Distribution Goes Back to School: Education Programs at Institutes of Higher Learning

By Contributed Article | March 06, 2013

Education Programs at Institutes of Higher Learning

The Way It Was

After managing a retail electronics store for eight years, I had had enough of shoplifters, bad checks, and long hours. Armed with a fairly good understanding of electronic components, a need to get away from the stresses of retail, and a desire to make a little more money, I went searching for a new career. I followed a lead to a headhunter who knew of a sales opening at a local distributor. I wasn’t completely clear on what a distributor salesperson did, but I thought I’d give it a shot.

The company was a local mill supply distributor that had recently expanded into electronics. In my interview, I was honest about my limited knowledge of their business, but they were sure that as long as I knew electronics, they could teach me the rest. They hired me and put me through a training program that would assure that I was totally prepared before going one-on-one with a customer.

That “training” consisted of the following:

First, I spent two weeks in the warehouse, learning how to “pull parts.” I never utilized this skill, however, because union rules prevented salespeople from doing anything in the warehouse, with the exception of supplying donuts on Fridays and booze at the holidays.

Next, I spent one week sitting next to the department’s expeditor: There’s not much difference between expediting a capacitor and a CB radio, so my retail experience got me through this learning module pretty quickly.

That was followed by three weeks on a sales desk — well, sort of. I spent one week with each of the three inside salespeople, but since none of them really trusted me to talk to their customers, I spent the time listening to one-sided phone conversations. They occasionally took the time to explain the transactions, but the expeditor had gone out on maternity leave, so I spent most of those three weeks at her desk expediting as well as training her replacement. You’ve heard of “train the trainer” programs? This was more like a “trained by the trainee” program.

Finally, I was ready for a two-week run of making actual sales calls with the experienced outside salespeople. I’m not sure why, but they hooked me up with people from the mill supply side of the business. I learned a little bit about drill bits and pipe fittings, but I spent most of my time listening to off-color jokes. Also, since it was December, I learned that business lunches took at least two hours but did not necessarily involve eating. (I must admit, however, that the jokes seemed a lot funnier in the afternoon.)

So now I was ready to attack the brave new world of outside sales. But first, I needed a sales territory, or at least some accounts. I spent the holiday period combing through miscellaneous and inactive account files, making detailed lists of accounts that included what the customer had bought in the past and, in some very rare instances, the name of an actual contact person! On January 2, I took my list of accounts, a box of catalogs, a street map of Cleveland, and headed out. I was a distributor salesman!

If my experience was even somewhat typical of electronics distribution at that time (and I think it was), how did the industry survive? Fortunately, there were pioneers like Seymour Schweber, Charles Avnet, and Tony Hamilton. Somehow, they built a multi-billion dollar industry on the backs of people answering want ads. Let’s face it, there weren’t, and still aren’t, many kids out there saying they want to be a distributor salesperson when they grow up.

Filling the Void

One industry program has been trying to change that. Industrial Careers Pathway (ICP) was created in 2002 to address this very need. The organization began by working with community colleges to create programs that in turn would create qualified employees and provide the industry with key entry-level talent. Henry Ford Community College in Dearborn, Mich., enrolled the first students in its Industrial Distribution Certificate Program in 2003, and by 2006, six other community colleges had followed suit.

This effort immediately began supplying the industry with qualified employees. Although effective, the results served a very small percentage of the United States, a country that, according to the Bureau of Labor Statistics and a 2009 Wholesale Distribution Economic Report, attributes around 2% of its GDP to the industrial distribution sector each year. A much more emphatic approach was needed to really reach the ICP goal of “meeting the need for a skilled industrial distribution workforce for today and tomorrow.”

One step in this direction was the “Elements of Distribution” online curriculum developed in 2008. This online textbook sought to fill a gap both in the traditional education sector and in the workplace. Community colleges were encouraged to use the curriculum in their existing courses, and employers were given the opportunity to use it to train employees who might also be new to the industry. The curriculum was the equivalent of a three-credit course, and sought to give the student an overview of how industrial distribution fits into the overall global economic landscape. Students are exposed to the various business models that exist in the industry. With segments like “Sales = Service in Distribution,” “Adding Value,” and “Profitability: Competing without Price Cutting,” the curriculum provides both breadth and depth to anyone looking to enter the field of distribution.

In 2009, ICP evaluated its accomplishments and goals. The biggest hurdle they still faced was getting the word out about the industry as a whole. They decided to very specifically target the 18- to 34-year-old demographic in order to attract young talent that would be with the industry for a more extensive period of time, and opted to do so through three approaches: outreach, connections, and preparation.

