Staying relevant is critical to success in today’s quickly evolving electronics market. At the same time, history and long-time relationships with customers have a place in the recipe for success.
The big question is how to balance these two: maintaining corporate identity and adapting to meet the needs of a changing market. We sat down with Frank Flynn, president at Sager Electronics, to talk about how his company has maintained its long track record as a distributor of interconnect, power, and electromechanical components. The company recently celebrated 130 years in business, having started as an electrical products company.
Flynn joined Sager in 1983 and took the helm of the company in 1999. Prior to assuming the position of president, Frank served as chief financial officer, chief operating officer, vice president of finance, and director of corporate development. During Flynn’s tenure, the distributor made a handful of acquisitions aimed at cementing the companies direction and leadership. In addition, the company was acquired by distributor TTI five years ago.
We asked Flynn about how he sees the electronics distribution market changing, as well as about how Sager has evolved over the years.
EBN: Your company has managed to stay relevant for more than a century. What would you say is the cornerstone of your strategy, the foundation? And what are the newest ways that your customers want to work with you?
Flynn: Adaptability and customer service. Our ability to evolve as the business evolved and to maintain a high level of customer service through the years have been the keys to our relevancy. The company started by selling speaking tubes out of a storefront in Boston in 1887 with an in-house, knowledgeable service staff and on-hand inventory. Over time, Sager expanded its product offering to the electrical equipment, radios, and time-saving devices customers were seeking.
As electronics were introduced, it became a much more important part of the Sager line and the company transitioned from a retailer to a wholesaler. In addition, the company began marketing itself as Sager Electronics, putting its corporate name, Sager Electrical Supply Company, in the background.
Today, Sager Electronics has ten service centers strategically located across North America, a team of field sales and technical sales engineers, a line card of interconnect, power and electromechanical electronic components, a state-of-the-art warehouse, and a Power Solutions Center dedicated to value-add services. In addition to the traditional sales models it offers, Sager has taken a unique approach to direct field sales, using a dual coverage model for highly technical products like power supplies and thermal solutions through the company’s specialized group, Sager Power Systems. In this model, a technical sales person called a Power Systems Sales Engineer works directly with our customer's engineering team while our field sales representatives work with engineering and purchasing providing greater customer value.
EBN: Consolidation in electronics distribution landscape has continued as the norm. Your company was bought by TTI. Tell us a little about how being part of TTI has furthered your company’s strategy?
Flynn: Being part of TTI but remaining a separate company has both required and afforded us the ability to differentiate ourselves in the marketplace. While both companies enjoy a strong interconnect and electromechanical line card, Sager has taken the lead in power supply and thermal product solutions through its specialized group, Sager Power Systems. This group features a dedicated and technical outside sales force selling power supply and thermal only.
Sager’s specialization in power is unique and would not have been achieved as quickly without the resources of TTI and Berkshire Hathaway. Growing our power supply line card and capabilities has proven valuable to both suppliers and customers, as Sager works to redefine the traditional idea of IP&E. Our specialization in power complements the strength of our interconnect and electromechanical offering, allowing Sager to provide more value and a full breadth of solutions to better meet the needs of our customers.
EBN: What are the biggest changes you’ve seen in the electronics distribution landscape in terms of the role of the distributor?
Flynn: It’s not just part numbers, price, and availability anymore. Customers are demanding more technical know-how to get to market faster. Our role today includes management of shared forecasts, special packaging programs, and regulatory and compliance requirements. In addition, customers are demanding design and value added services. Sager has responded to these needs with a 40,000-square-foot facility dedicated to value add design and service complete with mechanical and electrical engineering, testing, and production staff. This staff together with Sager’s sales engineers and field sales team have the technical knowledge and skills to meet customers’ demands.
EBN: What key investments have you made in your business and how are you reaping the rewards of those investments?
Flynn: Sager Electronics’ most recent investments have been centered around furthering power supply sales as a growth strategy. In 2014, Sager purchased a West Coast-based distributor named PowerGate LLC, which specialized in power supply design and service. In 2015, we purchased Norvell Electronics, a Texas-based distributor specializing in value add design and service in the same market. Through these acquisitions, we acquired sales and marketing talent, key new product lines, and value added capabilities.
Additionally, Sager has made other investments in support of its strategy. The company has strengthened its team and added skills in all areas of the company. Sager invested in our websites, made significant inventory investments, system upgrades, and branding.
These investments have positioned Sager for new growth. Today, we are recognized as a full-service interconnect and electromechanical distributor with a specialized power group on its way to being recognized as a leading power supply distributor in North America.
EBN: What emerging technologies or customer segments have had the most impact on your business?
Flynn: Sager’s core markets include industrial, medical, and instrumentation. These markets have a strong impact on our business, with lighting showing a new level of growth potential. The expansion of robotics in industrial applications has provided Sager with new opportunities, while energy-efficient processes, regulatory compliance and the implementation of automated solutions are factors driving the instrumentation market. The medical market must address the challenges of an aging population and the need for portable devices, improved information transfer and hefty regulation requirements. The lighting industry continues to move to smaller, leaner LED solutions as the demand for energy efficiency grows.
EBN: What other industry trends are you watching today, particularly as they relate to customers and the supply chain?
Flynn: Customers want better access to their specific account information, and the ability to manage it online. Through forecasting and other reporting vehicles, Sager offers customers a variety of means for sharing data, and we are constantly evaluating and streamlining processes to communicate this information faster and more consistently.
EBN: What do you have planned for Sager’s future?
Flynn: Continued growth. Sager will monitor customer service trends and invest accordingly. We will continue to test our dual coverage model to ensure its effectiveness with customers. We are seeking additional product lines that provide further specialization in the thermal area as well as other growth opportunities. We plan to expand our value add services beyond the current power and thermal focus. We are actively seeking further acquisitions that support our strategies.