Cellnet’s turnaround man

In broad-based distribution, Davenport argues that companies like Cellnet can move beyond just providing warehousing and logistics or time and place services for the reseller channel. "There is value [as a distributor] that we can add. It’s not just a price equation. We now do configuration and provide technical advice. We’ve got quite a large team in Queensland and people in other states and we have a small white-box operation as well," he says.

These days, Davenport believes that manufacturers want simplicity and scale from a distribution partner. "They don’t want large numbers of relationships. There’s extra costs in all those roles — they [manufacturers] don’t want to have too many relationships. We [Cellnet] have started reducing the number of vendors that we represent," he says,  while declining to name them. There are four vendors the distributor is no longer working with and Cellnet is now focusing on vendors that it can build strong relationships with, he says.

"We’ve applied a filter to all of our vendors and identifi ed which ones are poised for good growth and which ones [are not]. Some of them haven’t passed through that filter."

We think that some companies have got good growth prospects — some are struggling a little bit and we want to work with companies that are going somewhere," he says.

Vendors too are deciding what their long-term strategies are, which has prompted most of them to look carefully at which distributors are representing their products, Davenport says.

Cellnet deals with many retailers across the country and Davenport admits that retail conditions at the moment are quite difficult. "I think that’s across the board. As far as retailers are concerned, there’s a lot of changes going on down there."

The SMB and retail markets are merging and the retailers and resellers that are nimble and can take advantage of market dynamics are going to survive, he says. New retail buying groups are also emerging that are resulting in these groups taking advantage the benefits of pricing and support usually enjoyed by larger retailers.

Growth areas

The distributor is branching out into other areas — one being its new ‘Mercury’ division, which is offering ring tones and music downloads that Davenport says it a huge growth area.

"We’ve got a number of different activities here that allow us to maintain our margins — this is a year of transition."

Making that transition to higher profits has included collapsing six or seven Cellnet divisions that were overlapping and strengthening the distributor’s management team.

Davenport recently appointed Geoff Sondergeld to the new role of general manager, supply chain at the distributor. Sondergeld has experience in supply chain management at companies such as James Hardie and at Post Logistics, a division of Australia Post.

His focus is on taking costs out of the supply chain and working with partners to take costs out of the business, Davenport says.

Family time

Since taking the job in June, Davenport — who has two children, one who is completing the Higher School Certificate in Sydney — is commuting quite frequently between Sydney and Melbourne.

He will move to Queensland — where Cellnet has its headquarters — in January when his daughter finishes studying. "We’ll all start supporting the Reds [Queensland state rugby] and being Queenslanders."

Davenport enjoys golf, although he admits he has not had time to hit the course lately, and has been known to ski at NSW’s Perisher Blue ski fields.

However, "the scale is much bigger and the snow is more consistent in Europe", he quips.