FROM THE TOP
by Chuck Tanzola, CPMR
Every day we are presented with choices of how we spend our time: Coke or Pepsi, Democrat or Republican, Giants or Jets, Yankees or Mets, (oh, okay Cubs or White Sox), etc. However, sometimes we make these choices “either/or” decisions when in fact, the options are not mutually exclusive.
For example, “Work smarter, not harder” — No doubt you’ve heard this repeated many times. What you may not know is the origin of the phrase. I used Google to find out that it was coined by industrial engineer Allen F. Morgenstern in the 1930s during his development of the work simplification program. The program’s intent was to increase the ability of people to produce more with less effort – ostensibly through the use of efficient processes and effort multiplying tools. Makes a lot of sense, doesn’t it?
Yet, while I readily understand the concept and agree with the efficient process premise, I would also offer the observation that working smarter and working harder are NOT mutually exclusive! Is this an “either/or” statement? Why not “both/and” instead? Was the original concept designed to relieve one of the responsibilities of hard work? I don’t think so, but in many instances today, I believe that we have made this statement a justification for less effort.
There are, of course, many notable exceptions. I am proud to pay tribute to the smart and hard work of the outstanding ERA staff. In 2017, the ERA staff undertook the task of migrating the national ERA Conference from a biannual event to an annual event, without a proportional increase in staffing resources to undertake the effort. Coupling hard work with an enviably smart volunteer committee structure, they raised the bar and our expectations. They could have stopped there and would have been judged as very successful. However, consider the (incomplete) list below of new initiatives supported by the ERA staff over the last few years: the ERA/Edgewater Business Environment Survey (2023); ERA SearchLink. ai (2023); ERA HoverMap (2022); ERA Mark Motsinger White Pin Internship (2022); ERA Water Cooler (2020)/ERA LIVE (2022); the updated Manufacturers’ Representatives Toolkit (2022); ERA STEP (Sales Training for Electronics Professionals) (2021); ERA new membership support (2021); and the ERA Talks podcast (2020).
Their repeated commitment to smart and hard work has not only delivered value to the members of ERA, but has also placed the Association in the strongest position ever. Well done, team!
Returning to the initial theme of this article, let me also give another example of a potential false choice that I believe is prevalent today.
One of the challenges facing every organization in our industry is finding and introducing new, younger people into the business. ERA has addressed this challenge head-on with the creation of ERA White Pin Internships and the formation of the ERA NEXGEN Special Interest Group. While both efforts are in their nascent stages, they are beginning to show dividends for those involved and our industry. Yet, while these are good initial steps, at a recent local ERA chapter online panel discussion I attended, I was not surprised to hear members of the NEXGEN group readily agree that it was advantageous to their careers to change jobs/companies frequently in order to achieve personal development and career goals.
They cited the ability to accelerate personal development, find greater skills and learning opportunities, achieve a greater salary/on-target earnings (OTE) growth, climb the corporate ladder faster, improve work/life balance and avoid stagnation as the primary benefits of such action. I am confident that this thinking is not unique to our industry, and concede it may even be accurate in the majority of situations.
However, I am equally convinced that personal/professional development and staying with one company are not mutually exclusive. One of the many benefits I’ve enjoyed by being a manufacturers’ representative is the variety of experiences and responsibilities I’ve had—each of which has provided me an opportunity to develop new skills encompassing a variety of disciplines, including sales, sales management, business development, human resources, IT support, marketing, legal and financial (all within 40+ years with a single company).
While this is my personal story, I know that I am not unique in this. Take a look around at the longevity evidence in the industry. (As an aside, the thoughts presented by the NEXGEN members do present both a warning and an opportunity for those looking to develop new employees. I encourage us to collectively be smart and work hard to rise to the challenges!)
As I conclude, I hope that my observations serve as food for thought. Yes, there are many times when choices are either/or – but not always. Avoid the false narrative of mutual exclusivity!
I appreciate and welcome the feedback and comments I get from each of you. As always, I can be reached at ctanzola@fusionsourcing.com. And I look forward to seeing you in person at the annual ERA Conference in Austin in February 2024— all systems go!
