High service; high expectations: Interview with Premier Farnell CEO Laurence Bain

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The high service distribution sector continues to reinvent itself, as Premier Farnell's CEO tells Graham Pitcher.

A decade or so ago, there was no such thing as the high service distribution sector; there was a collection of companies which distributed catalogues regularly. Engineers ordered small quantities of components by mail or over the phone and these were delivered a couple of days later. That was then. Today, the high service distribution sector is almost unrecognisable from its ancestor – the web has changed everything. At first, companies simply replicated their catalogues online. Now, the functionality available from sites such as element14 has broadened dramatically as high service distribution has repositioned itself at the front line. While companies such as element14 still supply sample quantities of components, they also offer visitors to their sites access to things like design software, product information, design support and proprietary development kits. And high service distributors have started to address small volume manufacturing orders. Laurence Bain, chief executive of element14's parent Premier Farnell, has been overseeing a reorganisation of the company since he took the 'hot seat' in June 2012. That reorganisation has seen it take a global approach to business. "We've changed our capability and expertise," he said. "We've moved from a regional to a global structure, but have recognised there is still the need for regional teams because we need to be close to customers and responsive to their needs." He believes the reorganisation retains the best of both worlds. "We're providing high service in both respects; globally, we can be consistent, but, locally, customers have access to our global offering." The globalisation process was completed in May 2014. "We now have global heads of production, supply chain, technology and sales and marketing," Bain pointed out. The company is now in what he calls the 'integration phase'. "Once the changes have been made, customers who previously could only see 60% of our global offering, will be able to see all of it and get the support they need." There is also a benefit to suppliers. "Although they value us," Bain explained, "they don't want to interact with us multiple times. By globalising, they can work with one product manager, making it easier for them to do business with us. Internally, there's a more consistent way of working; there's more efficiency and this frees people from doing the same thing multiple times. From the customer's perspective, it's standard systems and service." The reorganisation has been accompanied by a new web platform, which is in the final stages of being rolled out. Before, there were 48 web sites in 35 local languages. Now, by the end of 2014, there will be one global site. "Since its launch in Europe," Bain contended, "we have seen a pick up in traffic. The UK has still to be upgraded, but this will happen in the next couple of weeks." What has driven this complete rebuild of how Premier Farnell goes to market? "It's technology," Bain explained, "and the way it's evolving. It's becoming more accessible, more affordable and customers are making new demands of us. We've made the investment to support those changes." And those changes are significant. Where the only interaction with customers in the era of the catalogue was taking and fulfilling orders, companies such as Premier Farnell are now positioning themselves as design partners. "We launched the Design Center at the beginning of September," Bain noted. This web based function provides application and product information, including images, videos and downloads, along with stock availability and price, manufacturer details and comments from element14's leading community. "We're already getting 40,000 hits a week," Bain continued, "and we'll be expanding this in phase two, which is a software licensing store to be launched in Q2 2015." Amongst the companies taking part in the software store will be ARM, Cadsoft and Atollic. "There will be 10 vendors involved by the time it launches," Bain asserted. Meanwhile, the 2012 acquisition of Chinese company Embest added embedded system development boards and tools, as well as design engineering services, to the portfolio. This was followed in 2014 by the acquisition of US engineering design services company Avid Technologies for its analogue, wireless, power management, FPGA and embedded expertise. "There has been strong demand for our design and manufacturing services," Bain explained, "so we bought Avid because we needed more capacity. We also wanted to expand our technology expertise and Avid brings that." Now, Premier Farnell has more than 200 engineers focused on design and more than 100 focused on tech support. "We're doing the job which manufacturers are looking for," Bain contended, "and we are doing it more efficiently in the early design phase." He added that Premier Farnell can now approach its suppliers, suggest they need a particular type of development kit and then develop it for them. One area where Bain sees opportunities is in small volume production. "It's an opportunity we should have addressed sooner," he admitted. "To support this, we've invested in more inventory and different packaging types: reels, for example. As part of this, we will be giving companies the opportunity to upload their bills of material and to schedule deliveries. While we're playing catch up, we're making good progress." Bain recognises that supporting prototyping remains the company's core business. "But we now follow through from design to prototyping to production. We're adding more value for design engineers and accelerating their time to market," he concluded. Laurence Bain Laurence Bain was appointed chief executive officer of Premier Farnell in June 2012. He is a chartered accountant with extensive operational management experience in the electronics manufacturing and distribution sectors. Before joining Premier Farnell as chief operating officer in July 2002, he was vice president and director of operations for Motorola in Europe, Middle East and Africa.