Crescent Electric Supply Co. has promoted Kristee Mitchell to chief supply chain officer, putting her in charge of key supply chain and distribution operations across one of the nation’s largest independent electrical distributors.

Mitchell, who joined Crescent in 2023, moved into the newly expanded role Aug. 31 after most recently serving as vice president of supply chain fulfillment.

She will oversee supplier partnerships, supply chain fulfillment, distribution center operations, transportation management, and operational excellence across the company. The responsibilities give Mitchell broad oversight of the operations that move products from suppliers through Crescent’s distribution network and to customers.

The East Dubuque, Illinois-based distributor said the promotion is part of its continuing effort to evolve its organizational structure and improve operational performance.

“We congratulate Kristee on this well-deserved promotion and look forward to the results that she will drive,” CEO Penny Cotner said.

Mitchell holds an executive Master of Business Administration in global supply chain management from the University of Tennessee and a bachelor’s degree in supply chain management from Michigan State University.

Crescent operates at more than 140 branches in 28 states and serves contractors, original equipment manufacturers and maintenance, repair, and operations customers in commercial, industrial, institutional, and utility markets.

In addition to its Crescent Electric operations, the company’s regional brands include BA Supply in Missouri; Interstate Electric Supply in Idaho and Oregon; Mesco Electrical Supply in Ohio; National Electric Supply in New Mexico; Womack Electric Supply in Virginia and North Carolina; Stoneway Electric in Washington and Idaho; and Lowe Electric in Georgia and South Carolina.

The promotion puts Mitchell at the center of Crescent’s efforts to coordinate suppliers, inventory movement, distribution center operations and transportation across that multistate network, functions that directly affect product availability, delivery performance, and customer service.

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W.W. Grainger Inc. has acquired technology, intellectual property, and talent assets from Adroit Worldwide Media for $210 million in cash, adding technology designed to automate inventory management for industrial customers.

Chicago-based Grainger said the acquired assets will strengthen inventory management capabilities within its High-Touch Solutions — North America segment. The company plans to begin integrating the technology immediately and launch a commercial pilot within the next several months.

Grainger said the technology is expected to help customers lower the total cost of managing maintenance, repair, and operating inventory, improve product availability and free skilled employees for higher-value work. The company said the acquisition is not expected to contribute materially to near-term results.

Adroit Worldwide Media, or AWM, develops technology that uses artificial intelligence, computer vision, and sensors to automate inventory tracking and replenishment.

AWM’s current systems combine AI-powered vision and sensor technology with smart shelving, inventory analytics, and access controls. The company says its technology can track tools and consumable products across warehouses, cribs and other locations and link products removed to individual users, job codes, or accounts.

AWM also offers predictive replenishment technology designed to identify what inventory should be restocked and when. Other capabilities include tool tracking, smart shelves with weight detection, product mapping, automated inventory reporting, and real-time inventory visibility.

Those capabilities provide more detail around what Grainger described in announcing the acquisition as “frictionless technology for industrial B2B distribution.”

AWM has previously applied its technology specifically to industrial inventory management.

In 2020, AWM announced a global partnership with OptiCrib, a Shamrock company, to apply its Automated Inventory Intelligence and AWM Frictionless technologies to industrial and commercial storeroom management.

The OptiCrib system used high-definition optical sensors combined with weight-sensing technology to automate monitoring of on-shelf inventory. The companies said the technology was designed to provide continuous inventory accountability for durable and consumable materials.

The application puts AWM’s technology squarely into an area already familiar to industrial distributors: managing and replenishing products inside customer facilities.

AWM has also deployed its computer vision and frictionless technology in automated retail environments. In 2024, Denver-based Choice Market selected AWM as its preferred frictionless checkout and technology development partner for its automated Mini-Mart concept. The partnership was intended to help Choice expand the format across locations including multifamily developments, campuses, electric vehicle charging sites and hospitality properties.

AWM is headquartered in Aliso Viejo, California, and lists a production facility in Santa Ana, California. Its website also lists fulfillment or warehouse locations in Las Vegas; Salt Lake City; Sacramento; Boise, Idaho; and Santa Ana.

Grainger did not disclose in its acquisition announcement which specific AWM technologies or intellectual property were included in the transaction or how many AWM employees are joining Grainger.

