Distributors are regularly exploring ways to gain a competitive edge in the marketplace, and recruit new talent who will help drive the company into the future as baby boomers enter retirement.
The Texas A&M University Industrial Distribution Program provides pivotal resources in both of those areas. Long respected as one of the premier programs of its kind in the nation, A&M has upped the ante by adding a Talent Incubator and increasing the hands-on interaction between its students and distributors from various industries.
Inspiring innovative thinking
Barry Lawrence, the program’s coordinator and professor, started the Talent Incubator with an idea and a handful of students. It was based on the premise that despite the increasing popularity of the dot coms, there would still be a tremendous need for traditional distributors. But to be competitive, they would need to think outside their traditional boxes.
It also solved two ongoing challenges identified by the university:
A&M really wanted to engage in formal undergraduate research projects, but had struggled with the concept. While students often were involved in various types of research, many times they were doing it on their own without faculty members being fully engaged. As a result, corporations didn’t give it the weight they would have if it were an officially sanctioned project.
In addition, companies interested in recruiting ID graduates often wanted insight into the best candidates.
“Ethically, I can’t make that call from among our 800 students,” Lawrence said. “On the other hand, if we had a program that essentially hired students into an elite organization, that would send a pretty clear message to potential employers. So it’s of great value to companies who are recruiting next-generation leaders.”
The Talent Incubator is designed to function like a global supply chain lab. Professional researchers were put in charge, led by Esther Rodriguez Silva, research assistant professor and director of the Talent Incubator. It runs on a nine-month academic calendar from September through May. To kick it off, the university required that the Talent Incubator have a five-year funding commitment from industry partner companies — all 10 of those positions were sold within months of the announcement.
“The energy and excitement associated with our undergraduates often goes beyond what industry professionals might have because they are looking at concepts through fresh sets of eyes, with few preconceived ideas,” Lawrence noted. “They want to bring innovative solutions to the market, and are thinking outside the box because they don’t know what the box is yet."
Thought leadership is extremely important to this process.
“We have some projects that are following more traditional distribution models, but also some that are highly creative and stretching new boundaries,” Lawrence added.
Real world classroom experience
As part of the ID program curriculum, Mark Johnson, associate professor of practice in the Engineering Technology and Industrial Distribution Department, was chosen to lead courses on ERP systems and supply chain management.
“Our faculty was doing the best we could with what we had,” Johnson said. “But we wanted the classes to be cutting edge and true to life. When the opportunity arose to partner with Mincron and use their technology solutions, it was exactly what we needed to raise the bar. The feedback we are getting now compared to when we didn’t have Mincron’s support is night and day. It’s been invaluable.”
As part of the partnership with A&M, Patty Baley, Mincron’s education specialist, was named the university’s account manager. She spends a lot of time on campus answering questions, and working with the staff as well as students.
The program designed a junior-year course on ERP systems as a way for students to get hands-on involvement with distribution management software.
“The way the course is set up, the professor conducts lectures about aspects of the system in class, and then the graduate assistant leads a hands-on lab to reinforce what had been taught in the lecture,” Baley explained.
Baley helped both the professor and the assistant develop Power Point presentations and real-world examples to instruct how her company’s customers actually use ERP systems to find solutions to each operational area of a distribution company.
Baley also sat through the first semester of lectures and labs to help fine tune teaching strategies.
For one of the labs, Baley came up with an idea to make signs for various students to wear in a role-playing exercise for “customer,” “vendor,” “sales person,” “warehouse,” etc. They used chocolate candy as the product, and watched how the system managed the product from the time it was ordered and received from the vendor, stored in the warehouse, and then ordered by and shipped to a customer.
“It gave the students a much clearer visualization of the system and how it works,” Baley added.
Johnson noted that the partnership with Mincron and resulting ERP course allowed students to learn much more about the crucial role software plays in distribution.
“It’s about teaching them to be proactive decision makers,” he added. “We are training our students to be executives, and while most of them won’t be going into the IT side of a distribution business, this gives them a solid understanding of that department’s importance and the analytics that it can provide.”
