C U R R E N T

9/11, 10 YEARS LATER

B U S I N E S S

HARNESS THE POWER OF YOUTUBE

F E A T U R E S T O R Y

WHY PLAN FOR SUCCESSION?

the ELECTRICAL DISTRIBUTOR

tEDwww.TedMag.com Sep.11

On the Path toPerfection

SPRINGFIELD ELECTRIC SUPPLY IS ON ITS WAY TO 100%

CEP CERTIFIED STATUS

MARK BARTHEL, vice president of sales

FC_TED.0911_0806 Cover2.qxp 8/23/11 12:11 PM Page 1

82 the ELECTRICAL DISTRIBUTOR • Sep. 11 www.TedMag.com

feature STORY

by Sonia Coleman

A candid discussion onhow leaders can implementautomation andtechnology tostay ahead of thecompetition.

DISTRIBUTORS AND MANUFACTURERS are investing impressive resources into

technology and automation to help their businesses thrive in this lean

economy. Drawing on their wisdom and insider experiences as current

and past IDEA (idea-esolutions.com) chairs, Larry Stern, president of

Standard Electric Supply, Milwaukee, and Del Nickel, past president of

Pentair Technical Products (pentairtechnicalproducts.com), had a frank discussion about where

the industry stands on innovation, technology trends and fears, misconceptions about the

Industry Data Warehouse (IDW), and actions leaders need to take to accelerate e-commerce.

LARRY STERN DEL NICKEL

���82,83,84,85.qxt_UpFront redesign.qxt 8/22/11 6:48 PM Page 82

Q: Technology is thetalk everywhere, fromsmart phones to socialmedia. What impact doyou see these trends hav-ing on the future of theelectrical industry?

Stern: That’s where theworld is today, and the elec-trical industry is no different.The issue is recognizing theimportance of these tech-nologies in our industry andtaking action as it’s requested—and even demanded—bycustomers.

Nickel: I believe bothmanufacturers and distribu-tors are behind the curve.We’re just reacting when we need to be anticipating.Young people aren’t going touse print catalogs. They wantmobile computing and onlineaccess to information fromany place at any time. It’s atrend that’s here to stay andwill accelerate.

Q: What technologicaladvances on the horizondo you think will play anintegral role in the indus-try’s future?

Stern: I don’t have a crys-tal ball, but what I do know isthat we have IDEA, which isowned by the industry and isdedicated to helping us un -derstand these new, con-stantly evolving technologies.IDEA is continually monitor-ing trends on our behalf anddeveloping tools we need togrow and evolve.

Just a couple of quick ex -amples: We now have theElectrical Attribute Schema, a template that defines thespe cific product marketinginformation we need to makesmart buying and selling de -cisions. This enables our sup-pliers to provide standard-ized marketing content to theIDW so that distributors can

build robust websites andimprove customer service.

Another new develop-ment is the Data Manage -ment Platform (DMP), whichis software that can be uti-lized by manufacturers toaggregate multiple databasesof information and integratethem into one.

Nickel: The DMP willhelp many manufacturersthat have grown by acquisi-tion and lack one commoninternal data structure. Thistool will make it easier formanufacturers and distribu-tors to align their data.

It’s also important to pointout that IDEA based its Elec -trical Attribute Schema on aglobally recognized standard,which is what will be used byelectrical industry companiesfor their product informationworldwide. It’s important formanufacturers and distribu-tors alike to un derstand anduse this global standard be -cause they will be increas-ingly facing global competi-tion. IDEA’s focus on globalstandards is a key differencefrom the proprietary com-modity codes used by otherservice providers.

Stern: IDEA is also offer-ing services that enable man-ufacturers to outsource theirdata attribution work. Unlikeother service providers thatgather the data from web-sites, IDEA believes that eachsupplier must be responsiblefor its own data. It’s easy topromote that philosophy, but it’s another thing to trulyimplement it—especially forlarge organizations.

Nickel: Manufacturer-sourced data is key. Manufac -turers know their productsbetter than anyone else andcan react with speed whenchanges are made. IDEA willcontinue to support manufac-

New resources and servicesAs a result of continuous collaboration between electri-cal industry distributors, manufacturers and top technol-ogy partners, IDEA is launching several new servicesand products to drive costs out of the industry:

Already available:• Electrical Attribute Schema 2.0 is a template

based on a global product categorization standard thatprovides manufacturers with a guide to communicate a standardized set of product descriptors for nearly2,500 product categories through the IDW. Distributorsuse these product attributes to build their catalogs, e-storefronts, ERP systems, etc., enabling more mar-keting and sales opportunities.