The investment comes as Grainger’s High-Touch Solutions — North America business continues to post robust growth.

Sales in the segment increased 11.9% in the second quarter from a year earlier. Companywide sales increased 10.3% to $5.02 billion from $4.55 billion, while operating earnings rose 19% to $807 million from $678 million.

Grainger also raised its full-year 2026 sales forecast Aug. 4 to between $19.4 billion and $19.7 billion, up from its previous range of $19.2 billion to $19.6 billion.

For Grainger, the acquisition potentially extends its inventory management capabilities beyond supplying MRO products and into more automated tracking and replenishment after products reach a customer’s facility.

AWM’s existing industrial technology is designed to provide visibility into what products are on hand, who is using them, what has been removed and what needs to be replenished.

Grainger will now evaluate whether those capabilities can become a broader commercial offering within its High-Touch Solutions business.

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The electronics supply chain is tightening again, with manufacturers reporting worsening component availability and longer supplier lead times during the second quarter.

Two-thirds, or 64%, of electronics manufacturers said components and materials were available only in limited quantities or with extended lead times, according to the Global Electronics Association’s August 2026 Global Sentiment Survey. No respondents reported readily available supplies with excess inventory.

The deterioration accelerated during the second quarter. 44% of manufacturers said component and materials availability worsened from the first quarter, compared with 10% that reported improvement. Another 42% said conditions were about the same.

Lead times also moved in the wrong direction. 53% of respondents said supplier lead times for components and materials increased during the second quarter, while just 3% said they decreased.

The results point to supply constraints across several major component and material categories rather than an isolated shortage.

Memory products and laminates and resins were each cited by 16% of respondents as leading sources of disruption. Microprocessors and graphics processing units followed at 14%, while 11% cited passive components.

The sources of supply pressure also differed by region.

In Europe, 35% of respondents cited laminates and resins as a source of disruption, compared with 6% in North America. In the Asia-Pacific region, 33% identified passive components as a source of supply pressure.

The findings could have broader implications for electronics distributors if manufacturers increase orders or carry more inventory to protect against longer lead times. Tighter supplies also could increase demand for alternative components and suppliers as customers try to keep production schedules on track.

“The signals have been building for months,” the Global Electronics Association said in releasing the findings. “Now the numbers confirm it: the electronics manufacturing supply chain is facing renewed and measurable pressure on component and materials availability, and conditions are moving in the wrong direction.”

The association stopped short of describing current conditions as a supply-chain crisis, but said the combination of constrained availability, longer lead times and shortages across multiple component categories warrants closer attention.

“The industry is not in crisis, but the trend lines are worth watching closely,” the association said.

The Global Electronics Association conducts its Global Sentiment Survey monthly to track conditions across the electronics manufacturing industry. The August survey included questions focused on component and materials availability.

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Artificial intelligence demand, shortages of key industrial materials and tariff uncertainty are creating a new set of supply chain bottlenecks that could keep product availability and costs under pressure into 2027, according to S&P Global Market Intelligence.

The firm’s third-quarter 2026 corporate strategy outlook says supply chain problems are increasingly moving beyond ports, shipping lanes, and other traditional transportation chokepoints. The greater risks now include scarce raw materials, constrained components, and shorter windows for companies to make sourcing and inventory decisions.

For distributors, the shift is significant. Electrical and technology distributors face rising semiconductors and computer costs as AI infrastructure consumes more memory chips. Chemical, plastics, and industrial distributors are dealing with tighter petrochemical supplies. Across distribution, tariff uncertainty is also encouraging companies to bring in inventory earlier and rebuild safety stocks.

“Supply chain bottlenecks are no longer just about where goods move,” S&P Global researchers wrote. “They increasingly depend on what materials are scarce, which components are constrained and how much time firms can afford to buy.”

Petrochemical Disruptions Expose Supply Risks

Recent Middle East disruptions showed how difficult it can be to replace certain industrial materials even when companies can find alternative transportation routes.

S&P Global identified plastics feedstocks, aluminum, fertilizers, and specialty materials among the manufacturing inputs most affected.

