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.

 

Rick McCartenBy Rick McCarten

What how much does the electrical industry have to improve to complete 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!

 

 

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David GordonBy David Gordon

The rep alignment dilemma… whom to align with to generate sales? End-users? National chains? Independent supportive distributors? Any distributor who will support the manufacturer? The manufacturer? But, the bottom line becomes, what will generate sales to meet manufacturer expectations?

It’s complicated, and channel consolidation and channel diversification will make this more complicated.

 

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Stephanie MedeirosBy Blake Marchand

Stephanie Medeiros leads ABB Canada’s Electric Vehicle Charging Infrastructure team, as well as transit bus charging in the United States and Canada. She has been with ABB in various positions for 10 years, compiling a diverse skillset that includes work all over the world. 

After receiving a degree in Electrical Engineering from McGill University, Medeiros got her start in the industry by volunteering with the Canadian government as an electrical engineering intern, where she travelled to Peru to help improve their water treatment infrastructure. 

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Wholesale SalesWholesale sales rose 0.6% to $64.1 billion in June, partly offsetting the 1.9% decline in May. Sales were up in four of seven subsectors, representing 54% of total wholesale sales.

In dollar terms, two subsectors — miscellaneous, and machinery, equipment and supplies — contributed the most to the increase in June, while the motor vehicle and motor vehicle parts and accessories subsector posted the largest decline.

 

 

 

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Investment In Building ConstructionTotal investment in building construction decreased 0.9% in June to $15.1 billion, the first decline in eight months. A slight increase in non-residential investment (+1.0% to $4.8 billion) was offset by a decrease in the residential sector (-1.8% to $10.3 billion). On a constant dollar basis (2012=100), investment in building construction decreased 1.1% to $12.7 billion. Despite the monthly decrease, total investment grew 1.6% year over year in the second quarter.

 

 

 

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ImarkDuring the recently held IMARK Canada 2019 meeting in Niagara Falls, executives from 14 of the leading manufacturers in the Canadian electrical and lighting industry participated in the IMARK Canada Product Stampede on September 13th.

Select manufacturer executives had precisely five minutes to present a key product with superior growth potential to the members of IMARK Canada. Distributor member executives then rated each supplier based on the quality of the presentation and the perceived sales potential of the product being demonstrated.

 

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Endress+HauserEndress+Hauser has broken ground for its new $28 million Customer Experience Centre for Central and Eastern Canada. When construction of the approximately 47,000 sq ft facility in Burlington is completed late next year, it will provide customers from Manitoba to Atlantic Canada with a generously equipped, state-of-the-art training and support hub for selecting and familiarizing themselves with the company’s latest innovations for process automation.

Last week’s official groundbreaking included a traditional Land Acknowledgment Ceremony performed by Chief R. Stacey Laforme of the Mississaugas of the Credit First Nations.

 

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Ariel Technology Inc.Heritage Sales and Marketing Group was created in late 2015 by Jack Eva, the former owner and operator of Electra Supply Inc., a four-branch independent distributor in South Western Ontario, which he sold in 2012 to the Franklin Empire organization based in Quebec Canada. Heritage Sales is an active member at Electro Federation Canada (EFC) & Canadian Electrical Manufacturers’ Representatives Association (CEMRA).

 

 

 

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Peers & Profiles

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Lori BagazzoliBy Blake Marchand

Lori Bagazzoli, Regional Sales Manager for Viscor, is a 20-year industry veteran that has built an interesting career from the bottom up. Beginning as a 19-year old just out of college in customer service with EXM, she gained an intimate knowledge of the electrical and lighting supply business by working her way through various organizational levels.

“I was definitely able to learn the different roles, and understand all the different aspects of the business,” she said, “starting so young, I really had to put in my time to be able to move up.”

 

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Louis BeaulieuBy Line Goyette

Neither a Millennial nor a Baby Boomer, Louis Beaulieu embraces new technologies and new markets, but remains faithful to family traditions. He holds a bachelor’s degree in finance and a master’s degree in management from Laval University and is the General Manager of Ouellet Canada. A perfect profile for a career in the family business.

When I ask him if, as is often the case in a family business, he had always known that he was going to join the company, he replied, “Not at all. When I was young, I spent my school holidays at my older brother’s farm at Ile d’Orléans.

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