CE Pro Podcast #111: From Supply Chain to Company Culture – Valuable Advice from an Industry Veteran

You, when you’ve been in the industry for decades, institutional knowledge is solid gold. And the ability to pass on the insights of those years of experience to the next generation of integration business owners is invaluable. With all the pressures CE professionals face today, from supply chain to labor rates to company culture, valuable advice from someone who has it all seen and all done are welcome.

This is where Franklin Karp comes in. After spending decades in the trenches, Karp is now sharing his sage advice with others by starting his own consulting firm: Franklin Karp & Co. Karp started out in the consumer electronics business when he was at the ‘university. stereos. This evolved into a retail job at Stereo Warehouse before moving to Harvey Electronics, a high-end dedicated retailer that eventually branched out into custom installation. Harvey’s reached $46 million in sales, including $21 million in custom installations during Karp’s long tenure. For the past decade he has worked at Audio Video Systems in New York, dealing with vendors and affluent customers.

Even though business is booming, there are always simmering issues on the horizon and efficiencies and improvements that can be made for business right now and to prepare the business for the future. .

Karp offers these important tips in these key categories:

Supply Chain

“Supplier relationships are very important right now. If you were the type of integrator who jumped between different providers based on your credit status or other reasons, things may be very difficult for you right now, especially if you are under pressure from customers, of contractors, architects and designers.

“You have to have strong relationships with them. There are very few exclusives as the distributor is the only one with a particular brand these days. Having a good relationship with your suppliers is essential. When you have a problem, especially if a product fails, they remember who treated them fairly. They remember who answered their phone calls or remember who took a meeting even though maybe you didn’t want to take that meeting. It’s all part of having a partnership in a relationship. When a regional sales manager calls and says, “My boss is going to be in town and I really need to have a meeting. If you make that regional guy look good, then who knows that regional guy is controlling the product faucet and he remembers who was nice to him. He remembers who didn’t yell at him and behaved like an animal. It depends on human relations.

Inventory management

“Cash flow is extremely important right now, especially if projects are delayed, which means your progress payments are delayed. If you’re disciplined enough to go to the client and say, ‘I can’t get this product before three months, six months or in some cases a year, but I can buy it today.” I want to schedule the order but I need you to give me the money now so I can buy it today. to buy. I have to pay for it in 10 days, 30 days or sometimes COD. It will stay in my warehouse, but we will know that it is there, and when the site is ready, I can be there in time and not delay the project.

“Normally I don’t believe in having a lot of inventory unless you need this product for service, but that’s an unfortunate situation right now. Cash flow is impacted whether you are a $10 million integrator or a $1 billion integrator. Cash is king. Credit officers at distributors and manufacturers have responsibilities and they cannot continue to extend your credit. I never believed in buying my video products until a week to 10 days before work due to market prices. Today, market prices are not as sensitive, but the life of a video product may be as little as eight months. On a large project that may span a year or more, you’d be crazy to buy video products that early.

Corporate culture

“Culture is probably the hardest thing to change in any company, regardless of size. At this time, it is important to behave like a human being, who listens more than he speaks. Your employees have lives. The pressures you feel as the director of your induction enterprise don’t have to trickle down to the soldiers in the field. They don’t want to work 80 hours a week even though you may be working 80 hours a week. Communications, listening to them and paying for them (or in some cases overpaying them). Are you doing enough to train these guys? This is very important because the training shows them that you want them to install it correctly. This will lead to happy customers, which will lead to more referrals, which will lead to more money, and ultimately, better compensation. It’s a family/team story. It’s no longer a situation of, ‘I get the money and you work for me.’ Culture is about how you treat them, how you communicate with them, how you educate them, and how you give them permission to talk and get involved in what’s going on. We’re really not in the installation business, but we’re in the service business. If you can’t remember, then you really should go hang your shingle somewhere else.

Sales management

“One of the mistakes I see made is that salespeople, many of whom are prima donnas, are probably on too much of a leash. It’s important to have regular dialogue – not emails – about proposals that don’t are not closed, or discuss the status of the process. Being engaged in what your salespeople are doing will help guide them to stay on track. It helps to see what they are selling, but not looking at products they don’t sell is a common mistake for many companies.If after-sales service isn’t crazy about a product, then why are you selling that product?

“Perhaps at the beginning of the month, discuss a particular selling proposition that hasn’t been closed and ask how you can help close that sale.”

Workforce management

“I loved sending birthday cards to all of my family, and I did my best to get to know their families… which they like to do and keep as much information about their personal lives as possible. It is very important and it is even more important today. The money you need to pay these people has made you excessive in some cases, and so you need other connections to them beyond money. This increases your chances of retaining someone for another company that waves more money to them.

Software Selection

“Once you get bogged down in multiple pieces of software, you’re ultimately wasting time, not saving time. And time is the most precious commodity we have at work and outside of work. End-to-end software has come a long, long way in our industry. Years ago, we were never big enough to catch the eye of the big software companies to create something specifically for our industry, so everything was out of the box and had to be changed. Once you start modifying the software, it costs time to implement. Everything takes forever. I’m not going to endorse one software over another, but I would advise dealers not to make overly fancy offers. Years ago, it was acceptable to make proposals in Excel. The truth is, a customer skips the last page anyway, but it’s all about timing and time management.

Standards and Best Practices

“I think standards and practices are something a lot of integrators say they do, but very few actually do what they say they do or even understand that there is a much better way to do it.

“Almost all integrators use the cheapest RJ-45 jack they can buy. I can tell you from firsthand experience how many times a service call has been generated because that cheap RJ-45 jack was used and the cable came loose. It costs you to drive a truck to reconnect that RJ-45 plug. Also, many guys rush their work and then something goes wrong and you have an unhappy customer. The old maxim is: Inspect what you expect. I don’t think enough people, whether it’s the project manager or the director, actually see the finished product when it’s in place and inspected.

“A customer doesn’t want to see the integrator guys walking around with a laptop trying to figure something out. It doesn’t give them a great sense of confidence to see the technician still at work tinkering. »

For more on the conversation with Franklin Karp, listen or watch the full podcast above. Find past episodes of the CE Pro Podcast by subscribing to the EC Professional YouTube channel or our Apple and Spotify podcast feeds.