Wesco builds, connects, powers and protects the world. Delivering ingenuity and expertise to approximately 150,000 customers worldwide, Wesco helps businesses run smoothly by providing solutions that can increase profitability, improve productivity and mitigate risk. With nearly 1.5 million products and locations in more than 50 countries, Wesco delivers what companies need when they need it.
Chris Wadsworth: That is a great question and can be confusing. I believe the biggest difference is where there is potential overlap in value-added services and in the handoff between the distributor and integrator. Each has unique capabilities and value propositions. An automation distributor brings franchise ownership and technical resources, as well as a deep supply-chain capability, but really stops at the point of installation. The integrator provides a much more technical value-added skill set, including commission, programing, customizing and aftermarket service for the solution. The value-adds are very vast from basic kiting all the way to integrated control design and even panel building. I see the automation distributor and the integrator as partners that complement the solution for the customer to optimize the success of the program or project.
Mike Bacidore: How much has the availability of components improved since the backlog of orders in previous years due to the global pandemic and supply-chain disruptions? What types of devices are still problematic?
Chris Wadsworth: The supply chain has definitely improved regarding both availability and improving lead times across the large majority of the supply base. As I say that, there are a number of problematic product categories that continue to keep supply from meeting demand and limiting potential sales growth and development. We all hear about the chip shortage as that gets daily press. What we have seen across the industry is that a number of legacy or older technology is not being invested in by manufactures which has forced many original equipment manufacturers (OEMs) to upgrade old technology and find alternate sources of supply.
This takes time and has created large backlogs and supply disruptions. What we do not hear as much about are the highly engineered products, such as switchgear that support both commercial construction projects but can also affect OEMs powering equipment. As products such as switchgear have long lead times, the balance of the system cannot be executed, which has been tying up working capital and revenue recognition and really slowing potential sales growth.
Transformers are another example. Lead times can be out 12 to 15 months. Manufacturers have not invested in capacity for a multitude of reasons. As we look to drive a hardened grid to support electrification, we find ourselves governed by the capacity and lead-time challenges. These facts are working against demand that is out there for us all to gain.
Mike Bacidore: How much of a shift have you seen toward data collection and transmission, whether it be for analysis at the edge, at the enterprise level or in the cloud? What sorts of smart devices have become more prevalent as a result of company’s pursuit of digital transformation?
Chris Wadsworth: Everything is migrating to the cloud, including enterprise-resource-planning (ERP) systems and basic applications, as well as edge device data. The shift is in play for sure, but I have to say we are all figuring out how to leverage and monetize the opportunity both for our customers and ourselves. Many platforms and methods exist.
I would say that most companies are very active with initiatives and diverse investments to figure this out. Making decision based on all this data is critical to all of us, and we all have opportunities to come up with creative and value-based solutions for our companies. Wesco has made a significant set of strategic investments in digitalization, and the smart devices are just one aspect of the long-term strategy.
I find very interesting all the sources for collecting data from lighting to cameras to onboard machine sensing, as we see all devices becoming smart. The intelligent devices are actively using the data to optimize production and overall equipment effectiveness (OEE), as well as using it to reduce equipment downtime via predictive-maintenance applications. Software development is also a high-growth area as well to support the use of these devices. The future is bright but very developmental at this point in the industry space.
Mike Bacidore: The skilled labor shortage has often prompted manufacturers to look further up the value chain for ways to compensate. How has the democratization of technology helped to alleviate the pressure to find competent workers, and what can factories and plants expect to find?
Chris Wadsworth: Since COVID, the skilled labor shortage has improved, but our company as well as many others across a diverse set of manufacturing and distribution are still struggling to get back to pre-COVID labor stability. While this is a challenge, it also presents an opportunity for a step change across these same key performance indicators (KPIs).
Companies are at a very wide range in their journeys to automate their operations. As a distribution company with a large solution set across automation products and solutions, we have both an internal and external opportunity to capitalize on this transition to automation.
Internally, we are on a digital transformation that includes warehouse automation solutions. Externally, we have diverse OEM firms, that build and support the warehouse automation revolution. Our industrial division is driving automation solutions on the plant floor driven by our automation’s supplier software, machine learning and component advancements.
Companies are really being forced to drive these changes as another factor is the aging skilled labor force that we have relied on to keep our factories running. Many of those domain experts will be retired over the next five to 10 years, and that skill set is not being replaced at the rate necessary, which will drive an even greater need for automation in factories and distribution centers.
The worker of the future will need more of a technology-driven bias, and technology and artificial intelligence (AI) will continue to close the gap in the experience that has been forming for years and continues.
Mike Bacidore: Safety has become an increasingly expected part of machinery’s control system, especially now with the popularity of collaborative robotic systems. What sorts of trends are you seeing in the way safety is being designed and implemented in manufacturing equipment and production lines?
Chris Wadsworth: Our automation suppliers have a significant bias in safety in their product portfolios, and many have grown their product diversification through acquisitions of safety-device and automation technology. Engineers also have the same bias in their design thinking about the worker safety as they automate machines and plant-floor applications.
These two trends complement each other very well and provide opportunity to drive productivity, quality and safety at the same time. Safety is really the top-priority measurement of manufacturing KPIs and is expected by company executives, which is translating into the product advancement and integration in the systems and controls.