Electronic Specifier talks to Rob Rospedzihowski, President EMEA Sales for Farnell about investments getting close to fruition, inter-company co-operation and meeting customer expectations during a pandemic.
Electronic Specifier Hello and welcome to this the latest podcast from electronics specify insights. guest today is Rob Ross. But yes ski president EMEA sales at sarnelli. Now it's four years since I've met acquired fire now, and in a recent call with financial analysts have met CEO Phil Gallagher emphasise both existing and future investments in farno, to take the company forward. Rob, if we could start with perhaps no pun intended something that is very concrete. And that's the investment in the new Leeds facility. Could you just talk us through how that progressing? Sure. And
let me just first of all, state that we're obviously delighted that Phil was appointed, or the confirmation yesterday, from acting to full CEO. So Phil brings huge experience a lot of great supplier and customer knowledge. So we're delighted that he has full control of the business. And yeah, in terms of your point make the investment decision that was one of the key investment decisions that avnet has made in the foreign oil business, the new DC delayed due to primarily the impact of COVID and social distancing. And obviously, us wanting to maintain full safety for our for the people that work out of the distribution centre and continue to work through in the first and the current lockdown for workers. The the operation is nearing completion, we are moving more and more inventory from the existing warehouse to the new warehouse. And we we look to be rational by Easter. So it's delayed by about three to four months. But we already shipping products have been since June to the customer base and an increasing percentage of products. I'd also just like to highlight, it's not just the investment in the new distribution centre, but one of the critical investments and one of the key reasons why avnet bought us was for our ability to reach a huge customer range through the web. And recently, it was announced that Chris Breslin, now my boss, who's the president of foreign oil, but has also got responsibility for foreign oil and having its digital channel. So the way in which we take our products to market and we are seeing increased investment through avenues for utilisation of our web offering and taking products to market. So I think I mentioned to you on a previous call for a mayor, we're now over the 80% mark or 85% and in some countries in the low 90s and that has been a key factor in helping us through weathering, a difficult COVID storm so it's invest in UTC web platform, and also in the supplier range so we've increased our inventory range and that's why we need the new distribution centre MC to hold more and more products for our customer base
okay
what are the kind of internal benefits as well as the the new facility what what is it going to enable found able to do better
time to the customer. So, we will hold more of our product inventory for some of the ranges primarily semiconductor and passive parts and more in the IP range centrally out of the new leads distribution centre. And what we call days to me is how many days does it take for us to ship product from the distribution centre to the customer base. So, European customers are have experienced next day or 48 hour delivery x leads across the whole of Europe and the new distribution centre will increase its shipments directly into Asia, which is as we know is one of the fastest growing markets and has recovered quicker in this COVID disrupted trading period. But we will also be shipping products from the UK into the American market and driving more of the semiconductor demand out of a centralised inventory base but fulfilling a global footprint. So that's what we see the new DC operating more on a global basis. still keeping our regional centres but for for some of the product range mainly the low ASP parts, it makes more sense to consolidate that centrally
Okay, and I assume this facility is fully automated and with with robotics and and new technology for warehouse utilities. Correct.
So you know we are looking for this second, really be shipping in the range of 80,000 plus lines per day. So it more than doubles our current capacity out of the existing maybrook distribution centre. But, yeah, we've partnered with companies who give us that Nevada system of robot robotics, bringing the product to the operator, rather than the operators going and finding and scanning parts and more a manual process that we operate today. But it also gives us greater in the build and we will be delighted to probably virtually make showing you that the new facility, but its height and reach allows us to operate more efficiently both for booking products in but then also picking packing and shipping products out to the customer base with the support of our carriers. So it's a more more efficient warehouse, better lighting, better quality, better environmental conditions for our for our workforce, and something we will be proud to showcase.
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listen testing.com. And I think he touched on this, but there has been quite a bit of investment as well in product lines, too. So to fill up the warehouse is a kind of target for the amount of product line or the stock keeping unit you want to add.
