Iillustration_60886103 / Kheng Ho To / Dreamstime
Photo 298445088 / Sascha Winter / Dreamstime
Photo 199231482 / Ye Jin Kang / Dreamstime
Photo 31660527 / Tudor / Vint / Dreamstime
Pphoto\ 33574911 / Khunaspix / Dreamstime

SupplyForce Merges with Vanguard National Alliance to Pursue National Integrated Supply

Feb. 27, 2014
Through Vanguard, SupplyForce gains members covering every Rockwell APR in North America. “Besides Rockwell, we have 20 members who have Schneider, we’ve got GE, Siemens,” Ludlam said. “If a customer wants to buy something, we have an authorized channel for it.”

It’s been about two decades since integrated supply was the main buzzword causing worry among industrial electrical distributors — the days when everyone who wanted to play in the market for industrial maintenance, repair and operations (MRO) supplies felt the need to find acquisitions and alliances that would allow them to present customers the full package of MRO goods from a single source. In the wake of that craze, many of the attempts at integrated supply foundered and went away, leaving behind a few organizations that managed to stand the tests of time and continue developing an integrated supply offering. One of those few was a spin-off from distribution buying/marketing group Affiliated Distributors, called SupplyForce.

The other side of the sole-sourcing craze was a greater focus on national accounts and blanket contracts. About a decade ago, a group of large electrical distributors with industrial specialties and Area of Primary Responsibility franchises for Rockwell Automation products joined forces to pursue national accounts together through an organization called Vanguard National Alliance (VNA).

As of Feb. 10, the two organizations have merged, and will operate under the SupplyForce name. The combined entity, with VNA technically a subsidiary of SupplyForce, will have existing contracts worth $400 million and more than 3,500 branch locations from which to serve customers. The headquarters will be in King of Prussia, Pa., but VNA’s offices in Boston will also stay busy.

The merger has been in the works for more than a year, spurred by the heavy overlap in membership and their desire for a single offering to present to national MRO customers, John Ludlam, president of SupplyForce, told Electrical Marketing.

“The two groups had a ton in common, and instead of focusing on competing with each other, we wanted to focus on the real competition in the marketplace,” Ludlam said. “Over 70% of VNA members already were members of SupplyForce, so there was a lot of redundancy and extra cost.”

Seeing some of the same names on competing proposals was often confusing to the customers, he added. “One group would call on a customer on Monday, and the other would call on the same customer on Tuesday, and the customer would say, ‘this feels awfully similar.’ They would ask the member, ‘Which one should I choose?’ and the member would say, ‘I don’t know, it’s your choice.’”

In its offerings to customers, the expanded organization now can provide an authorized source of just about any electrical product on the market. Through Vanguard, SupplyForce gains members covering every Rockwell APR in North America. “Besides Rockwell, we have 20 members who have Schneider, we’ve got GE, Siemens,” Ludlam said. “If a customer wants to buy something, we have an authorized channel for it.”

And with SupplyForce, the offering goes well beyond electrical. The group includes distributors in industrial mill supplies; electronics; filtration; pipe, valves & fittings; janitorial and sanitation; and safety supplies. SupplyForce also has procurement services and spot-buy processes to fill any gaps on a customer’s tool crib shelves.

On the operations side, the combination of the organizations brings together complementary strengths. VNA has very strong back-office operations, with better reporting and analysis for members, while SupplyForce has stronger field sales and customer support operations, Ludlam said. SupplyForce also has a robust online catalog, something VNA had been struggling to develop.

With the merger now done, the combined group will shift to growth opportunities, primarily in adding the non-electrical verticals SupplyForce covers to existing VNA customers, Ludlam said. The group will also be looking over the next few years to expand into market sectors it doesn’t currently serve. “We’re strong in some markets, like pulp & paper, food processing and aerospace. There are others where we aren’t very active and we’ll start to go after those.”

In a SupplyForce press release announcing the merger, John Burke and Kevin Powell, chairmen of the boards of SupplyForce and VNA, respectively, made a joint comment: “We look forward to beginning the integration of these two great organizations which will enable us to deliver what we feel will be the best national agreement solution in the market today.”

SupplyForce continues to have a relationship with Affiliated Distributors, but going forward any distributor with a Rockwell APR location can be part of SupplyForce even if they’re not an AD member.