Canadian Electrical Wholesaler

 October 15, 2019

Rick McCarten

By Rick McCarten

For a long time now, many experts have been pointing out how companies should be expanding their service offerings beyond their product sales. Companies are wrapping services around their product and packaging — everything from special deliveries, warranties, repair and technical assistance to 24-hour service. This “servic-ization” helps differentiate companies from their competitors. How big is this going to get? Some reports have this trend becoming the core of our future economy.

Take Rolls-Royce, a manufacturer of jet engines. These engines are highly sophisticated machines, arguably top of the line in technical intricacy and reliability. Yet Rolls-Royce treats the product like a loss leader because they want the lucrative service contract. Once the engines are sold, they set up monitoring systems for all the engines in the air. They know when an engine needs maintenance, can see if something is not performing to set up for repairs, and replace for end of life. The airlines fly the planes and worry about scheduling and selling seats, while Rolls-Royce looks after the engines. The service contract makes Rolls-Royce more money than the sale of the engine itself. 

Peloton is another example; they make stationary bikes for spinning. When you buy their bike you also purchase their monthly service, which allows you to take part in virtual spin classes without leaving your home. It is reported that they make better margins from the in-house spin class services than the actual product sale.

John Deere is currently in a court battle with some of their customers who refuse to use the dealership for maintenance. John Deere claims that while the product is under warranty John Deere still owns the tractor; customers are only leasing it from them. As owners they are demanding it be maintained properly. 

Back in pre-industrial times, the landowner/farmer held the wealth. Then came the industrial revolution and factories, and the wealth was transferred from the farm to the factory. Today, there are many wealthy landowners, but anyone who is a fan of Neil Young or Willie Nelson has heard of “farm-aid” and the plight of the small farmer. Meanwhile Kellogg’s, General Mills, Nestle’s, McCain’s and the other big food brands have cornered the food market for the best margins.

Fast forward, now “service” will do to production what production did to agriculture. Peloton and Rolls-Royce have figured out how to transform their business models from product to service. They have transformed from “landowners to food producers.” Not all companies, much like the farmers, will be positioned to do so.

The fact is with digitalization, which is driving much of this, many products will not transform to services but will simply disappear. Think videos, DVDs, GPS, cameras, pagers, even light bulbs. Others will lose their brand strength, which will lower margins. 

In service-ization, product branding could be replaced with service branding. The customer will determine the quality of the service provider. The quality of the product will be determined by the service provider. The electrical industry can benefit from service-ization; think about how your company can expand your service offerings beyond traditional product sales.

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

 

 

Carol McGloganBy Carol McGlogan

We are on the cusp of a major tidal wave hitting our industry; the onslaught of 10,000 new employees are set to replace the current base who are over 55 years of age and are on the horizon of retirement. This talent refresh brings on many opportunities for progress to address evolving customer needs, new product solutions and supply chain digitization. New skills and new ways of thinking will propel us forward. However, the challenge this talent pool will have is to understand the industry that they have settled in. This challenge is further magnified as the time required to absorb industry knowledge is compressed due to the accelerated exit of industry knowledge.

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Swati Vora-PatelBy Swati Vora-Patel

The Electrical industry is facing a runway of crossroads — and digital innovation intersects each one of the crossroads. Digital advancements in technology are transforming everything from product development and manufacturing to supply chain management and customer purchasing behaviours. While all of these changes have digitization at the core, there’s another factor that our industry needs to bring front and centre: People.

 

 

 

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Value of Building Permits - DecemberThe total value of building permits issued by Canadian municipalities increased 7.4% to $8.7 billion in December. Increases were reported in five provinces, led by Ontario (+10.5% to $3.4 billion) and Quebec (+15.8% to $2.2 billion). For 2019 overall, municipalities issued $102.4 billion worth of permits, up 2.6% compared with 2018.

Value of residential permits up

The total value of permits for multi-family dwellings was up 15.9% to $2.9 billion in December, mostly due to large projects in the census metropolitan areas (CMAs) of Montreal and Vancouver.

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Changing Scene

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The Alberta Electrical Alliance (AEA) proudly announces the launch of their multi-channel digital ...
Electricity Human Resources Canada (EHRC) celebrated innovation and leadership in human resources ...
On January 31,2020, the new IDEA Connector will go live to over 6500 distributor locations with ...
Arlington Industries has announced the recipients of their rep sales awards for 2019.   ...
EDGE Global Supply, through its subsidiary Technology BSA, completed the acquisition of RK ...
AD is reporting total 2019 member sales across its 12 divisions were $46.3 billion, an increase of ...
WESCO International announces its results for the fourth quarter and full year 2019.   ...
After six years as president of AD’s Electrical Business Unit and chief marketing officer, Ed ...
WESCO International, Inc. and Anixter International Inc. have announced that their boards of ...
OmniCable has announced the promotion of Chip Barrett to Vice President of Supply Chain and ...

IDEA Connector LaunchOn January 31,2020, the new IDEA Connector will go live to over 6500 distributor locations with updates being fed daily by the IDW. Distributors will gain access to IDEA Connector’s Production Environment on February 14, 2020 to verify their migrated extracts and custom maps before they are fully cutover in a phased approach from the IDW to IDEA Connector beginning March 22, 2020.

The IDEA Team is working to ensure a smooth launch. If you are a distributor customer, you’ll receive communications on your cutover date and what you’ll need to do to prepare.

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SouthwireSouthwire has appointed Rahila Dhansi to the position of Manager, Human Resources. In her role, Rahila will be responsible for overseeing Southwire Canada’s HR plans in ways that support our mission and strategy.

Rahila holds a Bachelor’s degree in Employment and Industrial Relations from the University of Toronto and is a Certified Human Resources Leader (CHRL) under the Human Resources Association.

 

 

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Graybar TaylorGraybar Canada announced the retirement of Executive Vice President and General Manager, Brian Thomas, effective March 1, 2020. Upon his retirement, Jason Taylor will be appointed Executive Vice President and General Manager, assuming leadership of Graybar Canada.

Thomas started his career with Graybar Canada, and its predecessor Harris & Roome Supply, in 1987. Throughout his 39-year career in the electrical industry, Thomas held a variety of sales and senior management positions before being promoted to Executive Vice President and General Manager in 2016. 

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Peers & Profiles

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Sean Bernard is the Intelligent Controls Manager, Canada for Ideal Industries. Sean resides in ...
Christina Huang is a Senior Contracts Manager for Schneider Electric. She has a varied, technical ...
Jenny Ng is a Business Development Manager for the Power Solutions Division of Schneider Electric. ...
With over 60-years of experience in the lighting industry, CBC Lighting has established itself as a ...

Sean BernardBy Blake Marchand

Sean Bernard is the Intelligent Controls Manager, Canada for Ideal Industries. Sean resides in Whitby with his wife, Melissa and their daughter, Everleigh.

Sean joined Ideal Industries mid-2019 after 13-years in lighting, working for companies like Phillips, Franklin Empire, and Standard Products. Throughout that time, he made his way from inside sales, to outside sales and up into management.

 

 

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