Industrial Electric says it provides products on time at a competitive price through a focus on best service practices.

Industrial Electric Wire and Cable Inc. continues its aggressive strategic expansion into international markets. Recent developments include the acquisition of two established wire and cable distribution businesses in North America in addition to three separate grassroot start-ups in Mexico, Canada and China. The company also continues efforts to strengthen its trans-Atlantic strategic alliance with P. Augsten GmbH,  headquartered in Frankfurt, Germany.     

“Industrial Electric’s decision to offer its distribution services into the international arena represents a natural extension of its historical growth pattern,” President Dave Nestingen says. The company’s entrepreneurial start-up dates back to 1962 and since that time the organization’s investment decisions have been strongly influenced by the needs and expectations of its customers. Currently, Industrial Electric supports its customers in the United States from six strategically placed regional distribution centers that include its corporate headquarters in New Berlin, Wis.; Cleveland; Boston; Greenville, S.C.; Dallas; and Phoenix. International locations now include Toronto and Montreal, Canada; Aguascalientes, Mexico; and Suzhou, China.

“Industrial Electric’s future investment decisions will continue to be strongly influenced by the expressed needs of our customers,” Nestingen says. “Industrial Electric has always maintained a keen focus on the OEM and sub-assembler markets. Industrial Electric has worked hand-in-hand with many customers in those markets to ensure its service offering can be enjoyed around the world. By following the migration pattern of its largest OEM and sub-assembler accounts, the company has been able to move in lockstep with the customer’s needs.”  

Customers are its Future
Paul Bryant, vice president of sales, marketing and purchasing, simplifies Industrial Electric’s overall strategic thrust by stating, “Customers are our future. Every business owes its existence to the strength of the market following it has successfully secured.”

Industrial Electric’s market meme, “Customer Driven, Solution Focused … We’ve Got You Covered,” pervades its entire work force. “Finding customer favor in today’s marketplace is the responsibility of every employee in the company,” Bryant continues. “In order to be successful, Industrial Electric must establish itself as an industry favorite. At the core of Industrial Electric’s long-run growth pattern is a companywide appreciation for the customer.”

Industrial Electric refers to itself as a  “unique service provider.” In essence, it provides appropriate products on time at a competitive price and it does so through a customer service environment that combines a series of industry best practices.

“Maintaining an industry favorite position requires a companywide commitment to evolve and change in ways that simplify commercial transactions and lower the overall cost of procurement for its customers,” Bryant says.

Evidence of this commitment to change can be found in Industrial Electric’s sustained investment in new technology and continuous improvement initiatives.

The relationship Industrial Electric initiated with the Milwaukee School of Engineering in 2004 ushered-in lean manufacturing concepts, including value stream mapping, which helps separate value-added activities from non-value-added activities.

“Our customers have come to appreciate that [we are] committed to partner with them in ways that help drive transactional costs out of the sourcing equation,” Bryant says.

Perhaps this point is best exemplified by Industrial Electric’s recent decision to establish a department dedicated to continuous improvement initiatives. The team of six employees is championed by a Six Sigma black belt and consists of business process experts and continuous improvement specialists.

Wayne Briesemeister, vice president of operations, is a strong advocate of effectively introducing technology to help streamline activities. “Sustaining operational excellence in wire and cable distribution necessitates an organizational culture that embraces change,” he states.
Employer of Choice

The driving force behind Industrial Electric is its employee-owners. It has been an ESOP company since 1985. The quest to sustain dynamic, profitable growth necessitates a leading, learning organization, it says. In fact, one of Industrial Electric’s seven foundational values for long-run success is captured by the term “transformation.” On balance, the employee-ownership work force and the culture at Industrial Electric can be characterized as being participative, healthy and alive.  

“People aren’t just employees here,” says Erica Roberts, director of human resources. “They’re owners. Everybody knows they are part of the ownership of the organization.”  