• The Attribute Fulfillment Service (AFS) is anoutsourced solution that helps manufacturers populatestandardized product marketing content into the IDWfaster and more cost-efficiently than using internalresources.

Coming soon:• The Data Management Platform (DMP) is a

new application that manufacturers and distributors canuse to aggregate and manage their product informationand relationships. This new product enables manufac-turers to manage and synchronize all types of productinformation (e.g. core transactional data, marketing con-tent, distributor-specific data, etc.) for multiple channels(e.g. electrical wholesale, retail, etc.) using a singlemethod of their choice. This integration will be key tosaving manufacturers time and helping distributorsaccess the accurate and complete information theyneed to compete.

• The B2B Partnership Rating Program (PRP) isan NAED-supported collaboration tool in which manufac-turers and distributors can identify, prioritize, and solvedata quality issues together.

IDEA will also reveal a new and improved user in-terface for the Industry Data Warehouse (IDW) later this year. Its annual e-business training and educationalevent, the IDEA E-Biz Forum, is taking place Sept. 26-28in St. Louis. Find out more by visiting idea-esolutions.com, emailing info@idea-esolutions.com, or calling 703-562-4600. —S.C.

www.TedMag.com Sep. 11 • the ELECTRICAL DISTRIBUTOR 83

���82,83,84,85.qxt_UpFront redesign.qxt 8/23/11 11:51 AM Page 83

84 the ELECTRICAL DISTRIBUTOR • Sep. 11 www.TedMag.com

feature STORY

turers with sourcing data and is introducing services tohelp manufacturers bring in -dustry knowledge and infor-mation up to date. We’re at a really positive crossroadsright now.

Q: Many smaller com-panies agree that thesetechnology trends areimportant, but finding theresources or manpower toimplement solutions canbe an issue. How shouldcompanies weigh theirinvestments?

Stern: If your customersare utilizing these tools, youhave to innovate with yourbusiness. And there’s a costto that, just as there was acost to the first fax machinesand the first computers.That’s just the way businessworks, and you shouldn’t befearful of new technologies.You either have to step up toaddress your customers’demands or recognize thatyou’re not going to be able todo business with those cus-tomers. Ultimately, the ques-tion is: Are you going to beable to survive and thrivelong term with your busi-ness? Then you have to fig-ure out how to incorporatethose new technologies and,from a cost standpoint, howto pay for them.

Nickel: Mobile com-puting and online purchas-ing trends are undeniableand unavoidable, even for the smaller companies. Ifthey are going to be a broad-based provider of productand services, they must find a partner at the right pricepoint to make the invest-ment. But in a couple ofyears, with the speed of technology and change, allbusiness owners will have

to make this investment tocompete. And if they don’t,they won’t get the best pricesor best products. Technologyis an expected offering; it’s nolonger a choice.

Q: What concerns arekeeping some companyleaders from fully embrac-ing e-commerce?

Stern: Fear of change.Anytime you implementchanges, no matter howsmall, it’s painful. Individuals

get comfortable in how theydo business and in their rela-tionships. Sometimes youjust don’t want to fight thatbattle with the folks in yourorganization.

The other reason is fear of the cost. In the distribu-tion business, the marginsand the return on sales areal ready so small that youworry you might overextendyourself.

Nickel: One of the prin-

cipal issues facing both dis-trib utors and manufacturersis that they are afraid of commoditization—becomingjust like everyone else. Theyare concerned that if the datais standardized, they’ll be thesame. It’s the fundamentalfear of computers replacingrelationships. However, re-lationships are still critical;it’s just that how we com-municate is changing. Thetouch points you have withtrading partners online sim-ply reinforce the relationshipsyou build in person.

I see everyone going toone common trusted placefor the data and then creatingunique sales opportunitiesbased on their core compe-tencies and strengths.

As Larry mentioned, costis an issue. In their mind andin their gut, both manufac-turer and distributor leadersknow that this is complex,detailed work, and they arescared of the cost and timeinvolved in completing aproj ect. But what they are not accounting for is the costand time that is wasted ad -ministratively underneaththeir current op erations,which results from mistakes,re turns, incorrect ordering,wrong information, and mis-communication. These coststypically outweigh a smart e-commerce investment.

Q: Where do thingsstand with the IDW? Andwhat would you say to theskeptics?

Stern: IDEA’s sole pur-pose and goal is promot-ing e-commerce in the in -dustry and developing therequired tools. That’s beenthe mission from day one.The reason that there may beskeptics is because on day

MOBILE COMPUTING AND ONLINE PURCHASINGTRENDS ARE

UNDENIABLE ANDUNAVOIDABLE, EVEN

FOR THE SMALLER COMPANIES. IF

THEY ARE GOING TOBE A BROAD-BASED

PROVIDER OF PRODUCT AND

SERVICES, THEYMUST FIND A

PARTNER AT THERIGHT PRICE POINT

TO MAKE THEINVESTMENT.

