to life-cycle assessment. This gives Green Globes "a very holistic approach in ensuring that we're getting the most environmentally friendly attributes overall," says Rossolo. However, LEED is working on including life-cycle assessment in future versions of its rating system.
Peter Casals, manager of membership and government relations for the Lumbermen's Association of Texas, says he wants to see how the upcoming changes in LEED pan out before he decides which rating system he prefers.
"I think it's too early to say one system is better than the other," he says. "I think that, as far as LEED, they are going to be making a lot of changes in the near future, and they are looking at a lot of things that will make them more flexible."
Source: Victoria Markovitz

Building Peak Performance Teams

By Herbert M. Greenberg, Ph.D., President and CEO of Caliper

Even if you are not a racing fan, there is something exhilarating, almost magical, about seeing a fiery car, in a blaze of color, fly into a pit, as crew members, in yellow, fire-retardant suits, at breakneck speeds, change tires, refuel the tank, replace hoses, make sure the engine is humming, attend to the driver, and, without a wasted motion, amid the incessant roar of engines, in a continuous blur of activity, get the car back into the race. 
Such pit stops can take less than ten seconds.  Ultimately, they are where records are won, and races lost. 

Developing Peak Performance Teams
Businesses, in this tight economy, can learn a lot about building peak performance teams from such pit crews. 
Whether companies are large or small, success often depends upon forming a cohesive group out of people who, in other situations, might not necessarily get along together.
It used to be enough for companies to concentrate on simply hiring the best people for each position.  But that alone is no longer enough to stay ahead of the competition in today's marketplace.  Now, the most successful companies are those that can create synergies, sparks and a sense of purpose among divergent team members. 
Such companies are able to create environments where managers are keenly aware of their own strengths and limitations, and are able to identify and develop the potential of their staff.  These companies have a special fire, a mission, which keeps them pulling in the same direction. 
Peak performance teams are able to bring out exemplary talents in each player, create efficiencies, prepare for eventualities, synchronize activities, communicate on the fringes of each other's abilities, and operate with a unique single-mindedness of purpose.
Creating peak performance teams is what separates the best companies from the rest.  But team building is not a discrete event.  It is a continuing, unfolding process.
In our consultations with over 23,000 companies throughout the past three decades, we have found that most managers succeed not because of their talent, knowledge or ability alone, but because they are able to recognize potential in others and turn their staff into a productive team.

Lessons from Team Building
Team building, as we have discovered, is not a quick, one-shot approach.  Rather, it is a continuous, evolving process, which, in order to be effective, starts with a clear vision of the team's goals and a well-defined strategy on how to attain those goals.
A team must be viewed as a totality, not as discrete elements.  Every team has particular strengths and weaknesses. 
Regardless of the nature of the business or the size of the company, peak performance teams typically share a number of common characteristics:

• They have a unified understanding and vision of the company's goals, objectives and future.
• Each team member is keenly aware of his or her own skills, precise role and value to the team, as well as those of all the other team members.
• Members of the team derive as much satisfaction from the performance and achievements of others as they do from their attaining their own milestones.
• Finally, communication among team members is open, informal and on-going.

There are, of course, many tools available to help management move a team forward.  Attitude studies, valid psychological tests, employee productivity workshops, and team building activities are just a few approaches worth considering.  Which of these activities, or combination of activities, might be appropriate depends on an understanding of what gaps exist between where the team is and where it could be. 
The touchstones for developing a peak performance team are: having insights into the strengths, limitations and potential of each of the members of the team, starting with the leader; developing a clear understanding of the chemistry among team members; unraveling possible areas of conflict; and knowing how the team fits in with the company's overall goals.
      Our work with start-up entrepreneurial firms and Fortune 500 corporations alike tells us that, while there are many differences, the most successful companies do share one thing: An emphasis on creating new, more effective ways for empowering people to collaborate.  Only with such a commitment can companies in today's marketplace keep ahead of the competition and move toward reaching goals and realizing visions.

