*NEWS*MOVE UP THE SUPPLY CHAIN

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Office Products Dealer Co-Op Moves up the Supply Chain In Bid to Compete With ‘Big Box’ Competition

Three Regional Distribution Centers Provide a Better Way to Buy Direct

INDIANAPOLIS,is.group, the Nation’s largest cooperative of independent office products dealers, is announcing a ground- breaking distribution and logistics system that for the first time will enable independent U.S. dealers to compete on price, selection, speed and service with the so-called “big boxes” — mega retailers, such as Staples, Office Depot, Boise and Corporate Express.

Control over distribution of products purchased directly from manufacturers will provide dealers significant bottom line benefits. Dealers will be able to acquire goods faster and more cost effectively from three new distribution centers managed by the is.group cooperative.

“We are done playing David to their Goliath,” said John Kreidel, is.group president and CEO. “The current dealer supply chain model is costing our members money, so we are changing it. We are getting rid of inefficiencies and modernizing our logistics and operations.”

The backbone of this innovative new system is three regional distribution centers — in Indianapolis, IN, Fontana, CA, and Mechanicsburg, PA. It is the first time a U.S. office supply dealer cooperative has “moved up the supply chain” and become its own distributor.

Independent dealers successfully serve part of a $56 billion market of high-growth small and mid-size businesses. But in recent years, “big box” retailers have gained a greater share of the overall office products market. “Taking control of distribution operations puts us on par with the giant retailers and secures our future,” said Harry Macey, is.group board chairman and owner of Perry Office Plus in Texas. “We can provide small and mid-sized businesses with a full-range of office supply products at prices and a level of service that equals or surpasses what the competitors can offer.”

Set to open in May 2004, the distribution centers will stock about 2,000 items from more than 40 manufacturers, offering a full range of office and computer supplies.

“Selected suppliers are big beneficiaries too, and they already are participating in the program,” Kreidel said. “Because is.group’s 700 members provide manufacturers with a potent sales and marketing force, they are instrumental in helping build brands within the expanding mid-sized business market. National wholesalers will also profit alongside independent dealers, who are their biggest customers.”

The announcement of the distribution centers is the second bold move for is.group in the last six weeks. On January 7, the co-op acquired Express Computer Supply, a leading wholesaler of IT products, the fastest growing segment in the office supply industry.

Founded in 1977 and located in Indianapolis, is.group is a dealer-owned, value-added cooperative whose members sell office supplies, furniture and office equipment. It has more than 700 members that employ some 2,100 sales representatives in over 1,000 locations in all 50 states. Collectively, is.group members produce $3.10 billion in end-user sales to approximately 640,000 small to medium enterprise businesses

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January 29, 2004 at 9:56 AM