Consequently, they redesigned their website to provide information to reach their new target audience, including video presentations that shine a light on the industry. Alongside the website, they launched the ICP Ambassadors Corps, a group made up of industry volunteers from all over the country. These volunteers visit high schools and colleges, as well as business and veterans groups, to spread the word about the industry and to actively recruit individuals into programs already in place.

Higher Education

W.W. Grainger took it one step further when it needed talent during a period of rapid globalization. The solution: The Grainger Center for Supply Chain Management, housed in the School of Business at the University of Wisconsin-Madison. Offering both an undergraduate specialization and an MBA in Supply Chain Management, the Center prepares students to work in diverse industries in the areas of supply and demand planning and forecasting, risk management, sourcing, and consulting. Verda Blythe, director of the program, said, “The most important qualifications for a student to enter the field are good communication skills and a head for analytical thinking.”

The Electronic Components Industry Association, ECIA, which represents all facets of the authorized electronic component supply chain, has supported an Education Foundation that started in 1984. It partners with universities to expose students to theory and research that will intellectually position them to apply leading- edge concepts to our increasingly complex industry. The Foundation works in conjunction with colleges and universities to promote industrial distribution, supply chain, and logistics degree programs, and careers within the industry.

Today, more than 20 institutes of higher learning, including such prestigious names as Purdue, Georgia Tech, and Arizona State, offer Industrial Distribution programs. One of the largest programs, often ranked the top Industrial Distribution program in the country, is offered by Texas A&M University. A number of scholarships are endowed by industry leaders, such as the Sterling Electronics Scholarship, endowed by Ron Spolane in honor of his father Michael, the founder of Sterling. (Sterling was acquired by Avnet in 1999.) Victor Jury Jr. endows another scholarship in honor of his parents, who founded Summit Electric Co.

One of the most significant supporters of the Texas A&M program is Paul Andrews, chairman of the board of TTI. In 2011, Paul and his wife Judy announced a $300,000 contribution to establish the Judy and Paul Andrews Endowed Excellence Fund for Global Research and Education, which will help industrial distribution researchers devise better methods to move products from manufacturers to customer.

“ID at Texas A&M is vital to the future of our company, and we depend upon the program to be our primary source of entry-level personnel. ID majors have a strong educational foundation and good work ethics. Consequently they become productive employees much sooner than students from other campuses and majors,” Paul Andrews said.

Dr. Barry Lawrence is the program director of the Industrial Distribution program at Texas A&M and director of the Thomas and Joan Read Global Supply Chain Laboratory. He says Texas A&M is the only university with a research center dedicated to the business of industrial distribution. There are more than 500 undergraduate and 90 graduate students currently in the program. Lawrence expects the program to grow rapidly over the next several years.

How do they recruit so many students for a program focused on an industry few people have heard of? According to Lawrence, they don’t. Few, if any, freshmen enroll in the course, but when students learn that the program has a virtual 100% placement rate and that graduates are usually in the top pay level within three years of entering the workforce, transfer requests flood in. Typically, there are more than 400 applicants for the 70 available slots. The student organization holds two job fairs each year, the only department at A&M to do so. They limit the number of recruiters to 65 and have to turn companies away each time. Approximately 70% of graduates find positions in the industrial distribution field. Manufacturers recruit most of the others, with many of those finding positions in supply chain and logistics management.

One of the unique features of the A&M program is that it is part of the College of Engineering, not the College of Business. Lawrence believes that this affords students the opportunity to take courses that will better prepare them to deal with the products and applications in the industrial distribution environment. It also allows the school to offer courses outside the typical business school curriculum, such as those focusing on logistics, industrial sales, and manufacturer-distributor relationships.

The Electronic Components Industry Association (ECIA) was an early supporter of ID programs and still works closely with A&M. Robin Gray, COO of ECIA, serves on the program’s advisory board. Representatives of Arrow and Avnet have served on the board and TTI is a permanent member. While only 5% to 10% of today’s graduates work in electronics distribution (the largest percentage go into electrical distribution), Lawrence feels that the relationship is critical to both the industry and the education programs. Electronics distribution requires the most sophisticated logistics and supply chain management in the industry. According to Lawrence, “you can’t do dumb distribution in electronics.” As such, the industry needs to learn from the universities and use their research to verify business processes. At the same time, academia can study and learn from the unique challenges that today only electronics distributors are facing.

The educational opportunities available today, ranging from online and junior college courses to master’s degree programs at prestigious universities, are far greater than at any time in the past. They have more than kept pace with the demands of an increasingly sophisticated supply-chain management process, which is the keystone of success in the distribution industry. Unfortunately, however, they have not, and probably will not, address the lack of visibility of distribution. Students will probably learn about the opportunities before they know much about the industry and then, hopefully, flood the programs with transfer requests, just as they do at Texas A&M.

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