Building blocks for the future
The roots of Texas A&M’s Industrial Distribution Program date back to 1956. It got an early boost a few years later when J. R. Thompson, an Allen Bradley distributor from Houston, infused industry relationships and funding into the program. Later, Don Rice was brought on board to lead the program.
With a mission to ensure students had a broad view of distribution, the two developed a highly successful curriculum model that put the program on the map.
As its reputation spread, A&M drew interest from distributors across a wide range of industries that led to internship programs, regular recruiting visits and, ultimately, hiring of A&M graduates.
Benefactors Thomas and Joan Read also played an important role in the program’s development by endowing the Read Center for Distribution Research & Education — the only one of its kind in the world in the late-1980s. At that point, the program had grown to about 500 students.
The addition of the Read Center meant that students could gain cutting-edge, real world knowledge through professional development courses that were based on the most important issues of the day for distribution.
“All of this just continued to add to the reputation that A&M had built with this program,” Lawrence said. “The demand for the type of information we could provide through the Read Center was great, and we started investing even more time and resources into research and consulting in the mid-1990s.
That led to the development of a library of books that were focused on the art of distribution. Previously, faculty members had to rely on books written for manufacturing, retail and other such environments and then adapt them to fit the distribution courses they were teaching.
“But the significant body of knowledge on operational excellence we had amassed thanks to our first-hand research and consulting was the basis for some of our first books on the subject,” Lawrence added.
The potential impact of those types of courses led many distributors to enroll key employees in the program so they could bring that knowledge back to their companies — or hire A&M team members for consulting projects.
As Lawrence described, most distributors had been focused on sales, and there hadn’t been a whole lot of dialogue when it came to operations. However, in order to be competitive and profitable, distributors needed to shift some of that emphasis on sales to discussing best operational practices.
Currently, the professional development arm of the program draws about 1,000 students per year for various certifications and executive strategic sessions.
“Distribution executives come here to design their growth strategies for the next year,” Lawrence said. “We focus on fundamental things that are really specific to each of their job responsibilities. When you mix industry professionals who have so many years of expertise with our young undergrads, master’s students and PhDs to work on projects and research together, it’s so valuable. The industry professionals are very much a part of the research taking place; they are participating, not just observing.”
Today, Texas A&M’s Industrial Distribution Program has 780 undergraduate students. Its Professional Association for Industrial Distribution (PAID) student group has over 700 members and is the third largest on campus. (The famed Corps of Cadets is the largest.) PAID runs two career fairs each year, with an average of 65 companies taking part.
“Distributors realize what a great recruiting opportunity this is,” Johnson added. “Larger companies traditionally have had an easier time getting on students’ radar because of name recognition. But it was difficult for students to even connect with smaller distributors. This evens the playing field, so to speak, and gives students a broader perspective of what choices are out there. Our program is proud to have nearly a 100 percent placement record, and nearly 90 percent retention rate. It’s a great win for everyone.”
Much of successful distribution revolves around the question of who is adding value and how distributors should sell and/or price that value.
It also involves navigating inherent hurdles such as economic crises, generational workforce changes and much more.
“Distributors are going to reinvent themselves as value-added providers,” Lawrence said. “It’s still unclear if they’ll be defined as a distributor of a product or of a service. What is clear, however, is that distributors have to make sure in this new millennial age that they remain relevant. They’ve got to communicate with customers and give them a reason to communicate back by offering the knowledge, solutions and capabilities that customers are seeking.”
Lawrence also believes distributors will become more diverse, and that manufacturer-distributor relationship may change.
“Some manufacturers will play the commodity game, while others will be part of the solutions and value-added process,” he added. “Distributors will have to be selective on whom they partner with.
And, finally, while the growing trend in online sales just adds to competitive challenges faced by distribution, there is still a need for their function.
“Distribution is still very necessary,” Lawrence explained. “Its basic functions will remain the same — transportation and storage. What is going to redefine them are their value-added services in a knowledge-driven economy.”
Mary Jo Martin is the marketing manager at Mincron Software Systems. Before joining Mincron in 2016, she spent two decades as an editor for plumbing, HVAC and industrial PVF distribution trade magazines.