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Readers Respond: The President and the budget fiasco

BY HBSDEALER Staff

During yesterday’s press conference on the debt ceiling, the budget, tax increases and spending controls, President Obama rejected the idea of a short-term deal to end the impasse. He added: "We might as well do it now, pull off the band aid, eat our peas." Time will tell.

Here’s what our readers said about the continuing "taxing-and-spending" debate raging in Washington, D.C.

"This fiasco, as you would call it, is all of their making. The President needs to tell the American people that if we default on our loans, the rumble would be worse that the last recession we had. We cannot continue politics as usual. They need to make decisions based on what the country really needs. He needs to tell the people that the Senate, the House of Representatives and he are going to cut their wages, go on Social Security (as we have it) and stop paying the retired congressmen their full salaries. That would be a good start."
— John Stokes

“There should be no compromise on guaranteed benefits for low- and middle-class America. He needs to stay true to the values that got him into office. It has been well proven that tax breaks and corporate tax loopholes do not create jobs in America. There is no shortage of upper class in this country, but a shortage of middle class. It’s time to stand up for all Americans — not just executives, bankers and corporations.”
— Frank Douwes

"What he should say is: ‘You’re absolutely right Republicans, my policies have not worked up to this point, and raising taxes during these economic times is nuts. Therefore, I will recommend no new taxes, we will create a balanced budget amendment, and we will reduce spending to a percent of GDP that both parties will agree to.’ "
— Mike Doogan

"How many households in the U.S. do you suppose can go out and spend way above their incomes and then go ask the boss for a raise, because of their spending habits? Where do the members of Congress lose this theory from their home to the Capitol building? It isn’t how much money you take in that is the problem, it is how much you spend that gets you in trouble. Washington, D.C., is a prime example of this."
— Merle P. Higgins

"The President should say: ‘In the spirit of the American people, we will also be tightening our belts.’ I would also propose one thing that would probably save the country quite a bit of money and solve health care. No politician either past or present should have their health care paid in total."
— Vicki Davison
Bloomington (Ind.) Hardware

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WOLF launches new cabinet line

BY Allison Har-Zvi

WOLF has launched a new line of cabinets, “WOLF Classic Cabinets,” available exclusively to independent dealers in 18 eastern states. With the new cabinet line, the largest U.S. supplier of kitchen cabinets hopes to compete with comparable products imported from overseas. 

Barry Graboski, WOLF’s senior VP product development for kitchen and bath, said that the new line was the result of collaboration with WOLF customers, who expressed a need for a product to compete with the foreign-made cabinets that dominate the category. 

WOLF has decided to accelerate its production schedule for WOLF Classic Cabinets due to the positive feedback the product received during a trial launch in select markets. WOLF expects that the new line will do well against similar imported products. 

WOLF will produce Classic Cabinets as part of a new business model the company adopted in 2010, which focuses on products marketed only to independent dealers.

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At Home Depot, supply chain investment pays dividends

BY Ken Clark

The next phase for Home Depot’s supply chain transformation is the implementation of a new forecasting and replenishment system within the company’s 19 rapid deployment centers (RDCs).

"This new system integrates our store and DC systems and is an important step in improving the throughput and productivity of our overall supply chain," said Ted Decker, the Atlanta-based retailer’s senior VP U.S. Retail, speaking at the recent Oppenheimer & Co. Consumer Conference.

In January of this year, Home Depot opened its 19th RDC, and the company now serves 100% of its stores through the RDC infrastructure, he said. Not counting special orders, about 40% of the merchandise flow to stores goes through the RDCs. 

Much of the 40 basis points of margin expansion experienced by Home Depot in 2010 came from the supply chain transformation, he said. And as the flow-through reaches 50%, the company expects to capture higher gross margin dollars.

"Many of [the RDCs] have just had their first spring, and the facilities operations will mature and they’ll get more efficient," Decker said. "Then we will put more volume through them; we will add more vendors and continue to lower the cost of goods of flow through the RDCs."

In-stock positions will be another area of improvement, especially in the chain’s lower-volume stores, according to Decker. The RDC system relieves store managers of the concept of "vendor minimums." "You can order one unit, and that’s the whole beauty of the business model," he said.

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