Naphtha and petrochemicals have been particularly difficult to replace. Imports into mainland China, Japan, Singapore, and Taiwan fell to 73% of pre-conflict levels in April. Propylene polymer shipments were at 80.9% of previous levels.

Other products proved easier to source elsewhere. Ethylene glycol shipments reached 97.9% of pre-conflict levels, while unwrought aluminum shipments increased as buyers sourced more material outside the Middle East.

For industrial and chemical distributors, the distinction is important. Changing transportation routes does little to solve a shortage when alternative sources of the underlying product are limited.

The disruptions are also increasing pressure on manufacturers to decide how much of their higher costs can be passed on to customers.

S&P Global said the gap between manufacturers’ input and output prices in June was the widest since the post-pandemic inflation period. That suggests companies have not fully passed higher costs downstream, increasing the risk of margin pressure if demand weakens.

AI Demand Tightens Electronics Supply

Technology distributors face a different problem.

Rapid investment in AI infrastructure is tightening memory-chip availability and increasing semiconductor prices, with S&P Global expecting the effects to work their way into computers and other electronics through 2027.

South Korea’s semiconductor producer price index reached 275% of its 2023 average in May, while export prices climbed to 715% of the 2023 average, according to the report.

S&P Global forecasts producer prices for computers will rise 16% in the U.S. and 10.9% in mainland China by the second quarter of 2027 compared with the fourth quarter of 2025.

That has direct implications for distributors selling computers, servers, networking equipment, and other data center technologies. AI-related demand is competing for components also used in traditional commercial and consumer electronics.

Chipmakers are spending heavily to add production capacity, but additional supply will take time.

S&P Global estimates capital spending by the three largest memory producers will reach $181.1 billion in 2027, up 141% from 2024. New plants and equipment, however, will not immediately eliminate shortages because new capacity must be built and components qualified before supply reaches the market.

Supplier Shifts Won’t Be Immediate

Companies are also looking for alternative sources of memory chips, but S&P Global cautioned that changing suppliers can take years because of technical qualification requirements and regulatory risks.

Mainland China and Hong Kong exports of memory circuits increased 151.5% year over year during the three months ended April 30, accounting for 28.1% of global trade.

South Korea remained the largest supplier, with a 44.5% share.

For distributors, that concentration creates a familiar problem: More potential suppliers do not necessarily translate into immediate availability if customers must qualify new components or technologies before they can be used.

Tariffs Push Companies to Ship Early

Tariff uncertainty is also changing when companies buy and ship products.

S&P Global found evidence that U.S. companies moved shipments forward in 2026 to get ahead of potential Section 301 tariff increases and prepare for peak-season demand.

U.S. seaborne imports of consumer electronics and leisure goods increased 23.4% from April to May, compared with an average May increase of 6.6% over the previous decade.

The increase moderated in June, when shipments rose 12.6%, in line with the 10-year average of 12.7%.

The figures suggest some companies accelerated orders rather than responding solely to stronger end-market demand.

That matters for distributors because pulling orders forward can temporarily inflate volumes while reducing demand later in the year.

Companies Rebuild Safety Stocks

Businesses are also responding to supply uncertainty by carrying more inventory.

The global manufacturing Purchasing Managers’ Index measure of purchased-material inventories increased to 51.4 in May from 49.7 in January, reaching its highest level since August 2022. A reading above 50 indicates expansion.

Safety-stock building has also increased, although S&P Global said it remains at about one-fifth of its December 2021 peak.

For distributors, carrying additional inventory can protect customers from shortages and delayed shipments. It can also tie up cash and increase the risk of excess inventory if demand slows, prices fall or technology changes.

The calculation is particularly difficult in electronics, where distributors must balance the risk of shortages against rapidly changing products and potentially higher tariffs.

Supply Chain Risk Moves Beyond Transportation

Transportation risks have not disappeared.

S&P Global warned that Panama Canal shipping could face renewed pressure over the next 12 months if El Niño reduces water levels. During previous El Niño periods, shippers routed more freight through U.S. West Coast ports and moved goods inland by rail.

But the broader message from the report is that supply chain planning is becoming less about solving a single transportation bottleneck.

A distributor may be able to change ports, carriers, or shipping routes. Finding another source for a specialized petrochemical, semiconductor or qualified electronic component can be far more difficult.

