ADI clears the shelves, new stocking system adopted

SSN Staff  - 
Thursday, January 1, 2004

The distributor streamlines products it carries, unveils new look
MELVILLE, N.Y. - For the first time in a decade, ADI, the security industry’s largest distributor in North America, is undergoing a major reorganization to help standardize products in stock and streamline the look of its showrooms.

The product stocking changes were expected to be completed by the first of the year, with a new look at each of the company’s 106 branches to get underway at approximately the same time.

The sweeping changes include new designations for products. For example, products labeled “core” by ADI will be carried by all branches, while a “b” designation for branch manager picks, represents products that an individual branch manager has selected for his specific location.

The overhaul is part of a program being implemented by Michael Flink, vice president of marketing and operations for ADI. Flink joined the company in April 2003 and came to ADI as the former vice president of Radio Shack in Toronto.

“Our system was a branch assortment system,” said Flink, where each ADI branch manager had to be convinced by product manufacturers to carry a specific security system or product line. The changes, said Flink, to some degree standardize the products each branch will carry, while at the same time leaving room for branch manager picks, national account needs and special orders.

In all, Flink said the change increases the number of products the average branch carries from 2,300 as part of the old system to up to 3,300 or 3,400 products. He said approximately 3,000 products have been labeled as core by ADI. But through a combination of special orders and the products it carries in-stock, ADI reports selling more than 100,000 different kinds of products each year.

The new designation for products has so far bode well for Amseco, a manufacturer of annunciators, magnetic contacts, strobes and fire-related products. More than 20 of its products have been deemed core and the company has already seen orders from ADI increase by 10 percent, said Tom Fessler, vice president of sales and marketing.

But some other security product manufacturers raised questions about the new system. An executive at one manufacturing company, who asked not to be identified, called the system “cherry picking.”

According to Joe Freeman, principle of research firm J.P. Freeman Co., the changes at ADI follow a concept used by the retail industry for years. That concept, he said, is going to the core of what customers want.

“It’s like sell it or drop it,” said Freeman. “I’m sure that ADI has been loaded with all kinds of little stuff that never sold and it’s taking up space. They’re trying to minimize that.”

Flink said the changes are not about taking a retail approach, but following how customers shop. For example, products used to be displayed at ADI by brand, not by category, such as sensors or cameras. The new floor plan for its showroom will group products by category and the top shelf of each section will be reserved for actual system display.

“It’s hard for a customer to go through a catalog to understand what the product is, whereas if you walk into a Home Depot and you’re a building contractor, you can pick up the lumber, look at the nails and try the tools,” Flink said.

The first major overhaul of branch showrooms is scheduled to get underway in Sacramento, Calif., and Dallas. Those locations will get a complete construction remodel, while other branches where leases are expected to expire in a few years will get a cosmetic upgrade for the time being until a new lease is negotiated. In all, it will take three years to complete the remodel of ADI’s branches.