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38 Years of Successfully Blending Electrical Distribution and Technology

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38 Years of Successfully Blending Electrical Distribution and Technology

Set to retire this month, IDEA’s Mike Wentz reflects on his nearly four decades in the electrical industry, discusses IDEA’s position in it, and tells what he thinks is ahead for the organization and for the industry as a whole.

 

In early-May, the Industry Data Exchange Association (IDEA) announced that Mike Wentz, its EVP of sales and marketing, would retire by the end of the month. In his current position since 2010, Wentz has been in the electrical distribution industry for about 38 years. During his tenure as IDEA’s EVP, he contributed to the vision that helped the firm evolve to meet the growing demand for high-quality content and digital integration.

With nearly four decades of electrical distribution experience under his belt, Wentz has witnessed the industry’s growth, trends, changes, and challenges from a unique vantage point. tED magazine interviewed him to talk about some of those transitions, discuss some of the key turning points, and make some predictions about what lies ahead (both for the industry and for Wentz himself). Here’s what he shared with us:

 

Q:  How did you get your start in electrical distribution and how did your career evolve over the years that followed?

A:  I started in 1981 working for a software company that specialized in electrical distribution software (Datafile & Array). I learned the business because they put me on an implementation team and I went through converting Connecticut Electric Supply to their first computer system where they automated all of their sales orders, accounts receivable and inventory management.  So, for the first year or so I really learned the business. After about twenty years in the industry, we got acquired by Prophet 21 and then Activant, and later got folded into Epicor. The entire time I literally worked for the same company, making software that a lot of electrical distributors still use even today.

Q:  Why did you make the switch from software and over to data and content?

A:  I felt that I was well prepared to make the move because I understood how a distributor operates. I knew what distributors needed and what their challenges were. My career experience really helped a lot by also understanding how enterprise resourcing planning (ERP) systems worked. Then, as e-commerce systems emerged, product content became more and more important to distributors. At that point, the opportunity to work with IDEA really made sense for me.

Q:  How has distribution technology changed since you got into the field?

A:  Well, I’ve seen several eras of technology. I entered the field back when mainframes were still being used in time-sharing environments. Then, we migrated to mini-computers and PCs became prevalent. For the most part, computing in distribution started out being a back-office process, with the systems and software being used to count money, basic billing and accounting functions. Later on, we saw the technology start to “push out,” with companies beginning to automate warehouse and sales order entry systems. I can still remember the first time we put terminals on the counter in a distributor’s location. No one thought it could work, and of course it did.  Over time, software vendors started providing systems that actually helped distributors make money. So, we’ve migrated from systems that were used to count money to systems that help you make money. Now, of course, we’re seeing a lot of focus on analytics, and a migration from expensive hardware and software systems to more affordable options. I think the first computer system I sold had a 96MB hard drive and that storage sold for $32,000. Now hardware is a lot more affordable and services/software are taking priority over hardware.

Q:  Are electrical distributors keeping up with these technological changes?

A:  When I came into the industry in 1981, most electrical distributors weren’t investing as high of a percentage of sales in technology as some other distribution verticals were (e.g., petrochemical, pharmaceutical, etc.). I think that’s still an issue today. Electrical distributors still tend to allocate about 2-3% of their annual sales to technology, versus the 10% that’s spent by some other verticals. Electrical is still struggling with the cost of technology, and that’s something distributors need to figure out as they strive to get the highest possible return on their investments.

Q:  What changes have you seen at IDEA since joining the organization in 2010?

A:  There have been some major shifts along the way. I was with Trade Service when IDEA was created, and the concept was that the company would be owned by the industry and for the industry. The organization got out of the gate slowly and sort of stumbled along the way but looking back now I can see why.  A tech company (CCI Triad) was brought in and charged with getting IDEA launched. The problem was that CCI Triad wasn’t from the electrical industry and neither was the CEO who was brought in to get IDEA started. No wonder they didn’t make much progress. When I joined about 10 years ago, the organization was becoming more industry focused.

Q:  In what ways has the organization evolved since you came onboard?