—DEL NICKELPAST PRESIDENT, PENTAIR TECHNICAL PRODUCTS

���82,83,84,85.qxt_UpFront redesign.qxt 8/22/11 6:49 PM Page 84

www.TedMag.com Sep. 11 • the ELECTRICAL DISTRIBUTOR 85

More industry leaders share theirperspectives on technology trends“Both management and technical professionals need toshift their focus from the technology of e-business to aphilosophy of improving how we conduct business. EDIdoes not equal e-business—e-business is about lookingat all the processes in your company and determiningwhether there is a better way to reach a goal or com-plete a task electronically. Just because a company hasperformed a task a certain way for years doesn’t meanit can’t change or improve.”

—Phil Barrios, senior director, corporate marketing and e-business, Hubbell (hubbell.com)

“Our data sophistication must increase as the nextgeneration, who grew up with information at their fin-gertips, enters the workforce. Our ultimate goal is to im prove the customer experience and match the rightproduct to the right customer needs at the counter and on the web. Distributors need more than basic transactional data to keep our competitive edge in thisnew generation.”

—Ron Schlader, vice president, operations andquality, Crescent Electric Supply, East Dubuque, Ill.

“We’re constantly working to keep up with global andindustry needs. We now know that marketing content,enriched descriptions, attributes, and multiple spec doc-uments are becoming global standards. To do businessglobally, this is going to be a necessity.”

—Angela LiVolsi, data synchronization specialist, Philips Lighting (lighting.philips.com)

“IDEA staff not only executed the project, but I feltlike someone was paying attention. They didn’t just sellme a service and then walk away and hope that the con-version would go through. They were involved 100%,and they stayed with it until it was done. They definitelyhave the technical competency on hand.”

—Bob Shapiro, president, Franklin Empire, Mont-Royal, Quebec, Canada —S.C.

one, we didn’t have all of the tools and capabilitiesnecessary for e-commerce. It was moving at a glacialpace and that frustrated in-dividuals. Today, we have the tools in place to achieveour goals.

But I’d like to point outthat we’ll never have “all the data” because our busi-ness needs are changing at the speed of technology;new innovations will con-tinue to impact us. For exam-ple, we started out focusingon transactional data. Todaywe’ve expanded our focus to marketing data; tomor-row we’ll be gathering BIMdata—and who knows whatelse.

Nickel: We also have the ability to quantify andprioritize data quality issuesthrough IDEA’s new B2BPartnership Rating Program.And I think there’s a morefocused commitment on thepart of NEMA and NAEDand their manufacturers anddistributors. The industry iscoming together in a posi-tive, productive way; this is akey development to gettingthe job done.

Q: How close are we tohaving robust marketingcontent in the IDW?

Nickel: I’m optimisticthat in another 12 to 18months, people will seetremendous progress nowthat manufacturers arebeginning to populate theIDW using the ElectricalAttribute Schema. Distribu -tors will see much more mar-keting information to powertheir online catalogs and ERPsystems.

Stern: Frankly, I would beextremely disappointed inmyself and in the industry if

we don’t see that kind ofprogress. The tools are there,the motivation is there, andwe’re seeing both manufac-turers and distributors drivethis process.

Q: What can companyleaders do to move theindustry forward? Whyshould leaders care?

Stern: It’s critical for in -dustry leaders in distributionand manufacturing to geteducated and understandwhat our industry needs todo to stay competitive. Thenleaders must continue tomake innovation a priorityand push e-commerce im -provements forward in theirorganizations.

From the distribution side, we need to have one-on-one conversations withour suppliers to clearly indi-cate the importance of prod-uct marketing informationand direct them to IDEA forsupport.

Nickel: If any leadersdon’t think they have to bee-commerce literate in to -day’s world, they are miss-ing a critical competitive is sue. Worldwide playerssuch as Home Depot,Lowe’s, and Grainger havethe resources to launch ef-fective e-commerce sites.Com panies in the electricalwhole sale in dustry have agolden opportunity to useIDEA’s re sources, skills, andcapabilities to keep up withtechnology and compete costeffectively against these pow-erful competitors. ■

Coleman has been writingabout electrical industry issuesfor more than a decade and is amarketing and web consultant.She can be reached at scoleman@colemanunlimited.com.

���82,83,84,85.qxt_UpFront redesign.qxt 8/24/11 4:52 PM Page 85