That puts sourcing, inventory management, and supplier diversification closer to the center of distribution strategy heading into 2027.

For technology distributors, the most immediate pressure may come from the collision between AI infrastructure spending and constrained semiconductor capacity. For chemical, industrial, and agricultural distributors, the challenge is tighter availability of petrochemicals, aluminum, fertilizers, and other materials with limited alternative sources.

Across distribution, tariffs are adding another layer of uncertainty by encouraging companies to order earlier and hold more inventory.

The result is a different kind of supply chain risk: The warehouse may have enough space, and the carrier may have enough capacity, but the product a customer needs may still be difficult — and increasingly expensive — to obtain.

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Distribution is undergoing a massive shift: taking pricing power away from a sales rep’s “gut feel” and moving it into a centralized, data-driven system. But let’s be honest—this transition is awkward. GMs and owners see their margins taking a hit because of inconsistent quotes in the field, yet they’re terrified to take the quoting pen away from their team for fear of a cultural meltdown.

Why do leaders tolerate this margin leakage for so long? To fix the quoting process, we must first understand the very real, human fears keeping the old system in place.

The Anatomy of Fear: Why Leaders Hesitate

You might assume that a failure to modernize pricing is a software problem, but in reality, it’s a human problem. You may avoid pulling pricing control from the field because of deeply rooted fears about your talent, your legacy, and the fear of conflict.

Distributors face pressing psychological hurdles:

1. The “Rainmaker” Ego Trap. For veteran sales legends, the power to set prices is a badge of honor. They see it as the ultimate proof of their market mastery. To them, “owning” the relationship means owning the number—and any attempt to centralize that power feels like a demotion that could send your top A-players straight to the competition.
2. The “Faceless” Corporation Trap. You’ve always believed the mantra: “You’re not just selling stuff; you’re selling relationships.” You’ve built your entire business on handshakes, customized deals, and remembering your customer’s birthday. That’s the whole DNA of independent distribution.

Moving to a cold, system-mandated price isn’t just a process change; it feels like ripping the soul right out of the operation. You are genuinely terrified that injecting a “faceless corporation” price into every transaction will absolutely kill the personal touch that made you successful.

3. The “Hard Conversation” Trap: You keep this broken system running because, honestly, silence feels safer than a yelling match. You think you’re protecting your team’s vibe by avoiding the pricing fight, but the opposite is true. That quiet tension isn’t neutral—it’s toxic. By refusing to call out the problem, you’re letting frustration fester into delayed responses, snappier tones, and quiet resentment. You’re trading one awkward conversation for years of dysfunction.

These worries lead to  one massive temptation: to just keep doing things the way you’ve always done them—to hold your position and stay the course. But those “tried-n-true” strategies? They simply cannot manage today’s volatile inflation, supply chain snarls, and unpredictable tariffs.

The Breaking Point: Move from Commodity Mover to Strategic Partner

For years, a booming economy masked the inefficiencies of sales-dictated pricing. But the market has changed. Three unavoidable realities are now forcing GMs to break the silence finally and change how they quote.

1. Unprecedented Market Volatility. Forget those slow, once-a-year price tweaks. Today’s market is a whirlwind of supply chain snags and sudden tariff changes that bring pure chaos to your doorstep. When these shifts force your vendors to hike costs every week, your margins don’t just slip—they bleed out. If you’re still letting your sales team price things by “gut feel” in the middle of this madness, you’re basically trying to win a high-stakes race while wearing a blindfold. By the time you ship that order at an old price, your profit has already vanished.
2. The Great Retirement and the Tech-Savvy Shift. The distribution industry faces a massive generational turnover. Veteran sales reps are retiring, and when they walk out the door, they take decades of institutional knowledge with them. In the mid-market, institutional knowledge confined to individual minds acts as both a premier asset and a significant liability.

Replacing them is a new generation of digital-native talent. These incoming reps do not want to navigate a million-row spreadsheet prison to figure out what to charge a customer. They grew up on smartphones and seamless apps; they expect their employers to provide intelligent, data-driven tool that guide their decisions. You simply cannot recruit or keep modern talent with a reactive, 1990s pricing process.

