Episode Transcript
[00:00:03] Speaker A: Welcome to INA Insights where prominent leaders and influencers shaping the industrial and industrial technology sector discuss topics that are critical for executives, boards and investors. INA Insights is brought to you by Aina AI, a firm focused on working with industrial companies to make them unrivaled segment of One leaders. To learn more about Aina AI, please visit our website at www.ina.AI.
[00:00:40] Speaker B: Hi everyone. Welcome to another episode of our Titanium Economy podcast series hosted by ina. Today we have the honor to host Iggy Domagalski who is the President and CEO of wajax. Wagax is one of Canada's longest standing and most diversified industrial products and services provide with $2 billion in annual revenue, more than 120 branches and 303,000 plus employees providing sales, parts and services to a broad range of more than 32,000 customers across verticals like construction, forestry, mining, manufacturing, transportation and energy. Iggy himself has been named one of Canada's top 40 under 40 and one of Canada's 50 most inspirational entrepreneurs.
Prior to joining Ajax, he was the CEO of Tundra Process Solutions and President of Western Industrial. Iggy, we are very excited to have you here today and explore your insights into the industry and learn more about Vijayag's story and their future directions.
[00:01:49] Speaker C: Well, thank you so much for having me on the show. I appreciate it. Great to be here.
[00:01:53] Speaker B: Perfect. So to get started, Iggy, why don't you give us a quick overview of the company, especially Vijax's focus within the industrial parts and engineering repair services space.
[00:02:07] Speaker C: Sure. Wejax has been around for quite some time. Our company was founded in 1858 so we are 166 years old. I have not been here that long but it's really a wonderful company with a great history. We are a Canadian company as you mentioned in the introduction. We have about 120 branches and over 3,000 teammates coast to coast. And we focus on serving Canadian industry. Really all industries in Canada. Anyone that needs any kind of industrial equipment they would probably be a customer. We have more than 30,000 customers that deal with us on a daily basis and specifically in our Like I said, we have two areas of our business. We have a heavy equipment side of our business which is a sales service and parts of pretty much anything with wheels. So if you think about excavators or wheel loaders or forklifts, we supply and service those. We have a series of shops across the country that do service on large trucks and buses and so that would be the heavy equipment side of our business. And then we have an industrial parts and engineered repaired services part of our business. Both are about half, Both are about $1 billion business for us. And within this industrial parts and services business, we supply things like bearings and gearboxes and hydraulic system, hydraulic cylinders and pneumatics and valves, instrumentation motors, drives. So all of the individual components that would go into pretty much any kind of facility, whether it be a gas processing facility, an oil plant, paper mill, any kind of mining operation, those are the kind of customers that we would, we would support. And all of our individual pieces essentially keep those facilities operating. So that would be, that'd be the supply side of our business. And then on the service side of our business, we're very proud to be a company that services everything that we sell. So that could be something as simple as the parts broken and they need to send it into one of our shops to get it fixed. We can do that for you. We also have hundreds of technicians on the road. So if something is broken in the field and it can't be shipped to our shop, and so you need it fixed in the field, we can certainly send out somebody to fix it for you. And then we also offer just what I would call value added services. So if you need to have one of these individual components built into some kind of larger, more complex assembly, we can definitely do that for you. Just a couple quick examples of what that could look like is we can sell you a hydraulic cylinder. If you that cylinder is broken, we can fix it for you in the field or in the shop, or we can put it together into a larger assembly that would power a car wash. So that would just be one example of kind of a value add service that we can operate. So I think that gives a pretty high level overview of really the business that we support in Canada. And it's for all types of customers. Anyone who needs any kind of industrial product.
[00:05:05] Speaker B: Right, Very interesting. And with those different types of businesses that you just described, the heavy equipment, the part supply and services, wejax hits or serves a diverse range of industries. How do you ensure that you stay attuned to the evolving needs of your customers across these various sectors? Because even in my introduction I mentioned at least like five, six different ones of them.
[00:05:32] Speaker C: Well, while we're a decent sized company, I think we are, we're almost a series of very small, focused small businesses. And so, so we are, I think, very in tune with our customers on a daily basis. And so they basically tell us what they're looking for. And I think that's really how we stay attuned to our customers. One of the things that I've really found at this company is that our people are just so laser focused on solving our customers problems. I wouldn't say that we are just an order taker shop.
