Finnish delegation visits U.S. distributors

Aug. 1, 2003
A delegation of Finnish electrical wholesalers and the chief executive of their national trade association, the Finnish Electrical Wholesalers Federation

A delegation of Finnish electrical wholesalers and the chief executive of their national trade association, the Finnish Electrical Wholesalers Federation (FEWF), visited three U.S. distributorships recently to exchange views with their counterparts here in the U.S. The host companies were Graybar Electric Co., Inc., St. Louis, Mo.; Turtle & Hughes, Inc., Linden, N.J.; and WESCO Distribution, Inc., Pittsburgh, Pa.

"It was our objective to find out as much as we could in a short time about the best practices and operational disciplines of a few top U.S. companies," says Markku Waltari, managing director of FEWF. Accompanying him were: Mauri Saarinen, managing director of SLO Oy; Bjorn Lonnberg, managing director of Oy Hedegren Ab and current chairman of FEWF; Raimo Kolehmainen, director of Elektroskandia Oy; and Jyrki Uurtio, director of Onninen Oy.

"Their main focal points were matters of electronic commerce," observed Bill Kuykendal, international general manager of Graybar. "They wanted to know how our computer system interfaced with bar coding and EDI, so we gave them a thorough tour of our information services operations and our warehouse."

Tim Flynn, corporate traffic and logistics manager of Turtle & Hughes, had a similar reaction to the visitors' questions: "They wanted to get an overview of what we're doing over here in comparison to what they're doing back home. Logistics was a big part of the discussion. They were very curious about how we serve one of our larger customers, the local electric utility company," Flynn commented. "They asked a lot of questions about how we have a section of the warehouse dedicated specifically to that customer, and how we consolidated deliveries to the customer on certain days of the week. They also seemed to like the idea that our warehouse people have specific duty assignments and responsibilities."

Another issue the Finnish wholesalers zeroed in on was integrated supply, according to Norman Blumenthal, vice president of the Miller-Knapp Electrical Division of Turtle & Hughes. "They were quite fascinated by the concept and how it works," he says. "They had a lot of questions on how an integrated supply package is put together, how a proposal is developed and what key factors are involved in being awarded a contract. They were impressed to learn that in a recent contract we bid on, 90 points out of 120 had nothing to do with price, but rather with value-added services, the quality of the written proposal and the efficiency of our facilities."

John Donahoe, manager of international business development at WESCO commented that it seemed electronic commerce is in a relatively early stage of implementation in Finland. "We discussed our own experiences with electronic cataloging and constructing a Web site. They had a number of questions about our procedures relative to inventory controls through bar coding and our overall logistical controls for improving operating efficiencies."

The Finnish delegation was most impressed by three aspects of the U.S. industry represented by the companies they visited: controlled operational costs, the high level of sophistication of electronic-commerce disciplines, and the way integrated supply actually works.

"With regard to integrated supply, we shared some of our marketing strategies with them and described a couple of agreements in detail," notes Bill Cenk, WESCO's director for integrated supply. "In conversation with them it became apparent that while there is a similarity of market classification into construction, industrial and utility areas both here and in Finland, their channel is considerably more concentrated. The four companies represented by these visitors have achieved an 80% market share."

The Finnish electrical wholesaling industry itself is valued at more than $500 million, with 95% accounted for by members of FEWF. The 11 member companies have 100-plus locations throughout the country and more than 1,000 employees. The national federation has a monthly sales statistics program with 38 product classifications and a common catalogue containing more than 29,000 standard products. Since the dissolution of the Soviet Bloc, the Finnish electrical wholesaling industry has concentrated significantly on expanding trade throughout the Baltic, and the federation catalogue is now available in Russian, Polish, Latvian, Lithuanian and Estonian.

"What impressed me most in talking with the Finns was that they were more interested in where trends are going than in where the market is today," says Kuykendal of Graybar. "They were quite aware that electronic commerce will continue to be critically important. Their questions indicated that their attention and their energies are focused on the industry of the future."

Contributed by John Paul Quinn, Stamford, Conn., a free-lance communications consultant who specializes in the international electrical distribution market.

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