> The ERA White Pin Internship program is now 
> If you did not have the chance to attend the live STEP 2023 event, but still want to access the event’s valuable educational content, the 
> IMPORTANT 
> The Fall 
The Electronics Representatives Association announces the latest graduates of its 2023 Chapter Officer Leadership Training (
> COLT — ERA’s live, virtual chapter officer leadership training program — will take place Nov. 1-3, and registration will end tomorrow, October 25! Chapter officers, or those interested in pursuing a chapter leader role, are encouraged to attend and gain creative ideas and practical knowledge about increasing member engagement and excitement in their local ERA chapter. 
> 2024 ERA Conference registration is at 85 percent capacity for attendees! Want to secure your seat at the most popular industry event, and have the opportunity to network with more than 600 rep, manufacturer and distributor leaders? Do not wait. 
> The hurrier I go – the behinder I get!
EXECUTIVE COMMENTARY
Walter Tobin, ERA CEO
by Walter E. Tobin, ERA CEO
This time a year ago, many of us were asking our partners (and were also asked by them), “How’s business?”
We then may have listed a litany of challenges that we were dealing with: long and uncertain lead times, unclear/inaccurate forecasts from our customers and being asked to adhere to and/or pass along NCNR clauses that had never seen before. There were shipping issues, port backups, the Great Resignation phenomenon, work-from-home issues, the search for the “golden screw”— so many things for us to consider and manage every day.
Yet, when a follow-up question was asked or we asked, “How’s your revenue this year?” we often said or heard, “We are having a record year!”
How was that even possible? I guess there must have been some product somewhere that was able to be shipped and billed to someone.
Was all of this product really needed? We have now become aware that there was a lot of double/triple ordering done to hedge our bets on averting product shortages. We may have agreed to NCNR clauses that we would have never even considered to agree to in the past, all while hoping that our own “golden screws” arrived on our docks.
So here we are a year later. Lead times have returned to a more normal cadence and many golden screws have been received. The NCNR clauses that we agreed to are now being enforced, all leading to a period of declining bookings with book-to-bill ratios falling below 1:1. We are now relying on our past order backlog to sustain us.
Bookings down, billings falling, inventory rising…yikes! What are we do to now? Some companies have adopted a “damn the torpedoes: full speed ahead” policy: cancel open orders, refuse shipments on past orders placed and accepted in good faith, renege on NCNR orders and begin to sell excess inventory on the open/gray market. This is all to achieve some short-term relief and to try to maximize their own quarterly/annual financials. Some of these tactics are working!
Some companies are demanding lower prices due to the return of a “buyer’s market” and to take advantage of companies who are now swimming (drowning?) in inventory. These companies are under pressure to reduce their own inventories and sell at reduced prices that will then lead to their own lower margins, which will then wreak havoc on their own financials.
In addition when companies sell their excess inventory to the gray market, it sits out there only to be sold down the road to customers who may take advantage of lower prices who may have bought this product from the authorized manufacturer/distributor channel who were relying on new orders down the road to help them sell their inventory. This excess inventory sits out there and then is sold down the road at lower prices —another short-term action that has longer-term ramifications on our supply chain.
When COVID-19 hit and the supply chain “broke,” why did it break? Because no one had any “upside” inventory to support the need for unforecasted demand inside of lead time. Customers were clamoring for manufacturers to simply “turn on” or build factories to support this unforecasted demand and many were asking as to why the distributors did not have more product on their shelves.
We will never learn, will we? But here we are again, looking to take margin away from the company to our left and right in the supply chain and to demand lower prices which then limits their ability to fund unforecasted inventory in the supply chain.
We need to try to take the long-term approach. It doesn’t help that Wall Street forces public companies to look at business on a 90-day horizon which forces public companies to do the yin and yang every 90 days. Wall Street also forces our publicly traded suppliers and channel partners to fight each other while customers are looking to us to right the ship, all while demanding lower prices.
A new and perhaps naive approach is for each one of us to ask the company above and below us in the supply chain for their help and guidance on preventing the supply chain disaster of the COVID-19 period from happening again. Ask, “What do you need from us?” Perhaps allow them to make a bit more margin on our business to then help fund new factories, unforecasted demand and shorter lead times. Build a true partnership based on mutual respect and trust, and not just on price alone.
Try it on one of your supply chain partnerships and see what they say. What harm can it do? You may end up positioning your company ahead of the rest of your competitors when times get tough again. It’s worth a try!
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