Visit Jodi Tolman, Director of Business Development at Caliper’s booth #204 during the November 6-8, 2008 NAWLA Traders Market®! Contact Caliper at www.caliperonline.com.

NAWLA Recommended and Approved Service Provider:
CALIPER
Solutions for peak performance.
506 Carnegie Center, Suite 300
Princeton, NJ 08543
Tel. 609-524-1384
Fax. 609-524-1201
Website : www.caliperonline.com

Jumpstarting Stalled Sales Productivity

Imagine this: You're a sales manager for a communications or high-tech company. Yesterday, one of your reps sold a product to a customer. You'd assume he's already moved on to the next prospect, right?

Not necessarily. Today, that customer called your rep, raising multiple concerns with the language in the sales contract. Why? Because he's the direct and only contact the customer has with your company. As such, your rep will spend the next two days (16 working hours) doing nothing but addressing these complicated customer contract issues. He's a salesperson—not a contract lawyer—but nonetheless, you can rest assured no selling will take place during those tedious hours.

Stalling Out

This is an all too frequent scenario salespeople grapple with. According to one research finding, the percentage of time a rep has to actually engage in selling has fallen during the past two years, decreasing from 48% to less than 36%. That means almost two-thirds of a salesperson's week is spent doing something other than selling, such as managing e-mail and handling the administrative side of contract processing and negotiations. Salespeople often must coordinate the fulfillment of a sale because of IT-led restructuring initiatives done in search of short-term back office cost reductions.

This widespread decline in sales productivity amounts to, arguably, the biggest reason companies in the communications, electronics and high-tech markets fall short of revenue and profit goals. As such, reversing this sales productivity decline ranks as one of the biggest opportunities to ignite a turnaround in revenues and sales and drive high performance among these companies. If comprehensive changes aren’t made, this productivity loss trend will continue.

Other market dynamics are compounding this inefficiency problem. For example, sales channels are becoming increasingly complex and tougher to figure out and leverage. The rapid growth of emerging markets and economies further complicates the sales process. The learning curves are huge in countries such as Brazil, India and Russia. And the rampant merger and acquisition activity strains sales productivity because of logistical, administrative and cultural challenges encountered when blending two separate sales organizations under one new company umbrella.

Companies have frequently addressed sales productivity problems by spending money on training salespeople more. But such efforts have been far from adequate. The reason has usually been that sales training has not been tightly aligned with the company's strategic focus and core capabilities. Too often, reps go out and sell whatever they think they can sell that their company offers, so as to meet their sales targets. And often what they’re selling is not aligned with the company's core capabilities and strategy focus.

Beyond training issues, salespeople too often (though understandably) get frustrated when what they're being asked to sell becomes too hard to sell. Reasons for this too frequently tend to be that the salesperson:

• Doesn't understand the company’s offerings, capabilities or products;

• Doesn't understand the strategic alignment of the company’s core capabilities with the strategy and what they're selling;

• Doesn't believe the commission to sell certain products and offerings is worth the investment of time and effort to learn about them, especially those that are complex;

• Decides to sell products and offerings that are easier to sell, that he already understands and has sold before.

Achieving these sales targets are paramount in the minds of salespeople because they're how they get paid and keep their jobs. That's just human nature. Salespeople won't change unless enticing reasons to change exist. And the most popular reasons are usually financial. Too often they don't have these monetary incentives, so they don't change. Sales stall and decline.

Getting Productivity Back on Track

To reverse this downward trend, companies need to consider the following:

1. Conduct a detailed analysis of where money is being spent—and on what—in the operation organization. What capabilities are in place compared to a best-case scenario? Companies often have inadequate visibility into how much they spend on sales operations because the various related activities span across other functions, such as finance, IT and supply chain.

2. Consider "core" sales operations versus those more appropriately considered "context." A company should continue to do core operations, such as what they do best and what differentiates them the most. And they should consider a shared services model for "context" operations, defined as those outside the company’s core competencies.

