Executive Briefings

Office Max Exec Heralds the Luke Skywalker of the Supply Chain

Asked how the economic downturn has affected Office Max's relationship with customers, Reuben Slone, executive vice president, supply chain, said:  "There have been two kinds of customers in the recession. There have been those that behaved in an enlightened way. They have not, for example, taken advantage of us when commodities - whether it was transportation, or steel, or iron - were priced at near zero. The enlightened customers were not using that as leverage to lock us into an unsustainable price position. They were saying, 'Let's take a long-term view, and we'll work through this together.' I would call those the Luke Skywalker-type of customers.

"Then there have been the Darth Vaders, who basically said: 'We're going to grind you down and take advantage of this economic dislocation to lock you into ridiculously low rates.' And I think what we're going to see is that the Luke Skywalkers will significantly distance themselves from the Darth Vaders over the next 10 years. The Vaders are going to have the lowest rates on paper - and they're not going to get what they need. They won't get steel; they won't get their stuff hauled."

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Asked how the economic downturn has affected Office Max's relationship with customers, Reuben Slone, executive vice president, supply chain, said:  "There have been two kinds of customers in the recession. There have been those that behaved in an enlightened way. They have not, for example, taken advantage of us when commodities - whether it was transportation, or steel, or iron - were priced at near zero. The enlightened customers were not using that as leverage to lock us into an unsustainable price position. They were saying, 'Let's take a long-term view, and we'll work through this together.' I would call those the Luke Skywalker-type of customers.

"Then there have been the Darth Vaders, who basically said: 'We're going to grind you down and take advantage of this economic dislocation to lock you into ridiculously low rates.' And I think what we're going to see is that the Luke Skywalkers will significantly distance themselves from the Darth Vaders over the next 10 years. The Vaders are going to have the lowest rates on paper - and they're not going to get what they need. They won't get steel; they won't get their stuff hauled."

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