A:  We started hiring people who had domain expertise, who understood electrical distribution, and who had hands-on experience either on the manufacturing or distribution side. Based on the progress we made, I think that’s what really made all of the difference. Over the last 10 years, we’ve doubled the number of NAED members that use the IDEA service and today about 90% of all the business that NAED members transact is based on IDEA-provided content. Along the way, the number of locations that we serve with our data has grown from less than 4,000 to more than 9,000. When you factor in the consolidation that’s taken place within the electrical segment, that’s pretty impressive growth.

Q:  Where does the electrical segment stand today in terms of data standards

A:  The industry approached data standards in a way that encouraged everyone to play by the same rules and to work from the same playbook. That has helped us get as far as we have. Some related industries (i.e., plumbing), still don’t have standards, so we’re far ahead of them in that aspect. Along the way, the data has consistently improved. It has also moved from being transactional data (e.g., pricing and packaging information), to enriched content that distributors use in their web stores and catalogues. Right now, IDEA offers around 350 different data fields that manufacturers can populate, including training videos, images, product specs, and other assets.

Q: How is the data integration piece progressing in the electrical segment right now?

A: It’s going well, and it’s going to get much better in the near future. Whereas today the IDW operates in more of a “central database” orientation—where we bring in all the manufacturer information and then redistribute it out in sort of a one-to-many approach—we’re going to see a lot more application programming interfaces (APIs) being used. We’re also going to be delivering a lot more access to the data and flexibility in terms of how distributors interact with it. So, whether someone wants a SQL database, a direct API, or a mini-version of the IDW database (a product information management system or PIM), IDEA will offer distributors some of the same tools we use and at a very reasonable cost.

Q: Can you get out your crystal ball for a moment and give some predictions on the future of electrical distribution?

A:  One of the things that jumps out at me is that we’ve seen a lot of consolidation and I think that’s going to continue in the industry. That consolidation might mean that there are fewer distributors, but many times it also means consolidation of product lines. So, we’re seeing more and more electrical distributors that have additional lines, including plumbing, lighting, or even fluid power. Distributors that have a good underlying capability to handle logistics are going to be handling more and more lines, so IDEA needs to be able to accommodate those. We have a lot of non-electrical distributors that use electrical data now, including HVAC and industrial distributors. I think we’re going to see more of that. And manufacturers are having to up their game as well because the products are all becoming more sophisticated. Be it lighting or some other product, it’s all becoming more automated, connected, and smart. Because of this, the level of technological competence has increased both for manufacturers and distributors. IDEA can play a role in that by delivering more capabilities and helping its trading partners manage more sophisticated products that require more specialized content.

Q:  What’s next for Mike Wentz?

A: I’m taking the month of June off to recharge. We have a mountain home in Pennsylvania and this is a beautiful time of the year to be there. My bride of 39 years and I are going to catch up a little bit on some time together and we plan to spend some of that with our family, which includes a new grandchild. I think I still have a lot to offer our industry, and if a consulting opportunity or the chance to lend my expertise to an organization (at least on a part-time basis), were to come up, I might be interested in exploring that. I would be interested in doing something more entrepreneurial. Who knows what will happen? After a month off I may never come back again, or I may be chomping at the bit to get back to work. I’m just leaving my options open at this point.

Q:  Do you have anything else to share with your peers and colleagues before you go enjoy your time in the mountains?

A:  I’ve been very blessed and very fortunate to be in this industry. I’ve always thought that my career was really more electrical industry-based than it was software- and technology-based. I’ve formed a lot of friendships over the last 38 years, and I wanted to pay a bit of an honor to a lot of the pioneers that got technology started in the electrical industry. We don’t talk about them enough, but they were truly innovators that really helped distributors be more profitable and more efficient. Ben Cooper (Dimis Systems); Steve Tecot (Elcon Systems) who built his own software, and then packaged and commercialized it; and folks like Tom McVeigh (Array), Ed Heon (T&E), John Megit (P21) and Bill Pratt (PM Systems) all made major contributions to get the industry where it is today. Those are the guys that really paved the way and I think that all of us in the industry have benefited a lot from the work that they did 50 years ago.

 

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Bridget McCrea  is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at bridgetmc@earthlink.net or visit her website at www.expertghostwriter.net.

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