Industrial Electric was recently honored with a first place award in The Business Journal’s annual Top Milwaukee Workplaces. In August 2007, The Business Journal recognized it as the Milwaukee Employer of Choice in the mid-sized company category. “The Business Journal took nominations from companies in southeastern Wisconsin and selected some companies to be considered for the award,” Nestingen says. “Then an independent research team solicited input from the employee-owners themselves and we finished in first place amongst mid-sized companies in the Milwaukee area.”

The recognition means a number of things for the company. “It is important feedback to the executive team,” Nestingen notes. “I think executive management is always wondering to some extent whether the relationship they have with employees is a good one. We have, in the past, looked at the issue by conducting employee satisfaction surveys. This award is just another confirmation that [Industrial Electric] is a desirable place to work.”  The award also is a source of pride for employee-owners and serves as a recruiting tool.  

“[Industrial Electric] is always looking for employees who really want to lead,” he adds. The company provides every new employee-owner with a personal welcome note inscribed in the book, Everyone Leads. “Everyone Leads means that every person, from the bottom to the top, is empowered to do what’s right for the customer, and encouraged to think and act like an owner,” Nestingen says.  

Providing Direction
The expansion into international markets evolved over time as many customers in those markets, who were receiving product from Industrial Electric’s stateside warehouse locations, urged the company to move closer to its assembly operations. Investment decisions of this magnitude are the responsibility of senior management and the board of directors. Within the past year, Industrial Electric has constructed a new distribution center in Aguascalientes, Mexico, and opened a new distribution center in Toronto, Canada, and Suzhou.

“The rapid escalation in commodity costs that go into the manufacture of wire and cable have required significant investments in working capital to support our customers,” Vice President of Finance Kyle Spader says. “The ability to simultaneously finance start-up locations and an acquisition strategy during an escalating commodity market is made possible by the strength of our balance sheet. In addition, we have established strong working partnerships within the financial community and our bankers have been very supportive in executing our growth strategy.”

“The decisions to support the three new warehouse locations came pretty easily,” Nestingen adds. “Customers were calling for us to support their migration and we responded quickly, but making a strategic acquisition is an altogether different challenge.”  

Inherent in the acquisition process is the need to consolidate operations and synergize the best of Industrial Electric with the best of Colonial and the best of WyroTech. “We looked for companies that would be accretive to value,” Bryant adds.  The Colonial acquisition catapults Industrial Electric into a target niche market – military/aerospace.  

In the case of WyroTech, this particular investment gives Industrial Electric a strategic location to better serve eastern Canada. “Early performance targets indicate that leadership’s expectations around both investment and integration have been met or exceeded for both acquisitions,” Spader states.

To aid global expansion, Industrial Electric invested in the SAP enterprise resource planning tool in 2003. “It supports our database,” Bryant explains. “It houses all of our information. It’s a very pervasive computer infrastructure that supports our business platform.”  

Bryant notes that SAP can handle multiple units of measure (imperial and metric), languages and currencies. “Our investment in SAP is helping us grow globally,” he continues. “It is one of the most significant [technology] investments we made in the history of our company.”

The core SAP platform has enabled Industrial Electric to extend its service orientation with several proprietary, interactive solutions like Customer Automated Replenishment Solution, Quick Quote (Supplier Relationship Management Solution), 20/20 Vision (Customer Relationship Management Solution) and 24/7 (E-Commerce Solution).

“When you boil it all down, critical to the company’s success as a wire and cable distributor is its ability to transact commerce in real time,” Bryant says. “It’s all about the quality and timeliness of communications, and our proprietary information-based systems represent industry best practices. These solutions accelerate the flow of critical information in an effective and productive manner. The effective interaction of man and machine makes doing business with Industrial Electric slick and quick.”     

Teamwork Drives Results
The combination of dynamic international growth and domestic expansions has put the Industrial Electric work force to the test. Nowhere has this been more obvious than in the area of recruiting and training. “We have grown our work force substantially over the past two years and although the English language has remained [dominant], Spanish, Mandarin and French continue to be used within the Aguascalientes, Suzhou and Montreal offices when it comes to local commercial activities,” Roberts states.

