Tuesday, November 28, 2006
Passives distribution bucks the trend
TTI Europe is on target to achieve year-on-year growth figures which are more than double that predicted for the industry in general.
TTI Europe, the world's leading authorised specialist distributor of passive, connector and electromechanical components, is on target to achieve year-on-year growth figures which are more than double that predicted for the industry in general. More, the company is moving up the top 10 largest European distributor rankings, despite the fact that it only sells low value components, not the high value semiconductor items which account for the majority of all other top 10 distributors' revenues. 'This year, the distribution industry is experiencing solid growth of around 15%', details Glyn Dennehy, TTI's VP Europe.
'We are on track to grow by 35% in revenue terms this year'.
'What's more, if we look at our performance over the last three years, we will have achieved a CAGR of 28.9% in a market (passives and e-mech) where the European TAM has only grown by around 3%'.
'In other words we are rapidly gaining market share'.
TTI has been seen by many commentators as a relatively new player on the European scene.
And of course it is easy to achieve high growth figures when starting from a small base.
But TTI is no longer a small player - in fact the company, predicts Dennehy, will end 2006 positioned as the ninth largest distributor (by revenue) in Europe - so the sales performance is a genuine reflection of market validation of TTI's approach.
Says Dennehy: 'Another point to remember is that we only sell low value items such as capacitors, resistors, inductors, connectors, relays'.
'All the other major distributors sell semiconductors as well'.
'If you just look at passive components, TTI is Europe's second largest distributor'.
So how has this been achieved?.
Says Dennehy: 'There is no question that we lead the field with our on-time delivery performance, and the breadth and depth of stock we hold on our lines is the best in Europe'.
'We also place a huge focus on design-in of suppliers' new products'.
'Customers know TTI's philosophy, they buy more from us, and they tell other customers'.
'Our business grows'.
'It's simple but hard work'.
He continues: 'Core to our philosophy is our focus on a small number of suppliers'.
'Yes this has grown, but we never add a line without staffing it'.
'85% of our revenue comes from 10 key suppliers, and we work very intimately with these market leaders to ensure that we mirror their focus'.
'This means that we sell more of their new products - often we are the first distributor in the network to hold stock of such items - sometimes we even stock them on an exclusive basis, a recent example being the AirMax connector from FCI'.
'But our - and I hesitate to use the description - smaller franchises are vital too'.
'They fill specific niches or maybe able to supply high end product in smaller quantities'.
'Syfer and Harwin are perfect examples'.
'We understand and promote their strengths and unique value propositions to maximise their opportunities with our customer base'.
The relationship TTI has with its suppliers is most simply represented by the number of awards the company has received this year.
Murata, FCI, Kemet, Bourns, Harwin, Amphenol and Phoenix Contact have all named TTI Europe in a roll call of honours.
By working so closely with a small number of leading players, TTI is able to deliver excellent customer service.
But the distributor is also very active in establishing close working partnerships with its customer base too.
Adds Dennehy: 'An increasing percentage - currently 30% - of our business goes through our inventory management system, whereby customers supply their forecasted component requirements directly to our system, so that we can manage any variances and address any supply chain issues before they become critical'.
'This frees up resources at our customers enabling them to concentrate on what they do best'.
Notable investments this year have included a $1 million warehouse control system at TTI Europe's headquarters in Maisach-Gernlinden.
This has improved productivity and efficiency - resulting in even fewer errors.
Concludes Dennehy: 'Because we deal with massive volumes of relatively low value items we have to able to do it well, or else it would all go wrong internally - let alone for the customer'.
TTI Europe, the world's leading authorised specialist distributor of passive, connector and electromechanical components, is on target to achieve year-on-year growth figures which are more than double that predicted for the industry in general. More, the company is moving up the top 10 largest European distributor rankings, despite the fact that it only sells low value components, not the high value semiconductor items which account for the majority of all other top 10 distributors' revenues. 'This year, the distribution industry is experiencing solid growth of around 15%', details Glyn Dennehy, TTI's VP Europe.
'We are on track to grow by 35% in revenue terms this year'.
'What's more, if we look at our performance over the last three years, we will have achieved a CAGR of 28.9% in a market (passives and e-mech) where the European TAM has only grown by around 3%'.
'In other words we are rapidly gaining market share'.
TTI has been seen by many commentators as a relatively new player on the European scene.
And of course it is easy to achieve high growth figures when starting from a small base.
But TTI is no longer a small player - in fact the company, predicts Dennehy, will end 2006 positioned as the ninth largest distributor (by revenue) in Europe - so the sales performance is a genuine reflection of market validation of TTI's approach.
Says Dennehy: 'Another point to remember is that we only sell low value items such as capacitors, resistors, inductors, connectors, relays'.
'All the other major distributors sell semiconductors as well'.
'If you just look at passive components, TTI is Europe's second largest distributor'.
So how has this been achieved?.
Says Dennehy: 'There is no question that we lead the field with our on-time delivery performance, and the breadth and depth of stock we hold on our lines is the best in Europe'.
'We also place a huge focus on design-in of suppliers' new products'.
'Customers know TTI's philosophy, they buy more from us, and they tell other customers'.
'Our business grows'.
'It's simple but hard work'.
He continues: 'Core to our philosophy is our focus on a small number of suppliers'.
'Yes this has grown, but we never add a line without staffing it'.
'85% of our revenue comes from 10 key suppliers, and we work very intimately with these market leaders to ensure that we mirror their focus'.
'This means that we sell more of their new products - often we are the first distributor in the network to hold stock of such items - sometimes we even stock them on an exclusive basis, a recent example being the AirMax connector from FCI'.
'But our - and I hesitate to use the description - smaller franchises are vital too'.
'They fill specific niches or maybe able to supply high end product in smaller quantities'.
'Syfer and Harwin are perfect examples'.
'We understand and promote their strengths and unique value propositions to maximise their opportunities with our customer base'.
The relationship TTI has with its suppliers is most simply represented by the number of awards the company has received this year.
Murata, FCI, Kemet, Bourns, Harwin, Amphenol and Phoenix Contact have all named TTI Europe in a roll call of honours.
By working so closely with a small number of leading players, TTI is able to deliver excellent customer service.
But the distributor is also very active in establishing close working partnerships with its customer base too.
Adds Dennehy: 'An increasing percentage - currently 30% - of our business goes through our inventory management system, whereby customers supply their forecasted component requirements directly to our system, so that we can manage any variances and address any supply chain issues before they become critical'.
'This frees up resources at our customers enabling them to concentrate on what they do best'.
Notable investments this year have included a $1 million warehouse control system at TTI Europe's headquarters in Maisach-Gernlinden.
This has improved productivity and efficiency - resulting in even fewer errors.
Concludes Dennehy: 'Because we deal with massive volumes of relatively low value items we have to able to do it well, or else it would all go wrong internally - let alone for the customer'.
# posted by Swathi @ 2:09 AM 
