Local distribution hero

4 min read

Has distribution gone 'full circle'? One industry veteran thinks it has.

It's 37 years since Anglia Components was established and Steve Rawlins has been associated with the company for 33 of those years. Now the company's chief executive officer, he believes the distribution industry has 'gone full circle'. "We are in exciting times," he said. Rawlins is proud of the fact that Anglia has retained its focus over the years. "We're a local distributor," he emphasised. "Today, companies can either be local or global. Those stuck in the middle aren't going anywhere," he believed. It's in this respect that he believes distribution has 'gone full circle'. "US semiconductor companies now want strong local technical distribution. The pan European model is dead," he asserted. And he thinks, understandably, the Anglia model is the right one. "We've stayed in the market, we've invested in stock and we're serving our customers. We will not venture outside of our market because there's a need for companies like Anglia. We have a good market position and we're privately owned, so profit gets reinvested. "We've been talking about local distribution for years and people are now beginning to believe in it. The best thing we have done is not to become a pan European distributor." Pointing out that Anglia has more engineers than sales people in the field, Rawlins noted: "In this market, people say that cash is king. I say stock is king. We've invested a lot lately because I believe we're about to see allocation; we're quite close to it." In his opinion, it's been coming for some time, as inventory gets moved through the system. "At the moment, we have enough stock that we only turn three times a year, compared to the 10 times a year of other companies. Demand is set to increase as the economy grows, but lack of availability will affect this. Is this investment in stock a gamble? Yes, but you have to call the market as you see it." It will also be no surprise to discover that Anglia has been affected by the downturn. Sales will be down by about 15% on last year's figures, he said. "But this month's sales will be better than those of October 2008. I'm not calling the end of the recession, but there is definitely light at the end of the tunnel." In fact, Rawlins goes as far as to describe himself as 'upbeat'. Despite the downturn, Anglia is continuing to broaden its line card, with recent additions including Intersil and AVX. But how much further can the company be expanded before it loses its 'look and feel'? "We're adding new suppliers," he said, "but we're trying to not get 'over franchised'. If we take on too many new lines, we'll become something we don't want to be." He believes there is probably room for 'one more blue chip franchise'. He pointed to the company's ability to send six of its engineers to a recent Intersil conference in the US. "We couldn't make that level of technology involvement if our line card was too big." He used the example of HB Electronics, which 'went under' a couple of years ago. "HB was a great company until it signed too many franchises." Meanwhile, Anglia has 'upped its profile' recently by signing up for the SC21 programme and it's been recognised to AS9120 high reliability standards. And it's looking to expand its business through adding focused operations. The latest of these is Anglia M2M, which will take products from 15 companies to market. Rawlins noted: "We've been expanding our communications portfolio for more than two years and have built relationships with some of the technology and sales market leaders. Forming Anglia M2M puts us in a position to build on this." Even so, he recognises that Anglia is late to market with a recognisable M2M offering. "But we've built our linecard up and have the engineering resources. We may be last in, but we have the right set up and this will make it work." Reinforcing its different nature, Anglia M2M will have its own website and team. "Calls can get lost in a big sales desk operation," Rawlins pointed out, "so you need dedicated contacts so callers can talk with specialists." Rawlins is also excited about the potential of LEDs, particularly in the lighting field. "We've invested a lot of money in LED and solid state lighting because there are massive opportunities in all sorts of lighting, ranging from standard lighting to advertising, for example." Interestingly, he sees a manufacturing industry growing in the UK for this technology. "Contract manufacturers are tooling up," he asserted. Building the LED business has required a different approach. "We haven't had much success from the existing customer base," he confessed. "The customers we are addressing are consumer facing and that's been hard." Anglia set up a separate telemarketing team to look at this market and identified 1200 prospects, from which a number of new customers have emerged. "But it's a not a 'price sell' in this market," Rawlins pointed out, "and that's hard when the customer only wants a white light. It's meant that we now have to engage with their customers." These new customers are typically electrical companies. "They know what they want," Rawlins observed, "but they don't know how to do it. They're 'engineering needy'." Rawlins is looking to build on the AS9120 certification in the near future by launching a high reliability division. "It will feature a bunch of suppliers with whom we've been working for the last six or nine months," he said. Although new chip suppliers will be added to the portfolio, Rawlins said he won't be pushing too aggressively. Another potential new Anglia division will address the embedded sector. It's just signed a deal with Taiwanese based Avalue, adding its products to its display lines. However, the company recognises that it is still missing what it describes as some 'key elements' and will work on filling in these holes over the next year or so. And two other franchises have been added to the general portfolio; Nichicon capacitors and Epson Toyocom timing devices. "The latter agreement is particularly satisfying," said Rawlins. "We are delighted to have formed a relationship with one of the world's leading manufacturers of timing components." For the future, Rawlins expects to see further consolidation in the distribution business, particularly in the US and Europe. "The distribution market is changing rapidly and if companies don't invest in change, then they won't be around in the future," he concluded. According to Stefan Hartmann, quartz devices department manager with Epson Europe Electronics: "We identified Anglia as an ideal expansion of our distribution network, as it has excellent contacts, taking us to many customers where we currently don't have representation. In addition, it has a very strong engineering team, able to work alongside customers to help them make the most of the solutions that we offer." Pictured at the signing are, from the left, Joel Munday, divisional marketing manager, Anglia, Christian Sammut, sales account manager, Epson Toyocom, Stefan Hartmann, department manager, Epson Toyocom, and Sarah Porter, Anglia's product marketing manager.