Industrial Electric employees have embraced the cultural diversity that has been introduced by virtue of its foreign investments. Nestingen is particularly pleased by one key attribute that each distribution center location seems to share: teamwork. “The quality of our people and their healthy, natural bias towards servicing the needs of our internal and external customers are helping Industrial Electric to succeed in all areas of the globe,” he says.

Supply Chain Partnership
Bryant believes Industrial Electric’s employees extend their service-minded work ethic in all directions including downstream with customers and upstream with suppliers. “Establishing and maintaining strong, healthy relationships with our customers is preceded by our ability to establish strong, healthy relationships with our suppliers,” he asserts.

Industrial Electric has favored use of the word “partnership” when describing its relationship with customers and suppliers. “It’s all about creating an earned position that generates win-win-win results for the supplier, for Industrial Electric and for the customer,” Bryant explains. “Establishing an earned position with suppliers and customers alike necessitates a commitment to excellence in every aspect of every transaction.”

To make sure the company and its suppliers complement each other as crucial links in the supply chain, it provides immediate feedback by using the company’s supplier scorecard. The scorecard contains up to five key performance measurements, such as the suppliers’ on-time delivery, defects per million, product lead times and pricing, Bryant explains.

Industrial Electric evaluates its suppliers every month and says it is very fortunate to work with some of the very best wire and cable manufacturers in the United States. “This strength in engineering and production translates into top-level service for [our] customers,” Bryant says.

‘Be a Tiger’
Industrial Electric recently restructured its sales department to help penetrate new markets and secure an earned position with new customers. Before, the company maintained a two-person sales team, which consisted of inside and outside sales representatives. Now, it has three-person teams that cover 30 territories. Each team consists of an account executive, an account manager and an account representative.   

“We felt that more folks should be in front of our customers to tell them our story,” Bryant says. “When we tell [our customers the Industrial Electric story] and explain what we do to help them, they establish a business relationship with us. And we perform up to the expectation – we handle high volumes of transactions day-in and day-out, with a very low error frequency. We strive to get the details right on each and every order. We strive to give the customer what they want, where they want it, how they want it and when they want it.”

The company calls this service objective “Operation Tiger,” after professional golfer Tiger Woods. “Our sales theme is based on Woods’ commitment to continuous improvement to be the very best golfer he can possibly be,” Bryant says.  “The idea is that we need to continuously improve every aspect of our business processes. It’s all about creating dynamic, profitable growth.”

The challenge associated with synchronizing individual sales effort with team-based sales efforts gets handled in establishing complimentary sales targets and performance objectives.

Team members stay connected on market and account developments by way of its proprietary Customer Relationship Management Solution known internally as 20/20 Vision.

Satisfaction Guaranteed
Industrial Electric’s mission statement references its key stakeholders as customers, suppliers, employee-owners and community.

Efforts to satisfy the community needs are overseen by the Charitable Giving Committee. A cross-functional group of employee-owners meets periodically throughout the year to assess the many needs of its local communities and to allocate a portion of its budget to various charitable causes.  

Industrial Electric also hosts a quarterly blood drive in conjunction with the American Red Cross Association. Many of its employees have been contributing to the local blood bank in Wisconsin for many years. One of its other foundational values is servant leadership. “The employees of Industrial Electric are committed to maintaining the core values of its founder, Ted Krzynski, that include the need to support one another in everything we do,” Nestingen says.

Creating More Opportunities
Bryant says the company plans for more growth. “We are never satisfied with the status quo,” he says. “We always push ourselves to the limit – to do better and to grow.”

He adds that the company must keep five basic business principles in mind while extending its business.

They are:

• “Customers are our future, and we need to understand this at all levels.”
• “The people – [employee-owners] – are the primary determinant of success.”
• “Leadership provides direction.  We create the vision and key objectives, and we create an environment for good things to happen.”
• “Teamwork provides results.  We’re a team of one and we’re a team of many.”
• “All stakeholder needs must be satisfied.”