In recent months, you and I have certainly heard a lot of speeches and read a lot of articles about the changing ways of doing business available to electrical distributors. We editors have listened as a number of distributors, manufacturers and consultants wax enthusiastic about the benefits of the various new technologies and practices. We've heard others acknowledge the inevitability of getting on the bandwagon. It's a matter of survival, we're given to understand. To be a competitor, a distributor will have to use electronic data interchange (EDI), bar coding and CD-ROM catalogs. He will have to get his company involved in a quality process. He will have to align with other distributors to provide an integrated source of supply.

At the same time, we editors have heard disappointment and puzzlement as to electrical distributors' activity on these technology fronts.

So what goes on here? I thought it was time to find out exactly where the electrical distribution industry stands on the use of "new" ideas, technologies and practices in their business. The industry needed a benchmark, so EW did a survey on the subject; it went out in July to 3,800 electrical distributor main houses nationwide.

The results of that survey make the picture pretty clear (see "A Toe In The Water," for the full report).

The fact of the matter is that for each new technology or business practice, only a vanguard of the industry is actually doing it. Additionally, in many cases, if a distributor is getting on with one thing, like bar coding, he's still dragging his heels on the others. (There was not a single return among the hundreds we received on which a distributor checked off, "We already have it/do it" for all nine categories listed.) And no matter what the technology, a goodly percentage of distributors have no plans whatsoever to use it. There are, however, substantial numbers of distributors thinking about or actively planning to get on board in the various areas.

Looking a little deeper into the results, I wanted to answer another question: Is there a size of distributorship at which management starts seriously to look at technology? Broken down by employee size, the results show this:

Among the very small electrical distributor companies (those with one to four employees and up to about $1 million in sales) the vast majority have "no plans" for any of these technologies. Depending on the area under examination, from 52% to 77% of the respondents in that size group answered with a firm negative. Results were similar among distributors with five to 10 employees ($1 million to $2.5 million or so in sales). Of course, in these groups some distributors were already using, planning or thinking about the technologies and practices; but those with no plans to get on board far outweighed them.

At the 11 to 20 employee size ($2.5 million to $5 million), attitudes get more positive. The proportion of distributors with no plans to use each of the items ranged from 15% to 46% (with the exception of ISO 9000 registration, which seems to be a sticking point at every size level). The story was repeated at the 21 to 40 employee ($5 million to $10 million) size range.

The break point seemed to come at the 41 to 80 employee ($10 million to $20 million sales) size range. The outright negatives dropped to 2% to 33%, depending on the category, and significantly more responses showed up in the "Already have it/use it" column.

At 200+ employees and over $50 million in sales, negativity is almost non-existent; and participation in the various new technologies ranges as high as 80% for EDI and integrated supply.

The bad news is that the bulk of the companies that do business in electrical distribution fall into the categories with the highest negative attitudes. Roughly 5% of the electrical distributor companies out there have more than 40 employees, the break point.

The message seems to be that the evolution to technology-aided operations in the electrical distribution industry will be longer and slower than most people expect or hope.

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