3. Stop trying to change your reps. People don't naturally change unless there’s a good reason to. Companies should change the processes and align strategies and core competencies with sales objectives. Companies should make sure salespeople understand this alignment and are sold on it themselves. Only then are they likely to change.

Source: Article by Kevin Bandy Kevin Bandy is Accenture's global lead for sales and marketing transformation within electronics and high-tech industries. He can be reached via e-mail at kevin.f.bandy@accenture.com.

Be Proactive to Avoid Supply Chain Interruptions

Working Capital Optimization Becoming a Top Priority for Majority of Companies

Organizations leveraging both financial and supply chain strategies to aid WCO initiatives, Aberdeen finds; best-in-class companies gain four day advantage in days payable outstanding

New York — August 25, 2008 — Working capital optimization is a high priority for a majority of companies, and increasing numbers of organizations are looking to leverage both financial and supply chain strategies and technologies to aid these initiatives, according to a new research brief from Aberdeen Group.

Seventy-one percent of companies identify working capital optimization as a high priority, Aberdeen reported in a research brief based on a series of surveys conducted by Aberdeen on working capital optimization and supply chain finance.

The survey showed that 11 percent of companies faced supply chain disruptions in the past year due to lack of working capital, and 13 percent experienced disruptions due to suppliers' deteriorating financial situations.

Aberdeen said that the results of the research show that best-in-class companies in managing working capital metrics are able to obtain the following competitive advantages:

Four day advantage in days payable outstanding compared to average companies;

• 19 day advantage in days inventory outstanding versus average companies;
• 6.5 times as likely as peers to have decreased end-to-end financing costs in the supply chain in the past year; and,
• 5 percentage points higher return on working capital versus average companies.

Aberdeen also found that best-in-class companies take proactive steps to integrate and automate their physical and financial supply chains to achieve end-to-end cost savings and process efficiencies.

"Today companies are increasing their already high focus on optimizing working capital, exploring both financial and supply chain strategies and technologies to aid in these initiatives," said Viktoriya Sadlovska, global trade and supply chain finance analyst at Aberdeen Group. "A strategic, forward-looking global corporation should think about its physical and financial supply chains holistically, integrating long-term end-to-end supply chain cost considerations with working capital concerns." Sadlovska added that there is still a lot of value "trapped" in today's manually managed financial supply chains. "Process and financial efficiencies can be achieved by improving visibility into physical and financial supply chain milestones and documents, automation of order-to-cash and procure-to-pay processes, and rethinking of the old financing and payment practices with a company's trading partners," she said.

The report is being made available for free (registration necessary) by TradeCard, a provider of supply chain solutions, at www.tradecard.com/aberdeenresearch.

"In today's complex supply networks and n-tier supply chains, there is a significant opportunity to improve cash flow at each level," said Ken Mizera, vice president of business development at TradeCard. "Instead of one party being a winner and the other a loser in a transaction, working capital improvements can be made in a win-win environment."

Mizera suggested that significant opportunity arises when a third party becomes involved to provide financial services. "With the right set of tools and services in place, companies can collaborate with supply chain partners to determine what is best for the overall supply chain and use the correct levers to improve margin and cash flow simultaneously," he said.

TradeCard said that it helps retailers and brands source smarter and faster through a rapidly deployed network that enables the extended supply chain. The TradeCard Platform synchronizes financial transactions with physical events in the global supply chain to help customers automate trade transactions from purchase order to payment and chargebacks, the solution provider said.

Source: Editorial Staff, Supply Demand Chain Executive
Visit www.sdcexec.com

On-Boarding: The Most Overlooked Part of Hiring

"The on-boarding process is one that is often ignored or left to generic on-boarding practices," says Patrick Stakenas, president of ForceLogix, a company that builds OnDemand sales performance management solutions for leading sales organizations. "These practices might be fine for non-revenue generating staff, but they are generally not designed to bring a salesperson up to full productivity fast enough to have the impact on revenue that is necessary. A 2007 CSO Insights report cites that to achieve sales performance optimization, one must truly understand the levers of sales performance and effectiveness. There are 'levers' inside the hiring and on-boarding process that must be defined as well."

