By Philippe Delpech, Sonepar President
When I joined Sonepar as its CEO, in 2017, after a series of senior roles in complex engineering sectors, it seemed that the recipe for being a successful distributor was tried and tested: a broad network of local branches that thrived on close relationships – offering a highly responsive, personal service. I had come from a world where global groups were increasingly using automation, based on standardized processes and sophisticated software. But even major distribution groups seemed to have remained decentralized – their ways of working remained traditional, labor-heavy, and distinctly local.
Yet, I had watched manufacturing start to transform itself in the 1990s with automation, so why hadn’t this type of radical investment in productivity touched distribution’s supply chain? The answer was not hard to see in a sector where “over-the-counter” discussions were the key to most transactions, heavy investment in an automated, upstream supply chain just didn’t make that much sense.
As I began looking at how we could optimize our business, I was struck by the fact that B2C trailblazers were already showing us that investments in modern logistics could be made to work – and create an unbeatable offering. What also struck me was that the key to unlocking these logistics benefits was the quality of the digital platform that underpinned the customer journey. In addition, digital’s potential in B2B was just maturing, with the right data analytics and developer know-how – meaning there was real potential to drive the same kind of revolution in electrical distribution. Success lay in the combination: a seamless customer experience combined with flexible flawless modern logistics.
The scale of the opportunity was soon obvious and motivating – having come from sectors where leveraging big data and the use of powerful software are the norm. Yet with distribution’s emphasis on face-to-face relations, grasping it would mean major transformation at a human level as well as a technological one. The management of change would be as crucial as the management of data. It’s a reflection of the quality of Sonepar’s leaders that they saw this potential too. Our shared values of entrepreneurship and pushing conventional boundaries, helped us rapidly frame a vision to be the world’s leading omnichannel electrical distributor. It was clear we had to be an early mover if we wanted to gain and retain, a long-term competitive advantage.
The key to navigating this new ecosystem is about our commitment to people, diversity, and inclusion are core values for Sonepar, so it’s more about progressively diversifying and re-skilling our workforce and enabling them to lead others on the journey.
Fast forward several years and we have seen real progress. We are investing heavily in our digital transformation and improving the customer experience through Spark, our omnichannel platform developed by the Sonepar Digital Factory. It aims to anticipate our customers’ needs and make their lives easier through simple interactions – across every device and touch point. And, just as in B2C, it is our digital transformation that has unlocked the potential to transform our logistics, resulting in an unprecedented €1bn being invested in our supply chain. Sonepar is moving from a branch-centric model to one that deploys state-of-the-art logistics. We are expanding our base of modern warehouses from about 150 today, to 200 by 2025. In addition, we are investing in 28 new and improved Customer Distribution Centers (CDCs). These new centers can hold six-figure numbers of SKUs (Stock Keeping Units), providing the broadest assortment of products and dispatching them with the highest levels of agility and customization. Underpinning all this is a focus on the right networks of partners, automated facilities, optimized packaging, and flawless logistics, via dedicated, often greener, transport.
It is a giant leap for Sonepar’s technologies and infrastructure, but what about that all-important human thread that runs through distribution? The key to navigating this new ecosystem is about our commitment to people, diversity, and inclusion are core values for Sonepar, so it’s more about progressively diversifying and re-skilling our workforce and enabling them to lead others on the journey. We have brought in new skills, like data analytics and software development, to existing entities. This has a double benefit: it attracts new associates already comfortable with a digital world, and, by giving them the autonomy to showcase their skills and the benefits, they inspire and motivate others.
For customers it is more about embracing new habits: getting comfortable with moving away from the “visible” – where they can see and touch products in a branch – and toward the “invisible” – ordering on a smartphone and having confidence that they’ll have what they need the next day, 70% of which might come direct from a CDC. First, the power of Spark and its emphasis on simplicity and flexibility is highly attractive to site managers already using a smartphone as their main work tool and comfortable with online ordering in their personal lives. Then, our omnichannel approach, where people are still a strong part of the mix, means that our associates act as ambassadors for change, showing our customers how their lives can be easier, as well as advising them on products.
This careful and strategic approach has really been about building critical momentum. With five countries where we operate now fully transformed, what we are seeing is a self-sustaining, virtuous circle. When a contractor finishes on-site at 4pm, orders on their smartphone at 5pm, and gets exactly what they need at 7am the next morning, the results speak for themselves – unmatched levels of service and productivity. As we move through the change, existing team members and prospective associates see the attractiveness of joining a modern, thought-leading, distribution group – helping carry the transformation forward. And other companies see the attractiveness of partnering with, or joining a group, that is investing in the future – enabling us to increase our market reach and product choice, bringing more customers to our platform.
This critical momentum now sees us at another milestone, we are confident we have the know-how to roll out this type of transformation to the wider group. Our next goal is to see our top twelve countries transformed, which will represent around 90% of our sales. It is a new phase for Sonepar and one I am looking forward to, as a very tangible expression of what Powered by Difference means!