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Independent distributors look to rally around trade association Group dedicated to image makeover
The Independent Distributors of Electronics Association (IDEA), which will be based in Princeton Junction, N.J., said it will promote quality and educate member companies on how to achieve high business standards through seminars, panel discussions, conferences, and newsletters. "Smith & Associates and other independent distributors run legitimate businesses," noted Leland Ackerley, executive vice president at Houston-based Smith & Associates Inc. and an IDEA spokesman. "There are companies that prey on independent distributors and we're tired of being ripped off. We're tired of being sold bad parts. More importantly, we want to make sure the parts sold to our customers are quality." To spread the message, IDEA has hired a media relations, marketing, and management firm to assist in promoting independent distribution through a media advocacy campaign. But skeptics say it will take more than just promotion, noting that this is not the first time the independent distribution industry developed an organization and guidelines to improve the quality of products and services. In 1989, 60 independent distributors formed the Association of Quality Electronics Distributors (AQED), whose charter called for education and improvement of ethics and standards. The group, which planned to host educational guest speakers, develop a parts rating system, and provide inventory sharing among members, managed to get off the ground but failed to gain the momentum and acceptance needed to sustain membership. Homey Sharooghi, president of Advanced MP Technology, San Clemente, Calif., and a board member of the former AQED, said the need has grown for independent distributors to filter out "bad elements" by strengthening the credibility of the estimated $10 billion industry. "The industry is maturing and independent distributors are gaining acceptance as a valuable piece in the supply chain," Sharooghi said. "Many independent distributors are ready and willing to invest whatever it takes to make their company a quality organization."
What's neededWhat it takes is financial backing and a strong commitment to the industry that IDEA serves, said Robin Gray Jr., executive vice president of the National Electronic Distributors Association (NEDA), a nonprofit trade organization geared toward supplier-authorized electronics distributors, based in Alpha-retta, Ga. "Hiring a staff familiar with running a nonprofit organization is important," Gray said. "IDEA could successfully form a trade association, but it takes a fair amount of money and some big players with deep pockets to get it started and keep it going. I'll be surprised if they have enough critical mass to sustain membership." Financially backed by dues from approximately 250 members, NEDA requires about $1.1 million a year to support basic organizational functions, according to Gray. "I'm willing to work with the organization in sharing my experience in association management, because I'd like to see this work," Gray said. "The mistake some groups make is to hire someone within the industry itself. They need to make sure the organization's goals are for the good of the industry, rather than for the benefit of a few." NEDA launched a supplier-authorized advocacy campaign at the Electronics Distribution Show in May 2001. But the charter really began to gain momentum at the beginning of 2002, according to Debbie Conyers, NEDA's marketing director. "We now have 34 distributors and 20 suppliers contributing to the advocacy campaign," she said. The success of that campaign was a factor in prompting Crystal Snyder, president of the Electronics Resellers Association International (ERAI), an industry watchdog for independent distributors based in Plymouth, Mass., to rally the independent distribution industry to develop IDEA, according to Billy Pursely, a manager at Smith & Associates.
Interim boardIDEA's board consists only of executives from the independent distribution industry. The nine-member, self-governing board will consist of three members who represent small companies with less than 20 full-time employees, another three who represent those with less than 50, and the remaining three from larger companies. Pursely of Smith & Associates, Nick Davis of Husky Electronics Internation-al Inc., Dan DiMase of SemiXchange Inc., Brian Folkes of Abacus Electronics Inc., Greg Radell of Electronic Equipment Co., and Tony Romano of American Electronic Resource, the charter member companies, will serve as the interim board until elections are held within 90 days. Three types of membership in IDEA are available: general (independent distributors), manufacturer (electronic component suppliers), and associate (service companies). Yearly dues and donations are expected to finance the association's programs.
Who gets to voteOnly members from the independent distribution industry will have the right to vote. "This advocacy group was founded by independent distributors for independent distributors, but we want suppliers and customers as part of the process and welcome their feedback," Pursely said. "The association is just getting off the ground and we could eventually consider giving voting rights to manufacturer and associate members." According to its charter, IDEA will address quality issues concerning OEMs and EMS providers that continue to scrutinize their supply base and reduce the number of independent distributors from which they procure parts.
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