For attendees at this year’s Industrial Supply Association (ISA) convention in Houston on April 6-8, it will definitely not be business as usual. “In years past the convention was where people showed up and networked,” says ISA President & CEO Ed Gerber, “but this year is truly about changing the way our members think about their business.”
The annual event and all topics covered are the launch of what ISA is branding as Channel 2.0. The core theme is that traditional supply channels and supporting sales models are no longer keeping up with end-user needs, and the rise of Industry 4.0 mandates new capabilities and standards to compete. Channel 2.0 sets a standard of expectations, helping all stakeholders (distributors, manufacturers and independent manufacturing representatives) create better value for each other within the channel, while attaining the goal of satisfying the end-user customer.
The ISA, which traces its origins back to 1902 and is the premier trade association for the maintenance, repair, operations and production (MROP) supply channel, has devoted countless hours and enormous effort over the last couple of years to repositioning itself as a driver of change in both industrial manufacturing and distribution. The Channel 2.0 launch at its April event is where the fruit of all that work will be presented to ISA members.
“One of the things about being an association that has 117 years of history and legacy is that, like many associations and their members, they don’t always evolve with the changing times,” says Gerber. “But the end-user needs continue to evolve; the channel has to adapt accordingly.” Gerber brought a unique resume to the association leadership role he took on two and a half years ago, having senior executive sales and marketing responsibility in both manufacturing and distribution segments of the channel that included 10 years at one of ISA’s larger distributor members.
Figuring out how exactly to adapt has been a principal focus of ISA since Gerber joined in 2016. The key has been to take a thorough, labor-intensive, task-force approach, with stakeholders from every part of the industrial supply chain meeting regularly for an extended period of time. “It wasn’t about me sitting in a room coming up with this stuff and saying this is what we’re going to do,” says Gerber.
“Instead, we created several task forces of executive leaders from diverse member companies – leading manufacturers, distributors and independent manufacturer representatives (IMRs) from different sized companies, representing different ownership structures, products and services,” Gerber says. (IMRs are independent agencies that sell manufacturers’ products through distribution to end-user customers, with unique value propositions for industrial supply channels.)
“Each group focused on a specific part of the channel and how they need to interrelate with each other to best serve the changing needs of our end-user customers. Slowly and methodically, each group studied the channel from end to end, examining the huge changes taking place in how, what, and why the end user buys, what needed to be done to address these changes and, not least, how best to help members understand what they should focus on and why it is important. Says Gerber, “We spent an entire year doing that.”
Analytics & Standards Drive Transformation
The effort paid off in Q1 2018 when the ISA launched a set of analytic tools for its distributors that focuses on optimizing three areas:
- P&L and operational metrics,
- top-line revenue growth, and
- compensation for the top 25 positions within a distributor.
Over 90 member companies currently use these new tools. Before the end of this quarter, the ISA will launch another suite of analytics, this one for manufacturers, that targets channel performance, sales force performance, and operational metrics. With the exception of the compensation analytics, all of the tools have been built from the ground up and customized to the needs of the ISA’s member companies – all with Channel 2.0 in mind.
Gerber’s team and a joint task force of independent representatives and manufacturers are currently working to transform independent manufacturer’s representative (IMR) agencies into stronger professional sales organizations. To this end, they will launch the industry’s first-ever sales process standard that includes metrics for sales stages, probability, pipeline and opportunity management.
The other part of this project is creating a customized sales pipeline software platform that will support the industry standard, ultimately creating an industry-first sales certification for the designation of “ISA IMRs 2.0.” The project’s soft launch will take place at ISA’s annual convention in April; the hard launch takes place at a new ISA event in the fall – the first annual business and planning conference exclusively for manufacturers and their IMR partners.
ISA is also targeting standards-based lean initiatives to help members eliminate waste for all channel members. A group of experts from member companies is creating an ISA standard for point-of-sales (POS) and standard pricing formats. “This is a critical aspect of our innovation focus to drive these standards for the channel,” Gerber says.
The reaction so far to all these changes suggests that, while ISA has been around in one form or another for a long time, it’s far from being set in its ways. “It’s actually been a thrill,” Gerber says of the ways in which members have responded. “Everyone is excited about the direction moving forward. When something stays the same for a hundred years, and the market around you is changing, it’s time to change… welcome to Channel 2.0!”
Visit 2019convention.isapartners.org/ for more information about the ISA convention in Houston, Apr. 6-8, 2019.
Ed Gerber will also be a speaker at MDM’s Sales GPS conference in Las Vegas in February. Learn more at salesgpsconference.com/.