3. The Threat of Semi-Automated Competitors. While your sales team is digging through spreadsheets, your rivals have automated systems that update their pricing within hours of getting a cost-change email from a vendor. They feed real-time cost data straight into their enterprise resource planning (ERP) system, which means they can instantly spit out an accurate quote.

Here’s the brutal truth: the first vendor to respond often wins the deal. If you’re still relying on a rep to crunch those numbers manually, you’re losing the business before you even hit “send” on your quote.

The decision to “hang in there” and “keep it going” leads to high-risk behaviors:

• Accepting low-quality, low-margin deals
• Offering over-customized solutions
• Discounting to ensure sales volume
• Avoiding tough negotiations
• Targeting commission not customer satisfaction

When you leave pricing control to salespeople, you trade long-term gain for short-term revenue. Pricing inconsistencies increase. You train the customers to negotiate every deal or wait until the end of the year to deal. You feel margins leak. And you encourage pricing that’s situational not strategic.

A “Hybrid-Pricing System” Solution

The answer to this tension is not for you to turn your sales team into robots or force a rigid, “one-size-fits-all” mandate onto every customer. You don’t replace human judgment; you enhance it.

Instead, you can move toward a Hybrid Pricing System. This approach bridges the gap between your need for margin discipline and your sales representatives’ need for negotiation autonomy, while perfectly bridging the generational divide.

1. Capturing Your “Tribal Knowledge” Base: The foundational stage of a hybrid pricing strategy involves securing the expertise of your veteran staff before they retire. By leveraging AI-driven pricing technology, the central office analyzes past transaction records to identify the successful pricing strategies used by your most experienced representatives.

This process isn’t about substituting human insight with technology; rather, it’s about transforming that insight into an operational standard. These captured insights allow the office to set segmented baseline prices within the ERP, using your team’s seasoned judgment as the bedrock for the entire system.

2. Providing “Radar” for the New Generation. For the incoming, tech-savvy generation, you provide an ERP-driven baseline that acts as their radar. Instead of forcing them to guess, you give them a mathematically sound starting point that accounts for the true cost-to-serve, customer volume, and real-time market conditions. This allows your new employees to get up to speed in months, not years.
3. The “Override” Tolerance. You don’t have to worry about locking your team out of the deal. To keep your veterans happy and handle the messy reality of sales, you give your reps a specific “tolerance window” to negotiate and close with no friction. This lets them stop grinding through spreadsheets and start acting like strategic partners, amplifying their expertise across all 30,000 SKUs instantly.

The “Hybrid Pricing System” acts as your compromise and a step toward automation. It shows how the system captures the knowledge of your veteran reps to create a baseline price in your ERP. This baseline can immediately improve your bottom line by 2-5%, while also giving your salespeople strategic value and protecting their ego by allowing them a specific “override tolerance.” Pricing is simply the fastest way to higher sales and more profits available to your business. At $50 million in revenue, a 2% margin improvement puts $1 million straight to your bottom line. Because a margin gain requires no new revenue and no added cost, it converts to profit dollar-for-dollar — unlike a sales increase, which still carries the cost of goods and delivery.”

Reduce the Hurdles; Take the Step; and Bring the Best Forward!

The transition may be uncomfortable. It requires the courage to step into the unspoken tension and have the hard conversations. But moving first is an act of leadership. By replacing the silent margin leakage with a transparent, office-led hybrid system, you don’t just protect your profitability—you immortalize your company’s knowledge and build a resilient foundation capable of scaling into the automated future.

The post You Can’t Automate a Custom Job: Breaking the Bottleneck of ‘Gut Feel’ Pricing appeared first on Distribution Strategy Group.

White Cap has opened a 480,940-square-foot enterprise distribution center in Bethlehem, Pennsylvania, expanding its distribution network and strengthening its ability to serve construction customers across the Northeastern United States.

The Bethlehem facility is White Cap’s second enterprise distribution center and its first in the Eastern United States. The company said the facility will supply 67 branches across 13 states, serving major construction markets including New York City, Boston, Philadelphia, Baltimore, and Washington.

The distribution center currently employs 66 associates, with plans to expand its workforce to more than 70 as operations grow.

