HOUSTON, TX — Until recently, Controls Group North America (CGNA) has been a fairly quiet and private organization. Started in 1983 by 13 hvacr controls distributors who wished to pool their buying power to obtain better pricing on thermocouples, the organization has grown to 37 members and 140 locations in the U.S. and Canada.

CGNA is a member-owned marketing group of hvacr controls distributors that provides a means for independent distributors to compete effectively in this era of consolidation. By banding together, the group can form strategic alliances with selected manufacturers, thus obtaining better pricing.

But there are other benefits as well. For example, members routinely share best practices with one another, and using the Internet, members are able to provide a higher level of customer service by sharing their inventories. This all benefits contractors and others who purchase from them.

The goal of the organization is to be the undisputed North American market leader serving the commercial and combustion hvacr industry through a united entrepreneurial organization. It’s an ambitious objective, but CGNA is working hard to achieve it.

An Elite Group

Not just anyone can become a member of CGNA. Melodie Matlock, the group’s executive director, says that they are very selective when evaluating prospective members.

“We have lengthy criteria. For example, they must be an hvacr controls distributor. They must have adequate financial and credit stability. They must have a volume of sufficient size in relation to their locations and the markets they serve. And they must make a commitment to the group programs and activities and support those programs and activities.”

All new members must be voted in by a two-thirds majority of the other members. The reason for this is that members of CGNA are the actual owners of the organization, and it’s important that existing members feel that a potential new member shares the same goals and beliefs.

The existing members also want to make sure that potential new members successfully cover their markets and have the same objectives.

“As owners of CGNA,” says Matlock, “our members are focused on the success of their businesses and exceeding the needs and expectations of their customers. This type of focus and the types of companies that were recruited for membership enables us to provide strategic market coverage and be a valuable and dependable resource to the customers we serve.”

Once new members are accepted into the group, they must support CGNA’s long-term growth focus on commercial and combustion controls.

Basically, their business focuses should be on track and within easy reach of the existing business profile of the current members.

Or, the members can support a secondary objective as outlined by the group, or support a new, unidentified growth opportunity which is not supported by existing members.

Join For the Programs,Stay For the Benefits

The main reason why controls distributors want to join CGNA is the purchasing programs the group can provide through partnerships with selected manufacturers. With combined purchasing power and sales of half a billion dollars, they are not an entity that is easily ignored.

However, once distributors are in the door, other benefits can help them run their businesses. For example, the group pooled its resources to publish The Controls Book, a comprehensive controls catalog that would have been very expensive to do individually.

In addition, CGNA provides weekly communications to the membership, which cover topics such as member and vendor recruiting, technology and marketing initiatives, and new manufacturer purchasing programs.

Another benefit the group has realized is “sharing” its inventory. CGNA has a members-only online inventory system where all member companies are able to download their inventory to a central server for transactional business over the Internet.

“Member distributors can get on the Internet, type in the model number that they’re looking for, and the system will tell them which of the members has that item in stock,” says Matlock. “Even if a member needs five different items from five different members, they just point and click to fill their shopping cart.”

Another benefit is the camaraderie these distributors have with one another.

“Companies join for the purchasing program, and they stay for everything else,” says Matlock. “Members get together and talk, share ideas, and help each other solve problems.”

Contractors Benefit, Too

CGNA eventually intends to allow access to the online inventory system to buying contractors as well. Because so many of the products are restricted (gas valves, boiler controls, etc.), people who wish to buy online will have to register; the member serving that market will authorize that person to buy.

Once they’re able to point and click online, contractors will be able to order from the aggregate inventory of all 140 locations. And they can get what they need overnight.

“One of the major reasons why contractors should consider doing business with CGNA members is our technical expertise in providing what I would call well-founded jobsite solutions.

“Product availability is another reason contractors should seriously consider contacting their local CGNA member. We have a combined inventory of over 13,000 items in stock from over 600 manufacturers.”

Support is another reason why contractors will enjoy doing business with CGNA distributors, says Matlock.

“With manufacturers today providing less and less support, the local Controls Group member is providing more and more.

“We also offer extensive product training and new product introductions. And, of course, there is superior customer service provided by all CGNA distributors.”

It’s amazing what a group of professionals can achieve when they work together for the common good.

For more information about Controls Group North America, visit www.controls-group.com (website).

Publication date: 09/25/2000