Welcome to ElectricalTrends

ElectricalTrends is a communications vehicle offered to the electrical distribution industry by Allen Ray Associates and Channel Marketing Group. The purpose of ElectricalTrends is to share Allen Ray Associates' and Channel Marketing Group's insights on industry trends, observations on industry activities and issues and offer ideas that may benefit industry participants in their endeavor to improve their businesses in the areas of growth and profitability.

Readers should not construe our postings, nor comments from individuals as reasons to purchase / not purchase from a supplier nor as a basis for making an investment decision.

For more information about ElectricalTrends' purpose, moderation policy or to advertise on ElectricalTrends, click on the applicable link or email David Gordon.

Wednesday, January 29, 2014

2014 Western Wrap-Up

Last week I attended the NAED Western which was held at the Marriott Desert Ridge in Phoenix.  I hadn't attended the Western in awhile so it was good to see a number of old friends on the distributor side as well as regional manufacturer management.  The Marriott seems to be a popular spot as one manufacturer mentioned that he had been there four times in the past year...and it has a very good lobby and bar area which made networking and "hallway meetings" easy to occur for the 712 people who were registered for the meeting.

Speaking of attendance, there were 79 distribution companies (inclusive of multiple divisions of CED) and many manufacturers.  Surprisingly only 60 distributors had booths.  A few people mentioned to me that they were surprised that neither Rexel nor Platt were on the registration list (which prompted me to review the registration list three times.)

Some observations:
  • In speaking with distributors and manufacturers, their performance in this region, which is essentially west of the Mississippi, was relatively strong. Markets driving the growth included petrochem, multi-family, residential (especially renovation), Texas is strong, utilities, energy efficiency for commercial retrofits and some major construction projects.  The trend of greater growth in metropolitan areas (except for the petrochem areas) continued.  We heard high single digit and some double digit growth percentages.  The outlook, according to many, is for as good, if not better, for 2014.
  • Spoke to a distributor who has outsourced their trucks / deliveries to a local trucking company and has seen favorable results.  Interesting approach to managing expenses, outsourcing headaches and, in their case, removing a union issue.
  • Talked to another distributor, a large company, that is focused on LEDs. They mentioned that 20-25% of their lighting sales is now LEDs. As a thought, we've seen a correlation between companies that are focused on LEDs and sales performance. Distributors may want to set a goal for their LED sales ... may see a correlation to 2014 sales performance.  They key, however, is selling rather than bidding.
  • Herm Isenstein, DISC, introduced his son Gil to the industry so now succession for the industry's pre-eminent distributor served data source is assured. And they've introduced a new product that is able to track / project distributor served sales by SIC at the zip code level.  A huge, detailed database for a nominal incremental cost.  If you subscribe to Market Track you should upgrade to this immediately.
  • Heard the lack of talent woes from distributors. Difficulty (in one distributor's words "impossibility" of finding qualified inside / outside salespeople as well as project staff.  One claimed he was willing to relocate people. Which may mean higher wages for some or the need for distributors to invest, and over staff, in/with non-industry personnel. It requires a different training and management mind-set.
  • Spent some times with the guys from Datalliance.  Was surprised to hear that they now have 26 electrical manufacturers using their VMI system and are supporting over 100 distributors. It makes one wonder if these distributors are reaping financial benefits (improved turns, increased sales on these lines, lower error rates, higher employee productivity, etc) and if manufacturers are experiencing a lower cost to serve these distributors.
  • Heard some buzz from manufacturers regarding Jigsaw Systems and their SPA and inventory systems for manufacturers.  David Oldfather, ex-distributor and ex-AD, is affiliated with them. Seems to be a software platform / process improvement system that is generating lots of interest and could gain adoption.
  • eCommerce was talked about by a few companies.  Some of the conversation was about catalog content and further moving the industry forward (which means that IDEA and Trade Service are not doing too well in getting their messaging out to the broader distribution industry) and the inadequacy of ERP system web order entry systems. With Amazon Supply, Grainger and others, this is becoming more of an issue for larger distributors as well as companies responding to specific customers. And with the #200 distributor on the EW Top 200 list about $20M, cost-effective solutions are needed.
  • Interesting Graybar stat I heard ... for a company that many thinks is a construction-oriented company ... they have 400 industrial / automation personnel and are looking to hire 50 more in 2014.
  • Unfortunately I didn't get to any of the workshops (which is good as it means I had meetings with manufacturers and distributors) but didn't hear much about them (which infers few may have gone).  Did hear that the "Selling Services" session had some good ideas.
    • I did get to attend the general session.  A couple of observations:
      • Tom Nabor (NAED) mentioned that there is an upcoming meeting between NAED and IDEA to "identify joint mission" as it relates to technology.  Many wondered what was meant as they thought IDEA was leading this charge.  At the same time, most seem confused about NAED's DataFirst program, which he appeared to stumble on when mentioning it.
      • Tom shared significant growth of the NAED Learning Center ... 47% increase in participation, 43% more courses, over 13,000 manufacturer courses taken.  Wonder what BlueVolt's stats would be given their marketing group involvement and distributor specific involvement (and ElectricSmarts also develops training programs.)
      • Sandy Rosencrans, City Electric and NAED Chair, has an interesting story on how she got into the business.  If you haven't heard it and see Sandy, you should ask.
      • Dave Maxwell, Graybar DVP and NAED Western RVP talked extensively about the Western region's project ... a white paper on terms and conditions and contract negotiation ... which he found a way to be passionate about!  You can read the whitepaper at www.naed.org/TandC.
      • The incoming Western RVP is John Maltby from Maltby Electric.
      • The keynote speaker with Terry Jones who was involved with Sabre (American Airlines' reservation network before it was spun-off as Travelocity), Travelocity, Kayak and is now involved in venture capital.  The slides are available at www.tbjones.com (register under downloads).  He spoke on innovation and had some good ideas, albeit lots of references to Travelocity, relating to innovation and how to extract from your team.  The key, however, is identifying / setting your goals and the culture within your company.  Good messaging but ran a little "long" according to a number of people I spoke with afterwards.  You needed to pull out the nuggets.
It appeared to be a very productive meeting especially given the number of distributors who attended (and most brought multiple people with Elliott Electric taking the distributor honors for the most registrants - 14!).

If you attended, what was your experience? What did you hear?

3 comments:

  1. We've been doing VMI with Datalliance since 2010. Currently 4 manufacturers. Got 3 more scheduled for this year. We've realized all of the financial benefits mentioned above. I highly recommend it

    ReplyDelete
  2. I'm glad I'm not the only one who was wondering what Tom was meaning for a joint meeting. I thought IDEA is supposed to be a joint effort between distributors and manufacturers and was to drive the data and technology issue. NAED doesn't know squat about it and I can't figure out what this Datafirst thing is. Has NAED been so effective that it needs to be involved in everything?

    ReplyDelete
  3. David: You were wondering about BlueVolt's numbers. I'm not sure the time frame for the NAED's numbers so this may not be apples to apples, but for 2013, BlueVolt users enrolled in almost 1 million online courses, which was a 43% increase over 2012. More 4Q and year-end information is in this news release: http://www.bluevolt.com/news/bluevolt-reports-fourth-quarter-and-2013-year-end-results
    -Renee Seker, BlueVolt

    ReplyDelete

Channel Marketing Group | Allen Ray Associates