CEO Alan Sollenberger said the facility will place more inventory closer to customers, improving service in some of the country’s busiest construction markets.

“Our Bethlehem EDC puts more of our broad product assortment closer to our customers’ job sites,” says Sollenberger.

Chief supply chain officer Tracy Rosser notes the facility will increase inventory capacity, shorten order turnaround times, and improve delivery capabilities while supporting major commercial and infrastructure projects throughout the Northeast.

The new facility is part of White Cap’s continuing investment in its North American distribution network as the company expands capacity to support faster fulfillment and improve supply chain efficiency. Larger regional distribution centers are becoming increasingly common across wholesale distribution as companies seek to improve inventory deployment, reduce delivery times, and support customers managing complex construction projects.

White Cap distributes specialty construction supplies, safety products, tools, equipment, fasteners, concrete accessories and chemicals, building materials, waterproofing products, and erosion control products. The company operates approximately 575 branches across North America, employs more than 12,000 people, and serves about 200,000 customers.

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Interest in artificial intelligence for inventory management is growing rapidly, but adoption remains limited, according to a new survey released by inventory management software provider inFlow Inventory.

The company’s state of inventory management 2026 report found that 81% of warehouse and operations professionals want to implement AI in inventory or warehouse operations, yet only 11% currently use AI tools in their daily work.

The findings are based on a March survey of 400 warehouse, inventory, supply chain, and operations professionals across 33 industries. InFlow said it also compared the survey results with 4,000 customer interactions from 293 companies collected between February and June.

The survey found operators are most interested in using AI for demand forecasting and automated replenishment rather than chatbots or other general-purpose applications.

Interest in AI now matches the adoption rate of barcode scanning, with 81% of respondents reporting they use barcode technology. The report suggests AI has become a mainstream priority for warehouse operations, even as deployment remains in its preliminary stages.

Despite growing interest in AI, spreadsheets continue to dominate inventory management.

The survey found that 85% of respondents use spreadsheets as a primary inventory management tool, while 74% rely on spreadsheets as their only or primary inventory system without dedicated inventory management software.

Reliance on spreadsheets extends beyond smaller organizations. Among companies with 500 or more employees, 53% said spreadsheets remain their primary inventory management tool.

Although 92% of respondents said they are satisfied with their current inventory management approach, many continue to face operational issues.

Half (49.5%) identified inventory accuracy as the area most in need of improvement, while 44% reported experiencing stockouts at least once a month. Another 52% cited supplier reliability as their biggest operational challenge.

Respondents identified implementation cost as the biggest obstacle to adopting AI.

Among those considering AI, 62% cited cost as their primary concern. Only 21.5% questioned whether AI would deliver an adequate return on investment, making ROI the least frequently cited adoption concern measured in the survey.

Respondents reported cost increases across several areas of their operations.

Product and material costs, freight, and shipping each were identified by 23% of respondents as their largest cost pressure over the past year, followed closely by labor at 22%.

Two-thirds reported increases in both freight and material costs, while 84% said they buy inventory ahead of demand at least occasionally to guard against supply uncertainty, increasing inventory carrying costs.

For distributors, the findings suggest that interest in AI is increasingly centered on operational applications rather than experimental technology. Demand forecasting, replenishment planning and inventory optimization remain among the most sought-after capabilities, but broader adoption is likely to depend on lower implementation costs and easier integration with existing inventory systems.

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U.S. manufacturing expanded in July, but growth slowed for a second consecutive month as production and new orders moderated and supply chain disruptions intensified, according to preliminary data released Friday by S&P Global.

The S&P Global Flash U.S. Manufacturing Purchasing Managers’ Index slipped to 53.8 in July from 53.9 in June, its lowest reading in four months. A reading above 50 indicates expansion. The index remained among the highest levels recorded during the past four years despite the slight decline.

Manufacturing output continued to grow but slowed to its weakest pace since March. New orders also increased at the slowest rate in four months, while exports declined again, indicating domestic demand continued to drive factory activity. Companies cited stronger-than-usual Fourth of July spending, FIFA World Cup-related activity and increased investment in sales, marketing and product development as supporting demand.

Manufacturers continued building inventories as a precaution against higher prices and concerns about the availability of materials tied to the conflict in the Middle East. However, S&P Global said fewer companies reported stockpiling than in previous months, contributing to slower manufacturing growth.

