Julian Mitchell: That’s very helpful. Thank you.
Blake Moret: Thank you.
Operator: Our next question comes from Noah Kaye from Oppenheimer. Please go ahead, your line is open.
Noah Kaye: Thanks very much. I just want to ask one final one on the production constraints. Can you help us understand a little bit better, what is different about the configure-to-order business versus the type of products that you’ve been working down a backlog? Is there focus on different lines? Does it require different personnel? Just help us understand some of the actual operational dynamics you are going through as you kind of reconfigure for a more normal book-and-ship environment?
Blake Moret: Sure. Let me just clarify that. The shift that’s going on that we saw challenges in the first quarter was the move from servicing backlog of products to shipping out book-and-bill of products where the orders come in in the quarter. We continue to have a certain amount of configure-to-order business, our motor control centers, our big drives, our independent cart technology and so on. That isn’t representing the biggest challenge to us. Those are very different processes. Those configure-to-order businesses come in with varying degrees of customization specific to a customer. But the big dynamic that we’ve been talking about in Q1 is the move from a somewhat concentrated list of SKUs that we have backlog building — that backlog built up because we couldn’t get the chips, moving to book-and-bill of a more diverse set of SKUs as we see the largest portion of our shipments coming from orders received in that quarter, not one or two or three quarters prior.
So, that’s the main dynamic that we’re working through. You have much less visibility to what’s coming in from that book-and-bill profile. So that’s one of the changes. And what Nick was talking about in the previous question is we’re in the process of building up safety stock in those areas so that we can deal with the ebb and flow of the normal order book, in a quarter being able to turn that around and convert those orders to shipments in the quarter. So, those are the processes that are somewhat different from what — the world we’ve been living in for the last year or so, to what we’re transitioning to and we’ll continue to operate in, we hope, for a long time.
Noah Kaye: Thanks Blake. If I could ask just one follow-up. I think you’re not — you reiterated your organic industry segment outlook essentially for the full year. Is there any change or shift you’ve seen in the timing of demand and orders for any of the major segments or subsegments? It does seem like most of the cadence here is really driven by your own production considerations and where channel inventory is. But is there any shift in timing you can see among the end-customers?
Blake Moret: Yes, I think you said it right. The largest impact is based on getting those shipments out the door, being able to see the distributors return to equilibrium. We continue to see good activity in process applications. We talked about oil and gas, specialty chemical, mining. These are all areas that are relatively strong. Certainly, we’ve seen some slowdown in certain of the EV projects, but those projects are continuing. We’re continuing to win new business in those areas. And as I talked about in my prepared remarks, in traditional internal combustion engines and in hybrid manufacturing, we have very good readiness to serve in those areas as well, with a lot of experience. So, in a year of low growth, we’re not seeing any big ebbs and flows in the vertical end-market needs being the predominant factor in any changes through the year.
Noah Kaye: Understood. Thanks Blake.
Blake Moret: Thanks.
Aijana Zellner: Juliane, we’ll take one more question.
Operator: Our last question will come from Joe O’Dea from Wells Fargo. Please go ahead, your line is open.
Joe O’Dea: Hi, good morning. Thanks for taking my question. First, I just wanted to ask about the back half of the year margin profile. And it does seem like a transition from maybe a higher concentration of a narrower band of products that you would have had shipping out of backlog in 2023 compared to more kind of book-and-shipping quarter in 2024 is a bit of a mix headwind. And so when we think about back half of 2024 margins being better than back half of 2023, can you expand on that a little bit? Is it Devices is up, Lifecycle is up, maybe Software and Control is down a bit year-over-year? Just trying to contemplate what could still be a year-over-year mix headwind as you broaden out the book and ship?
Blake Moret: Yes, I think what you’re seeing from a positive standpoint is the greater percentage of products as those orders increase through the year. To be sure, we are seeing some headwind based on the comparables with the year where Logix grew over 30% last year as one of our most profitable product lines. But the other point is that, recognizing the puts and takes in this year, we did take cost out beginning in Q4 of the last year. And so that gives us help to being able to push those margins at the exit of 2024 higher than they were. That’s in — across our business and functions, most noticeably in Lifecycle Services.
Joe O’Dea: Great. And then just on the sort of channel inventory observations, and it sounds like taking a little bit longer than previously anticipated to get channel inventories to targeted levels, what are your observations of why that is in terms of kind of end market demand patterns or maybe a little bit more inventory out there than you appreciated for why it would be more middle of the year versus first half of the year where we would have seen channel inventory correct?