We have every inside salesperson, every professional that we have in our sales team or our service teams. They are professionals and they are technical experts. And so we do focus on solving these complex problems that our customers have. Sometimes they just need a part and sometimes they don't even know what part they need. And so I think we're pretty good at helping them solve those things. We're also pretty fortunate to be partnered up with a lot of manufacturing partners, world class manufacturing partners, who have huge R and D departments who are also quite tied into customers and understanding what they want. And they use the information that we filter up from our customers up to them, letting them know, hey, this is what our customers are thinking, this is what they need. And that informs the next round of R and D that they do.
[00:06:48] Speaker B: Iggy, very interesting. You said in your introduction of the company that it has a very long history, right? Over 160 years. So of course with that comes a strong brand reputation and a big name for YJAX in this space. So two questions out of that. So one, you just mentioned that you still run as a, as a, you still have that small business characteristic when you, when you work with your customers. So how, number one, have you been able to maintain that over so many years of the company's history? And second, as you think about innovation, how do you balance that while making sure that you retain some of the companies like traditional long standing strengths?
[00:07:32] Speaker C: On the first question, you know, I think there's a balance between, you know, being very, very entrepreneurial at the front lines and also really following larger company protocols. And I think we walk that line pretty well. We have small branches. Some of our branches are just a few people, whereas other ones might be 100 people. And each branch, whether we want it to or not, it has its own unique culture and it attacks the local market in a unique way because every market is unique and all business culture is local. And so I think the local people in our branches know what the local customers need. And so they just adapt to that and service the customers in the way that they want to be serviced. That's, I think, something that's pretty important. We don't try to have the customers adapt to us, we try to adapt to the customer well. At the same time we do have, for example, nationwide IT policies and a supply chain group. So we try to leverage the kind of the best things of a big company which would be some of those centralized functions around IT and finance and whatnot. But also give the branches the local decision making power to deal with the customers really I think as they see fit. That's how we try to balance that. And then on the innovation front, I think we really leverage our manufacturing partners a lot. They have some really great R and D and technology that. And it's our job to get that technology into our customers hands and I think we do a pretty good job of that.
[00:09:08] Speaker B: Perfect. And very interesting that you mentioned the need for localization to meet your customer customers needs. Right. To still maintain that entrepreneurship at the front lines. So that takes me actually to my next question.
How have you been able to still do that? Still like running that localized level of operations especially whatever has been happening around us with respect to global supply chain challenges?
[00:09:37] Speaker C: Yeah, so that's a good question. And I think a challenge that everyone's really struggled with over the last number of years really. I think in the world there was high adoptions of just in time manufacturing and just in time inventory. And the pandemic came and then, and then I think people started to really beef up their, their local supply a little bit more. And we were no different. You know, we took on a little bit of extra inventory. We started to really think about how we bring things in. We worked with our supply chain group a lot to ensure that we didn't have these major disruptions. And so, so I think we're, we're kind of in a lucky spot where we're big enough that we can have the central supply chain department that really thinks about these things. But at the same time we do give our local branches enough autonomy to order what they need to be stocked on their shelves for their local customers. So I do think it's a bit of a balance between allowing the local operation to make decisions that they know their customers care about and to make sure that they don't run out of stock that their customers really need while at the same time taking advantages of the benefits of just a larger, more sophisticated supply chain operation that can as an example, maximize rebates and you know, lower the, lower the total freight bill because we're, because they're, they're just able to think about that at a national scale as opposed to a local, local micro scale.
[00:11:05] Speaker B: Got it. And Iggy, you mentioned technology and a couple of phrases that are making headlines these days are things like AI Data analytics. So just curious to know, how does Wagax think about them in terms of your day to day operations or just like more broadly about the future of the industrial segments that you play in?