Supply chain conditions deteriorated further during the month. Manufacturers reported the sharpest increase in supplier delivery times since August 2022, extending a streak of worsening lead times to 11 consecutive months. The report attributed the delays to shipping disruptions around the Strait of Hormuz, demand for safety stock and tariff-related supply constraints.

Input cost inflation accelerated to its highest level since May 2025 as manufacturers reported higher energy, shipping, and raw material costs, along with tariff-related price increases from suppliers. Companies continued passing those costs on to customers, with overall selling price inflation reaching its highest level since August 2022.

Manufacturers also increased hiring during the month, helping lift overall business employment for the first time in three months. Hiring remained modest, however, as excessive costs and an uncertain trading environment caused some companies to delay filling vacant positions.

“US businesses reported a good start to the third quarter, the ‘flash’ PMI survey data broadly consistent with GDP growing at an annualized 2.0% against a 1.2% pace signalled for the second quarter,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said in the report. “The month saw an encouraging return to hiring by companies, with employment rising for the first time in three months.”

Williamson said the manufacturing sector showed signs that the inventory buildup seen in recent months was beginning to fade even as supply chain disruptions and price pressures intensified.

“It was also worrying — though not unexpected — to see manufacturing growth weaken as some of the stock building seen in prior months showed signs of fading,” Williamson said. “Instead, July saw a concerning intensification of supply chain delays and accompanying renewed upturn in price pressures, constraining growth and subduing demand.”

For distributors serving industrial customers, the report points to continued manufacturing expansion but a more measured pace of activity. Slower production growth, moderating demand, and persistent supply chain disruptions could lead manufacturers to manage inventories more cautiously while continuing to contend with higher operating costs.

The manufacturing survey contrasted with stronger growth in the broader economy. S&P Global’s Flash U.S. Composite Output Index rose to 53.6 in July from 51.9 in June, reaching its highest level in eight months as stronger services activity offset slower manufacturing growth.

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Fastenal Co. reported a 14.7% increase in second-quarter sales as share gains with larger customers, pricing actions and continued expansion of its digital supply chain programs drove growth amid modest improvement in industrial production.

The industrial distributor reported net sales of $2.39 billion for the quarter ending on June 30, up from $2.08 billion a year earlier. Net income increased 15.9% to $382.8 million, or 33 cents per diluted share, compared with $330.3 million, or 29 cents per share, in the second quarter of 2025. Operating income rose 15.1% to $501.8 million, while operating margin remained unchanged at 21%.

Fastenal attributed the growth to improved customer contract signings since the first quarter of 2024, pricing actions, and modest improvement in industrial production during the first half of 2026. Pricing contributed approximately 2.9 percentage points to second-quarter sales growth.

Manufacturing remained Fastenal’s largest market, accounting for 75.9% of sales. Heavy manufacturing led to growth, with daily sales increasing 18.1%, while nonresidential construction posted 17% growth. Fastenal said the construction market recorded growth for the fifth time in the past 15 quarters. Transportation and warehousing customers also contributed to sales gains.

Sales growth continued to be led by larger contract customers. Contract sales increased 17.6% year over year and represented 75.8% of quarterly revenue, up from 73.2% a year earlier. By comparison, sales to non-contract customers rose 7.3%.

The company’s digital supply chain business also continued to expand. Sales through its FMI technology platform, which includes FASTStock, FASTBin and FASTVend, increased 16.4% to $1.08 billion and accounted for 44.6% of total sales. Digital Footprint sales, which combine FMI sales with eBusiness transactions that do not represent FMI billings, rose 16.2% to $1.49 billion, representing 61.6% of quarterly revenue.

Fastenal signed 6,993 weighted FASTBin and FASTVend machine-equivalent units during the quarter and ended June with 140,789 installed units. The company lowered its full-year signing target to between 27,000 and 29,000 machine-equivalent units, down from its previous goal of 28,000 to 30,000.

Gross margin declined 75 basis points to 44.6%, primarily because of unfavorable net price-cost conditions. Customer mix, higher transportation costs, and increased customer rebates also pressured the result. Fastenal said larger customers typically carry lower gross margins but generate higher profit dollars and operating efficiencies. Lower selling, general and administrative expenses as a percentage of sales fully offset the gross margin decline, allowing operating margin to remain flat.

