Serving information needs: Interview with Glenn Smith, chief executive, Mouser

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There's more to web based distribution than meets the eye, Mouser's chief executive tells Graham Pitcher.

The rapid pace of electronics technology is being matched by changes in the electronics component distribution business, where the internet is playing an increasingly central role. But far from offering engineers just another way to buy components, web based distributors are looking at information provision as part of their approach. Glenn Smith, president and chief executive of Mouser, said: "We saw early on that the web was a way to provide engineers with information easily and quickly. We consider providing information to be part of our responsibility." Smith said the approach is responding to increasing pressure on design engineers to get their products to market more quickly. "Our business model is focused on reducing their time to market," he asserted. "We want to help engineers make more efficient use of their time and the web is naturally a better way to do that." The approach appears to be working. "Engineers are coming to our site for more than just components," Smith continued. "When a new product is launched, we see more traffic on the site, with people going through the information and not ordering. Sometimes, that's down to the product not being suitable for their requirements, but engineers are looking for information, as well as parts." And yet the web is not the 'be all and end all' of the Mouser approach. "Of those who come to the website, perhaps 75% will buy online," Smith noted. "But 25% will place orders by phone." He ascribes this to product complexity. "We're offering leading edge devices," he continued, "and are often the first company to have them on the shelf. Engineers will have questions before they buy. In the end, we don't care how they buy; if they would rather call, it's up to them." This focus on information provision means Smith is pushing Mouser to be much more than an online parts provider. "I consider Mouser to be much more of an engineering support company; everything we do is concerned with how we can help engineers. But we do have to put limits on that; for example, Mouser isn't a design house. Our focus is on product availability, information availability, technical support and customer service." Would Mouser offer design services in the future? "We provide help with reference designs," he said, "but we don't want to be competition for our customers; it could be stifling. But we offer design tools and modules that customers can plug into their designs." Part of the approach is technical support. "We have hundreds of people working in what could be broadly called technical marketing," Smith continued. "Their job is to take the information released by manufacturers and to condense it into something that engineers can find useful." This content is used to populate some 1700 microsites designed to educate visitors. "We need to understand where engineers are in their design cycle, what they need to do next and what their internal processes are." In Smith's opinion: "If you reach engineers at the beginning of the design cycle, they're saying 'I'm building a product'. They're thinking about functionality, not about components. At that point, we supply content which says these are the things you need to think about. Then it moves to technology." Smith concedes that products underpin Mouser's business. "We have to have products and, at any time, there are 500,000 on the shelf." But he also contends that Mouser needs to offer more. "If it was just distribution, we wouldn't do the other stuff," he continued. "By providing added value, we're differentiating ourselves. And if we didn't have prototype parts in stock, they wouldn't get on the bill of materials." This performance is, not surprisingly, measured internally. "We look at the value we provide," Smith pointed out. "We have to ask 'did we add value?'." The obvious measures, he believes, include whether customers keep coming back and whether the customer base is growing. "If they return, we must be offering them value." Despite the apparent benefits of the web, Mouser has continued to open regional sales offices; the latest being in Munich. "We're pursuing a regional approach, not a global one," Smith explained, "and there are still places where we need to be." Has this approach worked? "Everywhere we've opened sales offices," he continued, "sales have grown quicker than where we haven't. If they would rather call, we have to make it easy for them to buy." However, the UK is an example of a country where web based distribution is making gains because many large companies have disappeared. Similarly Ireland. "One of the big broadliners was doing a lot of business in Ireland until manufacturing went and so did the broadliner. That meant 80% of its customers had nowhere to go. Now there are other companies who want that business," Smith noted. The web also fits new design strategies. "Engineers have more latitude as part of the time to market strategy and as part of their ownership of projects," Smith said. "If a project leader has profit and loss responsibility, they can purchase components. "But many designs are evolutionary. To be innovative, engineers need more freedom to make decisions and not be controlled by procurement staff." Change in the electronics industry is offering growth opportunities to all web based distributors. For the moment, Mouser sees nothing but growth, 'especially in Europe', said Smith. "Partly, this is because Europe is more of a design centre, but there are still plenty of engineers who don't know about us. "Europe plays to Mouser's strengths," he concluded. Glenn Smith joined Mouser in 1973 as a warehouse operations employee while attending college. Since then, he has held management positions in all areas of the company, including: technical sales; marketing; purchasing; operations; and IT. In 1985, he was promoted to senior vice president and general manager, assuming the responsibility for the day to day operations of the company. In 1988, Smith was named Mouser's president, adding the chief executive officer role in 2004. He is a member of the Board of Directors of the US Electronic Component Industry Association.