[00:11:31] Speaker C: Yeah, so we think about technology in a few different ways. We're in the final innings of a rollout of a new ERP system. It's gone pretty well. It's my third one in my career and it's by far the smoothest one that I've been a part of. Of course there's hiccups because there always is, but it's been up by all accounts quite smooth. And so we're, so we're, the way that we think about that is we want to really maximize the technology that is available to us from the creator of that ERP software. We don't like making customizations because that just causes problems later on. And there's a lot of off the shelf items that the software has. Just, and just one example is AI is being used in pricing. So we're piloting that and making sure that we're charging the right level, that we're not undercharging based on what's going on in the market, that we're not overcharging based on what's in the market. And there's an AI layer that helps us figure that out. So that's one area where we're dabbling in AI. Another area where we're dabbling in AI is again with the software provider that we, that we have, that we use and that we don't customize. Just salesforce.com, a lot of companies use that one. There, there's an AI, there's an AI module in there that helps plan the routes of your salespeople to be as efficient as possible and to, you know, cover the most amount of ground with the least amount of kilometers driven and that just using their time in the best possible way. So that's another way that we're, that we're just piloting AI a little bit in our business. It feels like everyone's using chat GPT. I use it all the time. I use it every day just to help me with, with, with, with simple tasks. So I think we're starting to move slowly into that area. We're not on the bleeding edge, but we're trying to use the tools that have already been proven and that are available out of the box. And when we think about technology with our customers, we really only want to do what they want. So we're not trying to build an Amazon type interface because most of our customers don't. Are not asking us for that. What our, what our customers are asking us for is, as an example, how do we have an electronic data interface with you and how do we make it so that we don't even have to email you a purchase order, that we can just create a purchase order in our system and it just automatically appears in your system and automatically gets shipped and all the documents are automatically processed in the background without having this long email chain. And so we do that with customers, with select customers that want that. So, so we, we really try to just work directly with their best customers and link into their systems, which I think makes, you know, it's obviously very good for them because they're asking for it and we're, and we're, and we're doing it. I think it's good for us because it makes us more integrated with our customers and it just, it makes the business a little bit stickier. Once you're, once you're integrated into their IT system, they're, you know, I think they're more likely to stick with you for the long term.
[00:14:29] Speaker B: Right. Those ERP changes are never fun, but it's glad to hear that it's going smooth so far for you guys. So, ign, one question that comes to mind when you say that Wagax has had such a longstanding history is about growth. Over so many years, what has been the company's approach towards growth? Especially also taking into account acquisitions and other forms of strategic partnerships.
[00:14:56] Speaker C: Our approach to growth is a reasonable one.
We try to think about the business in the long term, and sometimes growing too fast can create a whole bunch of problems as well. So our preference would be just to see reasonable organic growth year over year. And really, we kind of grow where our customers pull us. If our customers want more of something, then we'll offer more of that thing. But we don't try to, you know, we often don't try to create things looking for a market that, that wouldn't be really the way that we would grow. So the way the specific ways that we grow is we would grow with our manufacturing partners. So if one of our manufacturing partners has a new product that they want to bring to market and it's something that our customers are asking for, then we would help them do that. Also, if there's a market within Canada where we already have the expertise, but not the geographical expertise, often we'll fill that in with an acquisition. And so we, we've done a lot of acquisitions over wajax's history, we've kind of been doing two a year for the last number of years. And those is really where we fill in geographical gaps in areas where we already understand. So just, just as an example, last year we bought a company called Beta, which is a hydraulics company in Northern Ontario. We, we have lots of expertise in hydraulics and we've been in that business for a long time, but we didn't have that expertise in Northern Ontario, and it was easier to get in with an acquisition as opposed to growing organically in that specific market.
[00:16:24] Speaker B: Got it. Got it. And one topic that is also big these days within the industrial sector and also it's big in Canada, is sustainability.
So how does Wajax ensure that its growth principles are in alignment with sustainable business practices?
[00:16:44] Speaker C: Yeah, so that's a good question. I think it's one that a lot of companies are contemplating and trying to figure out as best as they possibly can. So really, we think about sustainability in two ways. We think about the things that we're doing and then we think about the ways that we can help our customers. So when we look internally, we have certain ways that we would impact the environment. We have 120 branches, they all have an emission footprint, and then we have hundreds of vehicles and those have an emission footprint. So those, those are really the two big kind of environmental ways that we would look at it. And so we measure our kind of the intensity of all of those branches and vehicles, and we've been able to drive that down over the years, which is great. And that's something that we'll continue to do. And then we also think about things like community and how much are we investing in the community and diversity and what are diversity statistics and how are we, how are we doing better in those areas? And we continue to improve in all of those areas as, and then, and then really kind of the other bucket is customers. And I think that's really the bigger one where we can have a bigger impact. So we, we have a lot of wonderful manufacturers who create products that allow our customers to drive their environmental footprint down. And so just some examples of that would be our material handling business, which is forklift and that, and that's hydrogen forklifts, electric forklifts. Just, just doing things electrically where, where previously maybe they weren't done electrically. And then we have a whole series of products that really just help customers be more efficient. I'll just give you an example of one. One's called a variable frequency drive. A variable frequency drive is used to control an electric motor. And electric motors do something like 70 or 80% of the world's work. They're used to spin conveyor belts, fans and pumps, and crushers. And anything that spins really fast is done with an electric motor and it uses a ton of energy. And these variable frequency drives are basically like a dimmer switch for these motors. And by installing these and managing them properly, you can really reduce the amount of energy that's used, make the operation run more efficiently, and save the customer not only money, but also reduce emissions. And so those are, those are just a couple examples of the many areas where we can help our customers really meet their sustainability goals as well.