Operating cash flow totaled $265.7 million during the quarter, down 4.6% from a year earlier and equal to 69.4% of net income. Fastenal attributed the decline to higher accounts receivable associated with strong sales growth late in the quarter, including a 20.5% year-over-year increase in June sales. Inventory increased 0.5% from a year earlier, which the company attributed to disciplined inventory management.

Investment in property and equipment, net of proceeds from asset sales, totaled $60.5 million during the quarter. Spending was directed toward facility construction and upgrades, information technology, and industrial vending equipment. Fastenal maintained its expectation of investing between $310 million and $330 million in 2026, including spending to replace its Atlanta hub, improving picking capacity and efficiency, adding trucking capacity and continuing IT projects delayed from 2025.

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Amazon is expanding beyond parcel delivery, positioning its logistics network as a full-service supply chain platform for manufacturers, distributors, retailers, and other businesses.

The company launched Amazon Supply Chain Services (ASCS) on May 6, opening its freight transportation, warehousing, fulfillment, and parcel delivery capabilities to businesses regardless of whether they sell on Amazon’s marketplace. The move commercializes the logistics infrastructure Amazon built to support its own retail operations and extends it to third-party customers.

“Amazon is bringing the infrastructure, intelligence and scale of its supply chain services, proven over decades, to businesses everywhere, much like Amazon Web Services did for cloud computing,” Peter Larsen, vice president of Amazon Supply Chain Services, said in announcing the platform.

The network includes more than 200 U.S. fulfillment centers, more than 80,000 trailers, more than 24,000 intermodal containers and more than 100 aircraft.

Several large companies have already adopted the service. Procter & Gamble is using Amazon’s freight network to move raw materials and finished goods throughout its supply chain, while 3M is using the service to transport products from manufacturing facilities to distribution centers worldwide. Lands’ End is using Amazon’s inventory network to fulfill orders across multiple sales channels, and American Eagle Outfitters is relying on Amazon’s parcel network to deliver online orders.

Amazon expanded the platform again on June 10 by opening its less-than-truckload service to shipments moving anywhere, not just freight destined for Amazon facilities. Previously available only to Amazon selling partners and vendors, the service now allows businesses to ship one to six pallets, or 150 to 15,000 pounds, to third-party warehouses, distribution centers, and retail locations.

The LTL service includes GPS shipment tracking, automated appointment scheduling, electronic proof of delivery, electronic data interchange integrations and a fleet equipped with cargo cameras and door sensors.

Amazon is also continuing to invest heavily in the infrastructure supporting the network.

The company plans to build a 248,687-square-foot robotics-enabled fulfillment center in Georgetown, Texas, according to a state filing. The approximately $48 million project will include robotic storage and sorting systems, cold storage, and order fulfillment operations. Construction is expected to begin in August and finish in July 2027.

The project follows the opening of a $250 million fulfillment and distribution center in Round Rock, Texas, which received a temporary certificate of occupancy in May, and a 62,000-square-foot last-mile delivery station that opened in Brownsville in March.

For distributors, Amazon’s expansion represents more than another parcel delivery option. The company now offers freight transportation, inventory storage, warehousing, fulfillment and final-mile delivery through a single platform, allowing businesses to outsource multiple supply chain functions without using Amazon’s ecommerce marketplace.

The strategy creates another logistics option for distributors evaluating transportation and fulfillment partners, particularly those seeking to consolidate freight, warehousing, and delivery under a single provider.

It also raises strategic questions. Many distributors compete directly with Amazon in categories including industrial supplies, healthcare products, and consumer goods. As Amazon expands its logistics services, distributors will need to balance the operational advantages of its network against the risks of relying on a company that also competes in many of their end markets.

Amazon’s continued investment in fulfillment centers, freight services and logistics infrastructure suggests the company is building a long-term business that extends well beyond ecommerce. For distributors, which means Amazon is increasingly competing not only with FedEx, UPS, and DHL, but also with third-party logistics providers, contract warehouse operators and other companies that manage transportation and fulfillment.

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