Canadian Electrical Wholesaler

Sept 13, 2019

Rick McCartenBy Rick McCarten

How much does the electrical industry have to improve to compete with upcoming disruptions in the supply chain?

In May of this year, the delegates at Electro-Federation Canada (EFC)’s annual conference voted on when our industry would be hit with supply chain disruption. The group collectively agreed that our industry in Canada has only three years to prepare for major disruption. We need to act fast!

The graph below on digitization is adapted from a study by Peter Diamandis of Singular University. His study finds that digitization has a pattern that affects both products and services.

Diamandis states: “Anything that becomes digitized, enters the same exponential growth we see in computing." The result is that digital exponential growth (yellow line) starts growing at a much slower pace then traditional linear growth (red line). If digitization grows exponentially on a yearly basis, the first 10 years of digitization are what Diamandis calls “deceptive”. It is a great opportunity for denial, to argue against it, to fight it off. Meanwhile, as the numbers on the right side of the graph show, digitization is compounded year after year. 

At year 10, the compounding gets serious; it begins to grow faster than the linear model. It enters the disruptive stage. Three things happen at this stage:

  • De-materialize: things start to literally disappear. Examples: CD players, cameras, video stores, printed maps, incandescent bulbs.
  • De-monetize: software costs nothing to reproduce. Any form of physical product cannot compete with software. Prices fall.
  • Democratize: once-held monopolies can no longer hold their position. Customers have multiple sources. 

The gray bars on the graph show the vote our industry took on where we are on this graph. Individuals answered independently via a mobile app. The results varied from year 2 to year 12. The concentration was around the 7-and 8-year mark, with the average coming in close to the 7-year mark. If we were to take the average at seven, it means we have a three-year window to improve our industry to compete with potential disruption. 

Wholesale Graph

How much do we have to improve?

In the July 13th edition of The Economist, McKinsey and Company estimated that “40% of all procurement tasks (vendor managed inventory, order placement and invoice processing) can be automated today, and 80% will soon [be automated]; this could produce annual cost savings of 3-10%. All told, it reckons applications and manufacturing could create US$2trn of value.“

This year’s Pathfinder report has our industry sales pegged at $11.5 billion (includes non-full-line distributors).

If we assume 25% of that is cost incurred in the supply chain (across manufacturer, distributor and rep functions, shipping, warehouse, credit, freight, commissions, etc., from place of origin), multiply that by 10% savings, we come up with $290 million.

Best guess of what we need to do to prepare for the disruption is to improve our efficiencies to in the tune of $290 million in the next three years.

Recognizing this is spit-balling, it provides a target of something to aim towards, as well as points to the challenges in both dollars and time needed.

How do you begin to accomplish this?

The solution comes down to talent. Not just one at the top, but throughout your entire organization. The right people need to be in the right spots to make it happen.

At Electro-Federation Canada, we are hosting our first-ever Supply Chain Conference this November to help our members take on these tasks. Delegates will be receiving roadmaps for electronic data exchange, data sharing and vendor managed inventory, see the event ad in this publication in the coming weeks for details and to register.

EFC Supply Chain Conference: November 25-26, Pearson Convention Center, Toronto
www.electrofed.com

Rick McCarten is VP, Operations, Electro-Federation Canada.

       Partnering For The Next Step                                                                     

Siemens CanadaWelcome to the Digital Enterprise Virtual Summit brought to you by Siemens

How quickly can you react to changing conditions and demands in your market? How can you ensure your production will run securely at any time in the future?

Industry’s digital and technological transformation is the answer for meeting today’s and tomorrow’s challenges and market needs.

With the right digitalization and automation solutions, expertise won from practical experience, and a partnership approach that benefits all involved parties.

To explore these possibilities, we’re bringing together top-level speakers, specialists and decision-makers from various industries and experts from Siemens to the Digital Enterprise Virtual Summit under the motto “Partnering for the next step.”   

This virtual summit will be an interactive digital event featuring first-hand experiences and success stories achieved with industrial digitalization and automation solutions, and cutting-edge technologies.

Join us on July 16 and learn from customers and experts how you can respond efficiently, flexibly and safely to the changing market environment.

To cover as many different time zones as possible, we offer two almost identical live sessions – you can also watch them on demand at your convenience:

Sessions runs from :  9:30 am to 2:15 pm ET (3:30 pm to 8:15 pm CEST)


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John JefkinsBy John Jefkins

In 2011, I started working in the electrical arena and quickly noticed that there was a high employee retention rate within the industry. Today, I regularly engage with Electro-Federation Canada members with 20, 30 and even 40 plus year tenures. Other industries I had worked in previously, such as telecommunications, had higher turnover rates.

Our industry faces an increasing need for talent, with new retirements and product/process innovations and modernization driving the need for specialized roles — some not even known yet.

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Digital Twin MarketA recent Markets & Markets report estimates the Digital Twin market will grow from US$3.8 billion in 2019, to US$35.8 billion per year by 2025, at a CAGR of 45.4%. Digital Twin software is already revolutionizing industries such as healthcare, architecture, aerospace, defence, and automotive and transportation.

Furthermore, the global smart infrastructure market, which includes the Digital Twin sector, is expected to thrive at a considerable CAGR between 2020 and 2025 as demand for the smart infrastructure has been a booming year on year, reports Market Research Explore - details. 

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PNNL StudyBy Craig DiLouie

The U.S. Department of Energy has released the results of a study examining authentication vulnerabilities in connected lighting systems (CLS). Particularly as emerging CLS incorporate distributed intelligence, network interfaces and sensors, they can serve as data-collection platforms that enable a wide range of valuable new capabilities as well as greater energy savings in buildings and cities. However, CLS technology is currently at an early stage of development, and its increased connectivity introduces cybersecurity risks that are new to the lighting industry and must be addressed for successful integration with other systems.

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David GordonBy David Gordon

COVID-19 has heightened the benefit of, and interest in, eCommerce for electrical distributors. Our second and third COVID-19 Electrical Market Sentiment Reports have shown that those with an eCommerce offering have seen online sales increases. Further, from conversations with distributors, their site activity increased. The benefit is that these companies had lower sales declines (and some increases), and were able to better serve their customers.

A further benefit is that their remote workforce had access to an online resource, other than manufacturers, for quick, easy, product research.

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2020 q2 Pulse of Lighting FindingsChannel Marketing Group’s 2020 Q2 Pulse of Lighting Report projects that the lighting market, through electrical distribution, contracted by 20%.

The survey, conducted the third week in June, received responses from 164 individuals who equally represented industry stakeholders.

Distributor Performance
Very few distributors reported either flat or positive performance with over 30% reporting declines of over 30% for the quarter.

 

 

 

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Due to the rapid development and generational changes of LED technologies the timing is perfect to launch the EiKO Marketplace as an outlet to sell high quality, value-priced products.

 

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LevitonLeviton Canada is pleased to announce the nomination of Thomas Supinski as Sales Director for Alberta and the Prairies as of June 1st, 2020, as Julie Marineau will be moving to Montreal along with her family. Julie will be promoted to Vice-President, Retail at Leviton Canada’s head office.

Thomas has been residing in Calgary since 2003 and has a deep understanding of the regional market and its specific needs.

 

 

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Anju UddinBy Blake Marchand

Sonepar is excited to introduce Anju Uddin as the new Marketing Manager for their Ontario Region! Anju has more than 15 years of experience as a marketing expert, which includes running an independent agency working with a multitude of businesses in various industries and geographies from around the globe. 

With a passion for reinvention and finding success through a commitment to education and innovation, Anju has utilized her exceptional creativity and business acumen to engineer seamless brand experiences...

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