Business to

Business Case
Submission

Introduction
Electrical

Equipment Supplies (EES) products distributor.

Value

to suppliers : generating demand for their

products.

Value

to Customers : Offered one stop solution, inventory

management & cost reduction.

Manufacturers

Strong ties with 150+ suppliers.

CUSTOMERS
Electrical Contractors

Industrial Customers

CIG Customers

Bid & Quote Business

Shortlisted
Distributors
Offers with lowest
overall price

Ongoing need for EES

Products
Maintenance,
Operations & Repairs
(MRO) activities
Several industry
segments (Utility,
Transport etc.)

The smaller WESCOs

business
Commercial
customers : hotels &
motels
Institutional
customers: hospitals
& universities
Small, stable & low
potential customers
to WESCO

National Account Program

Goal Annual growth rate of 6% to 8 % in sales and 12% to 16% in profitability
over the next five years.
Premise Large contracts could mean significant savings for both customers and
WESCO.
Benefits
Competitive Advantage Customers & Suppliers
Competitive Prices Regardless of volumes
Inventory Reduction
Inventory Management JIT Delivery
Efficiency Improvement (Price, Reports, IT etc.)

NA CLIENTS
Key NA Clients

Focus NA Clients

Other NA Clients

50 Key Clients
Turnover - $180
Million
Average $ 3.6
Million per
customer
Cost Index - $80
Million

100 Clients
Turnover - $ 52
Million
Average $ 500K
per customer
Cost Index $ 110
Million

150 Clients
Turnover - $ 34
Million
Average $ 250K
per customer
Cost Index $ 100
Million

SALES DISTRIBUTION
Branch Sales
Representatives
Outside Sales Rep Inside Sales Rep.
* Served 20 40
Customers
* Visiting Customers
Regularly, identifying
new sales
opportunities and
developing solutions
together
* Hunter Mentality

* For each outside

sales rep there is an
inside one
* Process new orders,
Expedite existing
orders, and provide all
necessary service &
support

ACQUIRED

RETENTION

NAMs
18 NAMs across the
country
Functions :
* Expected to call
prospective customers
* Lead the active selling
and implementation
process with new NA
customers
* Maintain long standing
relationship with existing
NA customers

CAUSES OF FAILURE FOR

NA PROGRAM

TOO much burden on NAM

o In case of any service requirement/defects problem/replacement of parts etc.
local plant manager contacts the local branch manager, who in turn contacts
the National Accounts Manager(NAM).
o NAM tries to resolve the problem with his NIT counter part at the local level.
o Every NAM has 10-15 current customers to handle along with 15-20
prospective clients. Also every customer has on an average 5-20 plant
locations across US.

TOO much burden on NAM

o If we take on an average of 12 current customer with each having 10 plants(average) across
US, then each NAM is handling (12 x 10) = 120 plants at a time.
o Apart from handling these 120 plants every NAM is responsible for other 15-20 prospective
clients with whom he may be at any stage of active selling, intensive implementation stage
etc.
o If you consider a particular NAMs total time, he is totally burdened with sheer numbers of
plants locations and the investment of time for the prospective clients. At any given point of
time, he may be handling some current accounts as well as some process of new customers.

NO coordination between customers

HQ and local plants

o In case of some customers, the local procurement officers are procuring

materials from the local distributors irrespective of being the NA customer of
WESCO.
o The reason for plants team still favouring the local distributors is that they
have good relationship with them and thus dont want to change their system.

NO coordination between customers

HQ and local plants
o If the customers corporate HQ has done a Rate Contract with WESCO, then
the local plant managers are not ready to procure the materials from them.
o Local procurement is still doing the procurement of EES items in their own
individual capacity despite their plant being included in the Rate Contract.

Mentality of sales representatives

o Mentality of sales person needs to be changed. If they are catering to the industrial
customer then they have farmer mind-set and when they are searching for
electrical contractors then they have hunter mind-set.
o Also, one of the sales rep say that he doesnt want to serve a NA plant which is
giving $50,000 revenue per year.
o If we see the overall scenario, then that customer is of $5.4 million revenue per year
across all plants.

Mentality of sales representatives

o Considering the fact that it is a NA customer and assuming that this customer is having 10 plants
across US, it is highly inappropriate for this sales rep not to serve that plant.
o Just because a location is generating little revenue doesnt mean that he will not serve that
location. This phenomena is totally against the arrangement of the nation wide Rate Contract with
WESCO.
o The customer is hugely profitable to WESCO, and however it is unprofitable in a certain location, it
is a source of huge revenue in other 9 locations.
o That sales rep is viewing the scenario in isolation and not as a whole system.

Possible solutions to correct

NA PROGRAM

o Increase the number of NAMs in the long term so as to lessen their burden. In
this way they can devote their time effectively to each current customer as well
as prospective customer.
o Have a dedicated sales team for the major key accounts and assign them to
each NA so as to have better monitoring and coordination with every plant
location.

o Grooming of the sales representatives through a training program should be done.

Currently in a particular branch office, each rep is handling 20-40 customers. These will
comprise NA as well as other customers. Hence to that rep, NA customer is just another
customer to serve. He is not giving that due importance to NA customers as he doesnt
differentiate between NA and others.
o Also through these grooming sessions their mentality shall change from hunter to
"farmer. Farmers must have a long term view to have a strong relationship with the
local procurement team of that plant.

o WESCO must ask its local sales rep to improve and strengthen the relationship with local
procurement team. In this way they will generate orders from them which were previously being
given to the local distributors.
o Perhaps WESCO can include the clause of local buying through its branch offices in its Rate
Contract made with the customers. In this way plants will buy through WESCO only.
o Corporate Head Quarter of customer must channelize the information to its local plants procurement
team though circulars etc. This will keep both the parties at the same pace. Also they should clearly
notify the local procurement officials of the items which they can procure locally and which items they
should procure nationally if they are NA customers.

Analysis based on Price and Cost Index

Profit base on Price and Cost Index
20
15
10
5
0
-5
-10
-15
-20

o The above chart depicts the profit that might be earned from various
customer segments. The assumption that the operating margin is 3%
on a base average selling price of $ 100 is used to calculate the above
figures with the price and cost index (Exhibit 5).

Future road map for Industrial NA

customers
As the growth potential is high and there is a scope of long-term
relationship with NA customers , Wesco should be proactive in
acquiring them.
Wesco being the third major distributor occupies the sweet spot
of the customer list and has the potential to forge long term
relationship with the industrial NA customers who are willing to go
beyond transactional relationships.
Pitch for Value added services to these customers and convert
non-exclusive to exclusive NA contracts.
Convert reliable focus NA customers into Key NA customers.

Contd

To cater to the new trends of Integrated solutions WESCO should for

tier system rather than an alliance because
Alliances involve investment in learning about each others
businesses.
Scope of each customer coming up with a different set of
suppliers and distributors.
Compete with competitors of alliance partners.
Being proactive will enable WESCO to be in the first tier and
hence earn profits by marking up the prices provided by second
tier.
For example ,in India Blue Star Air Conditioning services provides
Facility Management Services through outsourcing.

THANK
YOU