The Circuit – February 2026 Newsletter

News From Our CEO

Where I’m Seeing Leverage Right Now

I left the PEI Executive Summit this year with a clearer sense of where the pressure is, and where the opportunity still lives.

Most leaders I spoke with expect to stay busy. Service demand is there. Investment is continuing. But nearly every conversation eventually landed in the same place: it’s getting harder to turn effort into margin. That challenge isn’t theoretical. It’s structural.

Labor Is the Cost Everyone Is Carrying

Labor dominated the PEI conversations, as it should. The companies doing the work, the ones dispatching technicians every day, are facing higher wages, tighter labor markets, and rising expectations from customers.

Most are already doing the right things: improving dispatch, tightening routes, simplifying workflows, and investing in training. Those efforts matter. But one reality came through clearly: even strong efficiency gains in labor only go so far.

You can work smarter and save time, but the financial impact of labor efficiency alone is often incremental. Important, but bounded. Here is where I think the industry is looking past a bigger lever:

Much of the service industry remains intensely focused on labor efficiency because labor feels controllable—and because parts are often viewed as a fixed cost tied to OEM pricing. If you believe the parts cost is immovable, then all the pressure naturally shifts to labor.

But that assumption isn’t always true. Aftermarket suppliers, whether through remanufactured products or high, quality new alternatives can create leverage that labor efficiency simply can’t. The impact isn’t incremental. It can be orders of magnitude larger on a single job.

The real challenge isn’t finding those savings. It’s recognizing them for what they are: margin opportunity, not just cost reduction.

Execution Still Runs Through People

Even so, margin is still won or lost in execution. This month’s employee spotlight is a good reminder that impact often comes from people who understand systems deeply and quietly make them better, whether that’s engineering, quality, supply chain, or customer support. Those improvements don’t always draw attention, but they compound over time and show up in reliability and consistency.

At PEI, many of the strongest service organizations described a similar focus: fewer systems, clearer ownership, and partners who help them execute rather than complicate the job.

Practical Value Beats Complexity

Technology and innovation were everywhere at the Summit, but the most grounded conversations weren’t about what was new, they were about what was useful.

• Does it lower total repair cost?
• Does it improve uptime?
• Does it simplify the job for the service company and the end customer?

That same mindset shows up in this month’s product spotlight: applying proven capabilities in new places with a focus on value, serviceability, and economics, not novelty.

Small Friction Still Matters

Not all leverage comes from big strategic moves. Some of it comes from removing everyday friction.

This month’s tech tip is a good example. Small operational nuisances rarely make headlines, but eliminating them saves time, reduces errors, and improves the customer experience. At PEI, those kinds of improvements were often described as quiet wins: modest individually, meaningful in aggregate.

What I’m Carrying Into 2026

The tone at the PEI Executive Summit was constructive and optimistic. The industry isn’t standing still. New opportunities are emerging and investment continues, but the bar has moved.

As I think about 2026, I’m less focused on how busy the industry is and more focused on where leverage is actually created, and whether organizations are willing to rethink long-held assumptions about where profit comes from.

Patrick Jeitler

Freedom Electronics President & CEO