Well, we signed in the last year, together with avnet support over 30 new franchise lines. So that continues our expansion in depth and range of the product offering that we carry. We have gone deeper in some of our critical semiconductor and passive lines to fulfil the depth of the offering. So that we cover more and more products to the design and the Bill of Material manufacturing requirements of our customer base. And we continue to work obviously in some of the differentiated rain. So single board computing our continued support of the Raspberry Pi and the BBC micros in single board computing, we will expand our range in the interconnect products offering in the new year with some new lines we've signed, enhancing, specifically Schneider omega armour on and T product ranges. So this is to go more into the industrial area, which is the heartland of the foreign oil business. And the new warehouse will also help us with our international expansion. So I mentioned on a previous interview with the new MC but entering we've recently entered into the Russia market direct with the support of avnet. We've expanded our footprint in Turkey. We are now operational fully in South Africa, with North Africa to add so that's the Europe the Amir expansion, but we plan to also service new markets in APAC, from the distribution centre and help the APAC expansion into markets like Japan and Vietnam, where avenues are present but for now have not been present. So again utilising the the avnet footprint.
Okay, I know that one or two other investments we've got in it recently been introduced to a price optimization tool. Can you just talk us a little bit about that.
So we we brought in what we guess, my price value or supportive and Davos. It's a tool that avnet had already been using in a number of other companies used to ensure that we are selling the right inventory at the right cost. And we've expanded this across EMEA with pretty good results. So it's allowing our salespeople to work with our customers looking at the profile of what they are buying, looking at cyclical market trends to ensure that we are stocking the right levels of inventory but also passing them off at the right cost to our customer base and smoothing out some of the sort of the cyclical demand that we see in the supply chain. So it's it's proved to be invaluable to our inside sales teams in supporting the customers with more accurate information around demands and what they're looking to buy in the future.
Okay. And also, there's been some investment in e commerce functionality as well. So maybe you could just give us a little bit of bit of a bonus on that as well.
Sure we, we want the the journey of the customer to be a lot of our customers now, especially engineers want to operate in what we call a self serve environment. We found again, through this pandemic period that many of our obviously, our customers are like we are working from a home environment. And they are working outside what would be normally termed as business hours. And they want to use the websites completely automated. So they want increased functionality on the search, easy Checkout, ease of loading bills of materials, and also research finding solutions to their product design applications. So we have worked hard on investing in that web platform to provide a more robust self serve checkout way of working in the search and functionality. And the feedback from the customer base has been really, really positive. We've worked with a number of customers, and direct feedback as well as our suppliers. And the features and benefits with each iteration as we roll it out, generates app that leads to a higher online ordering pattern. But it also contributes to greater satisfaction that we get from NPS, around how people are valuing the benefits of the site and the ease of working. We will also introduce further enhancements on live chat. So we already provide 24 by five technical support on the site. But we will further increase chats from a sales perspective so that customers get the benefits of also online support rather than having to call one of our people, they'll get that real time live support through the web platforms.
Okay. And and are you are you seeing already kind of customer uptake on these new features?
Yeah, so as I mentioned earlier, the web percentage of how we transact our business has gone up nearly 4% in Europe this year, this calendar year, we are utilise our services. And I said outside the standard hours, but the the NPS, which is one of our key trackers, has been increasing. So the number of scores in the nine and 10 that we get from our customers with with the websites, this is obviously across all the countries that we operate in, in in an area where we provide the local language support as well. So this is eased some of the challenges of working at home as well for our sales support people because they can support more and more an online way of working then through telephony, and a greater availability, as at the self serve, eradicate the need, in some cases to talk to somebody because you can guide your way seamlessly through searching, ordering and receiving your products online.
Okay, I think you did touch on this earlier that admin obviously gives you opportunities to bring on new lines to the to the far narrow line card. So maybe you could give us a few examples of those. But also, I guess, the breadth of your line card is to have you had suppliers there that you can also help out adnet with in filling certain gaps. Can you just maybe just expand on that?
