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“It’s not complicated”

Steve Rawlins, CEO of Anglia, talks distribution with Neil Tyler

Steve Rawlins

 

By Neil Tyler - CIE - on March 2010

At the end of 2008 Steve Rawlins, the CEO of Anglia, was interviewed about the state of the UK components market. He said that it wasn’t “in the greatest of shape right now.” Well fast forward 12 months. It’s been a record breaking 2009, but for all the wrong reasons. I got to meet with Rawlins at a restaurant in Victoria in central London and started the interview by asking him how that last 12 months had been for Anglia.


“Well last year was absolutely dreadful,” he confides. “I think it’s been the worst year I can remember in over 30 years working in the industry. By contrast though, it’s been a good year for new designs. And despite the problems of the last 12 months I’m actually quite optimistic about 2010. There are loads of opportunities out there for the taking and we’ve started recruiting again, that’s the first time we’ve done that in almost two years.” However confidence remains fragile, according to Rawlins, and worries over a double dip recession remain significant.

“Beyond six months we don’t really know where the market will be,” he admits. “But what I’ve seen so far is a January in which orders are up 30 per cent, and that’s across the board. AFDEC is forecasting three per cent growth this year, but we’re more optimistic and think it’s more likely to be 15-20 per cent.

“Stock is vital. Customers are buying what they need and aren’t re-stocking. It’s a stocklite strategy. They’ve cut their inventory levels right back to the bone during this recession and aren’t, currently, billing to start restocking. Should that change then that could have an
impact in the longer term, but at the moment I’m pretty confident about the rest of the year.”

One concern he does express to me is that of the cost of materials and the impact that could have on customers.

“The price of copper, for example, is shooting up and I think that in the next six months we’ll see the bill of materials (BOM) rising significantly. And I’m not sure customers understand that and what the implications for the market could be as a result.”

Anglia has over the last 30 years established itself as a leading independent authorised distributor in the UK and Rawlins has been with the company throughout that period.

“I joined it when it was a tiny spares business that repaired commercial equipment. Now we distribute semiconductors, optoelectronics, interconnect, and passive and electromechanical components and stock over 700 million components from 500,000 product lines in the UK. We’ve certainly come a long way.” Born in Sheffield, Rawlins is your archetypal Yorkshireman. He’s straightforward, direct and open. “And that’s how we run the company. Distribution is all about understanding your customers and your suppliers. It’s not rocket science but what it is, is being honest with your customers, giving them good service and being truthful with them. It’s not complicated. You share information, you carry stock, you provide quality engineering services and look to deliver on time. It’s quite simple really.”

Open and direct
Rawlins started at Anglia in the early 1970s. He rose rapidly through the organisation becoming a sales manager at the age of 24 before becoming sales director, then managing director at the age of 38 and finally CEO a few years ago. So why sales and why Anglia?

“Well I needed a job and if truth be told I got into the industry by chance. I’d left school, was chasing girls and drinking beer and in order to support those hobbies I needed an income. A job with Anglia seemed like a good idea at the time. It still does. As for the rapid promotions, well there weren’t that many other people there to be honest. When I joined there were just half a dozen of us.” Like I said, straightforward, open and direct. But he’s also, as he readily admits, a
bit of an obsessive and blessed, or cursed, with vast amounts of energy.“I like to win and to do things well. And that means delivering on promises and being the best at what l do and that means being focussed and working hard.”

While 2009, as Rawlins explained, was the ‘worst’ he could remember and while a significant market downturn may not seem like the most suitable time to take on the costs of running new product lines it didn’t preclude the company from continuing to innovate and signing up new lines.

In May it signed the energy device line of Maxwell Technology and other big signings last year included the passive components supplier AVX and Intersil, the analogue chip firm.

“All of those were big signings for us,” Rawlins explains. “We’ve become over the last ten years a major supplier of silicon and the agreement with Intersil has really helped to strengthen our position in that market. It was certainly an important achievement for us in getting them. Especially when you consider that they’ve traditionally only worked with the big players like Arrow and EBV.”

Rawlins believes passionately that it was vital the company didn’t change its business model in response to the recession and true to his word Anglia added a variety of new lines to its portfolio last year, especially in those areas like M2M and LED lighting that could be expected to bounce back more quickly as the economy recovers.

A new business unit was formed with a dedicated team to address the machine-machine communications market. The launch of Anglia M2M was supported by a line-up of 15 leading suppliers including names like Cinterion, Fastrax and Ember.

According to Rawlins, “We’d been expanding that portfolio of communications technologies for over 2 years and been building a series of relationships with a mix of technology and sales market leaders in the field. The decision to launch the M2M communications business unit was based simply on the fact that we wanted to focus on those markets that were showing some strong growth, like smart energy, remote monitoring and security – that kind of thing.

“Despite the doom and gloom, there are still new and emerging technology areas out there that will continue to create new business opportunities for distributors like us.”

Innovation
Innovation is at the heart of the business. Ten years ago the company brought on board STMicroelectronics, a significant move which went a long way to transforming the perception of the company in the market.

“Up until them we were seen as a small business, secretive of our methods to be honest. Taking on a supplier like STMicroelectronics meant we had to change. We had to be more open, improve our inventory systems and so on. Suppliers became more demanding and we had to adapt. A few people within the company were unable to adjust to this new environment and they moved on.”

It took a lot of hard work to transform perceptions of the company. “I had to knock on a lot of doors. Anglia was historically seen as a low technology volume distributor. We’ve certainly changed that over the last ten years.”

The company’s success is, in no small part, built on people according to Rawlins and he’s at pains to talk of the company’s collective success and work ethic. “We need smart people, adaptable people, people who are able to take on our big competitors. Most of the people who work for Anglia are home grown talent. We need bright and enthusiastic people who will be able to provide the level of service and support that sets us apart from other companies.”

But when Rawlins talks about the company he also emphasizes the importance of consistency. There are just two shareholders, himself and the chairman.

“Our approach has been and will remain one in which consistency is at its heart. That might mean we’re a little slower than some but we don’t have to report to shareholders or city institutions and we don’t need to take short-term decisions. It’s all about making long-term plans that will be in the best interests of both our customers and the company itself. I never dreamed that the business would grow to the size it has.”

With success has come increased responsibility and employing over 160 people means that Rawlins has had to make some tough decisions, especially when it came to combating the recession.

“We certainly had to respond. In September of 2008 we saw a change in the order pattern and we proactively began to trim costs in January 2009. We made some significant cutbacks but we didn’t lose any sales people. Last year was all about focussing on driving down costs, improving service levels and delivery and investing in the web. We didn’t lose any customers but we did see a significant reduction in their spending.”

The company has certainly managed to get through a tough period and although wary “there are real difficulties in forecasting” Rawlins is certainly optimistic about the coming year.

The company’s strength, according to Rawlins is its focus on the UK and that’s a strategy that’s unlikely to change. With around four per cent of the UK distribution market Anglia’s still got plenty of scope for growth.

“We’ve absolutely no intention of moving into Europe. That’s always been central to our business strategy. Our focus is on the UK. Our bigger competitors may see the need for a European position but that wouldn’t necessarily benefit UK customers.

“To survive in Europe you need to have size. Abacus attempted that kind of strategy and look what happened to them. We understand the UK market, to move outside it would be a dangerous move on our part and I believe that the role of the strong local distributor is actually growing in importance.”

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This news article was originally published in March 2010

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