[00:19:06] Speaker B: And Iggy, just focusing on you for a couple of minutes now. Your own career has spanned various industries and roles. In your opinion, what experiences have been most influential in shaping your leadership style and approach to running wagx?
[00:19:23] Speaker C: Well, I think I've had some, I think I've been pretty fortunate along the way. I've been fortunate that I've had really some great mentors starting from an early age. And I think that has really, been really, really important in my life. You know, just people who took me under their wing and showed me the way. And I think I was really fortunate that these mentors were really, really ethical and just. And really, really great people. So I think that's. That was really, really helpful for me. So, yeah, if people can find mentors at an early age, that's that. I think that really, really makes a big difference. And I have been fortunate to be a part of a bunch of industries and have been really fortunate to do a lot of different roles. So I've. So from every kind of every function that you can have in a company for at least a period of time, I've done it. And just having that experience of how all of the pieces in a business fit together is really, really valuable. Just knowing that if you, if you pull an HR lever or a finance lever or some other lever in the company, having at least some idea of what that will do to other areas of the company is really, really important. And I think just, just at a high level in any business, there is the, I call it the commercial side of the business and the side deals with customers and suppliers and then there's a support side of the business. That's all. That's your it, finance, hr. And just having spent time in both of those areas, I think is really important because there's often, I think, a lack of understanding and sometimes a lack of respect for what the other side does, and having spent time in both of those gives you, I think, a really good grounding. And just in all areas of business and just from a personal perspective, it's interesting. I found all the roles interesting and challenging, and so I've really enjoyed them all along the way. And the variety of but I've had a chance to do has been pretty nice.
[00:21:22] Speaker B: Awesome. So a final question is at the heart of what we call as the titanium economy, right? Which is the underappreciated, the undervalued industrial sector, which is truly, truly the economic engine of the North America. North American economy. And we have a vested interest here to continue to shine the light on the sector after the book. So, which is why it's a pleasure to speak to people like you who are doing some great work in the sector. But what are your thoughts on this overall concept and just the future of the industrial sector?
[00:21:57] Speaker C: Yeah, the world's growing and it's growing quickly and in ways that keep changing. I mean, if we just think about data usage and all the data centers that are popping up, that's been.
Well, while there's always been data centers growing, just the extremely fast pace of data center growth recently has been huge. And in order to make sure that that can keep going, there is a whole energy system that needs to keep up, and that involves a whole bunch of new interesting challenges.
I just think that the way that the world is going is very. It's really interesting time. And the industrial business just continues to change and adapt. And I think when most people think about the industrial business, you think it's a little, maybe a little boring. And. But once, once you start peeling back the layers of it, the endless complexities of the technology, I find quite fascinating. And so that will just continue to change, continue to evolve and continue to be exciting. And I think the industrial industry is a great place to work, that the world will continue to grow. Industrial will always be needed.
And I think it's a place that's advancing and I think a lot of people have built really, really great careers in it. So I think that it's a wonderful place to be and one that will definitely keep anyone that's involved in it really, really interested for a long time.
[00:23:32] Speaker B: Awesome. Well, Iggy, thank you so much for that wonderful and insightful conversation. We really appreciate you making time for us today.
[00:23:41] Speaker C: Thank you for having me on the show. It's great to be here.
[00:23:44] Speaker B: Thank you.
[00:23:50] Speaker A: Thanks for listening to INA Insights. Please visit INA AI for more podcasts, publications and events on developments shaping the industrial and industrial technology sector.