Yeah, most of our suppliers are obviously keen on how we take their products to market, how we seed their new designs their new technologies and how we market their brands. And on the key lines to keep the case of lies that we have in combined line card avnet and far now, we are the starting base of the design engineers journey through which starts with hackster or element 14 but then works through the purchasing science of foreign oil. But those new designs are are also shared with our avnet colleagues it as it goes into mass production so we can support the customer's journey and ensure that what the engineers are looking for today is easily available in in larger scale production demands. But also from the supplier point of view that combined proach gives the supplier the knowledge that we can support, more design requirements, but also, as that product develops and moves into volume. And, you know, one of the good examples of that is, as you're well aware is some of the work we did in the very early days with the Raspberry Pi Foundation, and what a successful product that has been. But there are many types of you know, we will continually look for the next Raspberry Pi type customer, and actually, in many cases, utilising that technology in IoT to support the critical need for capturing and sharing data. And we've entered into new industries with with avnet into brewery into capturing events into not just the traditional sort of automotive industrial demand, but it's a win win solution that we feel our suppliers are very comfortable with. And that's why we've attracted new lines, but we're also growing in the existing critical lines that we we jointly cover.
Okay. And does that extend out? Because obviously, as you said, one of our strengths is in supplying the MRO market, does it expand out in into that in some customers as well with? If adnet gets asked, Can they access product from you to supply to a customer.
So the way it works make is that our sales teams work together in the account. So having it dealing with the mainstream in production do demands, but they then refer the customer to the far now web offering to support the the MRO needs. In some countries, we have worked very, very closely together with our respective sales team so that it could be that an avnet salesperson covers the account from an account management point of view. But we provide the fulfilment in an online web generated way of operating. And that's how we operate in South Africa. Now, which is a new market we've entered, where we utilise the avnet sales teams with their direct business customers. But we provide all of the back end sales support out of Leeds, UK through a South African website. so customers can then enjoy the volume of demand from avnet. But the pre production small quantity demand and the MRO needs and lines that avnet do not carry through the final offering. So it's a win win scenario. We're now adopting the same approach into Russia are also working in the same way in Turkey. And very soon we will also operate in the same way in in the Israel market.
Okay, terrific. So all in all, it's clear adnet and foreign l going to be working very closely together, an investment is coming in from magnet into fire now to continue to grow the business
very much. So you're right, it's it's four years. I've used this analogy before. So you know, we got married, and we're still in a in a honeymoon period. It's working very, very well. We're benefiting not just from the customer side. But from the HR people side. We're working on the back office systems, obviously, the logistics are still separate because we run separate warehousing. But we're definitely getting advantages from as I referenced, Chris now owning the digital ways of working and how we combine the synergies, their combined synergies in this in the supplier base, as well as some of the marketing campaigns as well. So it's worked really, really well. We've obviously got to get through these turbulent times now in in Europe around the impact that the virus has had on on our businesses and our combined businesses. But I've you know, separately mentioned to you that we've seen encouraging signs of growth in some of the markets. And you know, I'm pleased to say that across EMEA we are for the month of November in positive growth. So we've not been in that position for quite a while, but the market is starting to turn and I believe with the recently announced antidotes that we will all hopefully benefit from we see a better picture for what would be the start of the calendar year of our q3 trading period. Okay, and just done on that view. Obviously, both in the UK and in Europe. We've seen some more severe lockdowns coming in. Have you been able to support customers through this period? Yeah, we transferred with the exception of our warehouse teams we we've been operating in a work from home environment, including myself, I've not travelled anywhere as unique parent's not travelling anywhere since March. But, you know, our sales teams have all of the capabilities like we are now, on a team's video conference call, many customer reviews take place in quarterly business reviews with with our larger customers, but our sales teams, we continue to operate on 100% order completion every day, which is which is vital for the type of business that we're in. And we've we have had a small number of our sales teams returned to the leaves office or other offices across Europe, where government restrictions allow and provide a safe environment for for our individual salespeople to work from. But I would say as we emerge from this, we will definitely enter into a new way of working, post COVID and more flexibility, I think still more working from home. But absolutely, utilising the technologies of platforms like Microsoft Teams provides us on this call to maintain and grow our business, which ultimately, as you know, is the online way of working so it suits our our business model very effectively and very efficiently.
Okay, Rob, Rob eskie. Thanks very much for joining us. Thank you.
Thank you, Rick.
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