Unfortunately, great sales on-boarding programs are still the exception, rather than the norm, says Stakenas. He says that most companies are missing an opportunity in the first three to six months of a new hire's time to set the tone, discipline, and expectations. "To have them understand your desire for them to be successful, you must plan on using process, methodology, coaching, and technology to help them," says Stakenas. "IDC [a global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets] estimates that more than 25 percent of salespeople in companies will be new to their position this year and the 'typical' sales rep will only stay in that position for less than two years. If it takes 9-12 months on average to get them up-to-speed, you only get one year of productivity out of that person an expensive proposition. For example, if an annual quota for a sales rep is one million dollars, and in the first year he or she can only attain 40-60 percent of that quota, the lost revenue represents overwhelming costs that are often not factored in."

Stakenas says that when a new salesperson is hired, companies should consider things such as teaching them about the products, language, industry, and selling methodology, as well as how to navigate the organization and use the sales tools that are provided. He maintains that the new hire on-boarding levers must not only be taught, but also tracked, measured, monitored, and coached. "Understanding these levers and providing managers with the proper content and tools will reduce the time needed for new hires to become fully productive, and will reduce support costs for that rep," he says.

Stakenas also says that there are intangible benefits to ramping up a salesperson faster. "A guided salesperson that experiences success sooner is typically more loyal and more likely to stay longer than the average two years, reducing your need to hire year after year and bolstering your chances for long-term success," he says.

Source: Selling Power
www.sellingpower.com
The Hiring and Recruiting Newsletter

NAW Announces New Book Release

The NAW Institute for Distribution Excellence is pleased to announce a brand-new handbook: Essentials of Profitable Wholesale Distribution©, Second Edition.

Go to www.naw.org/essentialsprofwd for more information or call 202.872.0885. Quantity discounts apply when ordering two or more copies.
Twice the size of the first edition, this second edition includes both brand-new and updated instructional text and all-new graphics! The first edition was prerequisite reading at many distribution companies, so we have no doubt that this second edition will be just as valued across the wholesale distribution industry.

Making money in the wholesale distribution business gets tougher every year. When you add the current economic slump to the equation, making money can be downright grueling in some sectors of the market! More aggressive competition, expanded product lines, tighter profit margins, and more demanding customers require distributors to work longer, faster, and smarter to survive and remain profitable. Running a successful company requires cooperative efforts from knowledgeable and motivated employees. How can your members ensure that their employees are aligned with their goals for high performance and profitability? They give them Essentials of Profitable Wholesale Distribution©, Second Edition!

If you participate in the NAW Publications Marketing Allowance Program, we'll promote this new book directly to your members, saving you the time and expense of doing so. And you'll receive a marketing allowance equal to 10% of the value of all items ordered by your members during the year. Please contact Vicky Walsh for more information: 202.872.0885 or vwalsh@naw.org.

You can further help the NAW Institute publicize Essentials of Profitable Wholesale Distribution©, Second Edition by

• Mentioning it on your association's Web site with links to http://www.naw.org/essentialsprofwd. Go to http://www.naw.org/files/Essentials_Second_Edition_PR_080508.pdf to read the press release, and you can receive the book cover image by contacting Vicky Walsh at vwalsh@naw.org.
• Inviting Author Jim Olsztynski (wrdwzrd@aol.com) to speak at your convention or other industry gathering. You may contact him directly to arrange speaking engagements. 
•  Interviewing the author for feature stories in your publications or on your Web site. Again, you may contact him directly to make arrangements.

NAWLA is a member of NAW and NAWLA members may purchase NAW products and services at a discount by mentioning they are members of NAWLA.